Partial Assignment of Assets

This Partial Assignment of Assets (the " Assignment ") is made and entered into, effective as of December 31, 2012 (the " Effective Date "), by and between Rantoul Partners , a Delaware general partnership (" Assignor "), and Working Interest, LLC , a Kansas limited liability company (" Assignee "), with reference to the following facts:

Recitals:

A.           Pursuant to that certain Contribution Agreement dated December 14, 2011 (the " Contribution Agreement ") by and among EnerJex Resources, Inc., a Nevada corporation (" EnerJex "), Assignor, Viking Energy Partners, LLC, a Texas limited liability company (“ Viking ”), and FL Oil Holdings, LLC, a Florida limited liability company (“ FL Oil ”), EnerJex, Viking, and FL Oil previously formed Assignee pursuant to that certain General Partnership Agreement of Assignee dated December14, 2011 (the " Partnership Agreement ").

B.           In accordance with the Partnership Agreement, EnerJex, Viking and FL Oil have agreed to dissolve Assignor and distribute Assignor’s assets to EnerJex, Viking and FL Oil (or their respective designees) in accordance with their then-current ownership interest percentage in Assignor.

C.           As of the Effective Date, EnerJex owns seventy-five percent (75%) of ownership interests in Assignor (the “ EnerJex’s Ownership Percentage ”).

D.           Assignor owns those certain leasehold interests listed on Appendix 1 hereto (together with all rights, interests and benefits directly and indirectly related thereto, the " Rantoul Project Assets ").

E.           Assignor has agreed to assign to Assignee, as EnerJex’s designee, EnerJex’s Ownership Percentage in and to the Rantoul Project Assets.

Agreements:

Now, Therefore , in consideration of the premises and promises contained herein, it is hereby agreed as follows:

1.           Partial Assignment of Rantoul Project Assets. Assignor hereby sells, conveys, transfers, sets over and ASSIGNS to Assignee EnerJex’s Ownership Percentage of all of Assignor's right, title and interest in and to the Rantoul Project Assets (the “ Transferred Assets ”). Assignee hereby accepts such assignment, and agrees to perform the obligations of Assignor under the Rantoul Project Assets for all periods following the Effective Date of this Assignment.

2.           Representation and Warranty. Assignor agrees to warrant and defend, all and singular, unto Assignee, the Transferred Assets, by, through and under Assignor but not otherwise. Notwithstanding any limitation in the foregoing, Assignee shall have full rights of substitution and subrogation in and to all warranties and covenants heretofore given by others to Assignor and/or its predecessors-in-title, with respect to the Transferred Assets or any part thereof.

3.           Further Assurances . Upon the request of any party, each of the undersigned shall make, execute, and deliver such documents and instruments, and shall take such other steps, as may be reasonably necessary to carry into effect the assignment and delegation contemplated by this Assignment.

4.           Miscellaneous . This Assignment shall be governed by and construed in accordance with the internal laws of the State of Kansas (without regard to the conflict-of-law principles thereunder). Upon the request of either party, each of the undersigned shall make, execute, and deliver such documents and instruments, and shall take such other actions, as may be reasonably necessary to carry into effect the agreements described in this Assignment. This Assignment (a) represents the entire understanding between the parties regarding the subject matter hereof, and supersedes and replaces all prior and contemporaneous understandings, whether oral or written, regarding such subject matter, and (b) may not be modified or amended, except by a written agreement executed after the effective date hereof by the party sought to be charged by such modification or amendment. This Assignment may be executed in counterparts, each of which shall be deemed an original and both of which, taken together, shall constitute one and the same instrument, binding on each signatory thereto. A copy of this Assignment that is executed by a party and transmitted by that party to the other party by facsimile or as an attachment ( e.g ., in ".tif" or ".pdf" format) to an email shall be binding upon the signatory to the same extent as a copy hereof containing that party's original signature.

[ Signature and Acknowledgment page follows. ]

In Witness Whereof , the undersigned have executed this Assignment, effective as of the Effective Date.

Acknowledgment

On _________________before me, _____________________________, Notary Public, personally appeared _________________________________________________________ who proved to me on the basis of satisfactory evidence to be the person(s) whose name(s) is/are subscribed to the within instrument and acknowledged to me that he/she/they executed the same in his/her/their authorized capacity(ies) and that by his/her/their signature(s) on the instrument the person(s), or the entity upon behalf of which the person(s) acted, executed the instrument.

I certify under PENALTY OF PERJURY under the laws of the State of ________ that the foregoing paragraph is true and correct.

WITNESS my hand and official seal.

Acknowledgment

On _________________before me, _____________________________, Notary Public, personally appeared _________________________________________________________ who proved to me on the basis of satisfactory evidence to be the person(s) whose name(s) is/are subscribed to the within instrument and acknowledged to me that he/she/they executed the same in his/her/their authorized capacity(ies) and that by his/her/their signature(s) on the instrument the person(s), or the entity upon behalf of which the person(s) acted, executed the instrument.

I certify under PENALTY OF PERJURY under the laws of the State of ________ that the foregoing paragraph is true and correct.

Appendix 1

Rantoul Project Assets

FOURTH AMENDMENT TO

AMENDED AND RESTATED CREDIT AGREEMENT

THIS FOURTH AMENDMENT TO AMENDED AND RESTATED CREDIT AGREEMENT (this “ Fourth Amendment ”) is entered into and effective as of the Fourth Amendment Closing Date (as defined below) among ENERJEX RESOURCES, INC. , a Nevada corporation (“ Parent ”), ENERJEX KANSAS, INC. (f/k/a Midwest Energy, Inc.), a Nevada corporation (“ EnerJex Kansas ”), DD ENERGY, INC. , a Nevada corporation (“ DD Energy ”), Working Interest, LLC , a Kansas limited liability company (“ Working Interest ”) and BLACK SABLE ENERGY, LLC , a Texas limited liability company (“ Black Sable ”) (each, a “ Borrower ” and, collectively, “ Borrowers ”) and TEXAS CAPITAL BANK, N.A. , a national banking association, as a Bank, L/C Issuer and Administrative Agent (in such latter capacity and together with its successors and permitted assigns in such capacity the “ Administrative Agent ”), and the several banks and financial institutions from time to time parties to the Credit Agreement, as defined below (the “ Banks ”). Capitalized terms used but not defined in this Fourth Amendment have the meaning given them in the Credit Agreement.

RECITALS

A.           Borrowers, Administrative Agent, L/C Issuer and Banks previously entered into that certain Amended and Restated Credit Agreement dated as of October 3, 2011 (as amended by the First Amendment thereto dated December 14, 2011 (the “ First Amendment ”), the Second Amendment thereto dated August 31, 2012, the Third Amendment thereto dated November 2, 2012 and as amended, restated, supplemented or otherwise modified from time to time, the “ Credit Agreement ”).

B.           Pursuant to the Credit Agreement, Borrowers previously executed and delivered an Amended and Restated Note dated October 3, 2011, payable to the order of each Bank in the face principal amount of Fifty Million and No/100 Dollars ($50,000,000) and certain other Loan Documents.

C.           Parent previously entered into the Contribution Agreement by and among Rantoul, Parent and the Rantoul Investors, pursuant to which EnerJex Kansas contributed the Rantoul Project Assets to Rantoul in order to enable Rantoul to develop such Rantoul Project Assets.

D.           In accordance with the Contribution Agreement, EnerJex Kansas previously assigned, conveyed, transferred and contributed all of its right, title and interest in and to the Rantoul Project Assets to Rantoul (the “ Rantoul Assignment ”).

E.           In consideration of the Rantoul Assignment, Rantoul issued certain partnership interests to EnerJex Kansas which were immediately thereafter assigned to Parent such that (a) Rantoul became a Subsidiary of Parent and (b) Parent became Rantoul’s managing partner.

F.           Pursuant to the First Amendment and other Loan Documents executed and delivered in connection therewith, (a) Rantoul became a Guarantor pursuant to a Limited Guaranty, (b) Rantoul granted Liens (and assumed, ratified and confirmed the existing Liens on the Rantoul Project Assets) to the extent of Parent’s Beneficial Interest, and (c) Parent granted a Lien on all of Parent’s Rantoul partnership interests.

G.           In accordance with the Rantoul GP Agreement, the Rantoul Partners desire to (a) dissolve Rantoul (the “ Rantoul Dissolution ”) and (b) distribute (or cause the distribution of) the Rantoul Assets to each Rantoul Partner (or its designee) (the “ Rantoul Distribution ”) in accordance with each Rantoul Investors’ Final Beneficial Interest Percentage (as defined below).

H.           In connection with the Rantoul Distribution, Parent desires to assign, convey and transfer Parent’s Final Beneficial Interest (as defined below) to Working Interest pursuant to that certain Assignment of Assets dated as of the Fourth Amendment Closing Date (the “ Working Interest Assignment ”).

I.           Borrowers have requested that Administrative Agent and Banks consent to the Rantoul Dissolution, the Rantoul Distribution and the Working Interest Assignment.

J.           Administrative Agent and Banks desire to consent to the Rantoul Dissolution, the Rantoul Distribution and the Working Interest Assignment (such transactions, collectively, the “ Restructuring Transactions ”) subject to Working Interest granting Liens to the extent of Parent’s Final Beneficial Interest in and to the assets under the Working Interest Assignment.

K.          Borrowers, Administrative Agent, L/C Issuer and Banks have agreed to amend the Credit Agreement, subject to the terms and conditions of this Fourth Amendment.

AGREEMENT

NOW THEREFORE, for good and valuable consideration, the receipt and sufficiency of which are acknowledged, the undersigned hereby agree as follows:

I.             Specific Amendments to Credit Agreement .

A.            Article I, Definitions , of the Credit Agreement is hereby amended by adding the following definitions in their proper alphabetical order:

“ Fourth Amendment ” means the Fourth Amendment to Amended and Restated Credit Agreement dated effective as of the Fourth Amendment Closing Date by and among Borrowers, Administrative Agent, L/C Issuer and Banks.

“ Fourth Amendment Closing Date ” means December __, 2012.

“ Parent’s Final Beneficial Interest ” means Parent’s beneficial ownership of the Rantoul Assets calculated based on Parent’s Final Beneficial Interest Percentage.

“ Parent’s Final Beneficial Interest Percentage ” means seventy-five percent (75%).

“ Rantoul Dissolution ” is defined in Recital G to the Fourth Amendment.

“ Rantoul Distribution ” is defined in Recital G to the Fourth Amendment.

“ Rantoul Investors’ Final Beneficial Interest ” means the Rantoul Investors’ Beneficial Interest calculated based on the Rantoul Investors’ Final Beneficial Interest Percentage.

“ Rantoul Investors’ Final Beneficial Interest Percentage ” means twenty-five percent (25%).

“ Restructuring Transactions ” is defined in Recital J to the Fourth Amendment.

“ Working Interest Assignment ” is defined in Recital H to the Fourth Amendment.

II.            Schedule 5.13 . Upon satisfaction of all conditions precedent set forth in Article IV of this Fourth Amendment, Schedule 5.13 attached to the Credit Agreement is hereby deleted in its entirety and replaced with Schedule 5.13 attached to this Fourth Amendment and each reference in the Loan Documents to such Schedule 5.13 shall be deemed to refer to Schedule 5.13 attached to this Fourth Amendment.

III.           Consent to Certain Transactions . Subject to the terms of this Fourth Amendment, Administrative Agent and Banks hereby consent to (a) the Restructuring Transactions, including, without limitation, the Rantoul Dissolution, the Rantoul Distribution, and the Working Interest Assignment and (b) the termination of the Limited Guaranty executed by Rantoul in favor of Administrative Agent and Banks.

IV.           Conditions Precedent to Fourth Amendment . This Fourth Amendment shall be effective once each of the following conditions have been satisfied in Administrative Agent’s sole discretion on or before the Fourth Amendment Closing Date:

(a)          Borrowers, Administrative Agent and Banks shall have executed and delivered this Fourth Amendment (including, without limitation, all schedules, exhibits and annexes to be attached hereto and incorporated herein);

(b)          Working Interest shall have executed and delivered an amendment to the Collateral Documents granting a Lien in and to the Rantoul Assets assigned to Working Interest pursuant to the Working Interest Assignment and any other Collateral Documents that Administrative Agent may reasonably request;

(c)          Borrowers shall have delivered executed copies of the Working Interest Assignment and evidence of the Rantoul Dissolution, each in form and content satisfactory to Administrative Agent;

(d)          Borrowers shall have delivered to Administrative Agent such other documents as Administrative Agent may request, including without limitation, partnership resolutions of Rantoul authorizing and acknowledging the Restructuring Transaction, in each case, in form and content satisfactory to Administrative Agent; and

(e)          Administrative Agent shall have received, in form and content satisfactory to it, such other assurances, certificates, documents or consents related to the foregoing as Administrative Agent may request.

V.           Representations, Warranties and Covenants . Borrowers represent and warrant to Administrative Agent and Banks that (a) they possess all requisite Corporate Power and authority to execute, deliver and comply with the terms of this Fourth Amendment and the Restructuring Transactions, (b) this Fourth Amendment and the Restructuring Transactions have been duly authorized and approved by all requisite Corporate Action on the part of the Borrowers, (c) no other consent of any Person (other than Administrative Agent and Banks) is required for this Fourth Amendment and the Restructuring Transactions to be effective, (d) the execution and delivery of this Fourth Amendment and the Restructuring Transactions does not violate their Governing Documentation, (e)  the representations and warranties in each Loan Document to which they are a party are true and correct in all material respects on and as of the Fourth Amendment Closing Date as though made on the Fourth Amendment Closing Date, (f)  they are in full compliance with all covenants and agreements contained in each Loan Document to which they are a party, (g) no Event of Default or Default has occurred and is continuing, and (h) except as may be addressed in this Fourth Amendment, no exhibit or schedule to the Credit Agreement is required to be supplemented, amended or modified in connection with the transactions contemplated by this Fourth Amendment or any other matters occurring prior to the Fourth Amendment Closing Date. In particular, but without limiting the generality of the foregoing, Exhibit A attached to the Credit Agreement, as amended by this Fourth Amendment or any prior amendment, describes all of Borrowers’ Borrowing Base Oil and Gas Properties. The representations and warranties made in this Fourth Amendment shall survive the execution and delivery of this Fourth Amendment. No investigation by Administrative Agent or any Bank is required for Administrative Agent or any Bank to rely on the representations and warranties in this Fourth Amendment.

VI.           Scope of Amendment; Reaffirmation; Release . All references to the Credit Agreement shall refer to the Credit Agreement as amended by this Fourth Amendment. Except as affected by this Fourth Amendment, the Loan Documents are unchanged and continue in full force and effect. However, in the event of any inconsistency between the terms of the Credit Agreement (as amended by this Fourth Amendment) and any other Loan Document, the terms of the Credit Agreement shall control and such other document shall be deemed to be amended to conform to the terms of the Credit Agreement. Borrowers hereby reaffirm their obligations under the Loan Documents to which they are a party to and agree that all Loan Documents to which they are a party to remain in full force and effect and continue to be legal, valid, and binding obligations enforceable in accordance with their terms (as the same are affected by this Fourth Amendment). Borrowers hereby release, discharge and acquit Administrative Agent, L/C Issuer and Banks from any and all claims, demands, actions, causes of action, remedies, and liabilities of every kind or nature (including without limitation, offsets, reductions, rebates, or lender liability) arising out of any act, occurrence, transaction or omission occurring in connection with the Credit Agreement and the other Loan Documents prior to the Fourth Amendment Closing Date.

VII.        Miscellaneous .

(a)           No Waiver of Defaults . This Fourth Amendment does not constitute (i) a waiver of, or a consent to, (A) any provision of the Credit Agreement or any other Loan Document, or (B) any present or future violation of, or default under, any provision of the Loan Documents, or (ii) a waiver of Administrative Agent’s or any Bank’s right to insist upon future compliance with each term, covenant, condition and provision of the Loan Documents.

(b)           Form . Each agreement, document, instrument or other writing to be furnished to Administrative Agent under any provision of this Fourth Amendment, if any, must be in form and substance satisfactory to Administrative Agent and its counsel.

(c)           Headings . The headings and captions used in this Fourth Amendment are for convenience only and will not be deemed to limit, amplify or modify the terms of this Fourth Amendment, the Credit Agreement, or the other Loan Documents.

(d)           Costs, Expenses and Attorneys’ Fees . Borrowers agree to pay or reimburse Administrative Agent on demand for all its reasonable out-of-pocket costs and expenses incurred in connection with the preparation, negotiation, and execution of this Fourth Amendment, including, without limitation, the reasonable fees and disbursements of Administrative Agent’s counsel.

(e)           Successors and Assigns . This Fourth Amendment shall be binding upon and inure to the benefit of each of the undersigned and their respective successors and permitted assigns.

(f)           Multiple Counterparts . This Fourth Amendment may be executed in any number of counterparts with the same effect as if all signatories had signed the same document. All counterparts must be construed together to constitute one (1) and the same instrument. This Fourth Amendment may be transmitted and signed by facsimile or portable document file (pdf). The effectiveness of any such documents and signatures shall, subject to applicable law, have the same force and effect as manually-signed originals and shall be binding on Borrowers, Administrative Agent, L/C Issuer and Banks. Administrative Agent may also require that any such documents and signatures be confirmed by a manually-signed original; provided that the failure to request or deliver the same shall not limit the effectiveness of any facsimile document or signature.

(g)           Governing Law . This FOURTH Amendment and the other Loan Documents must be construed, and their performance enforced, under Texas law .

(h)           Entirety . The Loan Documents (as amended hereby) Represent the Final Agreement By and Among Borrowers, Administrative Agent, L/C Issuer and Banks and May Not Be Contradicted by Evidence of Prior, Contemporaneous, or Subsequent Oral Agreements by the Parties. There Are No Unwritten Oral Agreements between the Parties.

(Signature pages follow)

IN WITNESS WHEREOF, this Fourth Amendment is executed effective as of the Fourth Amendment Closing Date.

Signature Page to Fourth Amendment

Signature Page to Fourth Amendment

SCHEDULE 5.13

SUBSIDIARIES

Subsidiaries of EnerJex Resources, Inc.

Subsidiaries of EnerJex Kansas, Inc.

None.

Subsidiaries of DD Energy, Inc.

None.

Subsidiaries of Working Interest, LLC

None.

Subsidiaries of Black Sable Energy, LLC

None.

Schedule 5.13

FIRST AMENDMENT TO AMENDED AND RESTATED MORTGAGE, SECURITY AGREEMENT, FINANCING STATEMENT AND ASSIGNMENT OF PRODUCTION AND REVENUES

Among

working interest, llc

(Mortgagor and Debtor)

And

texas capital bank, n.a.

 (Mortgagee and Secured Party)

For purposes of filing this instrument as a financing statement, the mailing address of Mortgagor/Debtor is 4040 broadway, suite 305, san antonio, texas 78209; the mailing address of Mortgagee/Secured Party is ONE RIVERWAY, SUITE 2100, HOUSTON, TEXAS 77056.

THIS INSTRUMENT AND/OR THE MORTGAGE INSTRUMENT IT AMENDS CONTAINS AFTER-ACQUIRED PROPERTY PROVISIONS, AND COVERS FUTURE ADVANCES AND PROCEEDS. INTERESTS IN OIL, GAS, MINERALS AND OTHER AS-EXTRACTED COLLATERAL OR IN ACCOUNTS RESULTING FROM THE SALE THEREOF, WHICH ARE INCLUDED IN THE MORTGAGED PROPERTY, WILL BE FINANCED AT WELLHEADS LOCATED ON THE LANDS OR LANDS ASSOCIATED WITH PIPELINE DESCRIBED OR REFERRED TO IN EXHIBIT “A ” HERETO.

PERSONAL PROPERTY CONSTITUTING A PORTION OF THE MORTGAGED PROPERTY MAY BE OR MAY IN THE FUTURE BECOME AFFIXED TO THE LANDS OR LANDS ASOCIATED WITH PIPELINE DESCRIBED OR REFERRED TO IN EXHIBIT “A ” HERETO.

A POWER OF SALE HAS BEEN GRANTED IN THIS INSTRUMENT, OR TO THE INSTRUMENT IT AMENDS, TO THE EXTENT PERMITTED UNDER KANSAS LAW. A POWER OF SALE MAY ALLOW THE MORTGAGEE TO TAKE THE MORTGAGED PROPERTY AND SELL IT WITHOUT GOING TO COURT IN A FORECLOSURE ACTION UPON DEFAULT BY THE MORTGAGOR UNDER THIS INSTRUMENT.

THIS FINANCING STATEMENT IS TO BE FILED, AMONG OTHER PLACES, IN THE REAL ESTATE RECORDS AND INDEXED AS BOTH A MORTGAGE AND A FINANCING STATEMENT.

*********************************

This instrument was prepared by Matthew D. Lea, PORTER HEDGES LLP, 1000 Main Street, 36 ^th Floor, Houston, Texas 77002.

ATTENTION OF RECORDING OFFICER : This instrument and/or the mortgage instrument it amends 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, referred to, or referred to in the documents described in Exhibit “A ” hereto and/or Exhibit “A ” to the Mortgage (as defined below).

RECORDED DOCUMENT SHOULD BE RETURNED TO:

PORTER HEDGES LLP

1000 Main Street, 36 ^th Floor

Houston, Texas 77002

Attn: Ephraim del Pozo

FIRST AMENDMENT TO AMENDED AND RESTATED MORTGAGE,

SECURITY AGREEMENT, FINANCING STATEMENT AND ASSIGNMENT OF

PRODUCTION AND REVENUES

This FIRST AMENDMENT TO AMENDED AND RESTATED MORTGAGE, SECURITY AGREEMENT, FINANCING STATEMENT AND ASSIGNMENT OF PRODUCTION AND REVENUES (this “ First Amendment ”) is executed as of the ___ day of December, 2012 (the “ Effective Date ”) by WORKING INTEREST, LLC , a Kansas limited liability company, whose mailing address is 4040 Broadway, Suite 305, San Antonio, Texas 78209 (“ Mortgagor ”), and TEXAS CAPITAL BANK, N.A. , a national banking association, the banking quarters for which are in Texas, and the mailing address for which is One Riverway, Suite 2100, Houston, Texas 77056, as Collateral Agent (“ Mortgagee ”).

RECITALS

WHEREAS, Mortgagor, EnerJex Resources, Inc., EnerJex Kansas, Inc., DD Energy, Inc., EnerJex Resources, Inc., and Black Sable Energy, LLC, as Borrowers, and Mortgagee, as Administrative Agent, LC Issuer and a Bank, entered into that certain Amended and Restated Credit Agreement dated as of October 3, 2011 (as amended, restated, supplemented or otherwise modified from time to time, the “ Credit Agreement ”; capitalized terms used but not defined herein shall have the meanings given such terms in the Credit Agreement);

WHEREAS, in connection with the Credit Agreement, Mortgagor executed and delivered that certain Amended and Restated Mortgage, Security Agreement, Financing Statement and Assignment of Production and Revenues (“ Original Mortgage ”) dated October 3, 2011 in favor of Mortgagee, which Original Mortgage, has been recorded, among other places, as set forth on Exhibit “B” attached hereto; and

WHEREAS, Mortgagor and Mortgagee desire to amend the Original Mortgage to, among other things, (i) secure the payment of indebtedness owed or to be owing to Mortgagee by Mortgagor pursuant to the terms of the Credit Agreement, and (ii) amend Exhibit “A-1” to the Original Mortgage and thereby supplement the Original Mortgage by the inclusion of additional properties, all such properties to be a part of the Mortgaged Property (as defined in the Original Mortgage).

AGREEMENTS

NOW THEREFORE, in consideration of the premises and for other good and valuable consideration received by each party hereto, the receipt and sufficiency of all of which are hereby acknowledged, Mortgagor and Mortgagee hereby agree that the Mortgage is hereby amended as follows:

1.              Amendments . Effective as of the Effective Date, Exhibit “A-1 ” to the Original Mortgage is hereby amended by adding thereto the properties described on Exhibit “A-1 ” to this First Amendment, which, together with all related real, personal and mixed property, shall become for all purposes part of the “Mortgaged Property” referred to in the Original Mortgage, and, to secure payment and performance of the Secured Indebtedness (as defined in the Original Mortgage) and the performance of the covenants and obligations contained therein and secured thereby, Mortgagor does hereby GRANT, BARGAIN, SELL, CONVEY, TRANSFER AND ASSIGN to the Mortgagee all liens, security interests, assignments and other rights in and to the Mortgaged Property (as added to the Original Mortgage by this First Amendment) to the fullest extent provided for in said Original Mortgage. The interests listed on Exhibit “A-1 ” to this First Amendment are in addition to, and not inclusive of, the interests listed on Exhibit “A-1 ” to the Original Mortgage.

2.              Restatement of Grants . To secure payment and performance of the Secured Indebtedness (as defined in the Original Mortgage) and the performance of the covenants and obligations contained therein and secured thereby, Mortgagor does hereby GRANT, BARGAIN, SELL, CONVEY, TRANSFER AND ASSIGN to Mortgagee all liens, security interests, assignments and other rights in and to the Mortgaged Property added to the Original Mortgage by this First Amendment to the fullest extent provided for in the Original Mortgage. In furtherance of this intent, the terms and provisions of Article I of the Original Mortgage are hereby incorporated into this instrument as if set out in their entirety herein, and are hereby ratified, confirmed and reasserted as to the Mortgaged Property described on Exhibit “A-1” hereto as herein amended and supplemented. The grant and assignment made in this Section 2 is in addition and supplementary to and not in lieu, derogation or replacement of the grant and assignment made in the Original Mortgage.

3.              Ratifications . The terms and provisions set forth in this First Amendment shall modify and supersede all inconsistent terms and provisions set forth in the Original Mortgage and, except as expressly modified and superseded by this First Amendment, the terms and provisions of the Original Mortgage are ratified and confirmed and shall continue in full force and effect. By execution of this First Amendment, Mortgagor does hereby adopt, ratify and reaffirm, as of the date hereof, all of Mortgagor’s warranties, representations, and covenants set forth in the Original Mortgage and in the Credit Agreement. All representations, warranties and covenants of Mortgagor in the Original Mortgage (as amended by this First Amendment) are hereby repeated, remade and incorporated herein by this reference for the benefit of Mortgagee. All liens, security interests, assignments and other rights created by Mortgagor for the benefit of Mortgagee in or under the Original Mortgage are hereby extended, renewed and carried forward by this First Amendment and incorporated herein. Mortgagor and Mortgagee agree that the Original Mortgage, as modified hereby, shall continue to be legal, valid, binding and enforceable in accordance with its terms. Mortgagor and Mortgagee further agree that this First Amendment is not intended to be, nor shall it be construed to create, a novation or accord and satisfaction.

4.              Addresses . For purposes of filing this First Amendment as an amendment to a financing statement, the addresses for Mortgagor, as the debtor, and Mortgagee, as the secured party, are as set forth hereinabove.

5.              Successors and Assigns. This First Amendment is binding upon Mortgagor and its successors and permitted assigns and shall inure to the benefit of Mortgagee and its successors and assigns. For the avoidance of doubt, Mortgagor may not assign or transfer any of its rights or obligations hereunder without the prior written consent of Mortgagee.

6.              Final Agreement . THIS WRITTEN AGREEMENT REPRESENTS THE FINAL AGREEMENT BETWEEN THE PARTIES WITH RESPECT TO THE SUBJECT MATTER HEREOF AND MAY NOT BE CONTRADICTED BY EVIDENCE OF PRIOR, CONTEMPORANEOUS OR SUBSEQUENT ORAL AGREEMENTS OF THE PARTIES. THERE ARE NO UNWRITTEN ORAL AGREEMENTS BETWEEN THE PARTIES.

7.              Governing Law. THE SUBSTANTIVE LAWS OF THE STATE OF KANSAS (AND WHERE APPLICABLE, THE UNITED STATES OF AMERICA) SHALL GOVERN THE VALIDITY, CONSTRUCTION, ENFORCEMENT AND INTERPRETATION OF THIS FIRST AMENDMENT, UNLESS OTHERWISE SPECIFIED HEREIN OR UNLESS THE LAWS OF ANOTHER STATE SHALL MANDATORILY APPLY

8.              Multiple Counterparts . For the convenience of the parties, this First Amendment may be executed in multiple counterparts. 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 First Amendment.

[Signature and Acknowledgment Pages Follow]

Executed as of the date set forth in the notary block below but effective as of the Effective Date.

ACKNOWLEDGMENT

The foregoing instrument was acknowledged before me on this ____________ day of December, 2012 by Robert G. Watson, Jr., as Chief Executive Officer of Working Interest, LLC, a Kansas limited liability company, on behalf of said limited liability company.

Signature and Acknowledgment Page to First Amendment to to Amended and Restated Mortgage, Security Agreement, Financing Statement and Assignment of Production and Revenues

ACKNOWLEDGMENT

This foregoing instrument was acknowledged before me on this  ____________ day of December, 2012 by W. David McCarver IV, as Senior Vice President of Texas Capital Bank, N.A., a national banking association, on behalf of said banking association.

Signature and Acknowledgment Page to First Amendment to to Amended and Restated Mortgage, Security Agreement, Financing Statement and Assignment of Production and Revenues

EXHIBIT “A”

TO

first AMENDMENT TO amended and restated MORTGAGE, SECURITY AGREEMENT, FINANCING STATEMENT AND ASSIGNMENT OF PRODUCTION AND REVENUES

( Oil and Gas Properties )

EXHIBIT “B”

TO

first AMENDMENT TO amended and restated MORTGAGE, SECURITY AGREEMENT, FINANCING STATEMENT AND ASSIGNMENT OF PRODUCTION AND REVENUES

[End of Exhibit “B”]

MORTGAGE, SECURITY AGREEMENT, FINANCING STATEMENT AND

ASSIGNMENT OF PRODUCTION AND REVENUES

FROM

WORKING INTEREST, LLC

(Mortgagor and Debtor)

TO

TEXAS CAPITAL BANK, N.A.

(Mortgagee and Secured Party)

For purposes of filing this instrument as a financing statement, the mailing address of Mortgagor/Debtor is 4040 Broadway, Suite 305, San Antonio, Texas 78209; the mailing address of Mortgagee/Secured Party is ONE RIVERWAY, SUITE 2100, HOUSTON, TEXAS 77056.

THIS INSTRUMENT CONTAINS AFTER-ACQUIRED PROPERTY PROVISIONS, AND COVERS FUTURE ADVANCES AND PROCEEDS. INTERESTS IN OIL, GAS, MINERALS AND OTHER AS-EXTRACTED COLLATERAL OR IN ACCOUNTS RESULTING FROM THE SALE THEREOF, WHICH ARE INCLUDED IN THE MORTGAGED PROPERTY, WILL BE FINANCED AT WELLHEADS LOCATED ON THE LANDS OR LANDS ASSOCIATED WITH PIPELINE DESCRIBED IN EXHIBIT A-1 AND EXHIBIT A-2 HERETO.

PERSONAL PROPERTY CONSTITUTING A PORTION OF THE MORTGAGED PROPERTY MAY BE OR MAY IN THE FUTURE BE AFFIXED TO THE LANDS OR LANDS ASSOCIATED WITH PIPELINE DESCRIBED IN EXHIBIT A-1 AND EXHIBIT A-2 HERETO.

A POWER OF SALE HAS BEEN GRANTED IN THIS INSTRUMENT TO THE EXTENT PERMITTED UNDER KANSAS LAW. A POWER OF SALE MAY ALLOW THE MORTGAGEE TO TAKE THE MORTGAGED PROPERTY AND SELL IT WITHOUT GOING TO COURT IN A FORECLOSURE ACTION UPON DEFAULT BY THE MORTGAGOR UNDER THIS INSTRUMENT.

THIS FINANCING STATEMENT IS TO BE FILED, AMONG OTHER PLACES, IN THE REAL ESTATE RECORDS AND INDEXED AS BOTH A MORTGAGE AND A FINANCING STATEMENT.

*********************************

This instrument was prepared by Matthew D. Lea, PORTER HEDGES LLP, 1000 Main Street, 36 ^th Floor, Houston, Texas 77002.

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, referred to, or referred to in the documents described, in Exhibit A-1 and Exhibit A-2 hereto.

RECORDED DOCUMENT SHOULD BE RETURNED TO:

PORTER HEDGES LLP

1000 Main Street, 36 ^th Floor

Houston, Texas 77002

Attn: Matthew D. Lea

MORTGAGE, SECURITY AGREEMENT, FINANCING STATEMENT

AND ASSIGNMENT OF PRODUCTION and revenues

( THIS INSTRUMENT CONTAINS AFTER-ACQUIRED PROPERTY PROVISIONS )

Article I

GRANT OF LIENS AND SECURITY INTERESTS

KNOW ALL MEN BY THESE PRESENTS: That the undersigned WORKING INTEREST, LLC , a Kansas limited liability company (“ Mortgagor ”), whose mailing address is 4040 Broadway, Suite 305, San Antonio, Texas 78209, for valuable consideration, the receipt of which is hereby acknowledged, and in consideration of the debt, effective as of December __, 2012, has granted, bargained, sold, conveyed, transferred and assigned, and by these presents does GRANT, BARGAIN, WARRANT, SELL, CONVEY, MORTGAGE, PLEDGE, TRANSFER, ASSIGN AND SET OVER to TEXAS CAPITAL BANK, N.A., a national banking association, whose address is One Riverway, Suite 2100, Houston, Texas 77056, (“ Mortgagee ”), for itself, the Banks (as defined in the Credit Agreement), and for any Approved Counterparty (as defined in the Credit Agreement) under an Intercreditor Agreement (as defined in the Credit Agreement), all of Mortgagor’s rights, titles, interests and estates in and to the following property, whether real, personal or mixed, whether now owned or hereafter acquired under law or in equity (collectively, the “ Mortgaged Property ”); the inclusion of certain specific types and items of property and interests in one or more of the following Paragraphs are not intended in any way to limit the effect of the more general descriptions:

OIL AND GAS PROPERTIES

A.           All of Mortgagor’s rights, titles, interests and estates, now owned or hereafter acquired by Mortgagor, in and to those certain oil, gas and mineral leases, mineral interests, mineral servitudes, royalty interests, overriding royalty interests, production payments, net profits interests, fee interests, carried interests, reversionary interests and all other rights, titles, interests or estates described on Exhibit A-1 attached hereto and made a part hereof or in, on or under any lands described or referred to on Exhibit A-1 (the “ Lands ”), whether such rights, titles, interests or estates or such Lands are correctly described therein or not (all of which rights, titles, interests and estates described in this Paragraph A are hereinafter included within the term “ Subject Interests ”). The term “ oil, gas and mineral leases ,” as used in this instrument and in Exhibit A-1 includes, in addition to oil, gas and mineral leases, oil and gas leases, oil, gas and sulphur leases, other mineral leases, co-lessor’s agreements and extensions, amendments, ratifications and subleases of all or any of the foregoing, all as may be appropriate.

B.           All of Mortgagor’s rights, titles, interests and estates, now owned or hereafter acquired by Mortgagor, in and to present and future drilling, spacing, proration or production units, as created by the terms of any unitization, communitization and pooling agreements and orders, and all properties, property rights and estates created thereby which include, belong or appertain to the Subject Interests, including, without limitation, all such units formed voluntarily or under or pursuant to any Law relating to any of the Subject Interests. As used herein, the term “ Law ” means all applicable statutes, laws, ordinances, regulations, orders, writs, injunctions, or decrees of any state, commonwealth, nation, territory, possession, county, township, parish, municipality, or Tribunal, and the term “ Tribunal ” means any court or governmental department, commission, board, bureau, agency, or instrumentality of the United States or of any state, commonwealth, nation, territory, possession, county, parish, or municipality, whether now or hereafter constituted or existing.

C.           All oil, gas, casinghead gas, drip gasoline, natural gasoline, distillate, all other liquid or gaseous hydrocarbons produced or to be produced in conjunction therewith (including all as-extracted collateral), all products, by-products and all other substances derived therefrom or the processing thereof, and all other similar minerals, now owned or hereafter acquired by Mortgagor, now or hereafter accruing to, attributable to or produced from the Subject Interests or to which Mortgagor now or hereafter may be entitled as a result or by virtue of Mortgagor’s ownership of the Subject Interests (collectively, “ Hydrocarbons ”).

D.           All sulphur, lignite, coal, uranium, thorium, iron, geothermal steam, water, carbon dioxide, helium and all other minerals, ores or substances of value (whether similar to the foregoing or not), and the products and proceeds therefrom now owned or hereafter acquired by Mortgagor, including, without limitation, all gas resulting from the in-situ combustion of coal or lignite now or hereafter accruing to, attributable to or produced from the Subject Interests or to which Mortgagor now or hereafter may be entitled as a result of or by virtue of Mortgagor’s ownership of the Subject Interests (collectively, “ Other Minerals ”).

E.           All oil and gas wells, disposal and injection wells, rigs, improvements, fixtures, machinery and other equipment, inventory and articles of personal property or movables, wherever located, now owned or hereafter acquired by Mortgagor, including, without limitation, connection apparatus and flow lines from wells to tanks, wells, pipelines, gathering lines, trunk lines, lateral lines, flow lines, compressor, dehydration and pumping equipment, pumping plants, gas plants, processing plants, pumps, dehydration units, separators, heater treaters, valves, gauges, meters, derricks, rig substructures, buildings, tanks, reservoirs, tubing, rods, liquid extractors, engines, boilers, tools, appliances, cables, wires, tubular goods, machinery, supplies and any and all other equipment, inventory and articles of personal property of any kind or character whatsoever appurtenant to, or used or held for use in connection with the production of Hydrocarbons or Other Minerals from the Subject Interests, or now or hereafter located on any of the Lands encumbered by or pooled with any of the Subject Interests, or used on or about the Lands in connection with the operations thereon, together with all present and future improvements or products of, accessions, attachments and other additions to, tools, parts and equipment used in connection with, and substitutes and replacements for, all or any part of the foregoing (all of the types or items of property and interests described in this Paragraph E are hereinafter collectively referred to as the “ Personal Property ”).

F.           All rights, titles, interests and estates now owned or hereafter acquired by Mortgagor (including, without limitation, all rights to receive payments) under or by virtue of all easements, permits, licenses, rights-of-way, surface leases, franchises, servitudes, division orders, transfer orders and other agreements relating or pertaining to purchasing, exchanging, exploring for, developing, operating, treating, processing, storing, marketing or transporting Hydrocarbons now or hereafter found in, on or under, or produced from, any of the Subject Interests, or under or by virtue of any contract relating in any way to all or any part of the Mortgaged Property otherwise described herein, including, without limitation, farmout contracts, farmin contracts, operating or joint operating agreements, trade letter agreements and all agreements creating rights-of-way for ingress and egress to and from the Subject Interests (all of such rights, titles, interests and estates referred to or described in this Paragraph F are hereinafter collectively referred to as the “ Subject Contracts ”).

G.           All accounts (including, but not limited to, all open accounts receivable and accounts receivable arising under or pursuant to any joint operating agreements, division orders or other agreements, documents or instruments relating to any of the Subject Interests), general intangibles (including right to proceeds under Swap Contracts, as defined in the Credit Agreement), chattel paper, documents, instruments, cash and noncash proceeds and other rights, now owned or hereafter acquired by Mortgagor, arising from or by virtue of, or from the voluntary or involuntary sale or other disposition of, or collections with respect to, or insurance proceeds payable with respect to, or proceeds payable by virtue of warranty or other claims against manufacturers of, or claims against any other person or entity with respect to, all or any part of the Mortgaged Property described in this Paragraph G or otherwise (all of which types and items of property and interests described in this Paragraph G are hereinafter collectively referred to as the “ Accounts ”).

H.           All tenements, hereditaments, appurtenances, profits and properties in anyway appertaining, belonging, affixed or incidental to, or used or useful in connection with, all or any part of the properties and assets described herein, now owned or hereafter acquired by Mortgagor, including, without limitation, all reversions, remainders, carried interests, tolls, rents, revenues, issues, proceeds, earnings, income, products, profits, deposits, easements, permits, licenses, servitudes, surface leases, rights-of-way and franchises relating to all or any part of the Mortgaged Property.

PIPELINE

I.            All pipelines and gathering systems now owned and/or operated or hereafter acquired and/or operated by Mortgagor for the gathering, transmission, or distribution of Hydrocarbons including, without limitation, those pipelines and gathering systems described on Exhibit A-2 which is attached hereto, and any and all interests in real property relating thereto (collectively called the “ Pipelines ”).

J.           All tracts and parcels of real property described or referred to in Exhibit A-2 attached hereto, or the description of which is incorporated in Exhibit A-2 by reference to any other instrument or document associated with the Pipelines now owned or hereafter acquired by Mortgagor (collectively, the “ Lands Associated with Pipelines ”).

K .           All leases, leaseholds, easements, rights-of-way, licenses, franchises, privileges, permits, ordinances, grants, rights, consents, servitudes, surface leases or rights, amendatory grants and interests in land for the installation, maintenance and operation of the Pipelines or the assets associated with the Pipelines or any portion thereof, now owned or held or hereafter owned or held by Mortgagor including, without limitation, those leases, leaseholds, easements, rights-of-way, licenses, franchises, privileges, permits, ordinances, grants, rights, consents, servitudes, surface leases or rights, amendatory grants and interests in land applicable to the Pipelines or the Pipeline Assets now owned or held or hereafter owned or held by Mortgagor and those leases, leaseholds, easements, rights-of-way, licenses, franchises, privileges, permits, ordinances, grants, rights, consents, servitudes, surface leases or rights, amendatory grants and interests in land owned or held by Mortgagor and described on Exhibit A-2 attached hereto or arising by virtue of the documents described in Exhibit A-2 (collectively, the “ Rights-of-Way and Franchises ”).

L.           All other assets of Mortgagor now or hereafter situated on any of the Lands Associated with Pipelines or the Rights-of-Way and Franchises, including, without limitation, fixtures, improvements, equipment, surface or subsurface machinery, facilities, supplies, replacement parts, vehicles of every description, all process control computer systems and equipment or other property of whatsoever kind or nature, and including, without limitation, all buildings, structures, machinery, gas processing plants, stations, substations, pumps, pumping stations, meter houses, metering stations, regulator houses, ponds, tanks, scrapers and scraper traps, fittings, valves, connections, cathodic or electrical protection by-passes, regulators, drips, meters, pumps, pumping units, pumping stations, storage or tankage facilities, engines, pipes, gates, telephone and telegraph lines, electric power lines, poles, wires, casings, radio towers, fixtures, mechanical equipment, electrical equipment, machine shops and other equipment, used or useful in connection therewith; together with all of Mortgagor’s liquid hydrocarbons, carbon dioxide, natural gas liquids, refined petroleum products and other inventory fuels, carbon, chemicals, electric energy, and other consumable materials or products manufactured, processed, generated, produced, transmitted, stored (whether above or below ground) or purchased by Mortgagor for sale, exchange, distribution, consumption or transmission by Mortgagor, including, without limitation, off system gas, drip gas and line fill (collectively, the “ Pipeline Assets ”).

GENERAL

M.           All other interests of every kind and character which Mortgagor now owns or at any time hereafter acquires in and to the types and items of property and interests described in Paragraphs A, B, C, D, E, F, G, H, I, J, K and L preceding and all property which is used or useful in connection with the Mortgaged Property and the proceeds and products of all of the foregoing, whether now owned or hereafter acquired.

N.           To further secure the full and complete payment and performance of the Secured Indebtedness (defined below), Mortgagor, as debtor, hereby grants to Mortgagee and Mortgagee’s successors in title and assigns, as secured party, a first and prior security interest in and to all of Mortgagor’s right, title and interest now owned or hereafter acquired in and to the following types and items of property and interests now owned or hereafter acquired by Mortgagor (all of which are included within the term “Mortgaged Property”): (a) all Personal Property, Subject Contracts and Accounts; (b) all Subject Interests, Hydrocarbons and Other Minerals including all as-extracted collateral (including Accounts), as defined in and subject to the Uniform Commercial Code as enacted, amended and in effect in each jurisdiction in which any of the Mortgaged Property is situated (the “ UCC ”), and for which the creation and perfection of a security interest or Lien therein is governed by the provisions of the UCC; (c) all other Mortgaged Property described in “A” through “M” above consisting of Accounts, contract rights, general intangibles, chattel paper, documents, instruments, inventory, equipment, fixtures and other goods and articles of personal property of any kind or character defined in and subject to the UCC; (d) all increases, profits, combinations, reclassifications, improvements and products of, accessions, attachments and other additions to, tools, parts and equipment used in connection with, and substitutes and replacements for, all or any part of the Mortgaged Property described in this or any other clause of this Paragraph N; (e) all Accounts, contract rights, general intangibles, chattel paper, documents, instruments, cash and noncash proceeds and other rights arising from or by virtue of, or from the voluntary or involuntary sale or other disposition of, or collections with respect to, or insurance proceeds payable with respect to, or proceeds payable by virtue of warranty or other claims against manufacturers of, or claims against any other person or entity with respect to, all or any part of the Hydrocarbons, the Other Minerals or the Mortgaged Property described in this or any other clause of this Paragraph N; and (f) all security for the payment to Mortgagor of any of the Mortgaged Property described in this or any other clause of this Paragraph N and goods which gave or will give rise to any of such Mortgaged Property or are evidenced, identified, or represented therein or thereby; provided that nothing in this paragraph shall be deemed to permit any action prohibited by this instrument or by terms incorporated in this instrument.

In the event that the Mortgagor acquires additional undivided interests in some or all of the Mortgaged Property, this Mortgage shall automatically encumber such additions or increases to the Mortgagor’s interest in the Mortgaged Property without need of further act or document. Further, in the event the Mortgagor becomes the owner of an interest in any part of the lands described either on Exhibit A-1 or Exhibit A-2 or the documents described on Exhibit A-1 or Exhibit A-2 or otherwise subject to or covered by the Mortgaged Properties, this Mortgage shall automatically encumber such ownership interest of the Mortgagor without need of further act or document.

For the same consideration, Mortgagor hereby grants to Mortgagee any and all rights of Mortgagor to Liens and security interests in the Mortgaged Property securing payment of proceeds from the sale of production from the Mortgaged Property, including, but not limited to, those Liens and security interests provided for under applicable Law, including but not limited to the UCC.

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 Lien of this Mortgage, Security Agreement, Financing Statement and Assignment of Production and Revenues (the “ Mortgage ”), together with all rights, hereditaments and appurtenances in anywise belonging to the Mortgagee or assigns forever. Any additional right, title or interest which Mortgagor may hereafter acquire or become entitled to in all assets of the types described above shall inure to the benefit of and be covered by this Mortgage and constitute “ Mortgaged Property ,” the same as if expressly described and conveyed herein. Mortgagor hereby binds itself, its successors and permitted assigns, to warrant and forever defend all and singular the above described property, rights, and interests constituting the Mortgaged Property to Mortgagee and to its successors and assigns forever, against every person whomsoever lawfully claiming or to claim the same or any part thereof.

Article II

SECURED INDEBTEDNESS

This Mortgage is executed and delivered, to secure and enforce the payment of the following indebtedness, obligations and liabilities:

Article III

REPRESENTATIONS AND WARRANTIES

By execution of this Mortgage, Mortgagor does hereby adopt and ratify all of Mortgagor’s warranties and representations set forth in the Credit Agreement; and all the warranties and representations set forth in the Credit Agreement as they relate to the properties described on Exhibit A-1 and Exhibit A-2 attached thereto are hereby made and adopted with respect to the properties listed on Exhibit A-1 and Exhibit A-2 attached hereto. In addition, Mortgagor hereby represents and warrants as follows:

Any fractions or percentages specified on attached Exhibit A-1 in referring to Mortgagor’s interests are solely for the purposes of the warranties made by Mortgagor above and shall in no manner limit the quantum of interest with respect to any Subject Interests or with respect to any Unit or Well identified on Exhibit A-1 . If any of the Lands covered by the Subject Interests or Lands Associated with Pipelines or other instrument mentioned on Exhibit A-1 and Exhibit A-2 are incorrectly described, then nevertheless this Mortgage shall cover all Mortgagor’s interest in such Subject Interests, the Lands Associated with Pipelines and other instrument as to all of the lands covered thereby.

Article IV

COVENANTS OF MORTGAGOR

In consideration of the Secured Indebtedness, Mortgagor, for itself and its successors and its permitted assigns, hereby ratifies, covenants and agrees that Mortgagor shall comply with all Affirmative Covenants described in Article VI of the Credit Agreement, and Mortgagor shall not violate any of the Negative Covenants described in Article VII of the Credit Agreement. In addition, Mortgagor hereby covenants and agrees as follows:

A.            Defend Title . Mortgagor will not create or suffer to be created or permit to exist any Lien, senior to, junior to, or on a parity with, the Lien of this Mortgage upon the Mortgaged Property or any part thereof or upon the rents, issues, revenues, profits and other income therefrom, except Permitted Liens. Except for the Permitted Liens, Mortgagor will warrant and defend the title to the Mortgaged Property against the claims and demands of all other persons whomsoever and will maintain and preserve the Lien created hereby so long as any of the Secured Indebtedness secured hereby remains unpaid. Except for the Permitted Liens, should an adverse claim be made against or a cloud develop upon the title to any part of the Mortgaged Property, Mortgagor agrees it will immediately defend against such adverse claim or take appropriate action to remove such cloud at Mortgagor’s cost and expense, and Mortgagor further agrees that Mortgagee may take such other action as Mortgagee reasonably deems advisable to protect and preserve its interests in the Mortgaged Property, and in such event Mortgagor will indemnify Mortgagee against any and all costs, attorneys’ fees and other expenses which it may reasonably incur in defending against any such adverse claim or taking action to remove any such cloud .

B.            Correct Defects . Upon request of Mortgagee, Mortgagor will promptly correct any defect which may be discovered after the execution and delivery of this Mortgage, in the note or notes above described or other documents executed in connection herewith, in the execution or acknowledgment hereof or thereof or in the description of the Mortgaged Property, and will execute, acknowledge, and deliver such division orders, transfer orders and other assurances and instruments as shall, in the opinion of Mortgagee, be necessary or proper to convey and assign to Mortgagee all of the Mortgaged Property herein conveyed or assigned, or intended to be so.

C.            Notifications . Mortgagor will notify Mortgagee of the destruction, loss, termination or acquisition of any Mortgaged Property within two (2) Business Days of Mortgagor’s receipt of notice thereof.

D.            Pooling . Except as required by applicable Law, Mortgagor will not, without the prior written consent of Mortgagee, which consent shall not be unreasonably withheld, voluntarily pool or unitize all or any part of the Mortgaged Property where the pooling or unitization would result in the diminution of Mortgagor’s net revenue interest in production from the 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 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-1 hereto. In the event any proceedings of any governmental body 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.

F.            Taxes/Insurance . Mortgagor will carry with standard insurance companies satisfactory to the Mortgagee, insurance with respect to the Mortgaged Property against such liabilities, casualties, risks and contingencies and in amounts as is customary in the industry; and acceptable certificates evidencing the same thereof shall be delivered to Mortgagee annually after the execution of this Mortgage. Mortgagor will at all times maintain workers’ compensation insurance with a responsible insurance company where required by, and in accordance with, the applicable Laws of the state (i) in which the Mortgaged Property is located or (ii) which requires workers’ compensation to be maintained on such employees. In the event Mortgagor fails or neglects to pay any taxes, general or special, or fails or neglects to relieve the Mortgaged Property from any Lien which might become superior or equal to the Lien of this Mortgage, or fail to carry such workers’ compensation or other insurance, Mortgagee, at its option, may pay such taxes, Liens or charges, or any part thereof, or effect such workmen’s compensation insurance, and Mortgagor will promptly reimburse Mortgagee, as the case may be, therefor; and any and all such sums so paid hereunder shall be paid by Mortgagor upon demand at Mortgagee’s principal offices, and shall constitute a part of the Secured Indebtedness.

G.            Operation by Third Parties . All or portions of the Mortgaged Property may be comprised of interests in the Subject Interests which are other than working interests or which may be operated by a party or parties other than Mortgagor and with respect to all or any such Subject Interests as may be comprised of interests other than working interests or which may be operated by parties other than Mortgagor, Mortgagor’s covenants set forth in as expressed in Paragraph E are modified to require that Mortgagor use commercially reasonable efforts to obtain compliance with such covenants by the working interest owners or the operator or operators of such Subject Interest.

H.            Labor/Materials . Mortgagor agrees to promptly pay before delinquent, or cause to be paid before delinquent, all bills for labor and materials incurred in the operation of the Mortgaged Property, except any that is being contested in good faith and as to which satisfactory accruals have been provided; 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 amendment of existing operating agreement affecting the Mortgaged Property that in Mortgagor’s commercially reasonable opinion would diminish or alter Mortgagor’s net revenue interest therein, all without prior written consent of the Mortgagee.

I.            Legal Proceedings . Mortgagor will promptly notify Mortgagee or other holder or holders of the Secured Indebtedness, in writing, of the commencement of any legal proceedings affecting the Mortgaged Property or any part thereof, and will take such action as may be necessary to preserve its and Mortgagee’s rights affected thereby; and should Mortgagor fail or refuse to take any such action, Mortgagee may at its election take such action on behalf and in the name of Mortgagor and at Mortgagor’s cost and expense.

J.            Waivers . Mortgagor hereby expressly waives any and all rights or privileges of marshalling of assets, sale in inverse order of alienation, notices, appraisements, redemption and any prerequisite to the full extent permitted by applicable Law, 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 Lien of this Mortgage, 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 Secured 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 thereof not so released, or the right to receive future proceeds and income.

K.           Disposition . Without prior approval and written consent of Mortgagee, Mortgagor will not sell, assign, lease, transfer or otherwise dispose of all or any portion of the Mortgaged Property except as provided in the Credit Agreement, nor shall Mortgagor mortgage, pledge or otherwise encumber the Mortgaged Property or any part thereof, regardless of whether the Lien is senior, coordinate, junior, inferior or subordinate to the Lien created hereby, except for Permitted Liens.

L.            Notice of Assignments . Upon request of Mortgagee, Mortgagor will execute and deliver written notices of assignments to any persons, corporations or other entities owing or which may in the future owe to Mortgagor monies or accounts arising in connection with any of the following matters: (a) any oil, gas or mineral production from the Mortgaged Property; (b) any gas contracts, processing contracts or other contracts relating to the Mortgaged Property; or (c) the operation of or production from any part of the Mortgaged Property. The notices of assignments shall advise the third parties that all of the monies or accounts described above have been assigned to Mortgagee, and if required by Mortgagee, shall also require and direct that future payments thereof, including amounts then owing and unpaid, be paid directly to the Lockbox or directly to Mortgagee.

M.            Prohibitions Ineffective . Any (i) mortgage, pledge, or encumbrance, or (ii) unitization, pooling, or communitization (except as required by applicable Law) or other action or instrument in violation of the prohibitions contained in this Article IV shall be of no force or effect against Mortgagee.

Article V

RIGHTS AFTER EVENT OF DEFAULT

A.           If an Event of Default shall occur and be continuing, the Mortgagee shall have the right and option to proceed with foreclosure and to sell, to the extent permitted by applicable Law, all or any portion of the Mortgaged Property at one or more sales, as an entirety or in parcels, at such place or places and otherwise in such manner and upon such notice as may be required by applicable Law or, in the absence of any such requirements, as the Mortgagee may deem appropriate, and to make conveyance to the purchaser or purchasers.

B.           Notwithstanding any other provision of this Article V , if any of the Secured Indebtedness shall become due and payable and shall not be promptly paid, Mortgagee shall have the right and power to proceed by a suit or suits in equity or at law, whether for the specific performance of any covenant or agreement herein contained or in aid of the execution of any power herein granted, or for any foreclosure hereunder or for the sale of the Mortgaged Property under the judgment or decree of any court or courts of competent jurisdiction, or for the appointment of a receiver pending any foreclosure hereunder or the sale of the Mortgaged Property under the order of a court or courts of competent jurisdiction or under executory or other legal process, or for the enforcement of any other appropriate legal or equitable remedy. Any money advanced by Mortgagee in connection with any such receivership shall be a demand obligation (which obligation Mortgagor hereby expressly promises to pay) owing by Mortgagor to Mortgagee and shall bear interest from the date of making such advance by Mortgagee until paid at the Default Rate.

C.           Notwithstanding any other provision, Mortgagee shall also have the option to proceed with foreclosure in satisfaction of any installments of the Secured Indebtedness which have not been paid when due either through the courts or by proceeding with foreclosure in satisfaction of the matured but unpaid portion of the Secured Indebtedness as if under a full foreclosure, conducting the sale as herein provided and without declaring the entire principal balance and accrued interest due; such sale may be made subject to the unmatured portion of the Secured Indebtedness, and any such sale shall not in any manner affect the unmatured portion of the Secured Indebtedness, but, as to such unmatured portion of the Secured Indebtedness, this Mortgage shall remain in full force and effect just as though no sale had been made hereunder. It is further agreed that several sales may be made hereunder without exhausting the right of sale for any unmatured part of the Secured Indebtedness, it being the purpose hereof to provide for a foreclosure and sale of the security for any matured portion of the Secured Indebtedness without exhausting the power to foreclose and sell the Mortgaged Property for any subsequently maturing portion of the Secured Indebtedness.

D.           The Mortgaged Property may be sold in one or more parcels and in such manner and order as Mortgagee, in his sole discretion, may elect, it being expressly understood and agreed that the right of sale arising out of any Event of Default shall not be exhausted by any one or more sales.

E.           Upon the happening of any of the Events of Default, Mortgagee shall be entitled to all of the rights, powers and remedies afforded a secured party by the UCC with reference to the personal property, as-extracted collateral and fixtures in which Mortgagee has been granted a security interest hereby, or Mortgagee may proceed as to both the real and personal property covered hereby.

F.           Mortgagor agrees to the full extent it lawfully may, that, in case one or more of the Events of Default shall have occurred and shall not have been remedied, then, and in every such case, Mortgagee shall have the right and power to enter into and upon and take possession of all or any part of the Mortgaged Property in the possession of Mortgagor, its successors or permitted assigns, or its agents or servants, and may exclude Mortgagor, its successors or permitted assigns, and all persons claiming under Mortgagor, and its agents or servants wholly or partly therefrom. All costs, expenses and liabilities of every character incurred by Mortgagee in administering, managing, operating, and controlling the Mortgaged Property shall constitute a demand obligation (which obligation Mortgagor hereby expressly promises to pay) owing by Mortgagor to Mortgagee and shall bear interest from date of expenditure until paid at the Default Rate, all of which shall constitute a portion of the Secured Indebtedness and shall be secured by this Mortgage and all other Collateral Documents.

G.           Every right, power and remedy herein given to Mortgagee shall be cumulative and in addition to every other right, power and remedy herein specifically given or now or hereafter existing in equity, at law or by statute (including specifically those granted by the UCC in effect and applicable to the Mortgaged Property or any portion thereof) each and every right, power and remedy whether specifically herein given or otherwise existing may be exercised from time to time and so often and in such order as may be deemed expedient by Mortgagee, and the exercise, or the beginning of the exercise, of any such right, power or remedy shall not be deemed a waiver of the right to exercise, at the same time or thereafter any other right, power or remedy. No delay or omission by Mortgagee in the exercise of any right, power or remedy shall impair any such right, power or remedy or operate as a waiver thereof or of any other right, power or remedy then or thereafter existing.

H.           Neither Mortgagor, nor any guarantor or any other person hereafter obligated for payment of all or any part of the Secured Indebtedness shall be relieved of such obligation by reason of (a) the failure of Mortgagee to comply with any request of Mortgagor, or any guarantor or any other person so obligated, to foreclose the Lien of this Mortgage or to enforce any provision hereunder or under the Credit Agreement; (b) the release, regardless of consideration, of the Mortgaged Property or any portion thereof or interest therein or the addition of any other property to the Mortgaged Property; (c) any agreement or stipulation between any subsequent owner of the Mortgaged Property and Mortgagee extending, renewing, rearranging or in any other way modifying the terms of this Mortgage without first having obtained the consent of, given notice to or paid any consideration to Mortgagor, any guarantor or such other person, and in such event Mortgagor, guarantor and all such other persons shall continue to be liable to make payment according to the terms of any such extension or modification agreement unless expressly released and discharged in writing by Mortgagee; or (d) by any other act or occurrence save and except the complete payment of the Secured Indebtedness and the complete fulfillment of all obligations hereunder or under the Credit Agreement.

I.           Mortgagee may release, regardless of consideration, any part of the Mortgaged Property without, as to the remainder, in any way impairing, affecting, subordinating or releasing the Lien created in or evidenced by this Mortgage or its stature as a first and prior Lien in and to the Mortgaged Property, and without in any way releasing or diminishing the liability of any person or entity liable for the repayment of the Secured Indebtedness. For payment of the Secured Indebtedness, Mortgagee may resort to any other security therefor held by Mortgagee in such order and manner as Mortgagee may elect.

J.           To the fullest extent permitted by applicable Law, Mortgagor hereby irrevocably and unconditionally waives and releases (a) all benefits that might accrue to Mortgagor by virtue of any present or future moratorium Law or other Law exempting the Mortgaged Property from attachment, levy or sale on execution or providing for any appraisement, valuation, stay of execution, exemption from civil process, redemption or extension of time for payment; (b) all notices of any Event of Default or of Mortgagee’s intention to accelerate maturity of the Secured Indebtedness or of its election to exercise (or its actual exercise of) any right, remedy or recourse provided for hereunder or under the Credit Agreement; and (c) any right to a marshaling of assets or a sale in inverse order of alienation. If any Law referred to in this Mortgage and now in force, (of which Mortgagor or its successor or successors might take advantage despite the provisions hereof), shall hereafter be repealed or cease to be in force, such Law shall thereafter be deemed not to constitute any part of the contract herein contained or to preclude the operation or application of the provisions hereof.

K.          In case Mortgagee shall have proceeded to invoke any right, remedy or recourse permitted hereunder or under the Credit Agreement and shall thereafter elect to discontinue or abandon same for any reason, Mortgagee shall have the unqualified right so to do and, in such an event, Mortgagor and Mortgagee shall be restored to their former positions with respect to the Secured Indebtedness, this Mortgage, the Credit Agreement, the Mortgaged Property and otherwise, and the rights, remedies, recourses and powers of Mortgagee shall continue as if same had never been invoked.

L.           The proceeds of any sale of the Mortgaged Property or any part thereof and all other monies received by Mortgagee through any proceedings for the enforcement hereof or otherwise, whose application has not elsewhere herein been specifically provided for, shall be applied:

FIRST , to the payment of all expenses incurred by Mortgagee incident to the enforcement of this Mortgage, the Credit Agreement or any of the Secured Indebtedness (including, without limiting the generality of the foregoing, expenses of any entry or taking of possession, of any sale, of advertisement thereof and of conveyances, and court costs, compensation of agents and employees, and reasonable legal fees, and to the payment of all other charges, expenses, liabilities and advances incurred or made by Mortgagee under this Mortgage or in executing any power hereunder;

SECOND , to payment of the Secured Indebtedness in such order and manner as Mortgagee may elect; and

THIRD , to Borrowers, Mortgagor or as otherwise required by any applicable Law.

In connection with any action taken by Mortgagee pursuant to this mortgage, Mortgagee and employees, representatives, agents, attorneys, accountants and experts (“ Indemnified Parties” ) shall not be liable for any loss sustained by Mortgagor resulting from an assertion that Mortgagee has received funds from the production of Hydrocarbons claimed by third persons or any act or omission of any Indemnified Party in administering, managing, operating or controlling the Mortgaged Property unless such loss is caused by the gross negligence or willful misconduct of an Indemnified Party, nor shall Mortgagee be obligated to perform or discharge any obligation, duty or liability of Mortgagor. Unless such liability, loss, or damage is caused by the gross negligence or willful misconduct of an Indemnified Party, Mortgagor shall and do hereby agrees to indemnify each Indemnified Party for, and to hold each Indemnified Party harmless from, any and all liability, loss or damage which may or might be incurred by any Indemnified Party by reason of this Mortgage or the exercise of rights or remedies hereunder; should Mortgagee make any expenditure on account of any such liability, loss or damage, the amount thereof, including costs, expenses and reasonable attorneys’ fees, shall be a demand obligation (which obligation Mortgagor hereby expressly promises to pay) owing by Mortgagor to Mortgagee and shall bear interest from the date expended until paid at the applicable interest rate set forth in the Credit Agreement, shall be a part of the Secured Indebtedness and shall be secured by this Mortgage and any other security instrument. Mortgagor hereby assents to, ratifies and confirms any and all actions of Mortgagee with respect to the Mortgaged Property taken under this Mortgage. The liabilities of the Mortgagor as set forth in this Article V shall survive the termination of this Mortgage.

Article VI

ASSIGNMENT OF PRODUCTION AND REVENUES

(this “Assignment”)

Production

A.           In addition to the assignment and conveyance to Mortgagee herein made, Mortgagor does hereby transfer, assign, deliver and convey unto Mortgagee, its successors and assigns, all of the Hydrocarbons and Other Minerals produced, saved or sold from the Mortgaged Property and attributable to the interest of Mortgagor therein subsequent to 7:00 A.M. on the 1st day of the month in which this Mortgage is executed, together with the proceeds of any sale thereof (“ Hydrocarbon Proceeds ”); Mortgagor hereby directs any purchaser now or hereafter taking any production from the Mortgaged Property to pay to Mortgagee such Hydrocarbon 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; and the purchaser of any such production shall have no duty or obligation to inquire into the right of Mortgagee to receive the same, what application is made thereof, or as to any other matter; and the 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 Hydrocarbon Proceeds so paid to Mortgagee.

Revenues

B.           In addition to the assignment and conveyance to Mortgagee herein made, Mortgagor does hereby transfer, assign, deliver and convey unto Mortgagee, its successors and assigns, all the income, revenues, rents, issues, profits and proceeds arising from the Pipelines relating to the Mortgaged Property and attributed to the interest of Mortgagor therein whether due, payable or accruing (collectively, the “ Revenues ”) under any and all present and future contracts or other agreements relating to the transmission of the Hydrocarbons or the ownership of all or any portion of the Mortgaged Property. Mortgagor hereby directs any payor to pay to Mortgagee such Revenues derived from such contracts and agreements, and to continue to make payments directly to Mortgagee until notified in writing by Mortgagee to discontinue the same; and the payor shall have no duty or obligation to inquire into the right of Mortgagee to receive the same, what application is made thereof, or as to any other matter; and the payment made to Mortgagee shall be binding and conclusive as between such payor and Mortgagor. Mortgagor agrees to perform all such acts, and to execute all such further assignments, transfers and other instruments as may be required or desired by the Mortgagee or any party in order to have said Revenues so paid to the Mortgagee.

General

C.           The Mortgagee is fully authorized to (i) receive and receipt for said Revenues and Hydrocarbon Proceeds ; (ii) to endorse and cash any and all checks and drafts payable to the order of Mortgagor or the Mortgagee for the account of Mortgagor received from or in connection with said Revenues and Hydrocarbon Proceeds and apply the proceeds thereof to the payment of the Secured Indebtedness, when received, regardless of the maturity of any of the Secured Indebtedness, or any installment thereof, and (iii) execute any instrument in the name of Mortgagor to facilitate any of the foregoing. Upon receipt of written instructions from Mortgagor, Mortgagee agrees to release to Mortgagor any Revenues and Hydrocarbon Proceeds belonging to third parties; provided that the Mortgagee shall not be liable for any delay, neglect, or failure to effect collection of any Revenues and Hydrocarbon Proceeds or to take any other action in connection therewith or hereunder; but shall have the right, at its election, in the name of Mortgagor or otherwise, to prosecute and defend any and all actions or legal proceedings deemed advisable by the Mortgagee in order to collect such funds and to protect the interests of the Mortgagee and/or Mortgagor, with all costs, expenses and attorney’s fees incurred in connection therewith being paid by Mortgagor. Unless Mortgagee has claimed or is claiming, for its benefit Revenues and Hydrocarbon Proceeds belonging to third parties and not attributable to the Mortgaged Property, Mortgagor hereby agrees to indemnify the Mortgagee against all claims, actions, liabilities, judgments, costs, charges and attorneys’ fees made against or incurred by it, based on the assertion that it received Revenues claimed by third persons either before or after the payment in full of the Secured Indebtedness. Mortgagee shall have the right to defend against any such claims, actions and judgments, employing its attorneys therefor, and if it is not furnished with reasonable indemnity, it shall have the right to compromise and adjust any such claims, actions and judgments. Mortgagor agrees to indemnify and pay to the Mortgagee any and all such claims, judgments, costs, charges and attorney’s fees as may be paid in any judgment, release or discharge thereof or as may be adjudged against the Mortgagee. Mortgagor hereby appoints Mortgagee as its attorney-in-fact to pursue any and all rights of Mortgagor to Liens on the Mortgaged Property. Mortgagor hereby further transfers and assigns to Mortgagee any and all such Liens, security instruments or similar interests of Mortgagor attributable to its interest in the Mortgaged Property and Revenues and Hydrocarbon Proceeds arising under or created by any statutory provision, judicial decision or otherwise. The power of attorney granted to Mortgagee in this Paragraph C, being coupled with an interest, shall be irrevocable so long as the Secured Indebtedness or any part thereof remains unpaid .

D.           Should any purchaser or other party taking the production from the Mortgaged Property or owing payment to Mortgagor fails to make prompt payment to Mortgagee in accordance with this Assignment, Mortgagee shall, if permitted by applicable Law, have the right at Mortgagor’s expense to demand a change of connection and to designate another purchaser or other party 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; and failure of Mortgagor to consent to and promptly effect such change of connection shall constitute an event of default hereunder, and the whole Secured Indebtedness may be immediately declared due and payable, at the option of Mortgagee, and the Mortgaged Property shall become subject to the foreclosure proceedings hereunder.

E.           Mortgagor authorizes and empowers Mortgagee to receive, hold and collect all sums of money paid to Mortgagee in accordance with this Assignment, 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. All payments provided for in this Assignment shall be paid promptly to Mortgagee, and any provisions contained in the Note or any part thereof to the contrary notwithstanding, Mortgagee may apply the same or so much thereof as it elects to the payment of the Secured Indebtedness, application to be made in such manner as it may elect, regardless of whether the application so made shall exceed the payments of principal and interest then due as provided in the Note. After such application has been so made by Mortgagee, the balance of any such payment or payments remaining shall be paid to Mortgagor. Mortgagee agrees to give Mortgagor written notice simultaneously with its notice to the purchaser that such payments are to be paid to Mortgagee in accordance with the terms of this Article.

F.           It is understood and agreed that should such payments provided for by this Assignment be less than the sum or sums then due on the Secured Indebtedness, such sum or sums then due shall nevertheless be paid by Mortgagor in accordance with the provisions of the Loan Documents evidencing the Secured Indebtedness, and neither this Assignment nor any provisions hereof shall in any manner be construed to affect the terms and provisions of such Loan Documents. Likewise, neither this Assignment nor any provisions hereof shall in any manner be construed to affect the Liens, rights, title and remedies herein granted securing the Secured Indebtedness or Mortgagor’s liability therefor. The rights under this Assignment are cumulative of all other rights, remedies, and powers granted under this Mortgage, and are cumulative of any other Lien which Mortgagee now holds or may hereafter hold to secure the payment of the Secured Indebtedness.

G.           Should Mortgagor receive any of the proceeds which under the terms hereof should have been remitted to Mortgagee, Mortgagor will immediately remit same in full to Mortgagee.

H.           Upon payment and performance in full of all Secured Indebtedness, 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 by Mortgagee to Mortgagor at its request and its expense.

I.           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.

J.           To the extent permissible under applicable Law, Mortgagor hereby acknowledges that this Assignment is intended to be presently, unconditionally and immediately effective. Furthermore and to the extent permitted by applicable Law, Mortgagor agrees that Mortgagee is not required to assert any affirmative act, including the institution of any legal proceedings, to enforce this Assignment.

Article VII

ADDITIONAL REMEDIES

A.           If Mortgagor should fail to comply with any of the covenants or obligations of Mortgagor hereunder, then Mortgagee or its attorney in fact or agent may perform the same for the account and at the expense of Mortgagor but shall not be obligated so to do, and any and all expenses incurred or paid in so doing shall be payable by Mortgagor to Mortgagee, with interest at the rate agreed upon in the Credit Agreement, from the date when same was so incurred or paid, and the amount thereof shall be payable on demand and shall be secured by and under this Mortgage, and the amount and nature of such expense and the time when paid shall be presumptively established by the affidavit of Mortgagee or any officer or agent thereof, or by the affidavit of any attorney in fact or agent acting hereunder; provided, however, that the exercise of the privileges granted in this Paragraph A shall not be considered or constitute a waiver of the right of Mortgagee upon the happening of an Event of Default hereunder to declare the Secured Indebtedness at once due and payable but shall be cumulative of such right and all other rights herein given.

B.           To the extent permitted by applicable Law, in case any one or more of the Events of Default shall occur, then in each and every such case Mortgagee, whether or not the Secured Indebtedness shall have been declared due and payable, in addition to the other rights and remedies hereunder, may exercise the following additional remedy, but shall not be obligated so to do: Mortgagee or its attorney in fact or agent may enter into and upon and take possession of all or any part of the Mortgaged Property and each and every part thereof and may exclude Mortgagor, its agents, employees and representatives wholly therefrom and have, hold, use, operate, manage and control the Mortgaged Property and each and every part thereof and produce the Hydrocarbons 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 all Secured Indebtedness secured hereby, principal and interest, 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 Secured Indebtedness, the Mortgaged Property shall be returned to Mortgagor in its then condition and Mortgagee shall not be liable to Mortgagor for any damage or injury to the Mortgaged Property except such as may be caused through his, its or their fraud or willful misconduct.

C.           To the extent permitted by applicable Law, Mortgagor does hereby designate Mortgagee as Mortgagor’s agent to exercise each and every remedy set forth herein and to conduct any and all operations and take any and all action reasonably necessary to do so.

Article VIII

MISCELLANEOUS

A.           Any provision in any document that may be executed in connection herewith to the contrary notwithstanding, the Mortgagee shall in no event be entitled to receive or collect, nor shall any amounts received hereunder be credited so that the Mortgagee shall be paid as interest, a sum greater than that authorized by Law. If any possible construction of this Mortgage or any instrument evidencing the Secured Indebtedness, or any or all other notes, guaranties or papers relating to the Secured Indebtedness, seems to indicate any possibility of a different power given to the Mortgagee, or any authority to ask for, demand, or receive any larger rate of interest, such as a mistake in calculation or wording, this clause shall override and control, and proper adjustments shall be made accordingly.

B.           This Mortgage, for convenience only, has been divided into Articles and Paragraphs, and it is understood that the rights, powers, privileges, duties and other legal relations of the Mortgagor and the Mortgagee, shall be determined from this Mortgage as an entirety and without regard to the aforesaid division into Articles and Paragraphs and without regard to headings prefixed to such Articles.

C.           The terms used to designate any of the parties herein shall be deemed to include the heirs, successors and assigns of such parties; the term “ successors ” shall include the heirs, trustees and legal representatives; and the term “ Mortgagee ” shall also include any lawful owner, holder or pledgee of any Secured Indebtedness. 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.

D.           Every right and remedy provided for herein shall be cumulative of each and every other right or remedy of Mortgagee, whether herein or otherwise conferred, and may be enforced concurrently therewith, and the unenforceability or invalidity of any one or more provisions, clauses, sentences or paragraphs of this Mortgage shall not render any other provision, clause, sentence or paragraph unenforceable or invalid. No security theretofore, herewith or subsequently taken by Mortgagee shall in any manner impair or affect the security given by this Mortgage or any security by endorsement or otherwise presently or previously given, and all security shall be taken, considered and held as cumulative. In addition to the rights and remedies expressly set forth herein, Mortgagee shall be entitled to all other rights and remedies at law and in equity, which rights and remedies, together with rights and remedies described above are cumulative.

E.           This Mortgage shall be binding upon the parties, their respective successors and permitted assigns, and shall inure to the benefit of the Mortgagee, and the covenants and agreements herein contained shall constitute covenants running with the land.

F.           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 on Exhibit A-1 and Exhibit A-2 attached hereto by means of supplements or amendments identifying this Mortgage and describing such interests and properties to be so added and included, and upon the execution of any such supplements or amendments, the Lien, rights, titles and interests created herein shall immediately attach to and be effective as of the date of such supplemental indenture in respect to any such interests and properties so described, and the same being included in the term “ Mortgaged Property ,” as used herein.

G.           This Mortgage 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.

H.           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 or Lands Associated with Pipelines described herein or to which reference is made herein. In addition, the security interest created hereby under applicable provisions of the UCC attaches to minerals, including oil, gas and other as-extracted collateral, or accounts resulting from the sale thereof, at the wellhead or minehead located on the Lands or Lands Associated with Pipelines described or to which reference is made herein.

I.           This Mortgage may be filed as provided in Article 9 of the Texas Business and Commerce Code and Article 9 of the Kansas Uniform Commercial Code relating to the granting of security interests. In this connection, this instrument will be presented to a filing officer under the Uniform Commercial Code to be filed in the real estate records or official public records as a Financing Statement covering minerals and fixtures and as-extracted collateral, pursuant to Section 9.502(c) of the Texas Business and Commerce Code and K.S.A. 84-9-501.

J.           For purposes of filing this Mortgage as a financing statement, the addresses for Mortgagor, as the debtor, and Mortgagee, as the secured party, are as set forth hereinabove.

K.          For the convenience of the parties, this Mortgage may be executed in multiple counterparts. For recording purposes, various counterparts have been executed and there may be attached to each such counterpart an Exhibit A-1 and Exhibit A-2 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 Mortgage with a complete Exhibit A-1 and Exhibit A-2 may be obtained from the 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 Mortgage.

L.           The failure or delay of Mortgagee to file or give any notice as to this Mortgage, or to exercise any right, remedy or option to declare the maturity of the principal debt, or any other sums hereby secured, or the payment by Mortgagee of any taxes, Liens, charges or assessments, shall not be taken or deemed a waiver of any rights to exercise such right or option or to declare any such maturity as to any past or subsequent violations of any of such covenants or stipulations, and shall not waive or prejudice any right or Lien hereunder. Any election or failure by Mortgagee to exercise any rights, remedies or options hereunder shall not constitute a waiver or prejudice the exercise of other rights or remedies existing hereunder. All rights, powers, immunities, remedies and Liens of Mortgagee existing and to exist hereunder or under any other instruments, and all other or additional security, and Mortgagee’s rights at law and in equity, shall be cumulative and not exclusive, each of the other; and Mortgagee shall, in addition to the 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 Secured Indebtedness, for enforcing the covenants herein, and for foreclosing the Liens hereof. Resort by Mortgagee to any remedy provided for hereunder or at law or in equity shall not prevent concurrent or subsequent resort to the same or any other remedy or remedies.

M.            In the event of a conflict between the terms and provisions of this Mortgage and those of the Credit Agreement, or in the event that obligations imposed upon the Mortgagor in the Mortgage and the Credit Agreement in relation to non-monetary matters are inconsistent and require differing levels of performance, the terms and provisions of the Credit Agreement shall govern and control.

N.           This Mortgage is executed by Mortgagee solely for the purpose of acknowledging and accepting the benefits conferred on the Mortgagee and to evidence the agreements of Mortgagee set forth herein.

O.           Mortgagor and Mortgagee intend to contract in strict compliance with applicable usury Laws from time to time in effect. In furtherance thereof, the parties stipulate and agree that none of the terms and provisions contained in this Mortgage shall ever be construed to create a contract to pay, for the use, forbearance or detention of money, interest in excess of the maximum amount of interest permitted to be charged by applicable Law from time to time in effect. No Borrower nor any present or future guarantors, endorsers or other Persons hereafter becoming liable for payment of the Secured Indebtedness shall ever be liable for unearned interest thereon or shall ever be required to pay interest thereon in excess of the maximum amount that may be lawfully charged under applicable Law from time to time in effect. Mortgagee expressly disavows any intention to charge or collect excessive unearned interest or finance charges in the event the maturity of any Secured Indebtedness is accelerated. If (a) the maturity of any Secured Indebtedness is accelerated for any reason, (b) any Secured Indebtedness is prepaid and as a result any amounts held to constitute interest are determined to be in excess of the legal maximum, or (c) Mortgagee or any other holder of any or all of the Secured Indebtedness shall otherwise collect moneys which are determined to constitute interest which would otherwise increase the interest on any or all of the Secured Indebtedness to an amount in excess of that permitted to be charged by applicable Law then in effect, then all such sums determined to constitute interest in excess of such legal limit shall, without penalty, be promptly applied to reduce the then outstanding principal of the related Secured Indebtedness or, at Mortgagor’s or such holder’s option, promptly returned to Mortgagor or the other payor thereof upon such determination. In determining whether or not the interest paid or payable under any specific circumstance exceeds the maximum amount permitted under applicable Law, Mortgagor or Mortgagee (and any other payors thereof) shall to the greatest extent permitted under applicable Law, (x) characterize any non principal payment as an expense, fee or premium rather than as interest, (y) exclude voluntary prepayments and the effects thereof, and (z) amortize, prorate, allocate and spread the total amount of interest throughout the entire contemplated term of the instruments evidencing the Secured Indebtedness in accordance with the amounts outstanding from time to time thereunder and the maximum legal rate of interest from time to time in effect under applicable Law in order to lawfully charge the maximum amount of interest permitted under applicable Law.

P.           THIS MORTGAGE SUPERSEDES ALL PRIOR AGREEMENTS BETWEEN THE PARTIES WITH RESPECT TO ITS SUBJECT MATTER AND CONSTITUTES (ALONG WITH THE DOCUMENTS REFERRED TO IN THIS MORTGAGE) A COMPLETE AND EXCLUSIVE STATEMENT OF THE TERMS OF THE AGREEMENT BETWEEN THE PARTIES WITH RESPECT TO ITS SUBJECT MATTER. THIS AGREEMENT MAY NOT BE AMENDED EXCEPT BY A WRITTEN AGREEMENT EXECUTED BY THE PARTY TO BE CHARGED WITH THE AMENDMENT. THIS AGREEMENT WILL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF TEXAS AND THE LAWS OF THE STATE OF KANSAS THAT APPLY MANDATORILY, REGARDLESS OF THE LAWS THAT MIGHT OTHERWISE GOVERN UNDER PRINCIPLES OF CONFLICT OF LAWS THEREOF.

[ Signature and acknowledgement pages follow ]

EXECUTED as of the date set forth in the notary below, but effective for all purposes as of the date first written above.

BEFORE ME, the undersigned authority, on this day personally appeared Robert G. Watson, Jr., Chief Executive Officer of Working Interest, LLC, a Kansas limited liability company, known to me to be the person whose name is subscribed to the foregoing instrument, and acknowledged to me that he executed the same for the purposes and consideration therein expressed, as the act and deed of such limited liability company and in the capacity therein stated.

GIVEN UNDER MY HAND AND SEAL OF OFFICE this _______ day of December, 2012.

(Signature and Acknowledgement Page to Mortgage)

BEFORE ME, the undersigned authority, on this day personally appeared W. David McCarver IV, Senior Vice President of TEXAS CAPITAL BANK, N.A., a national banking association, known to me to be the person whose name is subscribed to the foregoing instrument, and acknowledged to me that he executed the same for the purposes and consideration therein expressed, as the act and deed of such national banking association and in the capacity therein stated.

GIVEN UNDER MY HAND AND SEAL OF OFFICE this ____ day of December, 2012.

(Signature and Acknowledgement Page to Mortgage)

EXHIBIT A

This Exhibit A consists of Exhibit A-1 and Exhibit A-2

Exhibit A

EXHIBIT A-1

TO MORTGAGE

Oil and Gas Properties

This Exhibit A-1 sets forth the description of the property interests covered by the Mortgage to which this Exhibit A-1 is attached. All of the terms defined in the Mortgage are used in this Exhibit A-1 with the same meanings given therein.

In addition, the designation “Working Interest” or “WI” 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 net revenue interest, or 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, windfall profits 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, windfall profits and other similar taxes.

Exhibit A-1

EXHIBIT A-2

TO MORTGAGE

Pipelines

All pipelines, gathering systems and related fixtures and equipment associated with the Wells and the Subject Interests.