Document:

Consent, Waiver and First Amendment to Amended and Restated Credit Agreement

 Exhibit 10.26.3 
  
  
 CONSENT, WAIVER AND FIRST AMENDMENT

 TO AMENDED AND RESTATED CREDIT AGREEMENT 
 AMONG 
 PRIME OFFSHORE L.L.C. 
 GUARANTY BANK, FSB, 
 as Agent 
 AND 
 THE LENDERS PARTY HERETO 

 Effective 
 June 30, 2009 
  
  

 TABLE OF CONTENTS 
  

					
	 	 	 	  	Page
	 ARTICLE I
	 	DEFINITIONS AND INTERPRETATION	  	1
	             1.1
	 	Terms Defined Above	  	1
	             1.2
	 	Terms Defined in Agreement	  	1
	             1.3
	 	References	  	1
	             1.4
	 	Articles and Sections	  	2
	             1.5
	 	Number and Gender	  	2
	             1.6
	 	Negotiated Transaction	  	2
			
	 ARTICLE II
	 	CONSENT AND WAIVER	  	2
	             2.1
	 	Consent	  	2
	             2.2
	 	Waiver	  	2
	             2.3
	 	Limitation on Consent and Waiver	  	2
			
	 ARTICLE III
	 	AMENDMENTS	  	3
	             3.1
	 	Amendments to Section 1.2	  	3
	             3.2
	 	Amendment to Section 2.12	  	3
			
	 ARTICLE IV
	 	RATIFICATION AND ACKNOWLEDGMENT	  	4
			
	 ARTICLE V
	 	REPRESENTATIONS AND WARRANTIES	  	4
			
	 ARTICLE VI
	 	CONDITIONS TO EFFECTIVENESS	  	4
			
	 ARTICLE VII
	 	MISCELLANEOUS	  	5
	             7.1
	 	Successors and Assigns	  	5
	             7.2
	 	Rights of Third Parties	  	5
	             7.3
	 	Counterparts	  	5
	             7.4
	 	Integration	  	5
	             7.5
	 	Invalidity	  	5
	             7.6
	 	Governing Law	  	5

  

 - i - 

 CONSENT, WAIVER AND FIRST AMENDMENT 
 TO AMENDED AND RESTATED CREDIT AGREEMENT 
 This
CONSENT, WAIVER AND FIRST AMENDMENT TO AMENDED AND RESTATED CREDIT AGREEMENT (this “Amendment”) is made and entered into effective the 30th day of June, 2009 (the “Effective Date”), by and among PRIME OFFSHORE L.L.C., a Delaware limited liability company
(the “Borrower”), the lenders party to the Amended and Restated Credit Agreement referred to below (collectively, the “Lenders”) and GUARANTY BANK, FSB, a federal savings bank, as administrative agent for the
Lenders pursuant to such Amended and Restated Credit Agreement (in such capacity, the “Agent”). 
 W I
T N E S S E T H: 
 WHEREAS, the Borrower, the Lenders and the Agent are parties
to that certain Amended and Restated Credit Agreement dated effective March 31, 2008 (the “Agreement”); 
 WHEREAS, the
Borrower has requested that the Agent and the Lenders consent to, and waive any default or right to exercise any remedy as a result of, the Borrower having failed to be in compliance with Section 6.16 of the Agreement at December 31, 2008
and Section 5.2 of the Agreement as to timely delivery of its Financial Statements at March 31, 2009 and for the quarter then ended, and the Agent and the Lenders have agreed to do so as provided in this Amendment; and 
 WHEREAS, the Borrower, the Agent and the Lenders desire to amend the Agreement in the particulars hereinafter provided; 
 NOW, THEREFORE, in consideration of the premises and the mutual covenants and agreements herein contained, the parties hereto hereby agree as follows:

 ARTICLE I 
 DEFINITIONS AND INTERPRETATION 
 1.1 Terms Defined Above. As used in this Consent, Waiver and First Amendment
to Amended and Restated Credit Agreement, each of the terms “Agent,” “Agreement,” “Amendment,” “Borrower,” “Effective Date” and “Lender” shall have
the meaning assigned to such term hereinabove. 
 1.2 Terms Defined in Agreement. Each term defined in the Agreement and used herein
without definition shall have the meaning assigned to such term in the Agreement, unless expressly provided to the contrary. 
 1.3
References. References in this Amendment to Schedule, Exhibit, Article, or Section numbers shall be to Schedules, Exhibits, Articles, or Sections of this Amendment, unless expressly stated to the contrary. References in this Amendment to
“hereby,” “herein,” “hereinafter,” “hereinabove,” “hereinbelow,” “hereof,” “hereunder” and words of similar import shall be to this Amendment in its entirety and not only to the
particular Schedule, Exhibit, Article, or Section in which such reference appears. Specific enumeration herein shall not exclude the general and, in such regard, the terms “includes” and “including” used herein shall 

 
mean “includes, without limitation,” or “including, without limitation,” as the case may be, where appropriate. Except as otherwise
indicated, references in this Amendment to statutes, sections, or regulations are to be construed as including all statutory or regulatory provisions consolidating, amending, replacing, succeeding, or supplementing the statute, section, or
regulation referred to. References in this Amendment to “writing” include printing, typing, lithography, facsimile reproduction, and other means of reproducing words in a tangible visible form. References in this Amendment to amendments
and other contractual instruments shall be deemed to include all exhibits and appendices attached thereto and all subsequent amendments and other modifications to such instruments, but only to the extent such amendments and other modifications are
not prohibited by the terms of this Amendment. References in this Amendment to Persons include their respective successors and permitted assigns. 
 1.4 Articles and Sections. This Amendment, for convenience only, has been divided into Articles and Sections; and it is understood that the rights and other legal relations of the parties hereto shall be determined from this
instrument as an entirety and without regard to the aforesaid division into Articles and Sections and without regard to headings prefixed to such Articles or Sections. 
 1.5 Number and Gender. Whenever the context requires, reference herein made to the single number shall be understood to include the plural; and likewise, the plural shall be understood to include the singular.
Definitions of terms defined in the singular or plural shall be equally applicable to the plural or singular, as the case may be, unless otherwise indicated. Words denoting sex shall be construed to include the masculine, feminine and neuter, when
such construction is appropriate; and specific enumeration shall not exclude the general but shall be construed as cumulative. 
 1.6
Negotiated Transaction. Each party to this Amendment affirms to the other that it has had the opportunity to consult, and discuss the provisions of this Amendment with, independent counsel and fully understands the legal effect of each
provision. 
 ARTICLE II 
 CONSENT AND WAIVER 
 2.1 Consent. The Agent and the Lenders hereby consent to the Borrower having failed to be
in compliance with Section 6.16 of the Agreement at December 31, 2008 and Section 5.2 of the Agreement as to timely delivery of its Financial Statements at March 31, 2009 and for the quarter then ended. 
 2.2 Waiver. The Agent and the Lenders waive any Default or Event of Default under the Credit Agreement or any other Loan Document which would
otherwise occur as a result of the Borrower having failed to be in compliance with Section 6.16 of the Agreement at December 31, 2008 and Section 5.2 of the Agreement as to timely delivery of its Financial Statements at March 31,
2009 and for the quarter then ended, together with the right of the Agent or the Lenders to exercise any remedy based thereon. 
 2.3
Limitation on Consent and Waiver. Except for the consent and waiver set forth above in this Article II, nothing contained herein shall otherwise be deemed a consent to any violation of, or a waiver of compliance with, any term,
provision or condition set forth in any of the Loan Documents or a consent to or waiver of any other or future violations, breaches, Defaults or Events of Default. 
  

 - 4 - 

 ARTICLE III 
 AMENDMENTS 
 As of the Effective Date, the parties hereto hereby amend the Agreement as
follows: 
 3.1 Amendments to Section 1.2. Section 1.2 of the Agreement is amended as follows: 
 (a) The definition of the term “Applicable Margin” appearing in Section 1.2 of the Agreement is amended to read as follows in its
entirety: 
 “Applicable Margin” shall mean, as to each LIBO Rate Loan, four percent (4.00%). 
 (b) The definition of the term “Commitment Termination Date” appearing in Section 1.2 of the Agreement is amended to read as
follows in its entirety: 
 “Commitment Termination Date” shall mean October 1, 2010. 
 (c) The definition of the term “Final Maturity Date” appearing in Section 1.2 of the Agreement is amended to read as follows in its
entirety: 
 “Final Maturity Date” shall mean October 1, 2010. 
 (d) The definition of the term “Floating Rate” appearing in Section 1.2 of the Agreement is amended to read as follows in its
entirety: 
 “Floating Rate” shall mean an interest rate per annum equal to the Base Rate from time to time in effect plus
three percent (3.00%), but in no event exceeding the Highest Lawful Rate or being less than the Adjusted LIBO Rate for an Interest Period of one month. 
 (e) The following sentence is added to the definition of “LIBO Rate” appearing in Section 1.2 of the Agreement: 
 “Notwithstanding the foregoing in this definition, in no event shall “LIBO Rate” mean a rate which is less than two percent (2%) per annum. 
 3.2 Amendment to Section 2.12. The words “0.375% per annum” appearing in line five of the text of Section 2.12 of the
Agreement are replaced with the following words: 
 “one half of one percent (0.50%) per annum”. 
  

 - 5 - 

 ARTICLE IV 
 RATIFICATION AND ACKNOWLEDGMENT 
 Each of the Borrower and the Lender does hereby adopt,
ratify and confirm the Agreement, as the same is amended hereby, and acknowledges and agrees that the Agreement, as amended hereby, is and remains in full force and effect. Each of the Borrower, the Agent and the Lenders hereby agrees and
acknowledges that, as of the Effective Date, the Borrowing Base is $10,000,000 and the Monthly Commitment Reduction Amount is $500,000, with the first reduction of such Borrowing Base amount as a result of such Monthly Commitment Reduction Amount to
occur on July 1, 2009 and subsequent monthly reductions of the Borrowing Base on the basis of such Monthly Commitment Reduction Amount to occur on the tenth day of each subsequent calendar month, commencing with the next monthly reduction on
August 10, 2009. 
 ARTICLE V 
 REPRESENTATIONS AND WARRANTIES 
 The Borrower does hereby re-make in favor of the Agent and the Lenders each of the
representations and warranties made by it in the Loan Documents to which it is a party and further represents and warrants that each of such representations and warranties made by it remains true and correct as of the date of execution of this
Amendment and giving effect to this Amendment, except to the extent such representations and warranties relate solely to an earlier date. 
 ARTICLE VI 
 CONDITIONS TO EFFECTIVENESS 
 The effectiveness of this Amendment is expressly subject to satisfaction of the following conditions precedent 
 (a) the Agent shall have received from the Borrower $2,870,000 in immediately available funds, which sum shall be applied to reduce the sum of the Loan
Balance and the L/C Exposure to an amount equal to the amount of the Borrowing Base as of the Effective Date as set forth in Article IV; 
 (b) the Agent shall have received multiple counterparts of security documents, in form and substance satisfactory to the Agent, duly executed on behalf of the Borrower, establishing, as security for the Obligations, liens and security
interests in favor or for the benefit of the Agent against the interest of the Borrower in the Loop Pipeline, South Padre Island 1111 and FWOE Partners L.P.; 
 (c) the Agent shall have received multiple counterparts, as requested by the Agent, of a Subordination of Liens and Security Interests, in form and substance acceptable to the Agent, duly executed on behalf of Artic
Management Corporation, a corporation incorporated under the laws of Panama, pursuant to which the first priority liens and security interests held by or benefiting such entity against certain assets of the Borrower are subordinated to the liens and
security interests held by or benefiting the Agent, for the benefit of the Lenders, against such assets of the Borrower; and 
  

 - 6 - 

 (d) the Agent shall have received from the Borrower $100,000 in immediately available funds in payment of
an extension fee due to the Agent for the account of the Lenders. 
 ARTICLE VII 
 MISCELLANEOUS 
 7.1
Successors and Assigns. This Amendment shall be binding upon and inure to the benefit of the parties hereto and their respective successors and assigns permitted pursuant to the Agreement. 
 7.2 Rights of Third Parties. Except as provided in Section 7.1, all provisions herein are imposed solely and exclusively for the benefit of
the parties hereto. 
 7.3 Counterparts. This Amendment may be executed by one or more of the parties hereto in any number of separate
counterparts, and all of such counterparts taken together shall be deemed to constitute one and the same instrument and shall be enforceable upon the execution of one or more counterparts hereof by each of the parties hereto. In this regard, each of
the parties hereto acknowledges that a counterpart of this Amendment containing a set of counterpart execution pages reflecting the execution of each party hereto shall be sufficient to reflect the execution of this Amendment by each necessary party
hereto and shall constitute one instrument. 
 7.4 Integration. THIS AMENDMENT
CONSTITUTES THE ENTIRE AGREEMENT AMONG THE PARTIES HERETO WITH RESPECT TO
THE SUBJECT HEREOF. ALL PRIOR UNDERSTANDINGS, STATEMENTS AND AGREEMENTS, WHETHER
WRITTEN OR ORAL, RELATING TO THE SUBJECT HEREOF ARE SUPERSEDED BY
THIS AMENDMENT. 
 7.5 Invalidity. In the event that any one or more of the provisions contained in
this Amendment shall for any reason be held invalid, illegal or unenforceable in any respect, such invalidity, illegality or unenforceability shall not affect any other provision of this Amendment. 
 7.6 Governing Law. THIS AMENDMENT SHALL BE DEEMED TO
BE A CONTRACT MADE UNDER AND SHALL BE GOVERNED BY AND CONSTRUED
IN ACCORDANCE WITH THE LAWS OF THE STATE OF TEXAS, WITHOUT REGARD
TO PRINCIPLES OF SUCH LAWS RELATING TO CONFLICTS OF LAW. 
 (Signatures appear on following pages) 
  

 - 7 - 

 IN WITNESS WHEREOF, the parties hereto have executed and delivered this Consent, Waiver and First
Amendment to Amended and Restated Credit Agreement to be effective as of the Effective Date. 
  

			
	BORROWER:
	
	PRIME OFFSHORE L.L.C.
		
	By:	 	  

		 	Beverly A. Cumming
		 	Chief Executive Officer

 (Signatures continue on following page) 
  

 - 8 - 

			
	AGENT:
	
	 GUARANTY BANK, FSB,
 as
Agent

		
	By:	 	  

		 	W. David McCarver IV
		 	Vice President
	
	LENDER:
	
	GUARANTY BANK, FSB
		
	By:	 	  

		 	W. David McCarver IV
		 	Vice President

  

 - 9 -Mortgage, Deed of Trust, Security Agreement, Financing Statement and Assignment

 Exhibit 10.27.2 
 MORTGAGE, DEED OF TRUST, SECURITY AGREEMENT, 
 FINANCING STATEMENT AND ASSIGNMENT OF PRODUCTION 
 (THIS INSTRUMENT CONTAINS AFTER-ACQUIRED PROPERTY PROVISIONS) 
 FROM  
 PRIME OFFSHORE L.L.C.  
 Taxpayer Identification Number: 76-0688905 
 (Mortgagor and Debtor) 
 TO 
 John A. Clark, Trustee 
 for the benefit of 
 GUARANTY BANK, FSB,
Agent 
 (Mortgagee and Secured Party) 
 Effective June 30, 2009 
 For purposes of filing this Deed of Trust as a financing statement, the mailing address of Mortgagor is 9821 Katy
Freeway, Suite 1050, Houston, Texas 77024; the mailing address of Mortgagee is 8333 Douglas Avenue, Dallas, Texas 75225. 
 v v v v v v v v v v v v v v v v v 
 This instrument, prepared by David G. Dunlap, Jackson Walker L.L.P.,
1401 McKinney, Suite 1900, Houston, Texas 77010, 713-752-4200, contains after-acquired property provisions and covers future advances and proceeds to the fullest extent allowed by applicable law. 
 ATTENTION OF RECORDING OFFICER: This instrument is a mortgage of both real and personal property and is, among other things, a Security Agreement and Financing
Statement under the Uniform Commercial Code. This instrument creates a lien on rights in or relating to lands of Mortgagor which are described in Exhibit A hereto or in documents described in Exhibit A. 
 RECORDED DOCUMENT SHOULD BE RETURNED TO: 
 JACKSON WALKER
L.L.P. 
 1401 McKinney, Suite 1900 
 Houston, Texas 77010 
 Attn.: Donna Gatliff 

 MORTGAGE, DEED OF TRUST, SECURITY AGREEMENT, 
 FINANCING STATEMENT AND ASSIGNMENT OF PRODUCTION 
 (THIS INSTRUMENT CONTAINS AFTER-ACQUIRED PROPERTY PROVISIONS) 
 This Mortgage, Deed of Trust,
Security Agreement, Financing Statement, and Assignment of Production (this “Deed of Trust”) is executed pursuant to the Amended and Restated Credit Agreement dated effective March 31, 2008, as amended on the effective date
hereof, by and among PRIME OFFSHORE L.L.C., a Delaware limited liability company (“Mortgagor”), the lenders party thereto from time to time (the “Lenders”) and GUARANTY BANK, FSB, a federal
savings bank, as Agent for the Lenders (as amended, supplemented, restated or otherwise modified from time to time, the “Credit Agreement”). Capitalized terms used but not defined herein shall have the meanings assigned to such
terms in the Credit Agreement. 
 Mortgagor, acting herein by and through its proper officer who has heretofore been duly authorized, the
mailing address for which, for purposes hereof, is 9821 Katy Freeway, Suite 1050, Houston, Texas 77024, hereby agrees as follows: 
 ARTICLE 1

 GRANT 
 1.1
Lien. Mortgagor, for valuable consideration, the receipt of which is hereby acknowledged, and in consideration of the debt and trust hereinafter mentioned, has granted, bargained, sold, conveyed, transferred and assigned, and by these
presents does grant, bargain, sell, convey, transfer and assign to John A. Clark, Trustee, whose address is c/o Guaranty Bank, FSB, 8333 Douglas Avenue, Dallas, Texas 75225, and his successors and substitutes in trust, as hereinafter provided (the
“Trustee”), for the benefit of Guaranty Bank, FSB, as Agent for the Lenders, with banking quarters in Dallas County, Texas, the mailing address for which, for purposes hereof, is 8333 Douglas Avenue, Dallas, Texas 75225
(“Mortgagee”), the following described Property: 
 (a) all right, title, and interest, whether now owned and
existing or hereafter acquired or arising, of Mortgagor in and to the leases, rights of way, easements, or other documents described in Exhibit A attached hereto and incorporated herein for all purposes or described or referred to in the
documents described in Exhibit A, without regard to any surface acreage and/or depth limitations set forth in Exhibit A, and all renewals and extensions thereof and all new leases, rights of way, easements, or other documents
(i) in which an interest is acquired by Mortgagor after the termination or expiration of any lease, right of way, easement, or other document described or referred to in Exhibit A, and (ii) that covers all or any part of the
Property described in and covered by such terminated or expired lease, right of way, easement, or other document, to the extent, and only to the extent, such new leases, rights of way, easements, or other documents may cover such Property (all of
the foregoing in this subsection (a) being the “Leases”); 

 (b) all right, title, and interest, whether now owned and existing or hereafter acquired
or arising, of Mortgagor in and to the lands subject to the Leases or otherwise described or referred to in Exhibit A, without regard to any surface acreage and/or depth limitations set forth in Exhibit A (the
“Lands”), including, without limitation, the oil, gas, mineral, and leasehold estates in and to the Lands; 
 (c) all right, title, and interest, whether now owned and existing or hereafter acquired or arising, of Mortgagor in and to any of the oil, gas, and minerals in, on, or under the Lands, including, without limitation, all contractual rights,
fee interests, leasehold interests, overriding royalty interests, non-participating royalty interests, mineral interests, production payments, net profits interests, or any other interest measured by or payable out of production of oil, gas, or
other minerals from the Leases and/or Lands; 
 (d) all of the foregoing interests of Mortgagor as such interests may be
enlarged by the discharge of any payments out of production or by the removal of any charges or encumbrances; 
 (e) all
right, title, and interest, whether now owned and existing or hereafter acquired or arising, of Mortgagor in, to, and under or derived from any present or future operating, farmout, bidding, pooling, unitization, and communitization agreements,
assignments, and subleases, whether or not described in Exhibit A, to the extent, and only to the extent, that such agreements, assignments, and subleases cover or include any right, title, and interest, whether now owned and existing or
hereafter acquired or arising, of Mortgagor in and to all or any portion of the Leases and/or the Lands, and all units created by any such pooling, unitization, and communitization agreements and all units formed under orders, regulations, rules, or
other official acts of any Governmental Authority having jurisdiction, to the extent and only to the extent that such units cover or include all or any portion of the Leases and/or the Lands; 
 (f) all right, title, and interest, whether now owned and existing or hereafter acquired or arising, of Mortgagor in, to, and under or
derived from all presently existing and future advance payment agreements, oil, casinghead gas, and gas sales, exchange, and processing contracts and agreements, including, without limitation, those contracts and agreements that are described or
referred to in Exhibit A, to the extent, and only to the extent, those contracts and agreements cover or include all or any portion of the Leases and/or the Lands; and 
 (g) all right, title, and interest, whether now owned and existing or hereafter acquired or arising, of Mortgagor in, to, and under or
derived from all existing and future permits, licenses, easements, and similar rights and privileges that relate to or are appurtenant to any of the Leases and/or the Lands. 
  

 3 

 1.2 Security Interest. Mortgagor, for the same consideration, hereby grants to Mortgagee a
continuing security interest in all improvements and all personal Property of any kind or character defined in and subject to the provisions of the Uniform Commercial Code (“UCC”), including, but not limited to, substitutions and
replacements for, accessions to, and the proceeds and products from any and all of such improvements and personal Property, as well as any and all “as-extracted collateral” as such term is defined in the UCC, whether now owned and existing
or hereafter acquired or arising, and situated on any of the Lands, including, but not limited to, pipe, casing, tubing, rods, storage tanks, boilers, loading racks, pumps, foundations, warehouses, and all other personal Property and equipment of
every kind and character upon, incident, appurtenant, or belonging to and used in connection with the interest of Mortgagor, whether now owned and existing or hereafter acquired or arising, in the Lands and/or the Leases, including all oil, gas, and
other minerals produced or to be produced to the account of Mortgagor from the Lands and all accounts receivable, general intangibles, and contract rights of Mortgagor in connection with the Lands and/or the Leases and all proceeds, products,
substitutions, and exchanges thereof (the Lands, the Leases, and the real and personal Property interests described in this Section being the “Mortgaged Property”). 
 1.3 Assignment of Security. Mortgagor, for the same consideration, hereby grants to Mortgagee any and all rights of Mortgagor to Liens securing
payment of proceeds from the sale of production from the Mortgaged Property. 
 1.4 After-Acquired Property. Mortgagor, for the same
consideration, hereby grants, bargains, sells, conveys, transfers, and assigns to the Trustee or grants to Mortgagee a continuing security interest in, as the case may be, all additional right, title, or interest which Mortgagor may hereafter
acquire or become entitled to in the interests, Properties, Lands, Leases, and premises aforesaid, and in the oil, gas, or other minerals in and under or produced from or attributable to any of the Lands or Leases, which additional right, title, and
interest, when acquired, shall constitute “Mortgaged Property,” the same as if expressly described and conveyed herein. 
 1.5
Habendum. TO HAVE AND TO HOLD all and singular the Mortgaged Property and all other Property which, by the terms hereof, has or may hereafter become subject to the Liens of this Deed of Trust, together with all rights, hereditaments, and
appurtenances in anywise belonging thereto, to the Trustee or Mortgagee, as the case may be, or the successors or assigns of either of them forever. 
 ARTICLE 2 
 INDEBTEDNESS SECURED 
 This conveyance is made, IN TRUST, HOWEVER, to secure and enforce the payment of the following indebtedness, obligations, and liabilities: 
 2.1 Specific Obligations. The Obligations, including, without limitation, the indebtedness evidenced by (a) the Credit Agreement, and (b) the Promissory Notes executed by Mortgagor to the order of the
Lenders pursuant to the Credit Agreement in the aggregate face amount of up to $200,000,000, bearing interest and being payable as provided therein or as provided in the Credit Agreement. 
  

 4 

 2.2 Additional Indebtedness. 
 (a) Payment of and performance of any and all present or future obligations of Mortgagor under Commodity Hedge Agreements, as defined in
the Credit Agreement. 
 (b) Payment of and performance of any and all present or future obligations of Mortgagor under any
Rate Management Transaction, as defined in the Credit Agreement, entered into by and between Mortgagor and a Lender. 
 (c)
Payment of and performance of any and all present or future obligations of Mortgagor under any guaranty in favor of Lenders of any of the Mortgagor’s subsidiary’s obligations under Commodity Hedge Agreements and Rate Management
Transactions and all present or future obligations of Mortgagor or Mortgagor’s subsidiaries under Commodity Hedge Agreements and Rate Management Transactions. 
 2.3 Other and Further Indebtedness. This Deed of Trust is intended to secure a revolving credit line as set forth in the Credit Agreement. If intermediate paydowns by Mortgagor reduce the outstanding
Indebtedness to zero, it is intended that the Liens created under this Deed of Trust shall remain in full force and effect as long as any Commitment exists. In addition, it is contemplated that Mortgagor may from time to time borrow additional sums
of money from or otherwise be or become obligated to Lenders. This Deed of Trust is given to secure any and all indebtedness of Mortgagor, present or future, either direct or indirect, primary or secondary, fixed or contingent, which Mortgagor may
now or hereafter owe, or as to which Mortgagor may in any manner become obligated to Lenders for payment, including, without limitation, indebtedness arising by way of guaranty as to obligations of another to Lenders and indebtedness originally owed
to a party other than Lenders but which becomes owing to Lenders as the result of Lenders having acquired the right to payment thereof. This Deed of Trust shall likewise secure not only the above described indebtedness, but any and all renewals for
any period, extensions, and rearrangements of all or any portion thereof; and the Liens under this Deed of Trust shall be cumulative of all other Liens and security of any and every other kind or character whatsoever securing the above-described
indebtedness. Notwithstanding the foregoing, it is not the intention of the parties hereto to extend the Liens of this Deed of Trust so as to violate, or give rise to an allegation of violation of, any provision of any statute, regulation, rule,
ordinance or order of any applicable jurisdiction, or any agency or subdivision of any of such jurisdictions. In this connection, this Deed of Trust shall not, solely as to the relevant indebtedness, serve as security for any indebtedness when for
it to do so would violate any provision of any statute, regulation, rule, ordinance or order of any applicable jurisdiction, or any agency or subdivision of any of such jurisdictions. 
 2.4 Indebtedness. The word “Indebtedness” wherever used in this Deed of Trust shall refer to all present and future debts,
obligations, and liabilities described or referred to in this Article 2, subject, however, to the limitations provided hereinabove in this Article 2. 
  

 5 

 ARTICLE 3 
 WARRANTIES 
 3.1 Warranty of Title. Mortgagor hereby binds itself, its legal representatives,
successors, and assigns, to warrant and forever defend all and singular the Mortgaged Property to the Trustee and the successors and assigns of the Trustee forever against every Person whomsoever lawfully claiming or to claim the same or any part
thereof. Notwithstanding that this Deed of Trust covers all of the right, title, and interest, whether now owned and existing or hereafter acquired or arising, of Mortgagor in and to the Mortgaged Property, Mortgagor, for itself, its legal
representatives, successors, and assigns, further covenants, represents, and warrants that Mortgagor has good and indefeasible title to the Mortgaged Property and that the interests of Mortgagor in and to the Leases and/or Lands described in
Exhibit A are not greater than the working interest nor less than the net revenue interest, overriding royalty interest, net profit interest, production payment interest, royalty interest, or other interest payable out of or measured by
production set forth in connection with each oil and gas well described in Exhibit A. In the event Mortgagor owns any other or greater interest, such additional interest is nonetheless included in, covered by, and subject to the liens and
security interests created by this Deed of Trust. 
 3.2 Additional Warranties. In consideration of the Indebtedness, Mortgagor, for
itself, its legal representatives, successors, and assigns, covenants, represents, and warrants that: 
 (a) Leases in
Effect. All of the Leases specifically described or referred to in Exhibit A are in full force and effect. All covenants, express or implied, in respect of the Leases specifically described or referred to in Exhibit A, or of any
assignment of any of such Leases, which may affect the validity of any of such Leases, have been performed insofar as such Leases pertain to the Lands. 
 (b) Interests Free of Liens. The interests of Mortgagor in the Mortgaged Property are free and clear of all Liens except for Permitted Liens. All gross production taxes and all taxes as to which non-payment
could result in a Lien against any of the Mortgaged Property have been paid. 
 (c) Representations and Warranties. As
of the date hereof, all representations and warranties of Mortgagor set forth in the Credit Agreement are true and correct in all material respects, except to the extent such representations and warranties relate solely to an earlier date, and all
such representations and warranties are hereby remade by Mortgagor to Mortgagee. 
  

 6 

 ARTICLE 4 
 COVENANTS OF MORTGAGOR 
 In consideration of the Indebtedness, Mortgagor, for itself, its legal
representatives, successors, and assigns, covenants and agrees as follows: 
 4.1 Maintenance of Leases. Mortgagor will keep and
continue all Leases, estates, and interests herein described and all contracts and agreements relating thereto in full force and effect in accordance with the terms thereof and will not permit the same to lapse or otherwise become impaired for
failure to comply with the obligations thereof, whether express or implied. In this connection, Mortgagor shall not release any of the Leases without the prior written consent of Mortgagee. 
 4.2 Maintenance of Property. Mortgagor will keep and maintain all improvements, personal Property, and equipment now or hereafter situated on the
Lands and constituting a portion of the Mortgaged Property and used or obtained in connection therewith in good repair and condition, ordinary wear and tear excepted, and will not tear down or remove the same or permit the same to be torn down or
removed without the prior consent of Mortgagee, except in the usual course of operations as may be required for replacement when otherwise in compliance with the provisions of this Deed of Trust and the Credit Agreement. 
 4.3 Pooling or Unitization. Mortgagor will not, without the prior written consent of Mortgagee, pool or unitize all or any part of the Mortgaged
Property where the pooling or unitization would result in the diminution of the net revenue interest of Mortgagor in production from the pooled or unitized lands attributable to the Mortgaged Property constituting a portion of such pooled or
unitized lands. Immediately after the formation of any pool or unit in accordance herewith, Mortgagor will furnish to Mortgagee a conformed copy of the pooling agreement, declaration of pooling, or other instrument creating the pool or unit. The
interest of Mortgagor included in any pool or unit attributable to the Mortgaged Property or any part thereof shall become a part of the Mortgaged Property and shall be subject to the Liens hereof in the same manner and with the same effect as
though the pool or unit and the interest of Mortgagor therein were specifically described in Exhibit A. In the event any proceedings of any Governmental Authority which could result in pooling or unitizing all or any part of the Mortgaged
Property are commenced, Mortgagor shall give immediate written notice thereof to Mortgagee. Any pooling or unitization of all or any part of the Mortgaged Property in violation of this Section shall be of no force or effect against the Trustee or
Mortgagee. 
 4.4 Operation of Mortgaged Property. Mortgagor will operate or, to the extent that the right of operation is vested in
others, will exercise its best efforts to require the operator to operate the Mortgaged Property and all wells now or hereafter located thereon continuously and in a prudent and workmanlike manner in accordance with the best usage of the field and
in accordance with all applicable Requirements of Law. Mortgagor will comply with all terms and conditions of the Leases and each assignment or contract obligating Mortgagor in any way with respect to the Mortgaged Property; but nothing herein shall
be construed to empower Mortgagor to bind the Trustee or Mortgagee to any contract or obligation or render the Trustee or Mortgagee in any way responsible or liable for bills or obligations incurred by Mortgagor. 
  

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 4.5 Compliance with Operating Agreements. Mortgagor agrees to promptly pay all bills for labor and
materials incurred in the operation of the Mortgaged Property and will promptly pay its share of all costs and expenses incurred under any joint operating agreement affecting the Mortgaged Property or any portion thereof; will furnish Mortgagee, as
and when requested, full information as to the status of any joint account maintained with others under any such operating agreement; will not take any action to incur any liability or Lien thereunder; and will not enter into any new operating
agreement or any amendment of any existing operating agreement affecting the Mortgaged Property without the prior written consent of Mortgagee. To the extent that Mortgagor is unable to consent to any proposed operation with respect to any of the
Mortgaged Property, prior to electing not to participate in the proposed operation, Mortgagor will use its best efforts, to the extent practicable and to the extent allowed to do so under the relevant operating agreement or other applicable
contract, to farmout to others acceptable to Mortgagee, on the best terms obtainable and acceptable to Mortgagee, the interest or relevant portion of the interest of Mortgagor in the proposed operation. 
 4.6 Access to Mortgaged Property. Mortgagor will permit Mortgagee and its accredited agents, representatives, attorneys and employees, at the
expense of Mortgagor, at all times to go upon, examine, inspect, conduct environmental audits and other testing of, and remain on, the Mortgaged Property, and to go upon the derrick floor of any well at any time drilled or being drilled thereon, and
will furnish Mortgagee, upon request, all pertinent information regarding the development and operation of the Mortgaged Property. 
 4.7
Waivers. Mortgagor hereby expressly waives, to the full extent permitted by applicable law, any and all rights or privileges of marshalling of assets, sale in inverse order of alienation, notices, appraisements, redemption, and any
prerequisite in the event of foreclosure of the Liens created herein. Mortgagee at all times shall have the right to release any part of the Mortgaged Property now or hereafter subject to the Liens of this Deed of Trust, any part of the proceeds of
production or other income herein or hereafter assigned or pledged, or any other security it now has or may hereafter have securing the Indebtedness, without releasing any other part of the Mortgaged Property, proceeds, or income, and without
affecting the Liens hereof as to the part or parts of the Mortgaged Property, proceeds, or income not so released or the right to receive future proceeds and income. 
 4.8 Compliance with Laws. Mortgagor will comply with all Requirements of Law applicable to the Mortgaged Property and the operations conducted thereon, including, without limitation, the Natural Gas Policy Act
of 1978, as amended, and Environmental Laws; and cause all employees, crew members, agents, contractors, sub-contractors, and future lessees (pursuant to appropriate lease provisions) of Mortgagor, while such Persons are acting within the scope of
their relationship with Mortgagor, to comply with all such Requirements of Law as may be necessary or appropriate to enable Mortgagor to so comply. 
 4.9 Hazardous Substances Indemnification. MORTGAGOR HEREBY INDEMNIFIES AND HOLDS MORTGAGEE AND
THE LENDERS AND THEIR RESPECTIVE SHAREHOLDERS, OFFICERS, DIRECTORS, EMPLOYEES, AGENTS,
ATTORNEYS-IN-FACT, AND AFFILIATES AND THE TRUSTEE HARMLESS FROM AND
AGAINST ANY AND ALL CLAIMS, LOSSES, DAMAGES, LIABILITIES, FINES, PENALTIES, CHARGES,
ADMINISTRATIVE AND JUDICIAL PROCEEDINGS AND ORDERS, JUDGMENTS, REMEDIAL ACTIONS, REQUIREMENTS
AND  

  

 8 

 
ENFORCEMENT ACTIONS OF ANY KIND, AND ALL
COSTS AND EXPENSES INCURRED IN CONNECTION THEREWITH (INCLUDING, WITHOUT LIMITATION,
ATTORNEYS’ FEES AND EXPENSES), ARISING DIRECTLY OR INDIRECTLY, IN WHOLE OR
IN PART, FROM (A) THE PRESENCE OF ANY HAZARDOUS SUBSTANCES ON,
UNDER, OR FROM ANY MORTGAGED PROPERTY, WHETHER PRIOR TO OR DURING THE
TERM HEREOF, (B) ANY ACTIVITY CARRIED ON OR UNDERTAKEN ON OR OFF
ANY MORTGAGED PROPERTY, WHETHER PRIOR TO OR DURING THE TERM HEREOF,
AND WHETHER BY MORTGAGOR OR ANY PREDECESSOR IN TITLE, EMPLOYEE, AGENT,
CONTRACTOR, OR SUBCONTRACTOR OF MORTGAGOR OR ANY OTHER PERSON AT ANY
TIME OCCUPYING OR PRESENT ON ANY MORTGAGED PROPERTY, IN CONNECTION WITH
THE HANDLING, TREATMENT, REMOVAL, STORAGE, DECONTAMINATION, CLEANUP, TRANSPORTATION, OR DISPOSAL
OF ANY HAZARDOUS SUBSTANCES AT ANY TIME LOCATED OR PRESENT ON OR
UNDER SUCH PROPERTY, (C) ANY RESIDUAL CONTAMINATION ON OR UNDER ANY
MORTGAGED PROPERTY, (D) ANY CONTAMINATION OF ANY MORTGAGED PROPERTY OR NATURAL
RESOURCES ARISING IN CONNECTION WITH THE GENERATION, USE, HANDLING, STORAGE,
TRANSPORTATION, OR DISPOSAL OF ANY HAZARDOUS SUBSTANCE BY MORTGAGOR OR ANY
EMPLOYEE, AGENT, CONTRACTOR, OR SUBCONTRACTOR OF MORTGAGOR WHILE SUCH PERSONS ARE
ACTING WITHIN THE SCOPE OF THEIR RELATIONSHIP WITH MORTGAGOR, IRRESPECTIVE OF
WHETHER ANY OF SUCH ACTIVITIES WERE OR WILL BE UNDERTAKEN IN
ACCORDANCE WITH APPLICABLE REQUIREMENTS OF LAW, OR (E) THE PERFORMANCE AND
ENFORCEMENT OF THIS DEED OF TRUST OR ANY OTHER ACT OR OMISSION
IN CONNECTION WITH OR RELATED TO THIS DEED OF TRUST OR THE
TRANSACTIONS CONTEMPLATED HEREBY, INCLUDING, WITHOUT LIMITATION, ANY OF THE FOREGOING
IN THIS SECTION ARISING FROM NEGLIGENCE, WHETHER SOLE OR CONCURRENT, ON
THE PART OF MORTGAGEE OR ANY LENDER OR ANY OF THEIR RESPECTIVE
SHAREHOLDERS, OFFICERS, DIRECTORS, EMPLOYEES, AGENTS, ATTORNEYS-IN-FACT, OR AFFILIATES
OR THE TRUSTEE; WITH THE FOREGOING INDEMNITY SURVIVING SATISFACTION OF THE
INDEBTEDNESS, THE TERMINATION OF THE CREDIT AGREEMENT, AND THE RELEASE OF
THE LIENS CREATED HEREBY. 
 4.10 Site Assessments. Mortgagee (by its
officers, employees and agents) at any time and from time to time, either prior to or after the occurrence of an Event of Default, may contract, at the expense of Mortgagor, for the services of Persons (the “Site Reviewers”) to
perform environmental site assessments and other tests (“Site Assessments”) on all or any portion of the Mortgaged Property for the purpose of determining whether any environmental condition exists on any Mortgaged Property which
could reasonably be expected to result in any liability, cost, or expense to Mortgagee or any owner, occupier, or operator of such Mortgaged Property. The Site Assessments may be performed at any time or times, upon reasonable notice, and under
reasonable conditions established by Mortgagor which do not impede the performance of the Site Assessments. The Site Reviewers are hereby authorized to enter upon all or any portion of the Mortgaged Property for such purposes. The Site Reviewers are
further authorized to perform both above and below the ground testing for environmental damage or the presence of Hazardous Substances on the Mortgaged Property and such other tests on the Mortgaged Property as may be necessary to conduct the Site
Assessments in the reasonable opinion of the Site Reviewers. Mortgagor will supply to the Site Reviewers such historical and operational information regarding the Mortgaged Property as may be reasonably requested by the Site Reviewers to facilitate
the Site Assessments and will make available for meetings with the Site Reviewers appropriate personnel having knowledge of such matters. On request, Mortgagee 

  

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shall make the results of such Site Assessments available to Mortgagor, which, prior to an Event of Default, may at its election participate under reasonable
procedures in the direction of such Site Assessments and the description of tasks of the Site Reviewers. The cost of performing all Site Assessments shall be paid by Mortgagor upon demand of Mortgagee and any such obligations shall be Indebtedness
secured by this Deed of Trust. 
 4.11 Uneconomic Wells. Should proceeds from the sale of production from any oil and/or gas well
constituting part of the Mortgaged Property (net of production, severance and windfall profit taxes and royalties, overriding royalties and other payments out of or measured by production) not exceed the expense of operation of such well (including,
but not limited to, operator’s overhead, payments to contractors and suppliers, and annual taxes assessed on the basis of the value of the Property prorated on a monthly basis, but expressly excluding any portion of the cost of drilling or
completing the relevant well or the cost of non-routine workover or remedial operations) for a period in excess of three consecutive calendar months, then, upon receipt by Mortgagor of written notification from Mortgagee, Mortgagor will
(a) take all necessary steps to abandon the relevant well, or (b) provide from sources other than proceeds from the sale of production attributable to the Mortgaged Property (i.e., through borrowings or contractual commitments obtained
from third parties not in violation of any provision of this Deed of Trust or any other Loan Document) the funds required to pay the share of Mortgagor of the expenses associated with the continuing operation of such well. 
 4.12 Performance of Gas Contracts. Mortgagor will perform and observe in all material respects all of its obligations under each contract relating
to the sale of gas produced from or attributable to the Mortgaged Property and will not, except in good faith and as the result of arm’s length negotiations and with prior written notice to Mortgagee, change, modify, amend or waive any of the
terms or provisions of any such contract or take any other action which would release any other party from its obligations or liabilities under any such contract. 
 4.13 Covenants Running with Land. All covenants and agreements herein contained shall constitute covenants running with the Land. 
 ARTICLE 5 
 DEFEASANCE, FORECLOSURE 
 AND OTHER REMEDIES 
 5.1 Defeasance. Should the Indebtedness be paid,
then the conveyance of the Mortgaged Property shall become of no further force and effect, and, at the request and expense of Mortgagor, the Lien granted hereunder shall be released, without recourse or warranty; otherwise, it shall remain in full
force and effect. 
 5.2 Events of Default. The occurrence of any Event of Default under the Credit Agreement shall constitute an
Event of Default under this Deed of Trust. 
  

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 5.3 Acceleration and Exercise of Power of Sale. 
 (a) Upon the occurrence of an Event of Default specified in Sections 7.1(f) or 7.1(g) of the Credit Agreement, the aggregate principal
amount of all Indebtedness then outstanding and all interest accrued thereon shall automatically become immediately due and payable, without presentment, demand, protest, notice of protest, default or dishonor, notice of intent to accelerate
maturity, notice of acceleration of maturity, or other notice of any kind, all of which are hereby expressly waived by Mortgagor to the full extent permitted by applicable law. Upon the occurrence of any other Event of Default, Mortgagee may declare
the aggregate principal amount of all Indebtedness then outstanding and all interest accrued thereon immediately due and payable, whereupon the same shall become immediately due and payable without presentment, demand, protest, notice of protest,
default or dishonor, notice of intent to accelerate maturity, notice of acceleration of maturity, or other notice of any kind, all of which are hereby expressly waived by Mortgagor to the full extent permitted by applicable law. 
 (b) Upon the occurrence of any Event of Default or at any time thereafter while the Indebtedness or any part thereof remains unpaid, it
shall be the duty of the Trustee, on request of Mortgagee (which request is hereby presumed), to enforce this Trust and, after advertising the time and place of the sale for at least 21 days prior to the day of sale, by posting or causing to be
posted a written or printed notice thereof at the courthouse door and by filing a copy of such notice in the office of the county clerk of each county in which the Mortgaged Property or any part thereof may be situated, and serving written notice of
the proposed sale on each debtor obligated to pay the Indebtedness according to the records of Mortgagee, by postage prepaid, certified United States mail, at the most recent address for such debtor as shown by the records of Mortgagee, at least 21
days prior to the day of sale, to sell the Mortgaged Property, either as a whole or in parcels, as the Trustee may deem proper, at public venue at the courthouse of the county in which the Mortgaged Property or any part thereof may be situated (and
being the county designated in the notice of sale) on the first Tuesday of any month between the hours of 10:00 a.m. and 4:00 p.m., to the highest bidder for cash, and after such sale to execute and deliver to the purchaser or purchasers good
and sufficient deeds and assignments, conveying such Property so sold to the purchaser or purchasers with general warranty of title made on behalf of Mortgagor. The Trustee, or his successor or substitute, is hereby authorized and empowered to
appoint any one or more Persons as his attorneys-in-fact or agents to act as Trustee under him and in his name, place and stead, such appointment to be evidenced by a written instrument executed by the Trustee, or his successor or substitute, to
perform any one or more act or acts necessary or incident to any sale under the power of sale hereunder, including, without limitation, the posting and filing of any notices, the conduct of the sale and the execution and delivery of any instruments
conveying the Mortgaged Property as a result of the sale, but in the name and on behalf of the Trustee, or his successor or substitute; and all acts done or performed by such attorneys-in-fact or agents shall be valid, lawful and binding as if done
or performed by the Trustee, or his successor or substitute. No single sale or series 

  

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of sales by the Trustee shall extinguish the Lien or exhaust the power of sale hereunder except with respect to the items of Property sold, but such Lien and
power shall exist for so long as and may be exercised in any manner by law or as herein provided as often as the circumstances require to give Mortgagee full relief hereunder. The purchaser at any such sale shall not assume, nor shall the heirs,
legal representatives, successors or assigns of such purchaser, be deemed to have assumed, by reason of the acquisition of Property or rights mortgaged hereunder, any liability or obligation of any lessee or operator of the Mortgaged Property, or
any part thereof, arising by reason of any occurrence taking place prior to such sale. It shall not be necessary to have present, or to exhibit at any such sale, any of the personal Property subject to the Lien hereof. 
 5.4 Rights as Secured Party. Upon the occurrence of any Event of Default, Mortgagee shall be entitled to all of the rights, powers, and remedies
afforded a secured party by the UCC with respect to the personal Property and fixtures and as-extracted collateral in which Mortgagee has been granted a security interest hereby, or Mortgagee may proceed in accordance with the provisions hereof as
to both the real and personal Property covered hereby. 
 5.5 Application of Proceeds of Sale. The Trustee is authorized to receive
the proceeds of each sale of Mortgaged Property and apply the same as follows: 
 FIRST: to the payment of all necessary costs and
expenses incident to the execution of this Deed of Trust, including, but not limited to, a fee to the Trustee of 5% of the amount realized at the sale, if required by the Trustee; 
 SECOND: to any and all Indebtedness then hereby secured, application to be made in such order and in such manner as Mortgagee may, in its
discretion, elect; 
 THIRD: the balance, if any, to Mortgagor or its successors or assigns, or other Person legally entitled thereto.

 5.6 Substitute Trustee. In the event of the death of the Trustee, or his removal from the State of Texas, or his failure, refusal,
or inability for any reason to make any such sale or to perform any of the trusts herein declared, or at any time, whether with or without cause, Mortgagee may appoint, in writing, a substitute trustee who shall thereupon succeed to all the estates,
rights, powers, and trusts herein granted to and vested in the Trustee. In the same events as first above stated, and in the same manner, successive substitute Trustees may thereafter be appointed. 
 5.7 Statements by Trustee. It is agreed that in any deed or deeds given by any Trustee any and all statements of fact or other recitals therein
made as to the identity of the holder or holders of the Indebtedness, or as to default in the payments thereof or any part thereof, or as to the breach of any covenants herein contained, or as to the request to sell, notice of sale, time, place,
terms and manner of sale, and receipt, application, and distribution of the money realized therefrom, or as to the due and proper appointment of a substitute trustee, and, without 

  

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being limited by the foregoing, as to any other or additional act or thing having been done by Mortgagee or the Trustee, shall be taken by all courts of law
and equity as prima facie evidence that the statements or recitals state facts and are without further question to be so accepted. Mortgagor does hereby ratify and confirm any and all acts that the Trustee may lawfully do in the premises by virtue
of the terms and conditions of this Deed of Trust. 
 5.8 Suit to Collect and Foreclose. Mortgagee, at its election, or the Trustee,
upon written request of Mortgagee, may proceed by suit or suits, at law or in equity, to enforce the payment of the Indebtedness in accordance with the terms hereof and of the notes, guaranties, or other documents evidencing it, and to foreclose the
Lien of this Deed of Trust as against all or any portion of the Mortgaged Property and to have such Property sold under the judgment or decree of a court of competent jurisdiction. 
 5.9 Mortgagee or Trustee as Purchaser. Mortgagee or the Trustee may be a purchaser of all or any portion of the Mortgaged Property at any sale
thereof, whether such sale be under the power of sale hereinabove vested in the Trustee, upon any other foreclosure of the Lien hereof, or otherwise. Mortgagee or the Trustee so purchasing shall, upon any such purchase, acquire title to the
Mortgaged Property so purchased, free of the Lien of this Deed of Trust and free of all rights of redemption in Mortgagor. 
 5.10 Entry
and Operation. Upon the occurrence of any Event of Default, then in each and every such case and in addition to the other rights and remedies hereunder, the Trustee or Mortgagee, whether or not the Indebtedness shall have become due and payable,
may, but shall not be obligated to, enter into and upon and take possession of all or any portion of the Mortgaged Property and may exclude Mortgagor, its agents and servants wholly therefrom and have, hold, use, operate, manage, and control all or
any portion of the Mortgaged Property and produce the oil, gas, and other minerals therefrom and market the same, all at the sole risk and expense of Mortgagor and at the expense of the Mortgaged Property, applying the net proceeds so derived,
first, to the cost of maintenance and operation of such Mortgaged Property; second, to the payment of the Indebtedness, application to be made first to interest and then to principal; and the balance thereof, if any, shall be paid to Mortgagor. Upon
such payment of all such costs and Indebtedness, the Mortgaged Property shall be returned to Mortgagor in its then condition, and neither the Trustee nor Mortgagee shall be liable to Mortgagor for any damage or injury to the Mortgaged Property
except such as may be caused through the fraud or willful misconduct of the Trustee or Mortgagee, as the case may be. 
 5.11 Power of
Attorney to Mortgagee. Mortgagor does hereby designate Mortgagee as the agent of Mortgagor to act in the name, place, and stead of Mortgagor in the exercise of each and every remedy set forth herein and in conducting any and all operations and
taking any and all action reasonably necessary to do so, recognizing such agency in favor of Mortgagee to be coupled with the interests of Mortgagee under this Deed of Trust and, thus, irrevocable so long as this Deed of Trust is in force and
effect. 
 5.12 Remedies Cumulative and Non-Exclusive. The rights of entry, sale, or suit, as hereinabove or hereinafter conferred,
are cumulative of all other rights and remedies herein or by law or in equity provided, and shall not be deemed to deprive Mortgagee or the Trustee of any such other legal or equitable rights or remedies, by judicial proceedings or 

  

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otherwise, appropriate to enforce the conditions, covenants, and terms of this Deed of Trust and the other Loan Documents. The employment of any remedy
hereunder or otherwise shall not prevent the concurrent or subsequent employment of any other appropriate remedy or remedies. 
 ARTICLE 6

 ASSIGNMENT OF PRODUCTION 
 6.1 Assignment. In addition to the conveyance to the Trustee herein made, Mortgagor does hereby transfer, assign, deliver and convey unto Mortgagee, its successors and assigns, all of the oil, gas, and other minerals produced, saved,
or sold from the Mortgaged Property and attributable to the interests of Mortgagor therein subsequent to 7:00 a.m. on the first day of the month in which this Deed of Trust is executed, together with the proceeds of any sale thereof. Mortgagor
hereby directs any purchaser now or hereafter taking any production from the Mortgaged Property to pay to Mortgagee such proceeds derived from the sale thereof and to continue to make payments directly to Mortgagee until notified in writing by
Mortgagee to discontinue the same. The purchaser of any such production shall not be required to see to the application of the proceeds thereof by Mortgagee, and payment made to Mortgagee shall be binding and conclusive as between such purchaser and
Mortgagor. Mortgagor further agrees to perform all such acts and to execute all such further assignments, transfer and division orders, and other instruments as may be required or desired by Mortgagee or any other party to have such proceeds and
revenues so paid to Mortgagee. 
 6.2 Postponement of Payment. For its convenience, Mortgagee has elected not to exercise immediately
its right to receive payment to it directly of the proceeds of any sale of the oil , gas and other minerals produced or sold from the Mortgaged Property and the purchasers may continue to make such payment or delivery of the proceeds to Mortgagor
until such time as Mortgagor and the purchasers have received notice that an Event of Default has occurred and is continuing, and that the purchasers are directed to make payment or delivery of the proceeds directly to Mortgagee. Such failure by
Mortgagee to exercise its rights immediately shall not in any way waive the right of Mortgagee to receive any of the proceeds, or to make any such demand, or to affect any such assignment as to any proceeds not theretofore paid or delivered to
Mortgagor. In this regard, if any of the proceeds are paid or delivered directly to Mortgagee and then, at the request of Mortgagee, the proceeds are, for a period or periods of time, paid or delivered to Mortgagor, Mortgagee shall nevertheless have
the right, effective upon written notice, to require that future proceeds be again paid or delivered directly to it. Mortgagee shall never be required to send any such notice to all purchasers, and may direct such notice only to those purchasers as
it may, in its discretion, desire. It shall never be necessary for Mortgagee to institute legal proceedings to enforce the assignment of hydrocarbons, proceeds, or other rents, profits, or income contained in this instrument. It shall not be
necessary for Mortgagee to obtain possession of the Mortgaged Property as a prerequisite to Mortgagee’s right to collect or receive any hydrocarbons, other minerals, proceeds, or other rents, profits, or income assigned to Mortgagee under this
instrument. Mortgagor and Mortgagee expressly agree and it is the express intention of Mortgagor and Mortgagee that in no event will any reduction in the obligations be measured by the fair market value of the hydrocarbons, other minerals, proceeds,
or other rents, profits, or income assigned to Mortgagee under this instrument. 
  

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 6.3 Change of Purchaser. Should any purchaser taking the production from the Mortgaged Property
fail to make prompt payment to Mortgagee in accordance with the provisions of Section 6.1, Mortgagee shall have the right, at the expense of Mortgagor, to demand a change of connection and to designate another purchaser with whom a new
connection may be made, without any liability on the part of Mortgagee in making such selection, so long as ordinary care is used in the making thereof. Promptly upon such demand, Mortgagor shall take all necessary and appropriate action to effect
such change of connection. 
 6.4 Application of Proceeds. Mortgagor authorizes and empowers Mortgagee to receive, hold, and collect
all sums of money paid to Mortgagee in accordance with the provisions of Section 6.1, and to apply the same as hereinafter provided, all without any liability or responsibility on the part of Mortgagee, save and except as to good faith in so
receiving and applying such sums. Mortgagee may apply all sums received by Mortgagee pursuant to Section 6.1 to the payment of the Indebtedness, application to be made in such manner as Mortgagee may elect, regardless of whether the application
so made shall exceed the payments of principal and interest then due as provided in the Loan Documents. After such application has been so made by Mortgagee, the balance of any such sums shall be paid to Mortgagor. 
 6.5 No Postponement of Installments on Indebtedness. It is understood and agreed that should such payments provided for by Section 6.1 be
less than the sum or sums then due on the Indebtedness, such sum or sums then due shall nevertheless be paid by Mortgagor in accordance with the provisions of the Loan Documents, and neither the assignment made pursuant to Section 6.1 nor any
other provisions hereof shall in any manner be construed to affect the terms and provisions of the Loan Documents. Likewise, neither the assignment made pursuant to Section 6.1 nor any other provisions hereof shall in any manner be
construed to affect the Liens, rights, title, and remedies herein granted securing the Indebtedness or the liability of Mortgagor therefor. The rights under this Article VI are cumulative of all other rights, remedies, and powers granted under this
Deed of Trust and are cumulative of any other security which Mortgagee now holds or may hereafter hold to secure the payment of the Indebtedness. 
 6.6 Turnover to Mortgagee. Should Mortgagor receive any of the proceeds of any sale of oil, gas, or other minerals produced, saved, or sold from the Mortgaged Property, which under the terms hereof should have been remitted to
Mortgagee, Mortgagor will immediately remit same in full to Mortgagee. 
 6.7 Release of Proceeds Upon Payment of Indebtedness. Upon
payment in full of all Indebtedness and the termination of the Commitment, the remainder of such proceeds held by Mortgagee, if any, shall be paid over to Mortgagor upon demand, and a release of the interest hereby assigned will be made, without
recourse or warranty, by Mortgagee to Mortgagor at its request and its expense. 
 6.8 Duty of Mortgagee. Mortgagee shall not be
liable for any failure to collect, or for any failure to exercise diligence in collecting, any funds assigned hereunder. Mortgagee shall be accountable only for funds actually received. 
  

 15 

 6.9 Power of Attorney to Mortgagee. Mortgagor does hereby designate Mortgagee as the agent of
Mortgagor to act in the name, place, and stead of Mortgagor for the purpose of taking any and all actions deemed by Mortgagee necessary for the realization by Mortgagee of the benefits of the assignment of production provided herein, recognizing
such agency in favor of Mortgagee to be coupled with the interests of Mortgagee under this Deed of Trust and, thus, irrevocable so long as this Deed of Trust is in force and effect. 
 ARTICLE 7 
 MISCELLANEOUS 
 7.1 Further Assurances. Upon request of Mortgagee, Mortgagor will promptly correct any defects, errors, or omissions in the execution or
acknowledgment of this Deed of Trust or any other Loan Document, and execute, acknowledge, and deliver such other assurances and instruments as shall, in the opinion of Mortgagee, be necessary to fulfill the terms of this Deed of Trust. 

7.2 Interest. Any provision in any document that may be executed in connection herewith to the contrary notwithstanding, Mortgagee shall in no
event be entitled to receive or collect, nor shall any amounts received hereunder be credited so that Mortgagee shall be paid, as interest a sum greater than that authorized by law. If any possible construction of this Deed of Trust or any Loan
Document seems to indicate any possibility of a different power given to Mortgagee or any authority to ask for, demand, or receive any larger rate of interest, this clause shall override and control, and proper adjustments shall be made accordingly.

 7.3 Agreement as Entirety. This Deed of Trust, for convenience only, has been divided into Articles, Sections, and subsections. The
rights, powers, privileges, duties, and other legal relations of Mortgagor, the Trustee, and Mortgagee shall be determined from this Deed of Trust as an entirety and without regard to the aforesaid division into Articles, Sections, and subsections
and without regard to headings affixed to such Articles, Sections, or subsections. 
 7.4 Number and Gender. Whenever the context
requires, reference herein made to the single number shall be understood to include the plural, and the plural shall likewise be understood to include the singular. Words denoting sex shall be construed to include the masculine, feminine, and neuter
when such construction is appropriate; and specific enumeration shall not exclude the general, but shall be construed as cumulative. 
 7.5
Rights and Remedies Cumulative. All rights, powers, immunities, remedies, and Liens of Mortgagee existing and to exist hereunder or under any other instruments or at law or in equity and all other or additional security shall be cumulative
and not exclusive, each of the other. Mortgagee shall, in addition to the rights and remedies herein expressly provided, be entitled to such other remedies as may now or hereafter exist at law or in equity for securing and collecting the
Indebtedness, for enforcing the covenants herein, and for foreclosing the Liens hereof. Resort by Mortgagee to any right or remedy provided for hereunder or at law or in equity shall not prevent concurrent or subsequent resort to the same or any
other right or remedy. No security heretofore, herewith, or subsequently taken by Mortgagee shall in any 

  

 16 

 
manner impair or affect the security given by this Deed of Trust or any security by endorsement or otherwise presently or previously given; and all security
shall be taken, considered, and held as cumulative. 
 7.6 Parties in Interest. This Deed of Trust shall be binding upon the parties
and their respective heirs, administrators, legal representatives, successors, and assigns and shall inure to the benefit of the Mortgagee and its legal representatives, successors, and assigns. The terms used to designate any of the parties herein
shall be deemed to include the heirs, administrators, legal representatives, successors, and assigns of such parties. The term “Mortgagee” shall also include any lawful owner, holder, or pledgee of any Indebtedness. 
 7.7 Supplements. Without in any manner limiting the effect of Section 1.4 or any other provisions of this Deed of Trust as to the binding
effect of this Deed of Trust on after-acquired rights of Mortgagor, it is contemplated by the parties hereto that from time to time additional interests and properties may or will be added to the interests and properties subject to the Liens,
rights, titles, and interests created by this Deed of Trust by means of supplemental indentures identifying this Deed of Trust and describing such interests and properties to be so added and included. Upon the execution of any such supplemental
indenture, the Liens, rights, titles, and interests created herein shall immediately attach to and be effective with respect to any such interests and properties so described, the same as if such interests and properties had been specifically
described herein, and such interests and properties being included in the term “Mortgaged Property,” as used herein. 
 7.8
Invalidity. In the event that any one or more of the provisions contained in this Deed of Trust shall for any reason be held invalid, illegal, or unenforceable in any respect, such invalidity, illegality, or unenforceability shall not affect
any other provision of this Deed of Trust or any other Loan Document. 
 7.9 Construction. All titles or headings to Articles,
Sections, subsections, or other divisions of this Deed of Trust or the exhibits hereto are only for the convenience of the parties and shall not be construed to have any effect or meaning with respect to the other content of such Articles, Sections,
subsections, or other divisions, such other content being controlling as to the agreement among the parties hereto. Article, Section, subsection, and Exhibit references herein are to such Articles, Sections, subsections, and Exhibits of this Deed of
Trust unless otherwise specified. The words “hereby,” “herein,” “hereinabove,” “hereinafter,” “herein-below,” “hereof,” and “hereunder” when used in this Deed of Trust shall refer
to this Deed of Trust as a whole and not to any particular Article, Section, subsection, or provision of this Deed of Trust. 
 7.10
Fixtures, Minerals and Accounts. Without in any manner limiting the generality of any of the foregoing hereof, some portions of the personal Property described hereinabove are or are to become fixtures on the Lands. In addition, the security
interest created hereby under applicable provisions of the UCC attaches to minerals, including oil and gas, and accounts resulting from the sale thereof, at the wellhead or minehead located on the Lands. 
 7.11 Financing Statement Filings. This Deed of Trust may be filed as provided in Article 9 of the UCC to assure that the security interests
granted by this Deed of Trust are 

  

 17 

 
perfected. In this connection, this Deed of Trust may be presented to a filing officer under the UCC to be filed in the real estate records as a Financing
Statement covering minerals and fixtures. Further, Mortgagor authorizes Mortgagee to execute and file at any time and from time to time any and all Financing Statements and amendments thereto in any UCC jurisdiction, pursuant to Article 9 of the
UCC, as Mortgagee deems necessary in its sole discretion, in conjunction with this Deed of Trust, and Mortgagor expressly authorizes execution and filing of such Financing Statements by Mortgagee without need of signature or execution by Mortgagor.

 7.12 Addresses. For purposes of filing this Deed of Trust as a financing statement, the addresses for Mortgagor, as the debtor, and
Mortgagee, as the secured party, are as set forth hereinabove. 
 7.13 Counterparts. For the convenience of the parties, this Deed of
Trust may be executed in multiple counterparts, each of which for all purposes shall be deemed, and may be enforced from time to time as, a chattel mortgage, real estate mortgage, deed of trust, security agreement, assignment or contract, or as one
or more thereof. For recording purposes, various counterparts have been executed, and there may be attached to each such counterpart an Exhibit A containing only the description of the Mortgaged Property, or portions thereof, which relates to the
county or state in which the particular counterpart is to be recorded. A complete, original counterpart of this Deed of Trust with a complete Exhibit A may be obtained from Mortgagee. Each of the counterparts hereof so executed shall for all
purposes be deemed to be an original, and all such counterparts shall together constitute but one and the same instrument. 
 7.14 No
Waiver by Mortgagee. No course of dealing on the part of Mortgagee, its officers or employees, nor any failure or delay by Mortgagee with respect to exercising any of its rights or remedies hereunder shall operate as a waiver thereof nor shall
the exercise or partial exercise of any such right or remedy shall preclude the exercise of any other right or remedy. 
 7.15 Governing
Agreement. This Deed of Trust is made pursuant and subject to the terms and provisions of the Credit Agreement. In the event of a conflict between the terms and provisions of this Deed of Trust and those of the Credit Agreement, the terms and
provisions of the Credit Agreement shall govern and control. The inclusion in this Deed of Trust of provisions not addressed in the Credit Agreement shall not be deemed a conflict, and all such additional provisions contained herein shall be given
full force and effect. 
 (Signatures appear on following pages) 
  

 18 

 IN WITNESS WHEREOF, this Deed of Trust is executed on the date of the acknowledgment
below but effective as of the 30th day of June, 2009. 
  

			
	MORTGAGOR (DEBTOR):
	
	PRIME OFFSHORE L.L.C.
		
	By:	 	  

	Name:	 	  

	Title:	 	  

  

							
	THE STATE OF	 	  
	    	§	  	
		 		    	§	  	
	COUNTY OF	 	  
	    	§	  	

 The foregoing instrument was acknowledged before me this      day of
            , 2009 by
                                        ,
                                         of
PRIME OFFSHORE L.L.C., a Delaware limited liability company, on behalf of such limited liability company. 
  

	
	  

	 NOTARY PUBLIC in and for
 the State of
                    

  

 19 

 EXHIBIT A 
 TO 
 MORTGAGE, DEED OF TRUST, SECURITY AGREEMENT, 
 FINANCING STATEMENT AND ASSIGNMENT OF PRODUCTION 
 The designation “Working Interest” or “WI” when used in this Exhibit means an interest owned in an oil, gas, and mineral lease that determines the cost-bearing percentage of the owner
of such interest. The designation “Net Revenue Interest” or “NRI” means that portion of the production attributable to the owner of a working interest after deduction for all royalty burdens, overriding royalty
burdens or other burdens on production, except severance, production, and other similar taxes. The designation “Overriding Royalty Interest” or “ORRI” means an interest in production which is free of any obligation
for the expense of exploration, development, and production, bearing only its pro rata share of severance, production, and other similar taxes and, in instances where the document creating the overriding royalty interest so provides, costs
associated with compression, dehydration, other treating or processing, or transportation of production of oil, gas, or other minerals relating to the marketing of such production. The designation “Royalty Interest” or
“RI” means an interest in production which results from an ownership in the mineral fee estate or royalty estate in the relevant land and which is free of any obligation for the expense of exploration, development, and production,
bearing only its pro rata share of severance, production, and other similar taxes and, in instances where the document creating the royalty interest so provides, costs associated with compression, dehydration, other treating or processing or
transportation of production of oil, gas, or other minerals relating to the marketing of such production. 
 Any reference in this Exhibit to
wells or units is for warranty of interest, administrative convenience, and identification and shall not limit or restrict the right, title, interest, or properties covered by this Deed of Trust. All right, title, and interest of Mortgagor in the
properties described herein are and shall be subject to this Deed of Trust, regardless of the presence of any units or wells not described herein. 
 The references to book or volume and page herein refer to the recording location of each respective Mortgaged Property described herein in the county where the land covered by the Mortgaged. 
  

 A-i 

 Loop Pipeline 
 A 12-3/4 inch pipeline 13.14 miles in length to transport gas and condensate from a 12-inch sub-sea tie-in in North Padre Island Area Block 996 (Segment Number 15073) through North Padre Island Blocks 997, 989, 976, 977, and 968 to a
10-inch sub-sea tie-in in North Padre Island Area Block 967 (Segment Number 5990). 
 Assigned Right-of-Way Number OCS-G26982 
 Assigned Segment Number: 15636 
 South Padre Island 1111

 Oil and Gas Lease OCS-G-24300, granted by the United States of America to F-W Oil Exploration L.L.C., dated effective November 1, 2002,
covering all of Block 1111, South Padre Island Area, OCS Leasing Map, Texas Map No. 1, offshore Cameron County, Texas. 
  

					
	Working Interest	  	20.00000%	  	
	Net Revenue Interest	  	16.06666%	  	

  

 A-ii

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