ASSIGNMENT OF OVERRIDING ROYALTY INTERESTS

SPYGLASS ENERGY GROUP, LLC, an Oklahoma limited liability company (“Assignor”), for Ten Dollars and other good and valuable consideration, the receipt and sufficiency of which is hereby acknowledged, hereby transfers, assigns, sets over, and delivers unto Petro Exploration Funding, LLC, a New York limited liability company (“Assignee”), an overriding royalty interest equal to TWO PERCENT (2%) of 8/8ths in the oil, gas and other hydrocarbon substances which may be produced, saved, sold and marketed from the oil and gas leases described in Exhibit A-1 and the Concession Agreement lands as defined and described in Exhibit A-2 (collectively referred to herein as the “Leases”), insofar as said Leases cover the lands specifically described therein, said lands being situated in Osage County, Oklahoma.

 

TO HAVE AND TO HOLD the overriding royalty interests unto Assignee, its respective successors and assigns forever, with warranty of title by, through, and under the Assignor, but not otherwise. The overriding royalty interests herein conveyed shall be subject to the following provisions and conditions:

 

1. The overriding royalty interests herein assigned shall be free and clear of and from any and all costs and expenses of developing, operating, producing and marketing, but shall bear its proportionate part of all gross production, severance and other taxes which may be assessed or levied against said overriding royalty interests or the production attributable thereto. Nothing contained herein shall impose on Assignor any covenant, duty or obligation to develop or operate the properties covered by the Leases other than as required by the Leases or to maintain the Leases in effect by the payment of delay rentals.

2. In the event Assignor owns less than the entire and undivided leasehold estate in the lands covered by the Leases, or any of them, the overriding royalty interests herein assigned shall be reduced proportionately and shall be payable to Assignee in the proportion which the leasehold interests owned by Assignor bear to the entire and undivided oil, gas and mineral estates described therein.

 

3. In the event the Leases, or any of them, cover less than the entire and undivided interest in the oil, gas and other minerals in the lands covered by the Leases, the overriding royalty interests hereby assigned shall be reduced proportionately and shall be payable to Assignee in the proportion which the interests in the oil, gas and other minerals in the lands covered by said Leases bear to the entire and undivided interest in the oil, gas and other minerals in and under said lands.

 

4. Assignor shall have the right to pool the Leases and the lands covered thereby, or any part thereof, with other lands and leases into units, and if the Assignor shall so pool the Leases and the lands covered thereby voluntarily, or if the Leases and the lands covered thereby, or any part thereof, are pooled with other leases and lands in order to form drilling and spacing units by any governmental authority having jurisdiction, then the overriding royalty interests herein assigned and conveyed shall be reduced in the proportion which the acreage covered by the Leases bears to all of the acreage included in any such pooled unit.

 

5. The overriding royalty interests herein assigned shall attach and apply to all of the Leases described in Exhibit A-1 and any renewals or extensions thereof, and to any future Leases granted under the Concession Agreement (as defined in Exhibit A-2) and any renewals or extensions thereof.