Common use of Overriding Royalty Interest Clause in Contracts

Overriding Royalty Interest. MI agrees to convey to the Agent, for the pro rata benefit of the Lenders based on their respective Percentage Shares at the time of receipt by the Agent of amounts due pursuant to the Assignment of ORRI, on the Closing Date and pursuant to the Assignment of ORRI, the Lenders ORRI. The following provisions are applicable to the Lenders ORRI, notwithstanding the fact that such provisions do not appear in the Assignment of ORRI: (a) upon the one year anniversary of the Closing Date and if during the term of this Agreement up to such point in time no Event of Default has occurred, one-half of the Lenders ORRI shall revert to MI; (b) following the twelve month anniversary of the final payoff of the Loan, but only if such final payoff occurs as scheduled herein, all scheduled reductions of the Loan Balance have been paid when due hereunder and all payments of interest due hereunder have been paid when due hereunder, one-half of the portion of the Lenders ORRI held by the Agent at the Maturity Date shall revert to MI; and (c) MI shall have the right (exercisable by written notice to the Agent), but not the obligation, and only if such final payoff occurs as scheduled herein, all scheduled reductions of the Loan Balance have been paid when due hereunder and all payments of interest due hereunder have been paid when due hereunder, to repurchase, at any time during the 24-month period immediately following the final payoff of the Loan and at a purchase price equal to 100% of the PV-10 value of the PDP Reserves attributable to such remaining portion of the Lenders ORRI using the higher of (i) Base Prices or (ii) NYMEX Strip Prices, determined as of a date within 45 days of such written notice to the Agent (the “Remaining Lenders ORRI Repurchase Closing Date”) and on the basis of the Reserve Report provided to the Agent in satisfaction of the requirement below in this Section 2.19. In connection with such purchase by MI from the Agent, MI shall deliver to the Agent a Reserve Report prepared by a nationally-recognized or regionally-recognized petroleum engineer or firm of petroleum engineers approved by the Agent and with an effective date of the Remaining Lenders ORRI Repurchase Closing Date. The Agent shall execute recordable conveyances in favor of MI, in form and substance reasonably satisfactory to the Agent and MI, necessary to give effect to the provisions of the immediately preceding sentence of this Section 2.20. Furthermore, the provisions of this Section 2.20 shall survive the payment and performance of all Obligations and the termination of this Agreement.

Overriding Royalty Interest. MI agrees At Closing, Borrower shall assign to convey Lender an ORRI equal to six percent (6%) of 8/8ths proportionately reduced to the AgentWorking Interest of Assignor; provided, however, that if Borrower submits a Request for the pro rata benefit Commitment for a Development Loan pursuant to Section 2.1(b) and Lender declines to provide such Development Loan, Lender only shall earn a six percent (6%) ORRI in all of the Lenders based on their respective Percentage Shares at Xxxxx drilled or in the time process of receipt by the Agent of amounts due pursuant to the Assignment of ORRI, being drilled on the Closing Date and pursuant to the Assignment of ORRI, the Lenders ORRI. The following provisions are applicable to the Lenders ORRI, notwithstanding the fact that such provisions do not appear in the Assignment of ORRI: (a) upon the one year anniversary Properties as of the Closing Date and if during date of Lender’s decision to decline to provide such Development Loan. In the term of this Agreement up event Lender declines to provide any such point in time no Event of Default has occurred, one-half of the Lenders ORRI shall revert to MI; (b) following the twelve month anniversary of the final payoff of the Development Loan, but only if such final payoff occurs as scheduled herein, all scheduled reductions of the Loan Balance have been paid when due hereunder and all payments of interest due hereunder have been paid when due hereunder, one-half of the Lender shall reconvey to Borrower any portion of the Lenders ORRI held by the Agent at the Maturity Date shall which should revert to MI; and (c) MI Borrower as set forth in this Section 8.4 and in connection with such declination. Set-Off Rights. Upon the occurrence and during the continuance of an Event of Default, Lender shall have the right (exercisable by written notice to set-off and apply against the Agent)Obligations in such manner as Lender may determine, but not the obligation, and only if such final payoff occurs as scheduled herein, all scheduled reductions of the Loan Balance have been paid when due hereunder any and all payments of interest due hereunder have been paid when due hereunderdeposits (general or special, to repurchasetime or demand, provisional or final) or other sums at any time during credited by or owing from Lender or any depositary to Borrower whether or not the 24Obligations are then due, except for any amounts owing to third-month period immediately party Working Interest and royalty interest holders of which Lender shall have been notified. Lender shall provide reasonable notice to Borrower following the final payoff of the Loan and at a purchase price equal to 100% of the PV-10 value of the PDP Reserves attributable to such remaining portion of the Lenders ORRI using the higher of (i) Base Prices or (ii) NYMEX Strip Prices, determined as of a date within 45 days any application of such written notice funds. As further security for the Obligations, Borrower hereby grants to Lender a security interest in all money, instruments, and other property of Borrower now or hereafter held by Lender, including, without limitation, property held in safekeeping. In addition to Lender’s right of set-off and as further security for the Agent Obligations, Borrower hereby grants to Lender a security interest and lien in all deposits (the “Remaining Lenders ORRI Repurchase Closing Date”general or special, time or demand, provisional or final) and other accounts of Borrower now or hereafter on the basis of the Reserve Report provided deposit with or held by Lender or any depositary and all other sums at any time credited by or owing from Lender or any depositary to the Agent in satisfaction of the requirement below in this Section 2.19. In connection with such purchase by MI from the Agent, MI shall deliver to the Agent a Reserve Report prepared by a nationally-recognized or regionally-recognized petroleum engineer or firm of petroleum engineers approved by the Agent and with an effective date of the Remaining Lenders ORRI Repurchase Closing DateBorrower. The Agent shall execute recordable conveyances rights and remedies of Lender hereunder are in favor addition to other rights and remedies (including, without limitation, other rights of MI, in form and substance reasonably satisfactory to the Agent and MI, necessary to give effect to the provisions of the immediately preceding sentence of this Section 2.20. Furthermore, the provisions of this Section 2.20 shall survive the payment and performance of all Obligations and the termination of this Agreementset-off) which Lender may have.

Overriding Royalty Interest. MI agrees to convey Pursuant to the AgentParticipation Agreement dated December 1, for 2003, by and among Palace Exploration Company, Zxxxx & Txxxxx, Inc., The Oxford Oil Company, and the pro rata benefit Company concerning the Cumberland, Mallard and Pintail Prospects (the “Participation Agreement”), the Company reserved an overriding royalty interest (“ORRI”) of three percent (3%) of the Lenders based on their respective Percentage Shares at Leases (as defined in the time Participation Agreement) as an employee overriding royalty (the “Employee Overriding Royalty”). Immediately prior to the closing of receipt the acquisition of the Company contemplated by Recital B. (above) (the “Closing”), and as further identified in Exhibit A attached hereto, the Company shall (i) pay to Employee the percentage of the earnings from the Employee Overriding Royalty that have been accrued by the Agent Company as of amounts due pursuant to the Assignment of ORRI, on the Closing Date (the “Accrued ORRI Earnings”), in the amount identified in Exhibit A, and (ii) assign to Employee the split and percentage amounts of the Employee Overriding Royalty identified in Exhibit A (the “ORRI Assignment”) and pursuant to the Assignment of ORRIOverriding Royalty attached hereto as Exhibit B. Except as described otherwise in this Agreement, the Lenders ORRI. The following provisions are applicable to the Lenders ORRI, notwithstanding the fact that such provisions do not appear in the Assignment of ORRI: (a) upon the one year anniversary of event the Closing Date and if does not occur during the term of this Agreement up Agreement, the Accrued ORRI Earnings shall not be paid to such point Employee and the Employee shall not receive the ORRI Assignment, but instead the Accrued ORRI Earnings and ORRI Assignment shall be re-allocated in time no Event of Default has occurred, one-half the sole discretion of the Lenders ORRI shall revert to MI; (b) following the twelve month anniversary Company’s board of the final payoff of the Loan, but only if such final payoff occurs as scheduled herein, all scheduled reductions of the Loan Balance have been paid when due hereunder and all payments of interest due hereunder have been paid when due hereunder, one-half of the portion of the Lenders ORRI held by the Agent at the Maturity Date shall revert to MI; and (c) MI shall have the right (exercisable by written notice to the Agent), but not the obligation, and only if such final payoff occurs as scheduled herein, all scheduled reductions of the Loan Balance have been paid when due hereunder and all payments of interest due hereunder have been paid when due hereunder, to repurchase, at any time during the 24-month period immediately following the final payoff of the Loan and at a purchase price equal to 100% of the PV-10 value of the PDP Reserves attributable to such remaining portion of the Lenders ORRI using the higher of (i) Base Prices or (ii) NYMEX Strip Prices, determined as of a date within 45 days of such written notice to the Agent (the “Remaining Lenders ORRI Repurchase Closing Date”) and on the basis of the Reserve Report provided to the Agent in satisfaction of the requirement below in this Section 2.19. In connection with such purchase by MI from the Agent, MI shall deliver to the Agent a Reserve Report prepared by a nationally-recognized or regionally-recognized petroleum engineer or firm of petroleum engineers approved by the Agent and with an effective date of the Remaining Lenders ORRI Repurchase Closing Date. The Agent shall execute recordable conveyances in favor of MI, in form and substance reasonably satisfactory to the Agent and MI, necessary to give effect to the provisions of the immediately preceding sentence of this Section 2.20. Furthermore, the provisions of this Section 2.20 shall survive the payment and performance of all Obligations and the termination of this Agreementdirectors.