MODIFICATION OF LIEN DOCUMENTS
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STATE OF TEXAS
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COUNTIES OF EASTLAND
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AND
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This
instrument is executed as of July 3, 2008, by ▇▇▇▇▇▇▇ ▇▇▇▇ DRILLING, INC. (a/k/a
▇▇▇▇▇▇▇ ▇. ▇▇▇▇ Drilling, Inc.), a Nevada corporation (“Grantor”), ▇▇▇▇ ▇▇▇▇▇▇▇
▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇, and HD SPECIAL-SITUATIONS, LP (“Lender”), whose
address is ▇▇▇ ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇,
for the purpose of modifying certain liens and security interests to secure
payment of the indebtedness owing to Lender under the Second Note Purchase
Agreement (defined below).
On
May
20, 2008, Knight Energy Corp. (“Borrower”) and ▇▇▇▇▇▇ entered into that certain
Note Purchase Agreement (the "First Note Purchase Agreement"), and pursuant
thereto Borrower has executed and delivered to Lender three (3) 15% Senior
Secured Promissory Notes payable to Lender in the aggregate principal amount
of
$1,500,000.00, and having a final maturity date of May 20, 2010 (collectively,
the "Prior Notes").
Payment
of the Prior Notes and the obligations of Borrower under the First Note Purchase
Agreement are secured, in part, by first liens and first security interests
created or described in the lien documents executed by Grantor in favor of
▇▇▇▇▇▇, affecting certain oil and gas properties of Grantor, and recorded as
described in Exhibit "A" attached (collectively the "Lien Documents"). The
oil
and gas properties covered by the Lien Documents will be referred to
collectively as the "Mortgaged Properties." For further reference, the original
Lien Documents may be found in the files of Lender at the above address.
Pursuant
to a Note Purchase Agreement of even date herewith between Borrower and Lender
(the “Second Note Purchase Agreement”), ▇▇▇▇▇▇▇▇ has executed and delivered to
Lender or after the date hereof will execute and deliver to Lender one or more
15% Senior Secured Promissory Notes payable to Lender in the aggregate principal
amount of $2,500,000.00, and having a final maturity date of May 20, 2010
(collectively, the "Additional Notes").
Grantor
and ▇▇▇▇▇▇ desire to renew and modify the Lien Documents to provide that they
secure the obligations of Borrower under the Second Note Purchase Agreement
and
payment of the Additional Notes, in addition to the obligations of Borrower
under the First Note Purchase Agreement and payment of the Prior Notes.
In
consideration of the loans represented by the Second Note Purchase Agreement
and
the Additional Notes, and for other valuable consideration, the receipt and
adequacy of which are hereby acknowledged, Grantor and ▇▇▇▇▇▇ agree as follows:
(a)
The
Lien Documents are amended to secure payment of the Additional Notes, including
the obligations of Borrower under the Second Note Purchase Agreement, and any
and all additional promissory notes that may be executed by Borrower under
the
Second Note Purchase Agreement, and the liens and security interests created
by
or described in the Lien Documents are renewed and extended until the Prior
Notes and the Additional Notes are paid in full and all obligations and
commitments (including the “Secured Indebtedness,” as defined in sub-clause (b)
below) under the First Note Purchase Agreement and the Second Note Purchase
Agreement are satisfied or terminated.
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(b) The
defined term "Secured Indebtedness" as set forth in the Lien Documents is hereby
amended to include, together with all items currently included in such
definition of Secured Indebtedness, (i) all indebtedness and obligations of
Borrower arising pursuant to the terms of the Second Note Purchase Agreement,
(ii) the Additional Notes and any other promissory notes issued pursuant to
the
Second Note Purchase Agreement, and (iii) any and all amendments to, extensions
of, or substitutes for any of the foregoing indebtedness, obligations and
liabilities or any part thereof.
(c)
The
Lien Documents, as amended hereby, are ratified, confirmed, and acknowledged
to
be valid, subsisting, and binding upon Grantor; no uncured breaches or defaults
exist under the Lien Documents; and no event has occurred or circumstance exists
which with the passing of time or giving of notice, will constitute a default
or
breach under the Lien Documents. There are no defenses or offsets with respect
to the First Note Purchase Agreement, the Prior Notes, the Second Note Purchase
Agreement, the Additional Notes, or the Lien Documents.
(d)
It is
the intention of Grantor and Lender that the Lien Documents shall cover and
include any and all of Grantor’s right, title and interest in and to any of the
oil, gas and mineral leases, other interests in oil, gas or other minerals,
and
other items of real and personal property described or covered by the Lien
Documents, including without limitation any right, title and interest of any
kind in any of the lands covered by such leases and mineral interests, whether
such right, title and interest of Grantor was or is acquired by Grantor before,
simultaneously with, or after the inception of such Lien Documents and whether
such right, title and interest of Grantor was or is acquired before,
simultaneously with, or after the date of this instrument and notwithstanding
any fractional quantities of ownership interest which may be set out in the
description of the property in any of the Lien Documents.
(e)
Grantor will execute all additional deeds of trust, mortgages, renewals,
extensions, or other related documents required by Lender to evidence the liens
and security interests of ▇▇▇▇▇▇.
To
secure
the Secured Indebtedness (as amended in sub-clause (b) above), Grantor has
granted, bargained, sold, mortgaged, assigned, transferred and conveyed and
by
these presents does grant, bargain, sell, mortgage, assign, transfer and convey
unto Grantor and unto ▇. ▇▇▇▇▇▇▇ ▇▇▇▇▇▇, as Trustee, and his respective
successors and substitutes in trust hereunder for the use and benefit of Lender,
all of Grantor’s right, title and interest, whether now owned or hereafter
acquired, in and to the Mortgaged Properties. TO HAVE AND TO HOLD the Mortgaged
Properties, together with the rights, privileges and appurtenances now owned
or
hereafter acquired at any time before the release of the Lien Documents in
anywise belonging or appertaining thereto, unto Lender and unto the Trustee
named above and to his successors and assigns, forever to secure the payment
of
the Secured Indebtedness and the performance of the agreements and covenants
of
Borrower and Grantor herein contained and in the First Note Purchase Agreement
and the Second Note Purchase Agreement.
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This
instrument is binding upon and inures to the benefit of the parties hereto
and
their respective successors and assigns.
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GRANTOR:
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| ▇▇▇▇▇▇▇ ▇▇▇▇ DRILLING, INC. | |
| (a/k/a ▇▇▇▇▇▇▇ ▇. ▇▇▇▇ Drilling, Inc.) | |
| a Nevada corporation |
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By:
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▇▇▇▇▇
▇. ▇▇▇▇, Chief Financial Officer and
Director
of Knight Energy Corp., the Sole
Stockholder
of ▇▇▇▇▇▇▇ ▇▇▇▇ Drilling, Inc.
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LENDER:
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HD
SPECIAL-SITUATIONS, LP
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By:
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▇▇▇▇
▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇, Managing Member
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THE
STATE OF TEXAS
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§
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§
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COUNTY
OF _____________
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§
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The
foregoing instrument was acknowledged before me this ____ day of July, 2008
by
▇▇▇▇▇ ▇. ▇▇▇▇, Chief Financial Officer and Director of Knight Energy Corp.,
the
Sole Stockholder of ▇▇▇▇▇▇▇ ▇▇▇▇ Drilling, Inc., a Nevada corporation, on behalf
of said corporation.
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Notary
Public, State of Texas
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STATE
OF CALIFORNIA
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§
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§
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COUNTY OF __________________
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§
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This
instrument was acknowledged before me on this ___ day of July, 2008, by ▇▇▇▇
▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇, Managing Member of HD Special-Situations, LP, a limited
partnership, on behalf of said limited partnership.
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the
State of California
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(PERSONALIZED
SEAL)
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When
Recorded, Return To:
▇▇▇▇▇▇
▇▇▇▇▇ ▇▇▇▇▇▇▇ & ▇▇▇▇▇▇▇, L.L.P.
▇▇▇
▇▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇
Fort
Worth, Texas 76102
Attn:
▇.
▇▇▇▇▇▇▇ ▇▇▇▇▇▇
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EXHIBIT
“A”
Lien
Documents
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NO.
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TEXAS
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INSTRUMENT
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FILING
INFO.
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1.
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Eastland
County
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Deed
of Trust, Mortgage, Security Agreement, Assignment of Production
and
Financing Statement dated May 20, 2008
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Filed:
05/22/2008
Document
No.: 02801749
Volume:
2597, Page 59
Official
Records
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2.
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▇▇▇▇▇▇▇▇
County
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Deed
of Trust, Mortgage, Security Agreement, Assignment of Production
and
Financing Statement dated May 20, 2008
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Filed:
05/22/2008
Document
No.: 1510
Volume:
1931, Page 162
Official
Public Records
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