Common use of Sales, Purchases and Operation of Producing Properties; Additional Financing Clause in Contracts

Sales, Purchases and Operation of Producing Properties; Additional Financing. A. Producing Properties whose purchase price exceeds 10% of the Unit Holders' Subscriptions may be acquired by the Partnership only if an Acquisition Reserve Report or an Engineering Review Letter has been received and evaluated by the General Partner with respect thereto. B. Neither the General Partner, Geodyne Resources, Inc. nor any Person controlled by Geodyne Resources, Inc. shall sell, transfer or convey any or all of its interest in Producing Properties to the Partnership or purchase or acquire any oil and gas properties or interest from the Partnership, directly or indirectly, except pursuant to transactions that are fair and reasonable to the Unit Holders under the circumstances at the time any such transaction is consummated. Except as otherwise provided in Section 4.3E below, such transactions shall be further subject to the following restrictions: (i) Prior to the date on which the Partnership has acquired its final Producing Property, neither the General Partner, Geodyne Resources, Inc. nor any Person controlled by Geodyne Resources, Inc. (other than an Affiliated Program) shall acquire any Producing Property after the Activation of the Partnership unless the General Partner shall have determined that the acquisition by the Partnership of such Producing Property, or an interest therein, would not be in the best interests of the Partnership; (ii) Any purchase or sale of a Producing Property from or to the General Partner or any Affiliate shall be made at the Property Acquisition Cost for such Producing Property as adjusted for intervening operations, unless the General Partner or such Affiliate has reasonable grounds to believe that cost is materially more or less than the fair market value of such property, in which case such sale or purchase shall be made at a price equal to the fair market value thereof as determined by an Independent Petroleum Engineer; (iii) If the General Partner sells, transfers or conveys any oil, gas or other mineral interest or property to the Partnership, it must, at the same time, sell the Partnership an equal proportionate interest in all its other property in the same Prospect. A sale, transfer or conveyance to the Partnership of less than the entire ownership interest of the General Partner or any Affiliate is only permitted if: (a) the interests retained or obtained by the General Partner or Affiliate and acquired by the Partnership are either (x) proportionate, uniform and undivided Working Interests if the Producing Property acquired by the Partnership is a Working Interest or (y) proportionate, uniform and undivided Royalty Interests if the Producing Property acquired by the Partnership is a Royalty, (b) the respective obligations of the General Partner or Affiliate and the Partnership are substantially the same, and (c) the interest of the General Partner or its Affiliate in revenues does not exceed the amount proportionate to its interest. The General Partner and its Affiliate may not retain or obtain any overrides or other burdens on the interest obtained by the Partnership, and may not enter into any Farmouts with respect to its retained interest, except to nonaffiliated third parties or to an Affiliated Program; (iv) In the event the General Partner or any Affiliate proposes to acquire an interest in a Prospect in which the Partnership has an interest or in a Prospect abandoned by the Partnership within one year preceding such proposed acquisition, the General Partner or Affiliate shall offer the interest to the Partnership; and if cash or financing is not available to the Partnership to purchase such interest, neither the General Partner nor Affiliate shall acquire an interest in such Prospect. The term "abandon" for the purpose of this subparagraph shall mean the termination, either voluntary or by operation of the Lease or otherwise, of all of the Partnership's interest in the Prospect. This subsection shall not apply after the lapse of five years of the Activation of the Partnership or to any Affiliated Program where the interest of the General Partner is less than or equal to its interest in the Partnership, there is no duplication of fees to the General Partner, and the General Partner does not obtain a greater benefit from purchase of the interest by the Affiliated Program than it would if the interest were purchased by the Partnership; (v) During the existence of the Partnership and before it has ceased operations, neither the General Partner nor any Affiliate (excluding any Affiliated Program where the interest of the General Partner is less than or equal to its interest in the Partnership) shall acquire, retain or drill for its own account any oil and gas interest in any Prospect upon which the Partnership possesses an interest, except for transactions which comply with Section 4.3B(iii) or 4.

Sales, Purchases and Operation of Producing Properties; Additional Financing. A. Producing Properties whose purchase price exceeds 10% of the Unit Holders' Subscriptions to the Limited Partnership may be acquired by the Production Partnership only if an Acquisition Reserve Report or an Engineering Review Audit Letter has been received prepared and evaluated by the General Partner with respect thereto. B. Neither the General Partner, Geodyne Resources, Inc. Managing Partner nor any Person controlled by Geodyne Resources, Inc. Affiliate shall sell, transfer or convey any or all of its interest in Producing Properties to the Production Partnership or purchase or acquire any oil and gas properties or interest from the Production Partnership, directly or indirectly, except pursuant to transactions that are fair and reasonable to the Unit Holders Limited Partnership under the circumstances at the time any such transaction is consummated. Except as otherwise provided in Section 4.3E below, such Such transactions shall be further subject to the following restrictions: (i) Prior to the date on which the Production Partnership has acquired its final Producing Property, neither the General Partner, Geodyne Resources, Inc. Managing Partner nor any Person controlled by Geodyne Resources, Inc. Affiliate of the Managing Partner (other than an Affiliated Program) shall acquire any Producing Property after the Activation of the Production Partnership unless prior thereto the General Production Partnership shall have been offered the right to acquire such Producing Property, or an interest therein, and the Managing Partner shall have determined that the acquisition by the Partnership of such Producing Property, or an interest therein, would is not be in the best interests of the Production Partnership; (ii) Any purchase or sale of a Producing Property from or to the General Managing Partner or any Affiliate shall be made at the Property Acquisition Cost for such Producing Property as adjusted for intervening operations, unless the General Managing Partner or such Affiliate has reasonable grounds to believe that cost is materially more or less than the fair market value of such property, in which case such sale or purchase shall be made at a price equal to the fair market value thereof as determined by an Independent Petroleum Engineerindependent petroleum engineer; (iii) If the General Managing Partner sells, transfers or conveys any oil, gas or other mineral interest interests or property to the Production Partnership, it must, at the same time, sell to the Production Partnership an equal proportionate interest in all its other property in the same Prospect. A sale, transfer Sale or conveyance to the Production Partnership of less than the entire ownership interest of the General Managing Partner or any Affiliate is only permitted if: (a) the interests retained or obtained by the General Managing Partner or Affiliate and acquired by the Production Partnership are either (x) proportionate, uniform and undivided Working Interests if the Producing Property acquired by the Production Partnership is a Working Interest or (y) proportionate, uniform and undivided Royalty Interests if the Producing Property acquired by the Production Partnership is a Royalty, (b) the respective obligations of the General Managing Partner or Affiliate and the Production Partnership are substantially the same, and (c) the interest of the General Managing Partner or its Affiliate in revenues does not exceed the amount proportionate to its interest. The General Managing Partner and its Affiliate may not retain or obtain any overrides or other burdens on the interest obtained by the Production Partnership, and may not enter into any Farmouts with respect to its retained interest, except to nonaffiliated third parties or to an Affiliated Program; (iv) In the event the General Managing Partner or any Affiliate proposes to acquire an interest in a Prospect in which the Production Partnership has an interest or in a Prospect abandoned by the Production Partnership within one year preceding such proposed acquisition, the General Managing Partner or Affiliate shall offer the interest to the Production Partnership; and if cash or financing is not available to the Production Partnership to purchase such interest, neither the General Managing Partner nor Affiliate shall acquire an interest in such Prospect. The term "abandon" for the purpose of this subparagraph shall mean the termination, either voluntary or by operation of the Lease or otherwise, of all of the Production Partnership's interest in the Prospect. This subsection shall not apply after the lapse of five years of the Activation of the Production Partnership or to any Affiliated Program where the interest of the General Managing Partner is less than or equal to its interest in the Production Partnership, there is are no duplication of fees to the General Managing Partner, and the General Managing Partner does not obtain a greater benefit from purchase of the interest by the Affiliated Program than it would if the interest were purchased by the Production Partnership; (v) During the existence of the Production Partnership and before it has ceased operations, neither the General Managing Partner nor any Affiliate (excluding any Affiliated Program where the interest of the General Managing Partner is less than or equal to its interest in the Production Partnership) shall acquire, retain or drill for its own account any oil and gas interest in any Prospect upon which the Production Partnership possesses an interest, except for transactions which comply with Section 4.3B(iii) or 4.

Sales, Purchases and Operation of Producing Properties; Additional Financing. A. Producing Properties whose purchase price exceeds 10% of the Unit Holders' Subscriptions to the Limited Partnership may be acquired by the Production Partnership only if an Acquisition Reserve Report or an Engineering Review Audit Letter has been received prepared and evaluated by the General Partner with respect thereto. B. Neither the General Partner, Geodyne Resources, Inc. Managing Partner nor any Person controlled by Geodyne Resources, Inc. Affiliate shall sell, transfer or convey any or all of its interest in Producing Properties to the Production Partnership or purchase or acquire any oil and gas properties or interest from the Production Partnership, directly or indirectly, except pursuant to transactions that are fair and reasonable to the Unit Holders Limited Partnership under the circumstances at the time any such transaction is consummated. Except as otherwise provided in Section 4.3E below, such Such transactions shall be further subject to the following restrictions: (i) Prior to the date on which the Production Partnership has acquired its final Producing Property, neither the General Partner, Geodyne Resources, Inc. Managing Partner nor any Person controlled by Geodyne Resources, Inc. Affiliate of the Managing Partner (other than an Affiliated Program) shall acquire any Producing Property after the Activation of the Production Partnership unless prior thereto the General Production Partnership shall have been offered the right to acquire such Producing Property, or an interest therein, and the Managing Partner shall have determined that the acquisition by the Partnership of such Producing Property, or an interest therein, would is not be in the best interests of the Production Partnership; (ii) Any purchase or sale of a Producing Property from or to the General Managing Partner or any Affiliate shall be made at the Property Acquisition Cost for such Producing Property as adjusted for intervening operations, unless the General Managing Partner or such Affiliate has reasonable grounds to believe that cost is materially more or less than the fair market value of such property, in which case such sale or purchase shall be made at a price equal to the fair market value thereof as determined by an Independent Petroleum Engineerindependent petroleum engineer; (iii) If the General Managing Partner sells, transfers or conveys any oil, gas or other mineral interest interests or property to the Production Partnership, it must, at the same time, sell to the Production Partnership an equal proportionate interest in all its other property in the same Prospect. A sale, transfer Sale or conveyance to the Production Partnership of less than the entire ownership interest of the General Managing Partner or any Affiliate is only permitted if: (a) the interests retained or obtained by the General Managing Partner or Affiliate and acquired by the Production Partnership are either (x) proportionate, uniform and undivided Working Interests if the Producing Property acquired by the Production Partnership is a Working Interest or (y) proportionate, uniform and undivided Royalty Interests if the Producing Property acquired by the Production Partnership is a Royalty, (b) the respective obligations of the General Managing Partner or Affiliate and the Production Partnership are substantially the same, and (c) the interest of the General Managing Partner or its Affiliate in revenues does not exceed the amount proportionate to its interest. The General Managing Partner and its Affiliate may not retain or obtain any overrides or other burdens on the interest obtained by the Production Partnership, and may not enter into any Farmouts with respect to its retained interest, except to nonaffiliated third parties or to an Affiliated Program; (iv) In the event the General Managing Partner or any Affiliate proposes to acquire an interest in a Prospect in which the Production Partnership has an interest or in a Prospect abandoned by the Production Partnership within one year preceding such proposed acquisition, the General Managing Partner or Affiliate shall offer the interest to the Production Partnership; and if cash or financing is not available to the Production Partnership to purchase such interest, neither the General Managing Partner nor Affiliate shall acquire an interest in such Prospect. The term "abandon" for the purpose of this subparagraph shall mean the termination, either voluntary or by operation of the Lease or otherwise, of all of the Production Partnership's interest in the Prospect. This subsection shall not apply after the lapse of five years of the Activation of the Production Partnership or to any Affiliated Program where the interest of the General Managing Partner is less than or equal to its interest in the Production Partnership, there is are no duplication of fees to the General Managing Partner, and the General Managing Partner does not obtain a greater benefit from purchase of the interest by the Affiliated Program than it would if the interest were purchased by the Production Partnership; (v) During the existence of the Production Partnership and before it has ceased operations, neither the General Managing Partner nor any Affiliate (excluding any Affiliated Program where the interest of the General Managing Partner is less than or equal to its interest in the Production Partnership) shall acquire, retain or drill for its own account any oil and gas interest in any Prospect upon which the Production Partnership possesses an interest, except for transactions which comply with Section 4.3B(iii) or 4.

Sales, Purchases and Operation of Producing Properties; Additional Financing. A. Producing Properties whose purchase price exceeds 10% of the Unit Holders' Subscriptions to the Limited Partnership may be acquired by the Production Partnership only if an Acquisition Reserve Report or an Engineering Review Audit Letter has been received prepared and evaluated by the General Partner with respect thereto. B. Neither the General Partner, Geodyne Resources, Inc. Managing Partner nor any Person controlled by Geodyne Resources, Inc. Affiliate shall sell, transfer or convey any or all of its interest in Producing Properties to the Production Partnership or purchase or acquire any oil and gas properties or interest from the Production Partnership, directly or indirectly, except pursuant to transactions that are fair and reasonable to the Unit Holders Limited Partnership under the circumstances at the time any such transaction is consummated. Except as otherwise provided in Section 4.3E below, such Such transactions shall be further subject to the following restrictions: (i) Prior to the date on which the Production Partnership has acquired its final Producing Property, neither the General Partner, Geodyne Resources, Inc. Managing Partner nor any Person controlled by Geodyne Resources, Inc. Affiliate of the Managing Partner (other than an Affiliated Program) shall acquire any Producing Property after the Activation of the Production Partnership unless prior thereto the General Production Partnership shall have been offered the right to acquire such Producing Property, or an interest therein, and the Managing Partner shall have determined that the acquisition by the Partnership of such Producing Property, or an interest therein, would is not be in the best interests of the Production Partnership; (ii) Any purchase or sale of a Producing Property from or to the General Managing Partner or any Affiliate shall be made at the Property Acquisition Cost for such Producing Property as adjusted for intervening operations, unless the General Managing Partner or such Affiliate has reasonable grounds to believe that cost is materially more or less than the fair market value of such property, in which case such sale or purchase shall be made at a price equal to the fair market value thereof as determined by an Independent Petroleum Engineerindependent petroleum engineer; (iii) If the General Managing Partner sells, transfers or conveys any oil, gas or other mineral interest interests or property to the Production Partnership, it must, at the same time, sell to the Production Partnership an equal proportionate interest in all its other property in the same Prospect. A sale, transfer Sale or conveyance to the Production Partnership of less than the entire ownership interest of the General Managing Partner or any Affiliate is only permitted if: (a) the interests retained or obtained by the General Managing Partner or Affiliate and acquired by the Production Partnership are either (x) proportionate, uniform and undivided Working Interests if the Producing Property acquired by the Production Partnership is a Working Interest or (y) proportionate, uniform and undivided Royalty Interests if it the Producing Property acquired by the Production Partnership is a Royalty, (b) the respective obligations of the General Managing Partner or Affiliate and the Production Partnership are substantially the same, and (c) the interest of the General Managing Partner or its Affiliate in revenues does not exceed the amount proportionate to its interest. The General Managing Partner and its Affiliate may not retain or obtain any overrides or other burdens on the interest obtained by the Production Partnership, and may not enter into any Farmouts with respect to its retained interest, except to nonaffiliated third parties or to an Affiliated Program; (iv) In the event the General Managing Partner or any Affiliate proposes to acquire an interest in a Prospect in which the Production Partnership has an interest or in a Prospect abandoned by the Production Partnership within one year preceding such proposed acquisition, the General Managing Partner or Affiliate shall offer the interest to the Production Partnership; and if cash or financing is not available to the Production Partnership to purchase such interest, neither the General Managing Partner nor Affiliate shall acquire an interest in such Prospect. The term "abandon" for the purpose of this subparagraph shall mean the termination, either voluntary or by operation of the Lease or otherwise, of all of the Production Partnership's interest in the Prospect. This subsection shall not apply after the lapse of five years of the Activation of the Production Partnership or to any Affiliated Program where the interest of the General Managing Partner is less than or equal to its interest in the Production Partnership, there is are no duplication of fees to the General Managing Partner, and the General Managing Partner does not obtain a greater benefit from purchase of the interest by the Affiliated Program than it would if the interest were purchased by the Production Partnership; (v) During the existence of the Production Partnership and before it has ceased operations, neither the General Managing Partner nor any Affiliate (excluding any Affiliated Program where the interest of the General Managing Partner is less than or equal to its interest in the Production Partnership) shall acquire, retain or drill for its own account any oil and gas interest in any Prospect upon which the Production Partnership possesses an interest, except for transactions which comply with Section 4.3B(iii) or 4.

Sales, Purchases and Operation of Producing Properties; Additional Financing. A. Producing Properties whose purchase price exceeds 10% of the Unit Holders' Subscriptions may be acquired by the Partnership only if an Acquisition Reserve Report or an Engineering Review Letter has been received and evaluated by the General Partner with respect thereto. B. Neither the General Partner, Geodyne Resources, Inc. nor any Person controlled by Geodyne Resources, Inc. shall sell, transfer or convey any or all of its interest in Producing Properties to the Partnership or purchase or acquire any oil and gas properties or interest from the Partnership, directly or indirectly, except pursuant to transactions that are fair and reasonable to the Unit Holders under the circumstances at the time any such transaction is consummated. Except as otherwise provided in Section 4.3E below, such transactions shall be further subject to the following restrictions: (i) Prior to the date on which the Partnership has acquired its final Producing Property, neither the General Partner, Geodyne Resources, Inc. nor any Person controlled by Geodyne Resources, Inc. (other than an Affiliated Program) shall acquire any Producing Property after the Activation of the Partnership unless the General Partner shall have determined that the acquisition by the Partnership of such Producing Property, or an interest therein, would not be in the best interests of the Partnership; (ii) Any purchase or sale of a Producing Property from or to the General Partner or any Affiliate shall be made at the Property Acquisition Cost for such Producing Property as adjusted for intervening operations, unless the General Partner or such Affiliate has reasonable grounds to believe that cost is materially more or less than the fair market value of such property, in which case such sale or purchase shall be made at a price equal to the fair market value thereof as determined by an Independent Petroleum Engineer; (iii) If the General Partner sells, transfers or conveys any oil, gas or other mineral interest or property to the Partnership, it must, at the same time, sell the Partnership an equal proportionate interest in all its other property in the same Prospect. A sale, transfer or conveyance to the Partnership of less than the entire ownership interest of the General Partner or any Affiliate is only permitted if: (a) the interests retained or obtained by the General Partner or Affiliate and acquired by the Partnership are either (x) proportionate, uniform and undivided Working Interests if the Producing Property acquired by the Partnership is a Working Interest or (y) proportionate, uniform and undivided Royalty Interests if the Producing Property acquired by the Partnership is a Royalty, (b) the respective obligations of the General Partner or Affiliate and the Partnership are substantially the same, and (c) the interest of the General Partner or its Affiliate in revenues does not exceed the amount proportionate to its interest. The General Partner and its Affiliate may not retain or obtain any overrides or other burdens on the interest obtained by the Partnership, and may not enter into any Farmouts with respect to its retained interest, except to nonaffiliated third parties or to an Affiliated Program; (iv) In the event the General Partner or any Affiliate proposes to acquire an interest in a Prospect in which the Partnership has an interest or in a Prospect abandoned by the Partnership within one year preceding such proposed acquisition, the General Partner or Affiliate shall offer the interest to the Partnership; and if cash or financing is not available to the Partnership to purchase such interest, neither the General Partner nor Affiliate shall acquire an interest in such Prospect. The term "abandon" for the purpose of this subparagraph shall mean the termination, either voluntary or by operation of the Lease or otherwise, of all of the Partnership's interest in the Prospect. This subsection shall not apply after the lapse of five years of the Activation of the Partnership or to any Affiliated Program where the interest of the General Partner is less than or equal to its interest in the Partnership, there is no duplication of fees to the General Partner, and the General Partner does not obtain a greater benefit from purchase of the interest by the Affiliated Program than it would if the interest were purchased by the Partnership; (v) During the existence of the Partnership and before it has ceased operations, neither the General Partner nor any Affiliate (excluding any Affiliated Program where the interest of the General Partner is less than or equal to its interest in the Partnership) shall acquire, retain or drill for its own account any oil and gas interest in any Prospect upon which the Partnership possesses an interest, except for transactions which comply with Section 4.3B(iii) or 44.8. In the event the Partnership abandons its interest in a Prospect, this restriction shall continue for one year following abandonment. The geological limits of a Prospect owned by the Partnership shall be enlarged or contracted on the basis of subsequently acquired geological data to define the productive limits of a reservoir and must include all of the acreage determined by the subsequent data to be encompassed by such reservoir. If, during the period of five years from the Activation of the Partnership, the geological limits of a Prospect, as so enlarged, encompass any interest held by the General Partner or an Affiliate of the General Partner (excluding an Affiliated Program where the interest of the General Partner is identical to or less than its interest in the Partnership), such interest shall be sold to the Partnership in accordance with the provisions of Section 4.3B(iv) and any net income previously received by the General Partner or Affiliate shall be paid over to the Partnership. If the General Partner acquires additional acreage or interests in a Prospect of the Partnership, it must sell such to the Partnership and is prohibited from retaining any such interest, except as may be permitted by Section 4.3B. Notwithstanding the foregoing, the Partnership will not be required to expend additional funds to acquire any such interest unless funds are available from the Capital Contributions of the Partners; (vi) Producing Properties may be sold, Farmed-out or otherwise transferred from or to an Affiliated Program only pursuant to transactions that comply with Sections 4.3B (iii), 4.3B(iv) or 4.8, provided that the compensation arrangement or any other interest or right of the General Partner or any Affiliate is the same in the Partnership and Affiliated Program, or, if different, the compensation of the General Partner does not exceed the lower of the compensation it would have received in the Partnership or the Affiliated Program; (vii) Any Sale of inventory or other materials by the Partnership to the General Partner or Affiliate shall be made at the applicable rates set forth in the standard form of the accounting procedure then recommended by the Council of Petroleum Accountants Societies of North America; (viii) Any operating agreements pursuant to which the General Partner or any Affiliate acts as operator of Producing Properties shall be of a nature customary in the industry and payments to the General Partner or any Affiliate for acting as operator shall not exceed the compensation which would be paid by unaffiliated third parties in the same geographic area for similar goods and services. Reimbursement of the General Partner's overhead pursuant to such operating agreement will not be duplicative of any reimbursement of General and Administrative Costs made pursuant to Section 4.12; and (ix) To the extent the General Partner or any Affiliate acquires an interest in a Producing Property in which the Partnership acquires an interest, the General Partner or Affiliate shall pay its allocable portion of the cost of the preparation of the Acquisition Reserve Report or Engineering Review Letter, as the case may be, respecting such Producing Property. A. provided that such interest rate shall in no event exceed the maximum allowed by law; and (z) expenditures made and costs incurred by the General Partner or such Affiliate, if any, for processing facilities, pipelines, gas sales facilities, Improved Recovery projects, drilling costs and other procedures and facilities necessary to produce efficiently and market the oil and gas reserves from a Producing Property, all to the extent such costs and expenditures are not Property Acquisition Costs. C. The General Partner may not expend any amount of Partnership funds over the term of the Partnership for the payment of Partnership costs (other than recompletion costs) incurred in connection with Development Drilling and Identified Development Drilling in excess of 10% of the sum of: (i) the amount of the Unit Holders' Subscriptions, plus (ii) the Partnership's permissible borrowings. If the General Partner determines that funds in addition to the Capital Contributions are required for the payment of Partnership costs (other than Property Acquisition Costs), the General Partner may apply or reserve Revenues or Investment Income for the payment of such Partnership costs and/or the General Partner may cause the Partnership to borrow funds for the payment of Partnership costs incurred in connection with Development Drilling, Identified Development Drilling, Improved Recovery operations, and capital expenditures or abandonment costs for processing and transportation facilities; provided, however, that the aggregate outstanding principal amount of such borrowings shall not at any one time exceed an amount equal to 20% of the Unit Holders' Subscriptions. No creditor who makes a nonrecourse loan to the Partnership may have or acquire, at any time as a result of making the loan, any direct or indirect interest in the profits, capital or property of the Partnership other than as a secured creditor. D. The General Partner shall have the authority to secure the payment of borrowings incurred by it for its own account or for purposes of paying its allocable share of Partnership costs by assigning to lenders all or part of its rights to receive distributions of Partnership Revenues, and by granting such lenders a security interest or mortgage in an undivided interest in any Partnership Property not to exceed its percentage interest in Revenues; provided, however, that the General Partner shall retain unencumbered at least a 1% interest in each item of Partnership Property, and each item of Partnership Revenues, gain, loss, deduction and credit. Notwithstanding anything to the contrary in this Agreement, in the event of any sale or foreclosure of the General Partner's interest in full or partial satisfaction of such borrowings, appropriate adjustments shall be made in the Capital Accounts of the General Partner and Unit Holders and in the method by which Revenues and costs are allocated to the General Partner and Unit Holders to assure that the Partnership will not bear any of the costs attributable to such sold or foreclosed interest and that the General Partner will not share or participate in any of the capital, Revenues, costs or distributions attributable to such sold or foreclosed interest except to the extent of the unencumbered interest retained by the General Partner. The General Partner shall indemnify the Partnership and the Unit Holders against any expenses resulting from a sale or foreclosure of the General Partner's interest. E. The provisions of Section 4.3B notwithstanding, if the Partnership intends to acquire Working Interests, acquisitions of Net Profits Interests by one or more I/P Partnerships may be made in connection with the Partnership's acquisitions of Working Interests. Net Profits Interests acquired by an I/P Partnership may either be carved-out of the Working Interests or reserved from the Working Interests by the sellers of such Working Interests on such basis as the General Partner determines. The Net Profit Interests acquired by an I/P Partnership may not exceed 75% of the net profits attributable to the aggregate Working Interests in all of the Producing Properties acquired by the Partnerships together. The primary factor in determining the sharing of net profits between the Working Interests acquired by the Partnership and the Net Profits Interest acquired by the I/P Partnership will be the amount of money contributed to each acquisition by each purchaser. In fixing such sharing percentages, the General Partner need not give special consideration to risks associated with the ownership of the Working Interests or to costs of equipment which will be owned by the Partnership as a Working Interest owner if such costs will be amortized against the proceeds of oil and gas production in arriving at the amount of net profits from which the I/P Partnership's (as Net Profits Interest holder) share of production is determined. If the amount of money contributed by each purchaser ever is not the primary factor in determining such sharing of net profits, then the sharing will be based upon a valuation of the respective interests made by a Independent Petroleum Engineer If the I/P Partnership acquires a Royalty interest in a Producing Property in which a Working Interest is acquired by the Partnership, each participant's portion of the purchase price will be determined on the basis of an appraisal by a Independent Petroleum Engineer of the fair market values of the respective interests in the property being acquired (taking into account the tax consequences applicable to the several participants). If the General Partner or an Affiliate other than an Affiliated Program acquires an interest in any such property acquisition, such appraisal will be performed by an Independent Petroleum Engineer and if the aggregate revenue interest of the General Partner and its Affiliates in any Affiliated Program participating in such a property acquisition is greater than their aggregate revenue interest in the I/P Partnership, then with respect to the property interests so acquired the greater aggregate revenue interest shall be reduced so as not to exceed the lesser revenue interest. F. The General Partner may cause the Partnership to acquire assets which may otherwise not be considered suitable for investment or operation by the Partnership if they are acquired as part of a package consisting primarily of Producing Properties; provided, however, that in the event any such assets are acquired by the Partnership, the General Partner shall use its best efforts to sell or otherwise dispose of such assets for value as soon as practical and any proceeds realized from such sale or disposition shall be allocated among the General Partner and the Unit Holders in the same proportions as the costs thereof were charged to their respective accounts.