Page 25 - Petrospex_Elaine Prospect

B. If Operator should elect to proceed to foreclose the lien of Operator
as against the interest of an Owner having an interest in the property, this
Operating Agreement does hereby include provisions for non-judicial sale
under the laws of the State of Texas and James M. Decker or other attorney
duly licensed by the State of Texas is hereby appointed as Trustee for such
purpose. Upon such default, said Trustee or Operator shall at least 30 days
preceding the date of nonjudicial sale serve written notice of the proposed
sale by certified mail on Owner at her/his address according to the records of
Operator. The affidavit of any person having knowledge of the facts to the
effect that such service was completed shall be prima facie evidence of the
facts of service. After such notice, said Trustee shall proceed to sell all the
interest of Owner in the property at public auction to the highest bidder for
cash after having given notice of the time and of sale and in the manner and
after the advertisement of such sale as is now required by statutes of the
State of Texas in making sales of real estate under deeds of trust. Sale of a
part of the realty would not exhaust the power of sale and sales may be made
from time to time until all of the property is sold or the obligations paid in
full. Said Trustee shall have authority to appoint an attorney in fact to act as
Trustee in conducting the foreclosure sale and executing a deed to the
purchasers; and it is further agreed that said Trustee or her/his successor
may sell said property together or in lots and/or parcels as to him shall deem
expedient and after such sales as aforesaid shall make, execute and
deliver to the purchaser thereof good and sufficient deeds, assignments
or other lawful conveyances to vest in said purchaser or purchasers title
to the Owner’s interest in the property in fee simple together with all
personal property used or obtained in connection therewith and together
with all of the proceeds of production held by any party for the payment to
Owner. From the proceeds of said sale, said Trustee shall first pay all
charges, costs and expenses in executing these provisions and secondly pay
any sums due by the Trustee for taxes in the preservation of the security and
thereafter pay to Operator the amount necessary to satisfy the obligations of
Owner hereunder and the balance, if any, shall be paid to Owner. It is
agreed that such sale shall be a perpetual bar against Owner and its heirs,
successors and assigns and legal representatives and all other persons
claiming under him, them or any of them. It is further agreed that said
Trustee or any holder or holders of said obligation or Operator shall have the
right to become the purchaser or purchasers at such sale to the highest
bidder or bidders in which event the bid or bids may be credited upon said
indebtedness of Owner. It is stipulated and agreed that in case of any sale
hereunder by Trustee or her/his successor all prerequisites of said sale shall
be presumed to have been performed and any conveyance given hereunder all
statements of fact or recitals therein made as to the non-payment of money
secured or as to any default under the terms hereof or as to the request of the

Operating Agreement - Page 5 of 15