Mortgage Agreement Securing Commercial Promissory Note for Mineral Interests

Contract Categories: Real Estate Mortgage Agreements
Summary

This agreement is between a Mortgagor and a Mortgagee, where the Mortgagor grants a mortgage over specified mineral interests to secure repayment of a commercial promissory note. The Mortgagor must repay the note, pay all related taxes and charges, and maintain the property. If the Mortgagor defaults, the Mortgagee may take action to protect its interests, including foreclosure. The agreement also covers successors and assigns, and outlines procedures for notices and handling liens. The mortgage includes all improvements, rights, and future additions to the mineral interests.

EX-10.3 3 ex10-3.txt 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 hereby 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 Mortgagor'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. 1 This grant is being made by said Mortgagor 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 2 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 Mortgagor: (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 Mortgagor 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 3 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. MORTGAGOR 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 Mortgagor'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 Mortgagor'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 Mortgagor, subject to the provisions of Section Eleven. Mortgagor's covenants and agreements shall be joint and 4 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 Mortgagor'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. 5 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 Mortgagor'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 6 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. 7 Mortgagor 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 8 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: Shackelford 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: Shackelford 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 9