Document:

Exhibit 10.3

 

EAGLE BANCORP, INC.

 

SUBSCRIPTION AGREEMENT

 

Eagle Bancorp, Inc.

Attention: Ronald D. Paul

7815 Woodmont Avenue

Bethesda, Maryland 20814

 

Ladies and Gentlemen:

 

1.             Subscription.  The undersigned hereby irrevocably subscribes
for and agrees to purchase                   
dollars principal amount of the 10% Subordinated Notes due 2014 (the “Notes”)
of Eagle Bancorp, Inc., a Maryland corporation (the “Company”), at a price
of 100% of the principal amount thereof, for a total purchase price of $                         
(the “Purchase Price”), in accordance with the terms and conditions of the
offering by the Company as set forth herein. 
This Subscription Agreement (the “Agreement”) may be rejected in whole
or in part by the Company at any time prior to the closing of the sale of Notes
subscribed to hereby. Notwithstanding the Company’s power of rejection and the
provisions of Section 6 hereof, this Subscription Agreement is binding
upon the undersigned and may not be revoked by him/her after its execution and
delivery to the Company.

 

2.             Payment
of Purchase Price.  The undersigned
hereby tenders herewith full payment of the Purchase Price, namely $                                    ,
by check or wire transfer payable to “Eagle Bancorp, Inc.
Sub Debt Escrow Account” (the “Escrow Account”). Following
acceptance of this Agreement and Closing hereunder, certificates representing
all of the Notes that the undersigned is purchasing, registered in the name of
the undersigned, and legended in accordance with the provisions hereof, will be
promptly delivered to the undersigned. 
Until the Closing, all subscriber funds will be held by  EagleBank in the Escrow Account, for the
benefit of subscribers, which account shall bear interest for the benefit of
subscribers, payable after the Closing, at a rate equal to EagleBank’s Fed
Funds rate.

 

3.             Additional
Terms.  Subject to the right of the
Company, in its sole discretion, to accept a limited number of smaller
subscriptions, the minimum subscription shall be for $50,000 principal amount
of Notes, for an investment of fifty thousand dollars ($50,000).  Purchase of Notes in integral multiples of
less than $1,000 will not be permitted. 
In the event of oversubscription of the offering, all subscriptions
shall be adjusted in such manner as the Company shall, in the exercise of its
sole discretion, determine.

 

4.             Representations
and Warranties.  The undersigned
hereby represents and warrants to the Company and its directors, officers,
employees, and agents, jointly and severally, as follows:

 

(a)           He/she
(if a natural person) is a citizen of the United States and is at least 21
years of age.

 

(b)           The
residence of the undersigned (if a natural person, or if a trust the location
of principal offices) set forth below in the signature block is the true and
correct principal residence (or principal office) of the undersigned and he/she
has no present intention of becoming a resident or domiciliary of any other
state, county, or jurisdiction.

 

(c)           He/she
has had made available to him/her, and carefully read, and is familiar with,
the Company’s periodic reports filed with the Securities and Exchange
Commission and the Company’s joint proxy statement/prospectus filed with the
Securities and Exchange Commission relating to the proposed acquisition by the
Company of Fidelity & Trust Financial Corporation (“Fidelity”) and its
subsidiaries (including the financial information regarding the Company and
Fidelity contained therein) and other written information requested from and
provided by the Company.  He/she is aware
of, and understands, the proposed acquisition transaction and the risks related
thereto.  He/she has been provided with
sufficient opportunity to make inquiries of, and receive documents or other
information from, the Company with respect to the operations and financial
performance of the Company, and Fidelity. 
He/she has received full and adequate responses to such inquiries and
requests.

 

1

 

(d)           The
undersigned understands and acknowledges that the future operating results or
financial performance of the Company, and the value of the Notes and Company’s
capital stock, are impossible to predict, and acknowledges and agrees that no
representation of any kind whatsoever has been made by the Company or any of
its affiliates with respect to the future operating results or financial
performance of the Company, or the value of the Notes, and that any such
representation with respect to such matters (including any financial or statistical
projections or pro forma financial statements for any future period), if made
or provided, has not been relied upon by the undersigned in making his or her
investment in the Notes.

 

(e)           The
undersigned understands and acknowledges that an investment in the Notes
involves a degree of risk of loss of the undersigned’s investment in the Notes.

 

(f)            The
undersigned has carefully considered, and to the extent he/she believes such
discussions are necessary, discussed with his/her professional legal, tax, accounting
and financial advisors the suitability of an investment in the Notes.  Taking into account his/her particular
financial situation, the undersigned has determined that the Notes being
subscribed for by him/her hereunder constitute a suitable investment for
him/her.  Either alone, or together with
his/her advisors, the undersigned possesses sufficient expertise to utilize the
information provided by the Company to evaluate the risks of investment in the
Notes and make an informed investment decision.

 

(g)           The Notes
for which the undersigned hereby subscribes will be acquired by the undersigned
for investment only, for the undersigned’s own account and not for the account
of others, and not with a view to resale, distribution, or transfer of the
same.  The Notes are not being purchased
for subdivision or fractionalization thereof; and the undersigned has no
present intention, and no contract, undertaking, agreement, or arrangement with
any person or entity, to sell, pledge, hypothecate or otherwise transfer (with
or without consideration) to any such person or entity any Notes for which the
undersigned hereby subscribes, and the undersigned has no present plans or
intention to enter into any such contract, undertaking, agreement, or
arrangement, except, in the case of pledge or hypothecation, as previously
disclosed to the Company.  In connection
with any proposed pledge or hypothecation, the lender shall execute an
acknowledgement of the restrictions on transfer contained herein, in the form
attached a Exhibit A hereto.

 

(h)           The
present financial condition of the undersigned is such that he/she is under no
present or contemplated future need to dispose of any portion of the Notes for
which the undersigned hereby subscribes to satisfy any existing or contemplated
undertaking, need or indebtedness.  The
undersigned’s overall commitment to investments which are not readily
marketable, is not disproportionate to his/her net worth and his/her investment
in the Company will not cause such overall commitment to become excessive.  The undersigned’s financial condition is such
that he/she is able to bear the financial risk of losing his/her entire
investment, and that after investing in the Notes he/she will have adequate
measures of providing for all current income needs and contingencies, without
regard to earnings, income or distributions, if any, on the Notes.

 

(i)            The
undersigned acknowledges and agrees that the offer and sale of Notes is being
effected in connection with the proposed closing of the Fidelity transaction in
order to enable the Company to meet the conditions of the regulatory approvals
relating to such transaction.  The
undersigned understands and agrees that while it is intended that the Notes may
be used to pay, in whole or in part, the subscription price of shares of
capital stock which may in the future be offered by the Company, and that the
Company currently expects to complete such an offering in the fourth quarter of
2008, there is no date by which the Company must commence or complete such offering.
Additionally, although the Company currently expects that it will seek to
redeem any Notes that are not used to pay the purchase price of shares of
capital stock in an offering out of the proceeds of such offering of capital
stock, the undersigned acknowledges and agrees that there is no date prior to
the final maturity date of the Notes on which the Company must redeem or call
the Notes, and there is no assurance that any future offering will provide
sufficient funds to effect such a redemption; and that any redemption is
subject to prior regulatory approval.

 

(j)            The
information which the undersigned has furnished, herewith furnishes or shall
furnish to the Company with respect to the financial condition, sophistication
and/or accredited investor status, including but not limited to the information
contained in this Agreement, is accurate and complete in all material
respects.  Specifically, the undersigned
represents and warrants that each of the categories initialed
below accurately reflects the status of the undersigned, and further
represents and warrants that except as marked to the contrary below (a) the
undersigned is an accredited investor as that term is defined in the
regulations of the Securities and Exchange Commission, and (b) the undersigned
meets any additional suitability and/or financial standards or requirements
which may be imposed in

 

2

 

connection with the sale of the Notes by the law or regulations of the
jurisdiction in which he/she resides.  (Initial those categories which apply)

 

(1)                                                                                The
undersigned investor hereby represents that he/she is a director or executive
officer of the Company.

 

(2)                                                                                The
undersigned investor hereby represents that he/she is a natural person whose
net worth at the time of purchase of the Notes, or joint net worth with the
undersigned investor’s spouse, exceeds $1,000,000.

 

(3)                                                                                The
undersigned investor hereby represents that he/she is a natural person who had
income in excess of $200,000 in each of the two most recent years, or who had
joint income with the undersigned investor’s spouse in excess of $300,000 in
each of those years, and who reasonably expects to reach the same income level
in the current year.  For the purpose of
this category, “income” is the undersigned’s adjusted gross income, as reported
on his/her federal income tax return, increased by the following amounts: (i) the
amount of any tax-exempt interest income received under Section 103 of the
Code; (ii) the amount of losses claimed as a limited partner in a limited
partnership as reported on Schedule E of Form 1040; (iii) any
deduction claimed for depletions under Section 611 of the Code; and (iv) amounts
contributed to an IRA or retirement plan.

 

(4)                                                                                The
undersigned investor hereby represents that it is a trust with total assets in
excess of $5,000,000, not formed for the specific purpose of acquiring the
securities offered, whose purchase is directed by a sophisticated person who
has such knowledge and experience in financial and business matters that he/she
is capable of evaluating the merits and risks of an investment in the common
stock of the Company.

 

(5)                                                                                The
undersigned investor hereby represents that it is a corporation, a
Massachusetts or similar business trust, partnership, or an organization exempt
under Section 501(c)(3) of the Internal Revenue Code, which has not
been formed for the specific purpose of acquiring the securities offered, and
which has total assets in excess of $5,000,000.

 

(6)                                                                                The
undersigned investor hereby represents that it is a partnership, corporation or
other entity all of whose equity owners satisfy one or more of the conditions
set forth in (1) though (5), and a certification as to such status by each
such equity owner is attached hereto.

 

(7)                                                                                The
undersigned investor hereby represents that he/she/it is an accredited investor
not described above, based on the following information:

 

 

(8)                                                                                The
undersigned investor hereby represents that he/she/it is not an accredited
investor.

 

(k)                                  The
undersigned has not distributed the documents or other information received
from the Company, or this Agreement to anyone other than his/her legal, tax,
accounting and/or financial advisors, and no one except such representatives
has used such documents, and the undersigned has not made any copies
thereof.  The undersigned agrees that
he/she shall keep confidential all information until such time as it is made
public by an authorized representative of the Company.

 

5.             Certain
Agreements Respecting Compliance with Securities Laws.  The certificates of the Company that will
evidence the Notes for which the undersigned subscribes hereby will be
imprinted with conspicuous legends in substantially the following form:

 

THIS SECURITY HAS NOT BEEN REGISTERED UNDER THE
SECURITIES ACT OF 1933, AS AMENDED (THE “SECURITIES ACT”), ANY STATE SECURITIES
LAWS OR ANY OTHER APPLICABLE SECURITIES LAW. 
NEITHER THIS SECURITY NOR ANY INTEREST OR PARTICIPATION HEREIN MAY BE
REOFFERED, SOLD, ASSIGNED,

 

3

 

TRANSFERRED, PLEDGED, ENCUMBERED OR OTHERWISE DISPOSED
OF IN THE ABSENCE OF SUCH REGISTRATION OR UNLESS SUCH TRANSACTION IS EXEMPT
FROM, OR NOT SUBJECT TO, THE REGISTRATION REQUIREMENTS OF THE SECURITIES ACT
AND ANY APPLICABLE STATE SECURITIES LAWS. 
THE HOLDER OF THIS SECURITY BY ITS ACCEPTANCE HEREOF AGREES TO OFFER,
SELL OR OTHERWISE TRANSFER THIS SECURITY ONLY (A) TO THE COMPANY, (B) PURSUANT
TO A REGISTRATION STATEMENT THAT HAS BEEN DECLARED EFFECTIVE UNDER THE
SECURITIES ACT, OR (C) PURSUANT TO ANY OTHER AVAILABLE EXEMPTION FROM THE
REGISTRATION REQUIREMENTS OF THE SECURITIES ACT, SUBJECT TO THE COMPANY’S RIGHT
PRIOR TO ANY SUCH OFFER, SALE OR TRANSFER TO REQUIRE THE DELIVERY OF AN OPINION
OF COUNSEL, CERTIFICATION AND/OR OTHER INFORMATION SATISFACTORY TO IT.

 

The undersigned agrees that the Notes being subscribed for hereby will
not be transferable under any circumstances except upon the conditions
specified in this Section 5 and in accordance with the other restrictions
herein contained.  The undersigned realizes
that by becoming a holder of  securities
subject to the restrictions set forth in the aforesaid legend, the undersigned
agrees, prior to any transfer, to give written notice to the Company expressing
the desire of the undersigned to effect such transfer and describing briefly
the proposed transfer. Upon receiving such notice, the Company shall present
copies thereof to counsel to the Company and the following provisions shall
apply:

 

(a)           If, in
the opinion of such counsel, the proposed transfer may be effected without
registration under the Act and the State Acts, the Company will promptly
thereafter notify the holder thereof, whereupon such holder shall be entitled
to transfer such securities in accordance with the terms of the notice
delivered by such holder to the Company and upon such further terms and
conditions as shall be required by the Company to assure compliance with the
Act and the State Acts; and the Company will deliver, upon surrender of the
certificate representing such securities, in exchange therefor, a new
certificate representing such securities, which new certificate may not bear a
legend of the character set forth above if such counsel agrees that such legend
is no longer required under the Act and the State Acts.

 

(b)           If, in
the opinion of such counsel, the proposed transfer may not be effected without
registration under the Act and the State Acts, a copy of such opinion shall be
delivered promptly to the holder who has proposed such transfer, and such
proposed transfer shall not be made unless such registration is then in effect.

 

(c)           Notwithstanding
anything contained herein, the Note may be pledge or hypothecated by the
undersigned in connection with a bona fide loan obtained for the purpose of
funding the initial purchase of the Notes from the Company, provided that the
Company is advised of such pledge or hypothecation and the lender provides the
acknowledgement in the form attached as Exhibit A.  The undersigned agrees to provide copies of
any such loan and pledge agreements to the Company upon request.

 

6.             Rejection or Termination of Subscription Agreement.  This Agreement may be rejected in whole or in
part by the Company, and the Company may terminate or cancel the offering to
which this Agreement relates, in its sole and absolute discretion at any time
prior to the Closing of the sale of Notes under this Agreement.

 

7.             Notices.  Any notices or other communications required
or permitted hereby shall be given by registered or certified U.S. first-class
mail, postage prepaid, return receipt requested; if to the Company, at the
address at the head of this Agreement, and if to the undersigned, at the
address set forth below his/her signature hereto, or to such other address as
either the Company or the undersigned shall designate to the other by notice in
writing. All such notices and other communications shall be deemed to be
received when given, as aforesaid.

 

8.             Successors
and Assigns.  This Agreement shall be
binding upon the Company and shall inure to the benefit of the Company and its
successors and assigns.  This Agreement
shall be binding upon and inure to the benefit of the undersigned and his/her
heirs, personal and legal representatives and guardians.

 

Neither this Agreement nor any part of it shall be assignable by the undersigned.

 

9.             Maryland
Law.  This Agreement shall be
governed by and construed and enforced in accordance with the laws of the State
of Maryland applicable to agreements to be performed entirely within such
state, and without

 

4

 

reference to the choice or conflict of laws principles thereof, and to
the extent it involves any United States statute, in accordance with the laws
of the United States.

 

[Remainder of page intentionally blank]

 

5

 

IN WITNESS WHEREOF, the undersigned has executed, sealed and delivered
this Agreement this             day
of                             ,
2008.

 

	
   

  	
   

  	
   

  
	
  (Witness)

  	
   

  	
  (Signature of
  Subscriber)

  

 

	
  Name:

  	
   

  	
  Age:

  
	
   

  	
   

  	
   

  
	
  Residence Address:

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  Business Address:

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  Telephone No.: Office:

  	
   

  	
  Residence:

  
	
   

  	
   

  	
   

  
	
  Email Address:

  	
   

  	
  Social Security No.:

  
	
   

  	
   

  	
   

  
	
  Check to
  indicate to which address mailings should be directed:

  	
   

  	
  o  Business

  	
  o  Residence

  

 

The name or names to be on the Note certificate or certificates and the
address and Social Security Number/Tax Identification Number of such person(s) or
entity(s) is as follows:

 

Name:

 

Address:

 

SSN/TIN:

 

THE NOTES HAVE NOT BEEN REGISTERED UNDER THE
SECURITIES ACT OF 1933, AS AMENDED, OR ANY STATE SECURITIES OR BLUE SKY LAWS,
AND MAY NOT BE OFFERED, SOLD OR OTHERWISE TRANSFERRED UNLESS THE NOTES ARE
INCLUDED IN AN EFFECTIVE REGISTRATION STATEMENT UNDER SUCH ACTS OR AN OPINION
OF COUNSEL HAS BEEN DELIVERED TO THE EFFECT THAT SUCH REGISTRATION IS NOT REQUIRED.

 

AN INVESTMENT IN THE SECURITIES OFFERED HEREBY
INVOLVES A HIGH DEGREE OF RISK.  NO
PERSON SHOULD INVEST IN THE NOTES UNLESS HE OR SHE CAN BEAR THE LOSS OF HIS OR
HER ENTIRE INVESTMENT.

 

THE OFFERING IS BEING MADE ONLY TO PERSONS TO WHOM
IT IS DELIVERED BY THE COMPANY AND THIS AGREEMENT SHALL NOT CONSTITUTE AN OFFER
TO SELL OR THE SOLICITATION OF AN OFFER TO BUY THE SECURITIES OFFERED HEREBY TO
ANY OTHER PERSON.

 

THE SECURITIES OFFERED HEREBY HAVE NOT BEEN
APPROVED OR DISAPPROVED BY THE SECURITIES AND EXCHANGE COMMISSION NOR HAS THE
COMMISSION OR THE SECURITIES COMMISSION OF ANY STATE PASSED UPON OR ENDORSED
THE MERITS OF THE OFFERING.  ANY
REPRESENTATION TO THE CONTRARY IS A CRIMINAL OFFENSE.

 

THE SECURITIES OFFERED HEREBY ARE NOT A SAVINGS
ACCOUNT OR DEPOSIT OF ANY BANK OR OTHER INSURED DEPOSITARY INSTITUTION, AND IT
IS NOT INSURED BY THE UNITED STATES OR ANY AGENCY OR FUND OF THE UNITED STATES,
INCLUDING THE FEDERAL DEPOSIT INSURANCE CORPORATION.

 

6

 

FORM OF PLEDGEE’S ACKNOWLEDGEMENT AND AGREEMENT

 

TO:         Eagle Bancorp, Inc.

 

The undersigned hereby advises Eagle Bancorp, Inc. (the “Company”)
that the undersigned is the holder of a valid lien, security interest or other
encumbrance (the “pledge”) secured by the below described Subordinated Notes
due 2014 of the Company (the “Notes”).

 

The undersigned acknowledges that it has been provided with a copy of
the Subscription Agreement submitted by the registered holder of the Notes (the
“Agreement”), and that such Agreement contains limitations on the ability to
transfer and sell the Notes, which such limitations are prescribed for the
purpose of protecting the exemption from registration under the Securities Act
of 1933, as amended and comparable provisions of state securities laws pursuant
to which the Notes were issued without registration.

 

The undersigned hereby acknowledges and agrees that the transfer
provisions of the Agreement are applicable to the Notes and that it shall abide
by and comply with such provisions in the event that the undersigned acquires
the Notes pursuant to the terms of the pledge agreement between the undersigned
and the registered holder.  This
agreement shall be binding upon the undersigned and the undersigned’s estate,
heirs, successors, assigns, transferees and personal representatives.

 

IN WITNESS WHEREOF, the undersigned has set its hand, duly authorized,
as of this       day of     , 20    .

 

 

	
   

  	
   

  
	
   

  	
  Name:

  
	
   

  	
  Title:

  
	
   

  	
  Organization:

  

 

Pledged Securities:

 

Note Certificate No:

 

Initial Principal Amount:

 

Name of Registered Holder:Exhibit 10.1

 

SECOND AMENDED AND RESTATED PROMISSORY NOTE

 

	
  $4,000,000.00

  	
  June 25,
  2008

  

 

FOR VALUE
RECEIVED, MESA OFFSHORE TRUST, a trust formed under the laws of the State of
Texas and having an address at 919 Congress Avenue, Austin, Texas 78701, by and
through JPMORGAN CHASE BANK, N.A (as successor to Texas Commerce Bank National Association),
solely in its capacity as Trustee (in such capacity, the “Trustee”) for
MESA OFFSHORE TRUST (the “Borrower”) pursuant to the Royalty Trust
Indenture dated as of December 1, 1982 (the “Trust Indenture”), by
and between Mesa Petroleum Co., as Trustor, and the Trustee, promises to pay on
the Maturity Date (as defined below), to the order of  JPMORGAN CHASE BANK,
N.A.  (the “Lender”),
whose address is 1111 Polaris Parkway, Columbus, Ohio 43240, at said address or
such other address as may be designated in writing by the holder hereof from
time to time, the principal sum of  FOUR MILLION
AND No/100 Dollars ($4,000,000.00), or, if less, the aggregate unpaid principal
amount of all loans (collectively, the “Loans”, and each a “Loan”)
made by the Lender to the Borrower, together with interest on said principal,
at a rate per annum equal to Prime Rate plus two percent (2%); provided, however, that in no event shall such rate exceed
the maximum legal rate of interest permitted by applicable law.  The Borrower promises to pay interest on the
unpaid principal amount of each Loan from the date such Loan is made until such
principal amount is paid in full, in arrears, at the interest rate specified
herein.  As used herein the term “Prime
Rate” means the rate of interest from time to time announced publicly by
the Lender at its principal office as its prime commercial lending rate, it
being understood that such rate is not necessarily the lowest or best rate
actually charged to any customer and that the Lender may make various
commercial or other loans at rates of interest having no relationship to such
rate.

 

This Second Amended
and Restated Promissory Note (the “Note”) evidences an extension of
credit for borrowed money authorized under Section 3.07 of the Trust
Indenture, and amends, restates, renews and extends the Amended and Restated Promissory
Note dated December 3, 2007 executed by the Borrower to the order of the
Lender (the “Amended Note”).  On
the date hereof, the outstanding principal amount of Demand Loans, under and as
defined in the Amended Note, is Two million eight hundred sixty seven thousand
eight hundred forty seven dollars and seventeen cents ($2,867,847.17), and all
such Demand Loans shall be Loans hereunder. 
This Note shall have the priority with regard to payments set forth in Section 3.07
of the Trust Indenture, and the Borrower agrees to comply with Section 3.07
of the Trust Indenture with regards to distributions to its unitholders.

 

The Borrower
may prepay all or any portion of the outstanding principal under this Note
together with accrued and unpaid interest on such principal, at any time
without premium or penalty; provided, however,
that any principal amount so repaid may not be reborrowed.

 

Except with
respect to interest on the principal amount of the Loans prepaid hereunder,
interest on the Loans shall be due and payable on the Maturity Date.  Interest on the outstanding principal as well
as the outstanding principal balance of the Loans shall be recorded by the
Lender on its books and records (which may be electronic in nature) and at any
time and 

 

1

 

from time to
time and may be entered by the Lender on the schedule attached or any
continuation of the schedule attached hereto by the Lender; provided,
however, at the discretion of the Lender, any such entries may
aggregate Loans (and payments thereon) with the same interest rate and tenor
and, if made on a given date, may show only the Loans outstanding on such date.

 

Until the
Maturity Date has occurred and so long as no Event of Default exists, the
Borrower may obtain Loans under this Note; provided, however,
the amount of Loans made hereunder (without regard to any repayment or
prepayment thereof) shall not exceed $4,000,000.00.  As used herein, the term “Event of Default”
means the occurrence of any one or more of the following events: (1) the
Borrower fails to pay any amount of principal or interest when due hereunder, (2) the
Borrower or the Trustee is declared insolvent or is the subject of any
proceeding in bankruptcy, (3) the sale of all or substantially all of the
assets of Mesa Offshore Royalty Partnership (the “Partnership”), and (4) the
commencement of any litigation (other than the Lawsuit, defined below,),
directly or indirectly, by any Trustee or any current Plaintiff or Intervenor
in the Lawsuit, defined below, including successors or assigns, against the
Lender in its individual capacity for any claim arising out of or relating to
the Mesa Offshore Trust.  As used herein,
the term “Maturity Date” means the earliest to occur of: (1) December 31,
2009 (the “Stated Maturity Date”), (2) the date that is thirty-one
(31) calendar days  after the
Borrower receives any settlement proceeds, recovery or judgment proceeds
arising out of Cause No. 2006-01984, MOSH Holding, L.P. et al. (the
“Plaintiffs and the Intervenors”) v. Pioneer Natural Resources Company;
Pioneer Natural Resources USA, Inc., Woodside Energy (USA), Inc., and
JPMorgan Chase Bank, N.A., as Trustee of the Mesa Offshore Trust,
filed in the 334th District Court of Harris County, Texas (the “Lawsuit”),
(3) the final liquidation of the Borrower’s assets or the assets of the
Partnership, (4) except for the liens securing this Note or any contingent
fee agreement with an attorney, the Borrower grants or permits to exist any
mortgage, pledge or security interest in, or other encumbrance on, its assets
without the prior written consent of the Lender, and (5) the acceleration
of the maturity of this Note by the Lender as a result of the existence of an
Event of Default.  If either (1) an
Event of Default exists or (2) the Maturity Date has occurred, the Lender
shall have no further obligation to advance any additional Loans to the
Borrower hereunder.

 

In the event
that the Lawsuit has not been resolved by settlement or final adjudication by December 31,
2009, and neither (1) an Event of Default exists nor (2) none of the
events referred to in clauses (2) through (6) of the definition of
Maturity Date has occurred, the Borrower may request an extension of the Stated
Maturity Date.

 

In the event
the maturity of this Note may be brought about (whether by acceleration or
otherwise) and it is placed in the hands of an attorney for collection, or is
collected through probate, bankruptcy or other proceedings, the Borrower
promises to pay all reasonable amounts actually incurred by the Lender for
court costs and attorneys’ fees in connection therewith.

 

The Borrower
waives grace, notice, demand, presentment for payment, notice of non-payment,
protest, notice of protest, notice of intention to accelerate the indebtedness
due hereunder and all other notice, filing of suit and diligence in collecting
this Note, and the enforcing of any of the security rights of the Lender, and
consents and agrees that the time of payment hereof may be extended without
notice at any time and from time to time, and for 

 

2

 

periods of
time, whether or not for a term or terms in excess of the original term hereof,
without notice or consideration to, or consent from, the Borrower.  Time is of the essence hereof.

 

The
indebtedness evidenced by this Note, as an amendment, restatement,  renewal and extension of the Original Note,
and is secured by a pledge of the Trust Estate, as that term is defined in the
Trust Indenture, including, without limitation, the 99.99% general partnership
interest in the Mesa Offshore Royalty Partnership owned by the Mesa Offshore
Trust, pursuant to that one certain pledge agreement dated June 25, 2008, executed
by the Borrower for the benefit of the Lender, as amended by the Second Amendment
to Pledge Agreement dated the date hereof.

 

This Note is
not assignable or transferable.

 

THIS NOTE SHALL BE GOVERNED BY, AND CONSTRUED
IN ACCORDANCE WITH, THE LAWS OF THE STATE OF TEXAS.

 

EXECUTED by
the parties hereto as of the date first written above.

 

 

	
   

  	
  MESA OFFSHORE TRUST,

  
	
   

  	
  a Texas trust

  
	
   

  	
   

  
	
   

  	
  By: The Bank of New York Trust Company, N.
  A.

  as attorney-in-fact for JPMORGAN CHASE

  BANK, N.A. Trustee

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
    /s/
  MIKE ULRICH

  
	
   

  	
  Name: 

  	
  Mike Ulrich

  
	
   

  	
  Title:

  	
  Vice President

  
	
   

  	
   

  	
   

  
	
   

  	
  JPMORGAN CHASE BANK, N.A.,

  
	
   

  	
  a national banking association

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
    /s/
  DAVID A. WEISBROD

  
	
   

  	
  Name: 

  	
  David A. Weisbrod

  
	
   

  	
  Title:

  	
  Managing Director

  
				

 

3

 

LOANS AND PAYMENTS OF PRINCIPAL

 

	
  Date

  	
   

  	
  Amount of Loan

  	
   

  	
  Amount of

  Principal Paid

  or Prepaid

  	
   

  	
  Unpaid

  Principal

  Balance

  	
   

  	
  Notation Made

  By

  	
   

  
	
   

  	
   

  	
  $

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
											

 

4

Source: [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00147-of-00352.parquet"}, [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00147-of-00352.parquet"}]]