EXHIBIT 10.3
MORTGAGE
XXXXXXXXXXXXXXXXX (Names of Mortgagor) (hereinafter Mortgagor), whose address is
XXXXXXXXXXXXXXX (address, city, state, zip code), for consideration paid, the
receipt and sufficiency of which is xxxxxx acknowledged, grants this mortgage to
XXXXXXXXXXXXXXXXX (hereinafter Mortgagee), whose address XXXXXXXXXXXXXXXX
(address, city, state and zip code), in the following described mineral
interests located in XXXXXX:
XXXXXXXXXXXX
This Mortgage and security instrument secures to Mortgagee: (a) the repayment of
the performance of the following obligations: (a) the repayment of the
Commercial Promissory Note described below and all renewals, extensions, and
modifications; (b) the payment of all other sums, with interest, advanced under
the terms of this Mortgage, or said Note to protect the security of this
Mortgage and security instrument; and (c) the performance of Xxxxxxxxx's
covenants and agreements under this Mortgage and security instrument.
Said Commercial Promissory Note is that certain Commercial Promissory Note dated
XXXXXXX (date), in the amount of $XXXXXXXXX, with interest at the rate of XXXXXX
percent (XXXX%), to be paid as follows:
One payment constituting the entire balance on or before XXXXX.
A copy of said Commercial Promissory Note is attached hereto as Exhibit B, and
is a made a part hereto by reference. Said Note is being made and given upon the
statutory Mortgage condition for the breach of which it is subject to
foreclosure as provided by law.
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This grant is being made by said Xxxxxxxxx together with all the improvements
now or to be instilled on the Mineral Interests, and all easements, rights,
appurtenances, rents, royalties, mineral, oil and gas rights and profits, water
rights and stock and all fixtures now or to become a part of the Mineral
Interests. All replacements and additions shall also be covered by this security
instrument. All of the foregoing is referred to in this security instrument as
the Mineral Interests.
Mortgagor covenants that Mortgagor is lawfully seized of the estate conveyed by
this security instrument and has the right to mortgage, grant, and convey the
Mineral Interests and that the Mineral Interests are unencumbered. Mortgagor
warrants and will defend generally the title to the Mineral Interests against
all claims and demands, subject to any encumbrances of record.
Mortgagor and Mortgagee covenant and agree as follows:
I. PAYMENT OF PRINCIPAL AND INTEREST; PREPAYMENT AND LATE CHARGES
Mortgagor shall promptly pay, when due, the principal of the debt evidenced by
the Note and late charges due under the Note.
II. APPLICATION OF PAYMENTS
Unless applicable law provides otherwise, all payments received by Mortgagee
under Section One shall be applied: first, to late charges due under the Note;
second, to any interest due after default; and last, to principal due.
III. CHARGES; LIENS
Mortgagor shall pay all taxes, assessments, charges, fines, and impositions
attributable to the Mineral Interests that may attain priority over this
security instrument, and leasehold payments or ground rents, if any. Mortgagor
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shall pay these obligations on time directly to the person owed payment.
Mortgagor shall promptly furnish to Mortgagee all notices of amounts to be paid
under this paragraph. If Mortgagor makes these payments directly, Mortgagor
shall promptly furnish to Mortgagee receipts evidencing the payments.
Mortgagor shall promptly discharge any lien that has priority over this security
instrument unless Xxxxxxxxx: (a) agrees in writing to the payment of the
obligation secured by the lien in a manner acceptable to Mortgagee; (b) contests
in good faith the lien by, or defends against enforcement of the lien in, legal
proceedings which in the Mortgagee's opinion operate to prevent the enforcement
of the lien or forfeiture of any part of the Property; or (c) secures from the
holder of the lien an agreement satisfactory to Mortgagee subordinating the lien
to this security instrument. If Mortgagee determines that any part of the
Mineral Interests are subject to a lien that may attain priority over this
security instrument, Mortgagee may give Mortgagor a notice identifying the lien.
Mortgagor shall satisfy the lien or take one or more of the actions set forth
above within Ten (10) days of the giving of notice.
IV. PRESERVATION AND MAINTENANCE OF MINERAL INTERESTS; LEASEHOLDS
Mortgagor shall not destroy, damage, or substantially change the Property, allow
the Mineral Interests to deteriorate, or commit waste. If this security
instrument is on a leasehold, Mortgagor shall comply with the provisions of the
lease, and if Mortgagor acquires fee title to the Mineral Interests, the
leasehold and fee title shall not merge unless Mortgagee agrees to the merger in
writing.
V. PROTECTION OF MORTGAGEE'S RIGHTS IN THE MINERAL INTERESTS; MORTGAGE INSURANCE
If Xxxxxxxxx fails to perform the covenants and agreements contained in this
security instrument, or there is a legal proceeding that may significantly
affect Mortgagee's rights in the Mineral Interests (such as a proceeding in
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bankruptcy, probate, for condemnation, or to enforce laws or regulations), then
Mortgagee may do and pay for whatever is necessary to protect the value of the
Mineral Interests and Mortgagee's rights in the Mineral Interests. Mortgagee's
actions may include paying any sums secured by a lien that has priority over
this security instrument, appearing in court, paying reasonable attorney's fees,
and entering on the Mineral Interests to make repairs. Although Mortgagee may
take action under this paragraph, Mortgagee does not have to do so.
Any amounts disbursed by Mortgagee under this Section shall become additional
debt of Mortgagor secured by this security instrument. Unless Mortgagor and
Mortgagee agree to other terms of payment, these amounts shall bear interest
from the date of disbursement at the Note rate and shall be payable, with
interest, on notice from Mortgagee to Mortgagor requesting payment.
VI. XXXXXXXXX NOT RELEASED; FORBEARANCE BY MORTGAGEE NOT A WAIVER
Extension of the time for payment or modification of amortization of the sums
secured by this security instrument granted by Mortgagee to any successor in
interest of Mortgagor shall not operate to release the liability of the original
Mortgagor or Xxxxxxxxx's successors in interest. Mortgagee shall not be required
to commence proceedings against any successor in interest or refuse to extend
the time for payment or otherwise modify amortization of the sums secured by
this security instrument by reason of any demand made by the original Mortgagor
or Xxxxxxxxx's successors in interest. Any forbearance by Mortgagee in
exercising any right or remedy shall not be a waiver of or preclude the exercise
of any right or remedy.
VII. SUCCESSORS AND ASSIGNS BOUND; JOINT AND SEVERAL LIABILITY
The covenants and agreements of this security instrument shall bind and benefit
the successors and assigns of Mortgagee and Xxxxxxxxx, subject to the provisions
of Section Eleven. Mortgagor's covenants and agreements shall be joint and
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several. Any Mortgagor who cosigns this security instrument but does not execute
the Note: (a) is cosigning this security instrument only to Mortgage, grant, and
convey that Xxxxxxxxx's interest in the Mineral Interests under the terms of
this security instrument; (b) is not personally obligated to pay the sums
secured by this security instrument; and (c) agrees that Mortgagee and any other
Mortgagor may agree to extend, modify, forbear, or make any accommodations with
regard to the terms of this security instrument or the Note without that
Mortgagor's consent.
VIII. NOTICES
Any notice to Mortgagor provided for in this security instrument shall be given
by delivering it or by mailing it by first class mail unless applicable law
requires the use of another method. The notice shall be directed to the Mineral
Interests address or any other address Mortgagor designates by notice to
Mortgagee. Any notice to Mortgagee shall be given by first class mail to
Mortgagee's address stated in this security instrument or any other address
Mortgagee designates by notice to Mortgagor. Any notice provided for in this
security instrument shall be deemed to have been given to Mortgagor or Mortgagee
when given as provided in this paragraph.
IX. GOVERNING LAW; SEVERABILITY
This security instrument shall be governed by federal law and the law of New
Mexico in which the Mineral Interests are located. If any provision or clause of
this security instrument or the Note conflicts with applicable law, the conflict
shall not affect other provisions of this security instrument or the Note which
can be given effect without the conflicting provision. To this end the
provisions of this security instrument and the Note are declared to be
severable.
X. MORTGAGOR'S COPY
Mortgagor shall be given one conformed copy of the Note and of this security
instrument.
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XI. TRANSFER OF THE PROPERTY OR A BENEFICIAL INTEREST IN MORTGAGOR
If all or any part of the Mineral Interests or any interest in it is sold or
transferred (or if a beneficial interest in Mortgagor is sold or transferred and
Mortgagor is not a natural person) without Mortgagee's prior written consent,
Mortgagee may, at its option, require immediate payment in full of all sums
secured by this security instrument. However, this option shall not be exercised
by Mortgagee if its exercise is prohibited by federal law as of the date of this
security instrument.
If Mortgagee exercises this option, Mortgagee shall give Mortgagor notice of
acceleration. The notice shall provide a period of not less than Thirty (30)
days from the date the notice is delivered or mailed within which Mortgagor must
pay all sums secured by this security instrument. If Mortgagors fails to pay
these sums prior to the expiration of this period, Mortgagee may invoke any
remedies permitted by this security instrument without further notice or demand
on Mortgagor.
XII. ACCELERATION; REMEDIES
Mortgagee shall give notice to Mortgagor prior to acceleration following
Xxxxxxxxx's breach of any covenant or agreement in this security instrument. The
notice shall specify: (a) the default; (b) the action required to cure the
default; (c) a date, not less than Thirty (30) days from the date the notice is
given to Mortgagor, by which the default must be cured; and (d) that failure to
cure the default on or before the date specified in the notice may result in
acceleration of the sums secured by this security instrument, foreclosure by
judicial proceeding, and sale of the Mineral Interests. If the default is not
cured on or before the date specified in the notice, Mortgagee at its option may
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require immediate payment in full of all sums secured by this security
instrument without further demand and may foreclose this security instrument by
judicial proceeding. Mortgagee shall be entitled to collect all expenses
incurred in pursuing the remedies provided in this paragraph, including, but not
limited to, reasonable attorney's fees and the costs of title evidence.
XII. MORTGAGEE IN POSSESSION
Upon acceleration, or abandonment of the Mineral Interests, Mortgagee (in
person, by agent, or by judicially appointed receiver) shall be entitled to
enter on, take possession of, and manage the Mineral Interests and to collect
the rents of the Mineral Interests including those past due. Any rents collected
by Mortgagee or the receiver shall be applied first to the payment of the costs
of management of the Mineral Interests and collection of rents, including, but
not limited to, receiver's fees, premiums on receiver's bonds, and reasonable
attorney's fees, and then to the sums secured by this security instrument.
XIII. RELEASE
On payment of all sums secured by this security instrument, Mortgagee shall
release this security instrument without charge to Mortgagor. Mortgagor shall
pay any recordation costs.
XIV. REDEMPTION PERIOD
If this security instrument is foreclosed, the redemption period after judicial
sale shall be one month.
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Xxxxxxxxx accepts and agrees to the terms and covenants contained in this
security instrument.
WITNESS OUR SIGNATURES this _____ day of __________________, 2011.
Black Rock Capital, LLC,
A Texas Limited Liability Company
By: _____________________________
Manager
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EXHIBIT A
Attached to and made a part of that certain Mortgage in Lea County, New Mexico,
dated April 29, 2011 between Black Rock Capital, LLC. and Red Mountain
Resources, Inc., including all right, title, interest plus any well bores.
List of Oil & Gas Leases
Lease No. 1 Allocated Value
Lessor; United States of America $474,790.00
Lessee: Xxxxxxxxxxx Oil Company
Lease Number NM-65441
Lease Date: 4/1/1983
Recording: Unrecorded
Land Description: Township 26 South-Range 34 East,
Section 24: All,
Section 25: All
Lease Status: HBP
Gross Acres: 1280
Net Acres: 507.75
Lea County, New Mexico
Lease No. 2
Lessor: United States of America $4,273,110.00
Lessee: Xxxxxxxxxxx Oil Company
Lease Number-NM-93223
Lease Date: 6/1/1994
Recording: Unrecorded
Land Description: Township 26 South-Range 35 East,
Section 18: SE/4, E/2SW/4, Lot 3, 4
Section 19: Lots 1, 2, 3, & 4, E/2W/2
Lease Status: HBP
Gross and Net Acres: 645.60
Lea County, New Mexico
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