Message-ID: <8765657.1075842215485.JavaMail.evans@thyme> Date: Tue, 25 Jan 2000 05:27:00 -0800 (PST) From: dan.bump@enron.com To: dan.hyvl@enron.com Subject: Bonepile: WHGGS Mortgage Mime-Version: 1.0 Content-Type: text/plain; charset=us-ascii Content-Transfer-Encoding: 7bit X-From: Dan J Bump X-To: Dan J Hyvl X-cc: X-bcc: X-Folder: \Dan_Hyvl_Dec2000_June2001\Notes Folders\All documents X-Origin: HYVL-D X-FileName: dhyvl.nsf Dan-- I'm forwarding these comments to the Mortgage Agreement from Quantum for your review. I'm not very familiar with Mortgage/credit - type issues, but let's discuss our responses at your convenience. Thx D ---------------------- Forwarded by Dan J Bump/DEN/ECT on 01/25/2000 02:22 PM --------------------------- Enron Capital & Trade Resources Corp. From: Doug Garrett 01/25/2000 12:43 PM To: Dan J Bump/DEN/ECT@Enron cc: "'roobannon@phillipsmcfall.com'" Subject: Bonepile: WHGGS Mortgage Dan, Per our discussion this am. Mortage concerns: B. Recitals: we want to make clear that the term loan amount can be "up to" $750,000 as opposed to "is" $750,000. 1.1: Mortgagors need to be defined as all working interest owners in the leases and not the royalty or overriding royalty owners. Also stipulate that ownership of the Wellhead Gas Gathering System (WHGGS) ownership is identical to the leasehold working interest ownership. Here again Quantum will need to sign on behalf of itself and as agent for its program investors. EOW will sign for itself. The nonworking interest owners will also need to sign for themselves. 1.2.b: Again stipulate that RI and ORRI owners not subject to mortgage or that all leasehold working interest owners are bound. 2.1: Mortgagee would be the assignee in this provision. We need clarification on the ramifications of the assignment being absolute. 2.4: No duty of Mortgagee to produce rents is too much control to give Mortgagee even in theory. 3.1: Stipulate that lien affects only leasehold working interest owners. 5.5.1: Again mortgagor needs to be well defined. 5.1.(b): Enernet of Wyoming (EOW) has granted a mortgage to secure the operations bond required by the Wyoming Office of State Lands and Investments in the amount of $10,000. This mortgage is a permitted exception hereto. EOW has also file of record AAPL Model Form 610RS-1989 Recording Supplement to the JOA and Financing Statement in the ordinary course of business. 5.4: The loss threshhold should probably need to be increased in light of the funding amount involved. 7.3: The personal liability language referenced in this provision appears inconsistent with the in rem nature of the mortage and therefore out of place. Dan, let me know when we can talk with you and/or your counsel on these matters. Thanks, Doug