Exhibit 10.1

CONVEYANCE OF NET PROFITS INTEREST

This Conveyance of Net Profits Interest (this “Conveyance”) is made, as of the
date set forth on the signature page hereof, from MV Partners, LLC, a Kansas
limited liability company (successor by conversion to MV Partners, LP, a Kansas
limited partnership) to The Bank of New York Trust Company, N.A., with offices
at 221 West Sixth Street, 1st Floor, Austin, Texas 78701, Attention: Mike J.
Ulrich, as trustee (the “Trustee”), acting not in its individual capacity but
solely as trustee of the MV Oil Trust (the “Trust”), pursuant to the Amended and
Restated Trust Agreement of the Trust, among MV Partners, LLC, as Trustor, The
Bank of New York Trust Company, N.A., as Trustee and Wilmington Trust Company,
as Delaware Trustee, a statutory trust created under the Delaware Statutory
Trust Act as of August 3, 2006 (such Trustee acting as trustee of the Trust,
“Grantee”).  Capitalized terms shall have the meaning set forth in Article II
below.

ARTICLE I
GRANT OF NET PROFITS INTEREST

FOR AND IN CONSIDERATION OF TEN AND NO/100 DOLLARS ($10.00) AND OTHER GOOD AND
VALUABLE CONSIDERATION (INCLUDING THE ISSUANCE BY GRANTEE TO GRANTOR OF
11,500,000 TRUST UNITS) TO GRANTOR PAID BY GRANTEE, THE RECEIPT AND SUFFICIENCY
OF WHICH ARE HEREBY ACKNOWLEDGED BY GRANTOR, GRANTOR HAS BARGAINED, SOLD,
GRANTED, CONVEYED, TRANSFERRED, ASSIGNED, SET OVER, AND DELIVERED, AND BY THESE
PRESENTS DOES HEREBY BARGAIN, SELL, GRANT, CONVEY, TRANSFER, ASSIGN, SET OVER,
AND DELIVER UNTO GRANTEE, ITS SUCCESSORS AND ASSIGNS, EFFECTIVE AS OF THE
EFFECTIVE TIME, (I) A NET PROFITS INTEREST (THE “NET PROFITS INTEREST”) IN AND
TO THE MINERALS IN AND UNDER AND PRODUCED AND SAVED FROM THE SUBJECT INTERESTS
DURING THE NET PROFITS PERIOD, CALCULATED IN ACCORDANCE WITH THE PROVISION OF
ARTICLE III BELOW AND PAYABLE SOLELY OUT OF GROSS PROCEEDS FROM THE SALE OF THE
SUBJECT MINERALS PRODUCED AND SAVED THROUGH THE SUBJECT WELLS, IN AN AMOUNT
EQUAL TO THE PRODUCT OF THE PROCEEDS PERCENTAGE TIMES THE NET PROFITS
ATTRIBUTABLE TO THE SUBJECT INTERESTS, ALL AS MORE FULLY PROVIDED HEREINBELOW
AND (II) WITHOUT DUPLICATION OF THE FOREGOING, AN AMOUNT, PAYABLE BY WIRE
TRANSFER OF IMMEDIATELY AVAILABLE FUNDS ON OR BEFORE THE FIFTH BUSINESS DAY
FOLLOWING THE FIRST QUARTERLY RECORD DATE, EQUAL TO THE PRODUCT OF THE PROCEEDS
PERCENTAGE TIMES THE NET PROFITS THAT WOULD HAVE BEEN PAYABLE BY GRANTOR TO
GRANTEE PURSUANT TO THE TERMS OF THIS CONVEYANCE HAD GRANTEE BEEN IN EXISTENCE
AND THIS CONVEYANCE BEEN DATED AND IN EFFECT AS OF JULY 1, 2006 THROUGH, BUT
EXCLUDING, THE EFFECTIVE TIME, PROVIDED THAT, IN THE EVENT THE AMOUNT PAYABLE BY
GRANTOR PURSUANT TO THIS CLAUSE (II) CANNOT BE DEFINITIVELY DETERMINED AS OF THE
FIFTH BUSINESS DAY FOLLOWING THE FIRST QUARTERLY RECORD DATE, GRANTOR SHALL PAY
GRANTEE, BY WIRE TRANSFER OF IMMEDIATELY AVAILABLE FUNDS ON THE SUCH DATE, AN
AMOUNT EQUAL TO GRANTOR’S GOOD FAITH ESTIMATE OF THE AMOUNT PAYABLE BY GRANTOR
PURSUANT TO THIS CLAUSE (II), AND GRANTOR AND GRANTEE SHALL COOPERATE TO
SUBSEQUENTLY DETERMINE THE FINAL AMOUNT PAYABLE BY GRANTOR TO GRANTEE PURSUANT
TO THIS CLAUSE (II) AND (A) IF SUCH FINAL AMOUNT IS MORE THAN THE AMOUNT
ESTIMATED AND PAID BY GRANTOR TO GRANTEE ON THE FIFTH BUSINESS DAY FOLLOWING THE
FIRST QUARTERLY RECORD DATE, THEN GRANTOR SHALL PAY THE DIFFERENCE BETWEEN THESE
TWO AMOUNTS TO GRANTEE BY WIRE TRANSFER IN IMMEDIATELY AVAILABLE FUNDS WITHIN 10
BUSINESS DAYS FOLLOWING THE DETERMINATION OF SUCH AMOUNT OR (B) IF SUCH FINAL
AMOUNT IS LESS THAN THE AMOUNT ESTIMATED AND PAID BY GRANTOR TO GRANTEE ON SUCH
DATE, THEN SUCH OVERPAYMENT SHALL BE ADDRESSED IN THE MANNER SPECIFIED IN
SECTION 3.4 HEREOF.

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TO HAVE AND TO HOLD the Net Profits Interest, together with all and singular the
rights and appurtenances thereto in anywise belonging, unto Grantee, its
successors and assigns, subject, however, to the following terms and provisions,
to-wit:

ARTICLE II
DEFINITIONS

As used herein, the following terms shall have the meaning ascribed to them
below:

“Administrative Hedge Costs” shall mean those costs paid by Grantor to
counter-parties under the Existing Hedges or to Persons that provide credit to
maintain any Existing Hedge, (in each case) after the Effective Time but
excluding any Hedge Settlement Costs.

“Affiliate” shall mean with respect to a specified Person, any Person that
directly or indirectly controls, is controlled by, or is under common control
with, the specified Person.  As used in this definition, the term “control” (and
the correlative terms “controlling,” “controlled by,” and “under common
control”) shall mean the possession, directly or indirectly, of the power to
direct or cause the direction of the management and policies of a Person,
whether through ownership of voting securities, by contract or otherwise.

“Assignment of Hedge Proceeds” shall mean that certain Assignment of Hedge
Proceeds of even date herewith between Grantor and Grantee.

“Average Annual Capital Expenditure Amount” shall mean the quotient of (a) the
sum of (i) the capital expenditures to be debited to the Net Profits Account and
(ii) the amounts debited to the Net Profits Account pursuant to Section
3.1(b)(xiii) for approved capital expenditure projects, in each case
attributable to the three twelve-month periods ending on the Capital Expenditure
Limitation Date, divided by (b) three.  Commencing on the Capital Expenditure
Limitation Date, and each anniversary of the Capital Expenditure Limitation Date
thereafter, the Average Annual Capital Expenditure Amount will be increased by
2.5%.

“BOE” shall mean (a) for Oil included in the Subject Minerals, one barrel, (b)
for Gas Liquids included in the Subject Minerals, 1.54 barrels, and (c) for Gas
included in the Subject Minerals, the amount of such hydrocarbons equal to one
barrel, determined using the ratio of six Mcf of Gas to one barrel of Oil.

“Business Day” shall mean a day on which any bank to or from which a payment
authorized hereunder may be made are not closed as authorized or required by law
under the laws of the State of Kansas.

“Capital Expenditure Limitation Date” shall mean the later to occur of (a) June
30, 2023 and (b) the last day of the Payment Period during which the total
volumes of the Subject Minerals produced, saved and sold from and after July 1,
2006 equals the volume of 13.239134 MMBOE.

“Contingent Debt Regulations” shall have the meaning given such term in Section
8.9(b).

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“Code” shall mean the Internal Revenue Code of 1986, as amended.

“Conveyance” shall mean this Conveyance of Net Profits Interest, as the same may
be amended or modified from time to time by one or more instruments executed by
both Grantor and Grantee.

“Debit Balance” shall have the meaning given such term in Section 3.2(c).

“Effective Time” shall mean 7:00 a.m., local time, in effect where the Subject
Interests are located, on January 24, 2007.

“Eligible Materials” shall mean Materials for which amounts in respect of the
cost of such Materials were properly debited to the Net Profits Account.

“Existing Hedges” shall mean the Hedges entered into by Grantor with respect to
the Subject Mineralsprior to the date hereof as more particularly described in
the Assignment of Hedge Proceeds.

“Fair Value” shall mean, with respect to any portion of the Net Profits Interest
to be released pursuant to Section 5.2 in connection with a sale or release of
any Subject Interest, an amount equal to the excess of (i) the proceeds which
could reasonably be expected to be obtained from the sale of such portion of the
Net Profits Interest to a party which is not an Affiliate of either Grantor or
the Trust on an arms’-length negotiated basis, taking into account relevant
market conditions and factors existing at the time of any such proposed sale or
release, over (ii) Grantee’s proportionate share of any sales costs, commissions
and brokerage fees.

“Farmout Agreement” shall mean any farmout agreement, participation agreement,
exploration agreement, development agreement or any similar agreement.

“Gas” shall mean natural gas and other gaseous hydrocarbons or minerals,
including helium, but excluding any Gas Liquids.

“Gas Liquids” shall mean those natural gas liquids and other liquid
hydrocarbons, including ethane, propane, butane and natural gasoline, and
mixtures thereof, that are removed from a Gas stream by the liquids extraction
process of any field facility or gas processing plant and delivered by the
facility or plant as natural gas liquids.

“Grantee” shall mean Grantee as defined in the first paragraph of this
Conveyance, and its successors and assigns; and, unless the context in which
used shall otherwise require, such term shall include any successor owner at the
time in question of any or all of the Net Profits Interest.

“Grantor” shall mean MV Partners, LLC and its successors and assigns; and,
unless the context in which used shall otherwise require, such term shall
include any successor owner at the time in question of any or all of the Subject
Interests.

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“Hedge” shall mean any commodity hedging transaction pertaining to Minerals,
whether in the form of (i) forward sales and options to acquire or dispose of a
futures contract solely on an organized commodities exchange, (ii) derivative
agreements for a swap, cap, collar or floor of the commodity price, or (iii)
similar types of financial transactions classified as “notional principal
contracts” pursuant to Treasury Regulation § 1.989-1T(a)(2).

“Hedge Settlement Costs” shall mean any and all payments required to be made by
Grantor to the counterparties in connection with the settlement or
mark-to-market of trades made under any Existing Hedge and all payments made by
Grantor for any early termination of any Existing Hedge.

“Lease” shall mean (i) a lease of one or more Minerals described in Exhibit A
attached hereto as to all lands and depths described in such lease (or the
applicable part or portion thereof if limited in depth and/or areal extent in
Exhibit A) and any interest therein and any leasehold interest in any other
lease of Minerals derived from the pooling or unitization of such lease (or
portion thereof if limited on Exhibit A) with other leases, together with any
interest acquired or maintained by Grantor in any and all extensions of such
lease, (ii)  any replacement lease taken upon or in anticipation of termination
of such lease (if executed and delivered during the term of or within one year
after the expiration of the predecessor lease), as to all lands and depths
described in the predecessor lease (unless the extended or predecessor lease is
specifically limited in depth or areal extent in Exhibit A, in which event only
the corresponding portion of such lease shall be considered a renewal or
extension or a replacement lease subject to this Conveyance), and (iii) any
other Mineral leasehold, royalty, overriding royalty or Mineral fee interest
described in Exhibit A attached hereto; and “Leases” shall mean all such leases
and all such renewal and extensions and replacement leases.

“LLC Agreement” shall have the meaning given such term in Section 3.1(b)(i).

“Manufacturing Costs” shall mean the costs of Processing that generate
Manufacturing Proceeds received by Grantor.

“Manufacturing Proceeds” shall mean the excess, if any, of (i) proceeds received
by Grantor from the sale of Subject Minerals that are the result of any
Processing over (ii) the part of such proceeds that represents the Market Value
of such Subject Minerals before any Processing.

“Market Value” of any Subject Minerals shall mean:

(a)           With respect to Oil and Gas Liquids, (i) the highest price
available to Grantor for such Oil and Gas Liquids at the Lease on the date of
delivery pursuant to a bona fide offer, posted price or other generally
available marketing arrangement from or with a non-Affiliate purchaser, or (ii)
if no such offer, posted price or arrangement is available, the fair market
value of such Oil and/or Gas Liquids, on the date of delivery at the Lease,
determined in accordance with generally accepted and usual industry practices;

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(b)           With respect to Gas, (i) the price specified in any Production
Sales Contract for the sale of such Gas or (ii) if such Gas cannot be sold
pursuant to a Production Sales Contract, (A) the average of the three highest
prices (adjusted for all material differences in quality) being paid at the time
of production for Gas produced from the same field in sales between
non-affiliated Persons (or, if there are not three such prices within such
field, within a 50-mile radius of such field) but, for any Gas subject to price
restrictions established, prescribed or otherwise imposed by any governmental
authority having jurisdiction over the sale of such gas, no more than the
highest price permitted for such category or type of gas after all applicable
adjustments (including without limitation tax reimbursement, dehydration,
compression and gathering allowances, inflation and other permitted
escalations), or (B) if subsection (b)(ii)(A) above is not applicable, the fair
market value of such Gas, on the date of delivery, at the Lease, determined in
accordance with generally accepted and usual industry practices.

“Materials” shall mean materials, supplies, equipment and other personal
property or fixtures located on or used in connection with the Subject
Interests.

“Mcf” shall mean one thousand cubic feet.

“Minerals” shall mean Oil, Gas and Gas Liquids.

“MMBOE” shall mean one million BOE.

“Net Profits” shall have the meaning given such term in Section 3.2(b).

“Net Profits Account” shall mean the account maintained in accordance with the
provisions of Section 3.1.

“Net Profits Interest” shall have the meaning given such term in Article I.

“Net Profits Period” shall mean the period from and after the Effective Time
until and including the Termination Date.

“Oil” shall mean crude oil, condensate and other liquid hydrocarbons recovered
by field equipment or facilities, excluding Gas Liquids.

“Payment Period” shall mean a calendar quarter, provided that the first Payment
Period shall mean the period from and after the Effective Time until December
31, 2006, and the last Payment Period shall mean any portion of the calendar
quarter during which the Termination Date occurs from the beginning of such
calendar quarter until and including the Termination Date.

“Permitted Encumbrances” shall mean the following whether now existing or
hereinafter created but only insofar as they cover, describe or relate to the
Subject Interests or the lands described in any Lease:

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(a)           the terms, conditions, restrictions, exceptions, reservations,
limitations and other matters contained in the agreements, instruments and
documents that create or reserve to Grantor its interests in any of the Leases,
including any Prior Reversionary Interest;

(b)           any (i) undetermined or inchoate liens or charges constituting or
securing the payment of expenses that were incurred incidental to maintenance,
development, production or operation of the Leases or for the purpose of
developing, producing or processing Minerals therefrom or therein, and (ii)
materialman’s, mechanics’, repairman’s, employees’, contractors’, operators’ or
other similar liens or charges for liquidated amounts arising in the ordinary
course of business that Grantor has agreed to pay or is contesting in good faith
in the ordinary course of business;

(c)           any liens for taxes and assessments not yet delinquent or, if
delinquent, that are being contested in good faith in the ordinary course of
business;

(d)           any liens or security interests created by law or reserved in any
Lease for the payment of royalty, bonus or rental, or created to secure
compliance with the terms of the agreements, instruments and documents that
create or reserve to Grantor its interests in the Leases;

(e)           any obligations or duties affecting the Leases to any municipality
or public authority with respect to any franchise, grant, license or permit, and
all applicable laws, rules, regulations and orders of any governmental
authority;

(f)            any (i) easements, rights-of-way, servitudes, permits, surface
leases and other rights in respect of surface operations, pipelines, grazing,
hunting, lodging, canals, ditches, reservoirs or the like, and (ii) easements
for streets, alleys, highways, pipelines, telephone lines, power lines, railways
and other similar rights-of-way, on, over or in respect of the lands described
in the Leases, provided that, in the case of clauses (i) and (ii), such
easements, rights-of-way, servitudes, permits, surface leases and other rights
do not materially impair the value of the Net Profits Interest;

(g)           all lessors’ royalties, overriding royalties, net profits
interests, carried interests, production payments, reversionary interests and
other burdens on or deductions from the proceeds of production created or in
existence as of the Effective Time;

(h)           preferential rights to purchase or similar agreements and required
third party consents to assignments or similar agreements;

(i)            all rights to consent by, required notices to, filings with, or
other actions by any governmental authority in connection with the sale or
conveyance of the Leases or interests therein;

(j)            production sales contracts; division orders; contracts for sale,
purchase, exchange, refining or processing of Minerals; unitization and pooling
designations, declarations, orders and agreements; operating agreements;
agreements for development; area of mutual interest agreements; gas balancing or
deferred production agreements; processing agreements;

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plant agreements; pipeline, gathering and transportation agreements; injection,
repressuring and recycling agreements; salt water or other disposal agreements;
seismic or geophysical permits or agreements; and any and all other agreements
entered into by Grantor or its Affiliates in connection with the exploration or
development of the Leases or the extraction, processing or marketing of
production therefrom or to which any of the Leases were subject when acquired by
Grantor or its Affiliates;  and

(k)           conventional rights of reassignment upon release or abandonment of
property.

“Person” shall mean any individual, partnership, limited liability company,
corporation, trust, unincorporated association, governmental agency,
subdivision, or instrumentality, or other entity or association.

“Possible Refundable Amounts” shall have the meaning set forth in Section
3.1(a)(v).

“Prime Interest Rate” shall mean the lesser of (a) the rate of interest per
annum publicly announced from time to time by JPMorgan Chase Bank, N.A. as its
“prime rate” in effect at its principal office in New York City (each change in
the prime rate to be effective on the date such change is publicly announced),
with the understanding that such bank’s “prime rate” may be one of several base
rates, may serve as a basis upon which effective rates are from time to time
calculated for loans making reference thereto, and may not be the lowest of such
bank’s base rates or (b) the maximum rate of interest permitted under applicable
law.

“Prior Reversionary Interest” shall mean any contract, agreement, Farmout
Agreement, lease, deed, conveyance or operating agreement that exists as of the
Effective Time or that burdened the Subject Interests at the time such Subject
Interests were acquired by Grantor, that by the terms thereof requires a Person
to convey a part of the Subject Interests to another Person or to permanently
cease production of any Subject Well, including obligations arising pursuant to
any operating agreements, Leases, coal leases, and other similar agreements or
instruments affecting the Subject Interests.

“Proceeds Percentage” shall mean eighty percent (80%).

“Processing” or “Processed” shall mean to manufacture, fractionate or refine
Subject Minerals, but such terms do not mean or include activities involving the
use of normal lease or well equipment (such as dehydrators, gas treating
facilities, mechanical separators, heater-treaters, lease compression
facilities, injection or recycling equipment, tank batteries, field gathering
systems, pipelines and equipment and so forth) to treat or condition Minerals or
other normal operations on any of the Subject Interests.

“Production Sales Contracts” shall mean all contracts, agreements and
arrangements for the sale or disposition of Minerals.

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“Quarterly Record Date” shall mean the 15th day (or the next Business Day, if
the 15th day is not a Business Day) of the first month following the close of
each Payment Period.  The first Quarterly Record Date shall be February 15,
2007.

“Related Party” shall mean either Vess Oil Corporation or Murfin Drilling
Company, Inc., as the case may be.

“Reserve Account” shall mean an account to be maintained by Grantor pursuant to
Section 3.1; provided that the balance in such account at any time shall not
exceed $1,000,000, and provided further that amounts held in such account shall
be expended by Grantor only with respect to the exploration, development,
maintenance or operation of the Subject Interests and related activities.

“Subject Interests” shall mean each kind and character of right, title, claim,
or interest (collectively the “rights”), that Grantor has or owns in the Leases
whether such right be under or by virtue of a lease, a unitization or pooling
order, an operating agreement, a division order, or a transfer order or be under
or by virtue of any other type of claim or title, legal or equitable, recorded
or unrecorded, all as such rights shall be (a) enlarged or diminished by virtue
of the provisions of Section 4.2, and (b) enlarged by the discharge of any
payments out of production or by the removal of any charges or encumbrances to
which any of such rights are subject on the Effective Time (provided that such
removal is pursuant to the express terms of the instrument that created such
charge or encumbrance) and any and all renewals and extensions of the right
occurring within one year after the expiration of such rights.

“Subject Minerals” shall mean all Minerals in and under and that may be
produced, saved, and sold from, and are attributable to, the Subject Interests
from and after the Effective Time, after deducting the appropriate share of all
royalties and any overriding royalties, production payments and other similar
charges (except the Net Profits Interest) burdening the Subject Interests at the
Effective Time, provided that, (a) there shall not be included in the Subject
Minerals (i) any Minerals attributable to non-consent operations conducted with
respect to the Subject Interests (or any portion thereof) as to which Grantor
shall be a non-consenting party as of the Effective Time that are dedicated to
the recoupment or reimbursement of costs and expenses of the consenting party or
parties by the terms of the relevant operating agreement, unit agreement,
contract for development, or other instrument providing for such non-consent
operations (including any interest, penalty or other amounts related thereto),
or (ii) any Minerals unavoidably lost in production or used by Grantor for
production operations (including without limitation, fuel, secondary or tertiary
recovery) conducted solely for the purpose of producing Subject Minerals from
the Subject Interests and (b) there shall be included in the Subject Minerals
any Minerals attributable to non-consent operations conducted with respect to
the Subject Interests (or any portion thereof) as to which Grantor shall be a
non-consenting party as of the Effective Time that are produced, saved, and sold
from, and are attributable to the Subject Interests after the Effective Time
from and after the recoupment or reimbursement of costs and expenses (including
any interest, penalty or other amounts related thereto) of the consenting party
or parties by the terms of the relevant operating agreement, unit agreement,
contract agreement, contract development, or other instruments providing for
such non-consent operations.

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“Subject Well” shall mean each well on the Subject Interests in respect of which
Grantor owns any interest or is entitled to any of the Minerals production or
the proceeds therefrom (whether directly or indirectly by virtue of the effect
of any farmout or farmin provisions or other provisions).

“Termination Date” shall mean the later of (a) June 30, 2026 and (b) the day on
which the total volume of the Subject Minerals (including any Subject Minerals
produced from the Subject Interests Transferred by Grantor pursuant to Section
5.1 hereof) produced, saved and sold from and after July 1, 2006 equals a volume
of (i) 14.393950 MMBOE less (ii) the aggregate volume of proved reserves
attributable to the Subject Interests that are Transferred by Grantor pursuant
to Section 5.2 hereof (with the volume of proved reserves attributable to any
individual Subject Interest so Transferred determined solely by reference to the
quantity of reserves attributable to such Subject Interest that are expected to
be produced during the term of the Net Profits Interest in the most recent
reserve report prepared by an independent reserve engineer in accordance with
the methodology specified in the rules and regulations of the Securities and
Exchange Commission, provided that, in the event an independent reserve engineer
has not prepared a reserve report satisfying the foregoing requirements within
12 months prior to the date of the Transfer of such Subject Interest, no volume
of proved reserves for much Subject Interest shall be included in such aggregate
volume pursuant to this clause (ii)).

“Third Party” shall mean any Person other than Grantor, Grantee or the Trust.

“Transfer” including its syntactical variants, shall mean any assignment, sale,
transfer, conveyance, or disposition of any property; provided, Transfer as used
herein does not include the granting of a security interest in Grantor’s
interest in any property, including the Subject Interests or the Subject
Minerals.

“Trust Units” shall have the meaning ascribed to such term in the Amended and
Restated Trust Agreement of MV Oil Trust, dated of even date herewith, by and
among Grantor, Grantee and Wilmington Trust Company.

ARTICLE III
ESTABLISHMENT OF NET PROFITS ACCOUNT

3.1           NET PROFITS ACCOUNT AND RESERVE ACCOUNT.  GRANTOR SHALL ESTABLISH
AND MAINTAIN TRUE AND CORRECT BOOKS AND RECORDS IN ORDER TO DETERMINE THE
CREDITS AND DEBITS TO A NET PROFITS ACCOUNT AND A RESERVE ACCOUNT TO BE
MAINTAINED BY GRANTOR AT ALL TIMES DURING THE NET PROFITS PERIOD, IN ACCORDANCE
WITH THE TERMS OF THIS CONVEYANCE AND PRUDENT AND ACCEPTED ACCOUNTING PRACTICES.
FOR PURPOSES OF THIS SECTION 3.1:

(A)           THE NET PROFITS ACCOUNT SHALL BE CREDITED WITH AN AMOUNT EQUAL TO
THE SUM, FROM AND AFTER THE EFFECTIVE TIME WITH RESPECT TO EACH PAYMENT PERIOD,
OF THE GROSS PROCEEDS (DETERMINED BEFORE CALCULATING THE NET PROFITS) RECEIVED
BY GRANTOR FROM THE SALE OF ALL SUBJECT MINERALS; PROVIDED, HOWEVER, THAT:

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(I)                                          GROSS PROCEEDS SHALL INCLUDE ALL
CONSIDERATION RECEIVED, DIRECTLY OR INDIRECTLY, FOR TRANSFERS OF SUBJECT
MINERALS AS, IF AND WHEN PRODUCED, INCLUDING WITHOUT LIMITATION (BUT SUBJECT TO
SECTION 3.1(A)(V)) ADVANCE PAYMENTS AND PAYMENTS UNDER TAKE-OR-PAY AND SIMILAR
PROVISIONS OF PRODUCTION SALES CONTRACTS;

(II)                                       IF ANY PROCEEDS ARE WITHHELD FROM
GRANTOR FOR ANY REASON (OTHER THAN AT THE REQUEST OF GRANTOR), SUCH PROCEEDS
SHALL NOT BE CONSIDERED TO BE GROSS PROCEEDS UNTIL SUCH PROCEEDS ARE ACTUALLY
RECEIVED BY GRANTOR;

(III)                                    IF GRANTOR BECOMES AN UNDERPRODUCED
PARTY UNDER ANY GAS BALANCING OR SIMILAR ARRANGEMENT AFFECTING THE SUBJECT
INTERESTS, THEN THE NET PROFITS ACCOUNT SHALL NOT BE CREDITED WITH ANY AMOUNTS
FOR ANY GAS ATTRIBUTABLE TO THE SUBJECT INTERESTS THAT IS DEEMED TO BE STORED
FOR GRANTOR’S ACCOUNT UNDER THE TERMS OF SUCH GAS BALANCING ARRANGEMENT, AND IF
GRANTOR BECOMES AN OVERPRODUCED PARTY UNDER ANY GAS BALANCING OR SIMILAR
ARRANGEMENT AFFECTING THE SUBJECT INTERESTS, THEN THE NET PROFITS ACCOUNT SHALL
NOT BE CREDITED WITH ANY AMOUNT FOR ANY GAS TAKEN BY AN UNDERPRODUCED PARTY AS
“MAKE-UP” GAS THAT WOULD OTHERWISE BE ATTRIBUTABLE TO THE SUBJECT INTERESTS. 
THE NET PROFITS ACCOUNT SHALL BE CREDITED WITH AMOUNTS RECEIVED BY GRANTOR (1)
FOR ANY “MAKE UP” GAS TAKEN BY GRANTOR AS A RESULT OF ITS POSITION AS AN
UNDERPRODUCED PARTY UNDER ANY GAS BALANCING OR SIMILAR ARRANGEMENT AFFECTING THE
SUBJECT INTERESTS, (2) AS A BALANCING OF ACCOUNTS UNDER A GAS BALANCING OR OTHER
SIMILAR ARRANGEMENT AFFECTING THE SUBJECT INTERESTS EITHER AS AN INTERIM
BALANCING OR AT THE DEPLETION OF THE RESERVOIR, AND (3) FOR ANY GAS TAKEN BY
GRANTOR ATTRIBUTABLE TO THE SUBJECT INTERESTS IN EXCESS OF ITS ENTITLEMENT SHARE
OF SUCH GAS;

(IV)                                   IF GRANTOR SHALL BE A PARTY AS TO ANY
NON-CONSENT OPERATIONS CONDUCTED WITH RESPECT TO ALL OR ANY OF THE SUBJECT
INTERESTS FROM AND AFTER THE EFFECTIVE TIME, ALL GROSS PROCEEDS TO BE CREDITED
TO THE NET PROFITS ACCOUNT WITH RESPECT THERETO SHALL BE GOVERNED BY SECTION
4.3;

(V)                                      IF A CONTROVERSY OR POSSIBLE
CONTROVERSY EXISTS (WHETHER BY REASON OF ANY STATUTE, ORDER, DECREE, RULE,
REGULATION, CONTRACT, OR OTHERWISE) AS TO THE CORRECT OR LAWFUL SALES PRICE OF
ANY SUBJECT MINERALS, OR IF ANY AMOUNTS RECEIVED OR TO BE RECEIVED BY GRANTOR AS
“TAKE-OR-PAY” OR “RATABLE TAKE” PAYMENTS ARE SUBJECT TO REFUND TO ANY PURCHASERS
OF SUBJECT MINERALS (IN EACH CASE, SUCH AMOUNTS TOGETHER WITH ANY OTHER GROSS
PROCEEDS WITHHELD FROM, OR REPAYABLE BY, GRANTOR, “POSSIBLE REFUNDABLE
AMOUNTS”), THEN:

(A)                                   AMOUNTS WITHHELD BY SUCH PURCHASER OR
DEPOSITED BY IT WITH AN ESCROW AGENT SHALL NOT BE CONSIDERED TO HAVE BEEN
RECEIVED BY GRANTOR AND SHALL NOT BE CREDITED TO THE NET PROFITS ACCOUNT UNTIL
ACTUALLY COLLECTED BY GRANTOR; PROVIDED, HOWEVER, THAT THE NET PROFITS ACCOUNT
SHALL NOT BE CREDITED WITH ANY INTEREST, PENALTY, OR OTHER AMOUNT THAT IS NOT
DERIVED FROM THE SALE OF SUBJECT MINERALS; AND

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(B)                                     AMOUNTS RECEIVED OR TO BE RECEIVED BY
GRANTOR AND PROMPTLY DEPOSITED OR TO BE DEPOSITED BY IT WITH A NON-AFFILIATE
ESCROW AGENT, TO BE PLACED IN INTEREST BEARING ACCOUNTS UNDER USUAL AND
CUSTOMARY TERMS, SHALL NOT BE CONSIDERED TO HAVE BEEN RECEIVED BY GRANTOR AND
SHALL NOT BE CREDITED TO THE NET PROFITS ACCOUNT UNTIL ACTUALLY DISBURSED TO
GRANTOR BY SUCH ESCROW AGENT; PROVIDED, HOWEVER, THAT THE NET PROFITS ACCOUNT
SHALL NOT BE CREDITED WITH ANY INTEREST, PENALTY, OR OTHER AMOUNT THAT IS NOT
DERIVED FROM THE SALE OF SUBJECT MINERALS;

(VI)                                   GROSS PROCEEDS SHALL NOT INCLUDE ANY
AMOUNT RECEIVED BY GRANTOR IN RESPECT OF ANY PRODUCTION OF SUBJECT MINERALS
PRIOR TO THE EFFECTIVE TIME;

(VII)                                THE NET PROFITS ACCOUNT SHALL NOT BE
CREDITED WITH ANY AMOUNT THAT GRANTOR SHALL RECEIVE FOR ANY SALE OR OTHER
DISPOSITION OF ANY OF THE SUBJECT INTERESTS OR IN CONNECTION WITH ANY ADJUSTMENT
OF ANY WELL AND LEASEHOLD EQUIPMENT UPON UNITIZATION OF ANY OF THE SUBJECT
INTERESTS;

(VIII)                             GROSS PROCEEDS SHALL NOT INCLUDE ANY
MANUFACTURING PROCEEDS OR OTHER AMOUNTS THAT ARE REDUCTIONS OF DEBITS TO THE NET
PROFITS ACCOUNT UNDER THE PROVISO OF SECTION 3.1(B);

(IX)                                     IN THE EVENT THAT SUBJECT MINERALS ARE
PROCESSED PRIOR TO SALE, GROSS PROCEEDS SHALL INCLUDE ONLY THE MARKET VALUE OF
SUCH SUBJECT MINERALS BEFORE ANY SUCH PROCESSING;

(X)                                        THE AMOUNT OF GROSS PROCEEDS CREDITED
TO THE NET PROFITS ACCOUNT DURING ANY PAYMENT PERIOD SHALL BE REDUCED BY (1) THE
AGGREGATE HEDGE SETTLEMENT COSTS PAID BY GRANTOR WITH RESPECT TO SUCH PAYMENT
PERIOD AND (2) OVERPAYMENTS PURSUANT TO SECTION 3.4;

(XI)                                     GROSS PROCEEDS SHALL NOT INCLUDE ANY
AMOUNT TO WHICH GRANTOR IS ENTITLED BY VIRTUE OF A JUDGMENT OF A COURT OF
COMPETENT JURISDICTION RESOLVING A DISPUTE HEREUNDER BETWEEN GRANTEE AND GRANTOR
IN FAVOR OF GRANTOR, OR ANY AMOUNT PAID TO GRANTOR IN SETTLEMENT OF SUCH
DISPUTE; AND

(XII)                                  GROSS PROCEEDS SHALL NOT INCLUDE ANY
ADDITIONAL PROCEEDS FROM THE SALE OF MINERALS RELATED TO ANY SUBJECT WELL WITH
RESPECT TO WHICH GRANTOR ELECTS TO BE A PARTICIPATING PARTY (WHETHER PURSUANT TO
AN OPERATING AGREEMENT OR OTHER AGREEMENT OR ARRANGEMENT, INCLUDING WITHOUT
LIMITATION, NON-CONSENT RIGHTS AND OBLIGATIONS IMPOSED BY STATUTE OR REGULATORY
AGENCY) WITH RESPECT TO ANY OPERATION WITH RESPECT TO SUCH SUBJECT WELL WHERE
ANOTHER PARTY OR PARTIES HAVE ELECTED NOT TO PARTICIPATE IN SUCH OPERATION (OR
HAVE ELECTED TO ABANDON SUCH SUBJECT WELL) AND GRANTOR ELECTS TO PAY THE COSTS
OF SUCH NONPARTICIPATING OR ABANDONING PARTY AND AS A RESULT OF WHICH GRANTOR
BECOMES ENTITLED TO RECEIVE, EITHER TEMPORARILY (I.E., THROUGH A PERIOD OF
RECOUPMENT) OR PERMANENTLY ANY ADDITIONAL PROCEEDS FROM THE SALE OF MINERALS
RELATED TO SUCH SUBJECT WELL.

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(B)           THE NET PROFITS ACCOUNT SHALL BE DEBITED WITH AN AMOUNT EQUAL TO
THE SUM OF THE FOLLOWING (EXCLUDING IN ALL EVENTS MANUFACTURING COSTS AND HEDGE
SETTLEMENT COSTS), TO THE EXTENT THAT THE SAME ARE PROPERLY ALLOCABLE TO THE
SUBJECT INTERESTS (AND ANY RELATED EQUIPMENT OR PROPERTY USED IN CONNECTION
THEREWITH) AND THE PRODUCTION AND (SUBJECT TO SECTION 4.5) MARKETING OF SUBJECT
MINERALS THEREFROM AND HAVE BEEN INCURRED OR ACCRUED (AS DESCRIBED BELOW) BY
GRANTOR FROM AND AFTER THE EFFECTIVE TIME AND ATTRIBUTABLE TO PERIODS ENDING ON
OR BEFORE THE TERMINATION DATE:

(I)                                          ALL DIRECT COSTS (INCLUDING CAPITAL
COSTS) PAID BY GRANTOR (A) FOR ALL DIRECT LABOR (INCLUDING FRINGE BENEFITS) AND
OTHER SERVICES NECESSARY FOR EXPLORING, DEVELOPING, OPERATING, PRODUCING,
REWORKING AND MAINTAINING THE SUBJECT INTERESTS, (B) FOR DEHYDRATION,
COMPRESSION, SEPARATION AND TRANSPORTATION OF THE SUBJECT MINERALS, AND (C) FOR
ALL MATERIALS PURCHASED FOR USE ON, OR IN CONNECTION WITH, ANY OF THE SUBJECT
INTERESTS (INCLUDING WITHOUT LIMITATION (1) ALL AMOUNTS CHARGED GRANTOR FOR
CONFORMANCE OF INVESTMENT IF THE SUBJECT INTERESTS OR ANY PART OR PARTS THEREOF
ARE HEREAFTER FROM TIME TO TIME UNITIZED OR IF ANY PARTICIPATING AREA IN A
FEDERAL DIVIDED-TYPE UNIT IS CHANGED, (2) THE COSTS OF ANY SEISMIC (INCLUDING
3-D SEISMIC SURVEYS), GEOLOGICAL OR GEOPHYSICAL OPERATIONS RELATING TO THE
SEARCH FOR SUBJECT MINERALS, (3) THE COSTS OF DRILLING, COMPLETING, TESTING,
EQUIPPING, PLUGGING BACK, REWORKING, RECOMPLETING AND PLUGGING AND ABANDONING
ANY WELL ON THE SUBJECT INTERESTS, WHETHER OR NOT SUCH WELL IS A PRODUCER OR IS
ABANDONED AS A DRY HOLE OR JUNKED, (4) THE COST OF CONSTRUCTING GATHERING
FACILITIES, TANKS AND OTHER PRODUCTION AND DELIVERY FACILITIES ON THE SUBJECT
INTERESTS, AND (5) THE COST OF SECONDARY RECOVERY, PRESSURE MAINTENANCE,
REPRESSURING, RECYCLING AND OTHER OPERATIONS CONDUCTED FOR THE PURPOSE OF
ENHANCING PRODUCTION); PROVIDED, HOWEVER, THAT THE DEBITS MADE TO THE NET
PROFITS ACCOUNT PURSUANT TO THIS SUBSECTION (AND, TO THE EXTENT APPLICABLE,
PURSUANT TO THE OTHER APPLICABLE PROVISIONS OF THIS CONVEYANCE) WITH RESPECT TO
ANY SUBJECT INTEREST SHALL BE MADE ON THE SAME BASIS AS SUCH COSTS ARE CHARGED
UNDER THE OPERATING AGREEMENT (IF ANY) APPLICABLE TO SUCH SUBJECT INTEREST AT
THE TIME THE TRANSACTION GIVING RISE TO SUCH DEBIT OCCURRED, EXCEPT THAT (I) IN
THE CASE WHERE GRANTOR, A RELATED PARTY OR ONE OF GRANTOR’S AFFILIATES ACTS AS
OPERATOR OF ANY SUBJECT INTEREST, THE COSTS (INCLUDING OVERHEAD CHARGES) DEBITED
TO THE NET PROFITS ACCOUNT WITH RESPECT TO SUCH SUBJECT INTEREST SHALL NOT
EXCEED THE CHARGES DETERMINED IN ACCORDANCE WITH THE APPLICABLE PROVISIONS OF
THE FIRST AMENDED AND RESTATED OPERATING AGREEMENT OF MV PARTNERS LLC DATED
SEPTEMBER 1, 2006 BETWEEN MV ENERGY, LLC AND VAP-1, LLC, AS CURRENTLY IN EFFECT
(THE “LLC AGREEMENT”); AND (II) IN THE EVENT A SUBJECT INTEREST IS OPERATED AT
SUCH TIME BY A NON-AFFILIATE OF GRANTOR BUT IS NOT SUBJECT TO AN OPERATING
AGREEMENT, SUCH DEBIT SHALL BE MADE ON THE SAME BASIS AS GRANTOR IS CHARGED BY
SUCH NON-AFFILIATE OF GRANTOR; PROVIDED, FURTHER, IF GRANTOR ELECTS TO PAY THE
COSTS OF A NONCONSENTING PARTY OR NONPARTICIPATING PARTY WITH RESPECT TO WHICH
THE NET PROFITS ACCOUNT IS NOT CREDITED PURSUANT TO SECTION 3.1(A), GRANTOR
SHALL BE SOLELY RESPONSIBLE FOR SUCH COSTS;

(II)                                       ALL COSTS (INCLUDING WITHOUT
LIMITATION OUTSIDE LEGAL, ACCOUNTING AND ENGINEERING SERVICES) ATTRIBUTABLE TO
THE SUBJECT INTERESTS OF (A) HANDLING, INVESTIGATING AND/OR SETTLING LITIGATION,
ADMINISTRATIVE PROCEEDINGS AND CLAIMS (INCLUDING WITHOUT

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LIMITATION LIEN CLAIMS OTHER THAN LIENS FOR BORROWED FUNDS) AND (B) PAYMENT OF
JUDGMENTS, PENALTIES AND OTHER LIABILITIES (INCLUDING INTEREST THEREON), PAID BY
GRANTOR (AND NOT REIMBURSED UNDER INSURANCE MAINTAINED BY GRANTOR OR OTHERS) AND
INVOLVING ANY OF THE SUBJECT INTERESTS, OR INCIDENT TO THE DEVELOPMENT,
OPERATION OR MAINTENANCE OF THE SUBJECT INTERESTS, OR REQUIRING THE PAYMENT OR
RESTITUTION OF ANY PROCEEDS OF SUBJECT MINERALS, OR ARISING FROM TAX OR ROYALTY
AUDITS, EXCEPT THAT THERE SHALL NOT BE DEBITED TO THE NET PROFITS ACCOUNT ANY
EXPENSES INCURRED BY GRANTOR IN LITIGATION OF ANY CLAIM OR DISPUTE ARISING
HEREUNDER BETWEEN GRANTOR AND GRANTEE OR AMOUNTS PAID BY GRANTOR TO GRANTEE
PURSUANT TO A FINAL ORDER ENTERED BY A COURT OF COMPETENT JURISDICTION RESOLVING
ANY SUCH CLAIM OR DISPUTE OR AMOUNTS PAID BY GRANTOR TO GRANTEE IN CONNECTION
WITH THE SETTLEMENT OF ANY SUCH CLAIM OR DISPUTE;

(III)                                    ALL TAXES (EXCEPT FEDERAL AND STATE
INCOME, TRANSFER, MORTGAGE, INHERITANCE, ESTATE, FRANCHISE AND LIKE TAXES)
INCURRED, ACCRUED OR PAID BY GRANTOR WITH RESPECT TO THE OWNERSHIP OF THE
SUBJECT INTERESTS OR THE EXTRACTION OF THE SUBJECT MINERALS, INCLUDING WITHOUT
LIMITATION PRODUCTION, SEVERANCE, AND/OR EXCISE AND OTHER SIMILAR TAXES ASSESSED
AGAINST, AND/OR MEASURED BY, THE PRODUCTION OF (OR THE PROCEEDS OR VALUE OF
PRODUCTION OF) SUBJECT MINERALS, OCCUPATION TAXES, SALES AND USE TAXES, AND AD
VALOREM TAXES ASSESSED AGAINST OR ATTRIBUTABLE TO THE SUBJECT INTERESTS OR ANY
EQUIPMENT USED IN CONNECTION WITH PRODUCTION FROM ANY OF THE SUBJECT INTERESTS
AND ANY EXTRAORDINARY OR WINDFALL PROFITS TAXES THAT MAY BE ASSESSED IN THE
FUTURE BASED UPON PROFITS REALIZED OR PRICES RECEIVED FROM THE SALE OF SUBJECT
MINERALS; PROVIDED, HOWEVER, THAT IF GRANTEE IS ASSESSED ANY OF SUCH TAXES
INDIVIDUALLY AND GRANTEE PAYS SUCH TAXES, THEN THE TAXES WHICH GRANTEE IS
ASSESSED INDIVIDUALLY AND HAS PAID SHALL NOT BE DEBITED TO THE NET PROFITS
ACCOUNT;

(IV)                                   INSURANCE PREMIUMS ATTRIBUTABLE TO THE
OWNERSHIP OR OPERATION OF THE SUBJECT INTERESTS PAID BY GRANTOR FOR INSURANCE
ACTUALLY CARRIED FOR PERIODS AFTER THE EFFECTIVE TIME WITH RESPECT TO THE
SUBJECT INTERESTS, OR ANY EQUIPMENT LOCATED ON ANY OF THE SUBJECT INTERESTS, OR
INCIDENT TO THE DEVELOPMENT, OPERATION OR MAINTENANCE OF THE SUBJECT INTERESTS,
IT BEING RECOGNIZED THAT WHERE THE COVERAGE IS GENERAL IN NATURE, OR RELATES TO
A GROUP OF PROPERTIES (OR MORE THAN ONE INTEREST IN THE SAME PROPERTY), ONLY
THAT PORTION WHICH IS REASONABLY ALLOCATED TO THE SUBJECT INTERESTS SHALL BE
DEBITED HEREUNDER;

(V)                                      ALL AMOUNTS PAID BY GRANTOR
ATTRIBUTABLE TO THE SUBJECT INTERESTS AND CONSISTING OF (A) RENT AND OTHER
CONSIDERATION PAID FOR THE USE OR DAMAGE TO THE SURFACE, (B) DELAY RENTALS,
SHUT-IN WELL PAYMENTS, MINIMUM ROYALTIES AND SIMILAR PAYMENTS PAID PURSUANT TO
THE PROVISIONS OF AGREEMENTS IN FORCE AND EFFECT BEFORE THE EFFECTIVE TIME AND
(C) FEES FOR RENEWALS OR EXTENSIONS OF THE LEASES INCLUDED IN THE SUBJECT
INTERESTS;

(VI)                                   AMOUNTS ATTRIBUTABLE TO THE SUBJECT
INTERESTS AND CHARGED BY THE RELEVANT OPERATOR (INCLUDING THOSE AMOUNTS CHARGED
TO GRANTOR BY ANY RELATED PARTY) AS OVERHEAD CHARGES SPECIFIED IN APPLICABLE
OPERATING AGREEMENTS OR OTHER ARRANGEMENTS NOW

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OR HEREAFTER COVERING THE SUBJECT INTERESTS OR GRANTOR’S OPERATIONS WITH RESPECT
THERETO (SUBJECT TO THE FIRST PROVISO IN SECTION 3.1(B)(I));

(VII)                                IF AS A RESULT OF THE OCCURRENCE OF THE
BANKRUPTCY OR INSOLVENCY OR SIMILAR OCCURRENCE OF THE PURCHASER OF SUBJECT
MINERALS ANY AMOUNTS PREVIOUSLY CREDITED TO THE NET PROFITS ACCOUNT ARE
RECLAIMED FROM GRANTOR OR ITS REPRESENTATIVE, THEN THE AMOUNTS RECLAIMED AS
PROMPTLY AS PRACTICABLE FOLLOWING GRANTOR’S PAYMENT THEREOF;

(VIII)                             IF GRANTOR SHALL BE A PARTY AS TO ANY
NON-CONSENT OPERATIONS CONDUCTED WITH RESPECT TO ALL OR ANY OF THE SUBJECT
INTERESTS, ALL COSTS RELATED TO SUCH NON-CONSENT OPERATIONS TO BE DEBITED TO THE
NET PROFITS ACCOUNT WITH RESPECT THERETO SHALL BE GOVERNED BY SECTION 4.3;

(IX)                                     THE COSTS PAID BY GRANTOR IN CONNECTION
WITH THE EXERCISE OF ITS RIGHTS PURSUANT TO SECTION 4.6;

(X)                                        ALL COSTS PAID BY GRANTOR FOR
RECORDING THIS CONVEYANCE;

(XI)                                     ALL ADMINISTRATIVE HEDGE COSTS PAID BY
GRANTOR;

(XII)                                  WITHOUT DUPLICATION OF THE COSTS
DESCRIBED IN (IX) ABOVE, ALL OTHER DIRECT COSTS PAID BY GRANTOR FOR THE
NECESSARY OR PROPER DRILLING, COMPLETION, HOOK UP, PRODUCTION, OPERATION,
REWORKING, RECOMPLETING AND MAINTENANCE OF THE SUBJECT WELLS AND SUBJECT
INTERESTS, AND THE PLUGGING AND ABANDONING OF ANY UNPLUGGED SUBJECT WELLS
LOCATED ON THE SUBJECT INTERESTS, ABANDONING OF ANY FACILITIES USED IN
CONNECTION WITH THE SUBJECT INTERESTS AND, WHERE APPLICABLE, RESTORING OF THE
SURFACE OF THE SUBJECT INTERESTS;

(XIII)                               ANY DEBIT BALANCE CARRIED FORWARD PURSUANT
TO SECTION 3.2(C); AND

(XIV)                              THE AMOUNT OF ANY INCREASE IN THE RESERVE
ACCOUNT RELATED TO PROJECTED COSTS OF SCHEDULED FUTURE CAPITAL EXPENDITURE
PROJECTS, INCLUDING WELL DRILLING, RECOMPLETION AND WORKOVER COSTS THAT HAVE
BEEN APPROVED BY GRANTOR IN WRITING;

provided that the costs referred to in this Section 3.1(b) shall be reduced by
the following amounts received by Grantor from and after the Effective Time: (A)
any amounts received by Grantor as delay rentals, bonus, royalty or other
similar payments in connection with any Farmout Agreement or for dry hole,
bottom hole or other similar contributions related to the Subject Interests or
otherwise, (B) upon salvage or other disposition, the applicable actual salvage
value (as determined in accordance with the applicable operating agreement then
in effect and binding upon Grantor) of any Eligible Materials, less, in each
instance the actual costs of salvage or other disposition, (C) any cash payments
received by Grantor as a result of any pooling or unitization of the Subject
Interests if the costs giving rise to such payments were charged to the Net
Profits Account, directly or indirectly, (D) any insurance proceeds received by
Grantor in respect of the Subject Interests, Subject Minerals or Eligible
Materials if the cost of such insurance was charged to the Net Profits Account,
directly or indirectly, (E) any amounts received by Grantor from third parties
as rental or use fees for Eligible Materials, (F) the gross

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proceeds of any judgments or claims received by Grantor for damages occurring on
or after the Effective Time to the Subject Interests (or any part thereof or
interest therein) or any Materials (or any part thereof or interest therein)
used in connection with the operation of the Subject Interests or any Subject
Minerals, (G) any proceeds from the sale of Eligible Materials, (H) any payments
made to Grantor in connection with the drilling or deferring of drilling of any
Subject Well, (I) if, from and after the Effective Time, any Subject Minerals
shall be Processed before sale, the excess, if any, of the Manufacturing
Proceeds arising therefrom over the Manufacturing Costs of such Processing, (J)
any interest, penalty or other amount not derived from the sale of the Subject
Minerals that is paid to Grantor by the purchaser of production or escrow agent
in connection with Possible Refundable Amounts withheld or deposited with an
escrow agent, and (K) any amounts in the Reserve Account that are used to pay
for any costs specified in clauses (i) through (xii) of this Section 3.1(b)
(which amounts so used shall reduce the amount of the Reserve Account); and
provided further that (1) during each 12-month period beginning on the Capital
Expenditure Limitation Date, the sum of (x) the capital expenditures to be
debited to the Net Profits Account and (y) the amounts debited to the Net
Profits Accounts pursuant to Section 3.1(b)(xiii) may not exceed the Average
Annual Capital Expenditure Amount, and (2) any amounts in the Reserve Account
referred to in Section 3.1(b)(xiii) immediately preceding the Termination Date
shall be credited to Net Profits Account as of the Termination Date.

(C)           NOTWITHSTANDING ANYTHING HEREIN TO THE CONTRARY, THE AMOUNTS
DEBITED TO THE NET PROFITS ACCOUNT SHALL NOT INCLUDE ANY OF THE FOLLOWING: (A)
ANY AMOUNT THAT HAS ALSO BEEN USED TO REDUCE OR OFFSET THE AMOUNT OF THE SUBJECT
MINERALS (OR PROCEEDS OF PRODUCTION THEREOF) OR HAS OTHERWISE NOT BEEN INCLUDED
THEREIN (INCLUDING, BY WAY OF EXAMPLE AND WITHOUT LIMITATION, PROCEEDS
ATTRIBUTABLE TO ROYALTIES, OVERRIDING ROYALTIES, PRODUCTION PAYMENTS AND OTHER
CHARGES BURDENING THE SUBJECT INTERESTS AT THE EFFECTIVE TIME); (B) ANY
OVERRIDING ROYALTY, PRODUCTION PAYMENT OR OTHER CHARGE BURDENING THE SUBJECT
INTERESTS WHICH WAS CREATED BY GRANTOR AFTER THE EFFECTIVE DATE; (C) ANY
GENERAL, ADMINISTRATIVE OR OVERHEAD COSTS PAID OR INCURRED BY GRANTOR OR ITS
AFFILIATES, EXCEPT FOR THOSE PERMITTED UNDER SECTION 3.1(B)(VI); (D) ANY AMOUNTS
PAID BY GRANTOR (INITIAL OR A SUCCESSOR) TO SUCH GRANTOR’S PREDECESSOR IN
INTEREST WITH RESPECT TO PART OR ALL OF THE SUBJECT INTERESTS (INCLUDING WITHOUT
LIMITATION ANY PURCHASE PRICE OR OTHER CONSIDERATION PAID BY GRANTOR TO SUCH
PREDECESSOR IN INTEREST TO ACQUIRE ALL OR PART OF THE SUBJECT INTERESTS); AND
(E) ANY INTEREST, PREMIUMS, FEES OR SIMILAR CHARGES ARISING OUT OF BORROWINGS OR
PURCHASES OF ANY GOODS, EQUIPMENT OR OTHER ITEMS ON CREDIT, WHETHER OR NOT USED
ON OR OTHERWISE RELATED TO THE SUBJECT INTERESTS.

(D)           NOTHING SET FORTH IN THIS SECTION 3.1 SHALL BE INTERPRETED OR
APPLIED IN ANY MANNER THAT SHALL EVER REQUIRE OR PERMIT ANY DUPLICATION OF ALL
OR ANY PART OF ANY CREDIT OR DEBIT (OR REDUCTION THERETO) TO THE NET PROFITS
ACCOUNT WITH RESPECT TO THE SAME TRANSACTION, ITEM OF EXPENSE OR CHARGE, UNDER
THIS CONVEYANCE, OR THAT SHALL EVER REQUIRE OR PERMIT ANY INCLUSION OF ANY
CHARGE TO THE NET PROFITS ACCOUNT THAT IS REIMBURSED TO GRANTOR BY ANY PERSON.

(E)           GRANTEE, BY ITS ACCEPTANCE OF THE NET PROFITS INTEREST, CLEARLY
AND UNEQUIVOCALLY EXPRESSES ITS INTENT THAT THE DEBITS TO THE NET PROFITS
ACCOUNT CONTAINED IN SECTION 3.2(B) SHALL BE APPLICABLE REGARDLESS OF WHETHER OR
NOT THE LOSSES, COSTS, EXPENSES AND DAMAGES THAT MAY BE DEBITED IN ACCORDANCE
WITH SUCH SECTION AROSE SOLELY OR IN PART FROM THE ACTIVE, PASSIVE OR

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CONCURRENT NEGLIGENCE, STRICT LIABILITY OR OTHER FAULT OF GRANTOR OR ANY OF ITS
AFFILIATES, OTHER THAN THE GROSS NEGLIGENCE OR WILLFUL MISCONDUCT OF GRANTOR OR
ANY OF ITS AFFILIATES, EXCEPT TO THE EXTENT THAT ANY SUCH LOSSES, COSTS,
EXPENSES OR DAMAGES RESULT, DIRECTLY OR INDIRECTLY, FROM ANY BREACH OR
NONCOMPLIANCE WITH THE OPERATIONS STANDARD SET FORTH IN SECTION 4.1 HEREOF, AND
NOTHING CONTAINED HEREIN OR ELSEWHERE IN THIS CONVEYANCE SHALL BE CONSTRUED AS A
WAIVER OR RELEASE OF GRANTOR FROM ANY CLAIM, ACTION OR LIABILITY ARISING UNDER
SECTION 4.1 HEREOF.

3.2           ACCOUNTING.

(A)           AT THE END OF EACH PAYMENT PERIOD, A CALCULATION OF NET PROFITS
SHALL THEN BE MADE BY GRANTOR BY DEDUCTING (I) THE TOTAL DEBITS (AND REDUCTIONS
THEREOF) PROPERLY MADE TO THE NET PROFITS ACCOUNT DURING SUCH PAYMENT PERIOD
PURSUANT TO SECTION 3.1(B) FROM (II) THE TOTAL CREDITS PROPERLY MADE TO SUCH NET
PROFITS ACCOUNT DURING SUCH PAYMENT PERIOD PURSUANT TO SECTION 3.1(A).

(B)           IF THE COMPUTATION MADE IN ACCORDANCE WITH SECTION 3.1(A) RESULTS
IN A POSITIVE AMOUNT WITH RESPECT TO A PAYMENT PERIOD (THE “NET PROFITS”), THEN
(I) THAT POSITIVE AMOUNT SHALL BE SUBTRACTED FROM THE BALANCE OF THE NET PROFITS
ACCOUNT TO CAUSE THE NET PROFITS ACCOUNT TO HAVE A ZERO BALANCE IMMEDIATELY
FOLLOWING THE END OF SUCH PAYMENT PERIOD, (II) THAT POSITIVE AMOUNT SHALL BE
MULTIPLIED BY THE PROCEEDS PERCENTAGE TO DETERMINE THE NET PROFITS INTEREST AND
(III) THE RESULTING PRODUCT FROM THE CALCULATIONS IN (II) ABOVE SHALL BE PAYABLE
TO GRANTEE AS SPECIFIED IN SECTION 3.3.

(C)           IF THE COMPUTATION MADE IN ACCORDANCE WITH SECTION 3.2(A) RESULTS
IN A NEGATIVE AMOUNT WITH RESPECT TO A PAYMENT PERIOD, THE NEGATIVE SUM SHALL BE
DEEMED THE “DEBIT BALANCE.”  ANY DEBIT BALANCE SHALL BE CARRIED FORWARD AS A
DEBIT TO THE NET PROFITS ACCOUNT FOR THE FOLLOWING PAYMENT PERIOD.  IF THERE IS
A DEBIT BALANCE AT THE END OF ANY PAYMENT PERIOD, NO PAYMENTS SHALL BE MADE TO
GRANTEE IN RESPECT OF THE NET PROFITS INTEREST NOR SHALL GRANTEE EVER BE LIABLE
TO MAKE ANY PAYMENT TO GRANTOR IN RESPECT OF THE DEBIT BALANCE.  IN THE EVENT
THAT ANY DEBIT BALANCE EXISTS, THEN AN AMOUNT SHALL BE COMPUTED EQUAL TO
INTEREST ON SUCH DEBIT BALANCE AT THE PRIME INTEREST RATE FOR THE PERIOD BETWEEN
THE LAST DAY OF THE PAYMENT PERIOD THAT RESULTED IN SUCH DEBIT BALANCE AND THE
LAST DAY OF THE NEXT PAYMENT PERIOD, WHICH AMOUNT SHALL, ON THE LAST DAY OF SUCH
NEXT PAYMENT PERIOD, BE DEBITED TO THE NET PROFITS ACCOUNT IN THE SAME MANNER AS
OTHER DEBITS TO THE NET PROFITS ACCOUNT FOR SUCH PAYMENT PERIOD.

(D)           ALL AMOUNTS RECEIVED BY GRANTOR FROM THE SALE OF THE SUBJECT
MINERALS FOR ANY PAYMENT PERIOD SHALL BE HELD BY GRANTOR IN ONE OF ITS GENERAL
BANK ACCOUNTS AND GRANTOR SHALL NOT BE REQUIRED TO MAINTAIN A SEGREGATED ACCOUNT
FOR SUCH FUNDS.

3.3           PAYMENT OF PROCEEDS PERCENTAGE OF NET PROFITS.  ON OR BEFORE THE
FIFTH BUSINESS DAY FOLLOWING THE QUARTERLY RECORD DATE FOR EACH PAYMENT PERIOD,
GRANTOR SHALL TRANSFER OR CAUSE TO BE TRANSFERRED TO GRANTEE AN AMOUNT IN
RESPECT OF THE SUBJECT INTERESTS EQUAL TO THE PRODUCT OF THE PROCEEDS PERCENTAGE
TIMES THE NET PROFITS WITH RESPECT TO THE IMMEDIATELY

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PRECEDING PAYMENT PERIOD IN ACCORDANCE WITH SECTION 3.2(B).  ALL FUNDS DELIVERED
TO GRANTEE ON ACCOUNT OF THE NET PROFITS INTEREST SHALL BE CALCULATED AND PAID
ENTIRELY AND EXCLUSIVELY OUT OF THE GROSS PROCEEDS ATTRIBUTABLE TO THE SUBJECT
MINERALS ATTRIBUTABLE TO THE SUBJECT INTERESTS.

3.4           OVERPAYMENT; PAST DUE PAYMENTS.  IF GRANTOR EVER PAYS GRANTEE MORE
THAN THE AMOUNT OF MONEY THEN DUE AND PAYABLE TO GRANTEE UNDER THIS CONVEYANCE,
GRANTEE SHALL NOT BE OBLIGATED TO RETURN THE OVERPAYMENT, BUT GRANTOR MAY AT ANY
TIME THEREAFTER REDUCE THE GROSS PROCEEDS USED TO CALCULATE THE NET PROFITS AND
RETAIN FOR ITS OWN ACCOUNT AN AMOUNT EQUAL TO THE OVERPAYMENT, PLUS INTEREST AT
THE PRIME INTEREST RATE ON SUCH AMOUNT, COMMENCING ON THE SIXTH (6TH) DAY FROM
THE DATE OF THE OVERPAYMENT TO THE DATE SUCH AMOUNT IS RECOVERED BY GRANTOR FROM
SUCH PROCEEDS.  ANY AMOUNT NOT PAID BY GRANTOR TO GRANTEE WITH RESPECT TO THE
NET PROFITS INTEREST WHEN DUE SHALL BEAR, AND GRANTOR HEREBY AGREES TO PAY,
INTEREST AT THE PRIME INTEREST RATE FROM THE DUE DATE UNTIL SUCH AMOUNT HAS BEEN
PAID.  GRANTOR SHALL GIVE GRANTEE WRITTEN NOTICE WITH RESPECT TO ANY
UNDERPAYMENT OR OVERPAYMENT DESCRIBED IN THIS SECTION 3.4, TOGETHER WITH
SUPPORTING WORKSHEETS AND DATA.

3.5           STATEMENTS.

(A)           ON EACH QUARTERLY RECORD DATE, GRANTOR SHALL DELIVER TO GRANTEE A
STATEMENT SHOWING THE COMPUTATION OF THE NET PROFITS AND THE PROCEEDS PERCENTAGE
OF THE NET PROFITS, INCLUDING GROSS PROCEEDS AND DEBITS THEREFROM (INCLUDING ANY
REDUCTIONS TO SUCH GROSS PROCEEDS AND/OR DEBITS), WITH RESPECT TO THE PRECEDING
PAYMENT PERIOD.

(B)           ON THE FIRST QUARTERLY RECORD DATE AFTER THE END OF EACH CALENDAR
YEAR AND ON THE QUARTERLY RECORD DATE AFTER THE TERMINATION DATE, SUCH STATEMENT
SHALL ALSO SHOW THE COMPUTATION OF THE NET PROFITS AND THE PROCEEDS PERCENTAGE
OF THE NET PROFITS, INCLUDING GROSS PROCEEDS AND DEBITS THEREFROM (INCLUDING ANY
REDUCTIONS TO SUCH GROSS PROCEEDS AND/OR DEBITS), FOR THE PRECEDING CALENDAR
YEAR (OR PORTION THEREOF WHEN THE NET PROFITS INTEREST WAS IN EFFECT).

(C)           IF GRANTEE TAKES EXCEPTION TO ANY ITEM OR ITEMS INCLUDED IN ANY
QUARTERLY STATEMENT REQUIRED BY SECTION 3.5(A), GRANTEE MUST NOTIFY GRANTOR IN
WRITING WITHIN ONE HUNDRED AND TWENTY (120) DAYS AFTER THE END OF THE FISCAL
YEAR WITH RESPECT TO WHICH SUCH STATEMENTS RELATE.  SUCH NOTICE MUST SET FORTH
IN REASONABLE DETAIL THE SPECIFIC DEBITS COMPLAINED OF AND TO WHICH EXCEPTION IS
TAKEN OR THE SPECIFIC CREDITS WHICH SHOULD HAVE BEEN MADE AND ALLOWED. 
ADJUSTMENTS SHALL BE MADE FOR ALL COMPLAINTS AND EXCEPTIONS THAT ARE AGREED TO
BY THE PARTIES; PROVIDED THAT IF THE PARTIES DO NOT AGREE, SUCH DISPUTED MATTERS
SHALL BE SUBJECT TO THE ARBITRATION PROVISIONS SET FORTH IN ARTICLE XI OF THE
AMENDED AND RESTATED TRUST AGREEMENT OF MV OIL TRUST DATED OF EVEN DATE HEREWITH
BY AND AMONG GRANTOR,  WILMINGTON TRUST COMPANY, A BANKING CORPORATION ORGANIZED
UNDER THE LAWS OF THE STATE OF DELAWARE, AND GRANTEE.

(D)           NOTWITHSTANDING ANYTHING TO THE CONTRARY HEREIN, ALL MATTERS
REFLECTED IN GRANTOR’S STATEMENTS FOR THE PRECEDING CALENDAR YEAR (OR PORTION
THEREOF) THAT ARE NOT OBJECTED TO BY GRANTEE IN THE MANNER PROVIDED BY THIS
SECTION 3.5(C) SHALL BE DEEMED CORRECT AS RENDERED BY GRANTOR TO GRANTEE.

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3.6           INFORMATION/ACCESS.

(A)           GRANTOR SHALL MAINTAIN TRUE AND CORRECT BOOKS, RECORDS, AND
ACCOUNTS OF (I) ALL TRANSACTIONS REQUIRED OR PERMITTED BY THIS CONVEYANCE AND
(II) THE FINANCIAL INFORMATION NECESSARY TO EFFECT SUCH TRANSACTIONS, INCLUDING
THE FINANCIAL INFORMATION NEEDED TO CALCULATE THE NET PROFITS WITH RESPECT TO
ANY PAYMENT PERIOD.

(B)           GRANTEE OR ITS REPRESENTATIVE, AT THE TRUST’S EXPENSE, MAY INSPECT
AND COPY SUCH BOOKS, RECORDS, AND ACCOUNTS IN THE OFFICES OF GRANTOR DURING
NORMAL BUSINESS HOURS AND UPON REASONABLE NOTICE.

(C)           AT GRANTEE’S REQUEST, SUBJECT TO APPLICABLE RESTRICTIONS ON
DISCLOSURE AND TRANSFER OF INFORMATION, GRANTOR SHALL GIVE GRANTEE AND ITS
DESIGNATED REPRESENTATIVES (ON BEHALF OF THE TRUST) REASONABLE ACCESS IN
GRANTOR’S OFFICE DURING NORMAL BUSINESS HOURS TO (I) ALL GEOLOGICAL, SUBJECT
WELL AND PRODUCTION DATA IN GRANTOR’S POSSESSION OR GRANTOR’S AFFILIATES’
POSSESSION, RELATING TO OPERATIONS ON THE SUBJECT INTERESTS AND (II) ALL RESERVE
REPORTS AND RESERVE STUDIES IN THE POSSESSION OF GRANTOR OR OF GRANTOR’S
AFFILIATES, RELATING TO THE SUBJECT INTERESTS, WHETHER PREPARED BY GRANTOR, BY
GRANTOR’S AFFILIATES, OR BY CONSULTING ENGINEERS.

(D)           GRANTOR MAKES NO REPRESENTATIONS OR WARRANTIES ABOUT THE ACCURACY
OR COMPLETENESS OF ANY SUCH DATA, REPORTS, OR STUDIES REFERRED TO IN SECTION
3.6(C) AND SHALL HAVE NO LIABILITY TO GRANTEE, THE TRUST OR ANY OTHER PERSON
RESULTING FROM SUCH DATA, STUDIES, OR REPORTS.

ARTICLE IV
OPERATION OF THE SUBJECT INTERESTS

4.1           OPERATIONS STANDARD.  TO THE EXTENT THAT GRANTOR CONTROLS SUCH
MATTERS AND NOTWITHSTANDING ANYTHING TO THE CONTRARY HEREIN, GRANTOR AGREES THAT
IT WILL CONDUCT AND CARRY ON, OR CAUSE TO BE CONDUCTED AND CARRIED ON, THE
EXPLORATION, DEVELOPMENT, MAINTENANCE AND OPERATION OF THE SUBJECT INTERESTS IN
THE SAME MANNER AS A REASONABLY PRUDENT OPERATOR IN THE STATE OF KANSAS WOULD DO
UNDER THE SAME OR SIMILAR CIRCUMSTANCES ACTING WITH RESPECT TO ITS OWN
PROPERTIES (WITHOUT REGARD TO THE EXISTENCE OF THE NET PROFITS INTEREST);
PROVIDED THAT IN NO EVENT SHALL GRANTOR BE DEEMED IN BREACH OF THE FOREGOING
STANDARD IN CONNECTION WITH COSTS OR CHARGES PAID BY GRANTOR TO ANY RELATED
PARTY FOR OPERATIONS WITH RESPECT TO THE SUBJECT INTERESTS IN ACCORDANCE WITH
SECTIONS 5.5 AND 5.6 OF THE LLC AGREEMENT.  GRANTEE ACKNOWLEDGES THAT GRANTOR IS
AND SHALL BE AN UNDIVIDED INTEREST OWNER WITH RESPECT TO THE SUBJECT INTERESTS. 
GRANTEE AGREES THAT THE ACTS OR OMISSIONS OF GRANTOR’S CO-OWNERS SHALL NOT BE
DEEMED TO CONSTITUTE A VIOLATION OF THE PROVISIONS OF THIS SECTION 4.1, NOR
SHALL ANY ACTION REQUIRED BY A VOTE OF CO-OWNERS BE DEEMED TO CONSTITUTE SUCH A
VIOLATION SO LONG AS GRANTOR HAS VOTED ITS INTEREST IN A MANNER DESIGNED TO
COMPLY WITH THIS SECTION 4.1.  NOTHING CONTAINED IN THIS SECTION 4.1 SHALL BE
DEEMED TO PREVENT OR RESTRICT GRANTOR FROM ELECTING NOT TO PARTICIPATE IN ANY
OPERATIONS THAT ARE TO BE CONDUCTED UNDER THE TERMS OF ANY OPERATING AGREEMENT,
UNIT OPERATING AGREEMENT, CONTRACT FOR DEVELOPMENT, OR SIMILAR INSTRUMENT
AFFECTING OR PERTAINING TO THE SUBJECT INTERESTS (OR ANY PORTION THEREOF) AND
PERMITTING CONSENTING PARTIES TO CONDUCT NON-CONSENT OPERATIONS THEREON IF A
REASONABLY PRUDENT OPERATOR IN THE STATE OF KANSAS ACTING WITH RESPECT TO ITS
OWN PROPERTIES (WITHOUT REGARD TO THE EXISTENCE OF THE NET PROFITS INTEREST)
WOULD MAKE SUCH ELECTIONS.

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4.2           POOLING AND UNITIZATION.  GRANTOR SHALL HAVE THE RIGHT TO POOL OR
UNITIZE ALL OR ANY OF THE LEASES AS TO ANY ONE OR MORE OF THE FORMATIONS OR
HORIZONS THEREUNDER, AND AS TO ANY OF THE SUBJECT MINERALS, WHEN, IN THE
REASONABLE JUDGMENT OF GRANTOR, IT IS NECESSARY OR ADVISABLE TO DO SO IN ORDER
TO FORM A DRILLING OR PRORATION UNIT TO FACILITATE THE ORDERLY DEVELOPMENT OF
THE SUBJECT INTERESTS OR TO COMPLY WITH THE REQUIREMENTS OF ANY LAW OR
GOVERNMENTAL ORDER OR REGULATION RELATING TO THE SPACING OF WELLS OR PRORATION
OF THE PRODUCTION THEREFROM.  FOR PURPOSES OF COMPUTING THE NET PROFITS, THERE
SHALL BE ALLOCATED TO THE SUBJECT INTERESTS INCLUDED IN SUCH UNIT A PRO RATA
PORTION OF THE MINERALS PRODUCED FROM THE POOLED UNIT ON THE SAME BASIS THAT
PRODUCTION FROM THE POOL OR UNIT IS ALLOCATED TO OTHER WORKING INTERESTS IN SUCH
POOL OR UNIT.  THE INTEREST IN ANY SUCH UNIT ATTRIBUTABLE TO THE SUBJECT
INTERESTS (OR ANY PART THEREOF) INCLUDED THEREIN SHALL BECOME A PART OF THE
SUBJECT INTERESTS AND SHALL BE SUBJECT TO THE NET PROFITS INTEREST IN THE SAME
MANNER AND WITH THE SAME EFFECT AS IF SUCH UNIT AND THE INTEREST OF GRANTOR
THEREIN WERE SPECIFICALLY DESCRIBED IN EXHIBIT A TO THIS CONVEYANCE.

4.3           NON-CONSENT.  IF GRANTOR ELECTS TO BE A NON-PARTICIPATING PARTY
(WHETHER PURSUANT TO AN OPERATING AGREEMENT OR OTHER AGREEMENT OR ARRANGEMENT,
INCLUDING WITHOUT LIMITATION, NON-CONSENT RIGHTS AND OBLIGATIONS IMPOSED BY
STATUTE OR REGULATORY AGENCY) WITH RESPECT TO ANY OPERATION ON ANY SUBJECT
INTEREST OR ELECTS TO BE AN ABANDONING PARTY WITH RESPECT TO A SUBJECT WELL
LOCATED ON ANY SUBJECT INTEREST, THE CONSEQUENCE OF WHICH ELECTION IS THAT
GRANTOR’S INTEREST IN SUCH SUBJECT INTEREST OR PART THEREOF IS TEMPORARILY
(I.E., DURING A RECOUPMENT PERIOD) OR PERMANENTLY FORFEITED TO THE PARTIES
PARTICIPATING IN SUCH OPERATIONS, OR ELECTING NOT TO ABANDON SUCH SUBJECT WELL,
THEN THE COSTS AND PROCEEDS ATTRIBUTABLE TO SUCH FORFEITED INTEREST SHALL NOT,
FOR THE PERIOD OF SUCH FORFEITURE (WHICH MAY BE A CONTINUOUS AND PERMANENT
PERIOD), BE DEBITED OR CREDITED TO THE NET PROFITS ACCOUNT AND SUCH FORFEITED
INTEREST SHALL NOT, FOR THE PERIOD OF SUCH FORFEITURE, BE SUBJECT TO THE NET
PROFITS INTEREST.  NOTWITHSTANDING ANYTHING TO THE CONTRARY CONTAINED HEREIN,
GRANTOR SHALL NOT ELECT, AS TO ANY SUBJECT INTEREST, TO BE A NON-PARTICIPATING
PARTY WITH RESPECT TO ANY OPERATION CONTEMPLATED IN THIS SECTION 4.3 IN THE
EVENT ANY AFFILIATE OF GRANTOR WILL ALSO BE A PARTICIPATING PARTY IN SUCH
OPERATION.

4.4           MARKETING/HEDGES.  AS BETWEEN GRANTOR AND GRANTEE, GRANTOR SHALL
HAVE EXCLUSIVE CHARGE AND CONTROL OF THE MARKETING OF ALL SUBJECT MINERALS
ALLOCABLE TO THE NET PROFITS INTEREST.  GRANTOR SHALL MARKET THE SUBJECT
MINERALS ALLOCABLE TO THE NET PROFITS INTEREST IN THE SAME MANNER THAT IT
MARKETS ITS SUBJECT MINERALS AND GRANTOR SHALL NOT BE ENTITLED TO DEDUCT FROM
THE CALCULATION OF THE NET PROFITS ANY FEE FOR MARKETING THE SUBJECT MINERALS
ALLOCABLE TO THE NET PROFITS INTEREST.  GRANTOR SHALL NOT ENTER INTO ANY HEDGES
(OTHER THAN THE EXISTING HEDGES) WITH RESPECT TO THE SUBJECT MINERALS FROM AND
AFTER THE EFFECTIVE TIME.

4.5           AMENDMENT OF LEASES.  GRANTOR SHALL HAVE THE UNRESTRICTED RIGHT TO
RENEW, EXTEND, MODIFY, AMEND, OR SUPPLEMENT THE LEASES WITH RESPECT TO ANY OF
THE LANDS COVERED THEREBY IN ANY PARTICULAR WITHOUT THE CONSENT OF GRANTEE;
PROVIDED, THAT THE NET PROFITS INTEREST SHALL APPLY TO ALL RENEWALS, EXTENSIONS,
MODIFICATIONS, AMENDMENT, SUPPLEMENTS AND OTHER SIMILAR ARRANGEMENTS (AND/OR
INTERESTS THEREIN) OF THE LEASES, WHETHER OR NOT SUCH RENEWALS, EXTENSIONS
MODIFICATIONS, AMENDMENT, SUPPLEMENTS OR ARRANGEMENTS HAVE HERETOFORE BEEN
OBTAINED, OR ARE HEREAFTER OBTAINED, BY GRANTOR AND NO RENEWAL, EXTENSION,
MODIFICATION, AMENDMENT, OR SUPPLEMENTATION SHALL ADVERSELY AFFECT ANY OF
GRANTEE’S RIGHTS HEREUNDER, INCLUDING, WITHOUT LIMITATION, THE AMOUNT,
COMPUTATION, OR METHOD OF PAYMENT OF THE NET PROFITS INTEREST; PROVIDED FURTHER
THAT ANY FEES PAYABLE WITH RESPECT TO SUCH RENEWAL, EXTENSION, MODIFICATION,
AMENDMENT

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OR SUPPLEMENTATION MAY BE DEBITED TO THE NET PROFITS ACCOUNT PURSUANT TO SECTION
3.1(B).  GRANTOR SHALL FURNISH GRANTEE WITH WRITTEN NOTICE OF ANY RENEWAL,
EXTENSION, MODIFICATION, AMENDMENT, OR SUPPLEMENTATION, WHICH MATERIALLY AFFECTS
THE NET PROFITS INTEREST WITHIN 30 DAYS AFTER GRANTOR HAS ENTERED INTO THE SAME,
WHICH NOTICE SHALL SPECIFY THE DATE THEREOF AND THE LOCATION AND THE ACREAGE
COVERED THEREBY.

4.6           ABANDONMENT.  GRANTOR SHALL HAVE THE RIGHT WITHOUT THE JOINDER OF
GRANTEE TO RELEASE, SURRENDER AND/OR ABANDON ITS INTEREST IN THE SUBJECT
INTERESTS, OR ANY PART THEREOF, OR INTEREST THEREIN EVEN THOUGH THE EFFECT OF
SUCH RELEASE, SURRENDER OR ABANDONMENT WILL BE TO RELEASE, SURRENDER OR ABANDON
THE NET PROFITS INTEREST THE SAME AS THOUGH GRANTEE HAD JOINED THEREIN INSOFAR
AS THE NET PROFITS INTEREST COVERS THE SUBJECT INTERESTS, OR ANY PART THEREOF OR
INTEREST THEREIN, SO RELEASED, SURRENDERED OR ABANDONED BY GRANTOR; PROVIDED,
HOWEVER, THAT GRANTOR SHALL NOT RELEASE, SURRENDER OR ABANDON ANY SUBJECT
INTEREST UNLESS AND UNTIL GRANTOR HAS DETERMINED (ACTING LIKE A REASONABLY
PRUDENT OPERATOR IN THE MID-CONTINENT REGION WITH RESPECT TO ITS OWN PROPERTIES,
WITHOUT REGARD TO THE EXISTENCE OF THE NET PROFITS INTEREST) THAT SUCH SUBJECT
INTEREST WILL NO LONGER PRODUCE SUBJECT MINERALS IN PAYING QUANTITIES; AND
PROVIDED FURTHER THAT GRANTOR WILL, AT LEAST THIRTY (30) DAYS PRIOR TO THE
RELEASE, SURRENDER OR ABANDONMENT OF ANY SUBJECT INTEREST, OR ANY PART THEREOF
OR INTEREST THEREIN, NOTIFY GRANTEE IN WRITING, GIVING A DESCRIPTION OF EACH
SUBJECT INTEREST, OR PART THEREOF OR INTEREST THEREIN, PROPOSED TO BE RELEASED,
SURRENDERED OR ABANDONED, AND THE DATE UPON WHICH SUCH RELEASE, SURRENDER OR
ABANDONMENT IS PROJECTED TO OCCUR.  GRANTOR SHALL HAVE AN UNEQUIVOCAL RIGHT TO
ABANDON THE SUBJECT INTERESTS, OR ANY PART THEREOF IF SUCH ABANDONMENT IS
NECESSARY FOR HEALTH, SAFETY OR ENVIRONMENTAL REASONS, OR THE SUBJECT MINERALS
THAT WOULD HAVE BEEN PRODUCED FROM THE ABANDONED SUBJECT INTERESTS WOULD
OTHERWISE BE PRODUCED FROM SUBJECT WELLS LOCATED ON THE REMAINING SUBJECT
INTERESTS.

4.7           CONTRACTS WITH AFFILIATES.  GRANTOR OR ITS AFFILIATES MAY PERFORM
SERVICES AND FURNISH SUPPLIES AND/OR EQUIPMENT WITH RESPECT TO THE SUBJECT
INTERESTS THAT ARE REQUIRED TO OPERATE THE SUBJECT INTERESTS IN ACCORDANCE WITH
THE OPERATIONS STANDARD SET FORTH IN SECTION 4.1 HEREOF AND DEBIT THE NET
PROFITS ACCOUNT FOR THE COSTS OF SUCH SERVICES AND/OR FURNISHING OF SUCH
SUPPLIES AND/OR EQUIPMENT, PROVIDED THAT THE TERMS OF THE PROVISION OF SUCH
SERVICES OR FURNISHING OF SUPPLIES AND/OR EQUIPMENT SHALL NOT BE LESS FAVORABLE
THAN THOSE TERMS AVAILABLE FROM NON-AFFILIATES IN THE AREA ENGAGED IN THE
BUSINESS OF RENDERING COMPARABLE SERVICES OR FURNISHING COMPARABLE EQUIPMENT AND
SUPPLIES, TAKING INTO CONSIDERATION ALL SUCH TERMS, INCLUDING THE PRICE, TERM,
CONDITION OF SUPPLIES OR EQUIPMENT, AVAILABILITY OF SUPPLIES AND/OR EQUIPMENT,
AND ALL OTHER TERMS, AND PROVIDED FURTHER THAT NOTHING IN THIS SECTION 4.7 SHALL
OPERATE TO PREVENT OR LIMIT ANY CHARGES DEBITED TO THE NET PROFITS ACCOUNTS FOR
COSTS OR CHARGES PAID TO ANY RELATED PARTY IN ACCORDANCE WITH SECTIONS 5.5 AND
5.6 OF THE LLC AGREEMENT.

ARTICLE V
RELEASES AND TRANSFERS OF SUBJECT INTERESTS/SUBJECT WELLS

5.1           ASSIGNMENT BY GRANTOR SUBJECT TO NET PROFITS INTEREST.

(A)           GRANTOR MAY FROM TIME TO TIME TRANSFER, MORTGAGE, OR PLEDGE THE
SUBJECT INTERESTS, OR ANY PART THEREOF OR UNDIVIDED INTEREST THEREIN, SUBJECT TO
THE NET PROFITS INTEREST AND THIS CONVEYANCE.

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(B)           UPON ANY TRANSFER OF THE SUBJECT INTERESTS, OR ANY PART THEREOF OR
UNDIVIDED INTEREST THEREIN, BY GRANTOR PURSUANT TO THIS SECTION 5.1, GRANTOR MAY
DELEGATE TO ITS TRANSFEREE ALL OBLIGATIONS, REQUIREMENTS, AND RESPONSIBILITIES
OF GRANTOR ARISING UNDER THIS CONVEYANCE WITH RESPECT TO THE PROPERTY
TRANSFERRED, BUT, AS BETWEEN GRANTOR AND GRANTEE, GRANTOR SHALL REMAIN
RESPONSIBLE THEREFOR AS IF THE TRANSFER HAD NOT TAKEN PLACE.

(C)           GRANTEE IS NOT ENTITLED TO RECEIVE ANY SHARE OF THE SALES PROCEEDS
RECEIVED BY GRANTOR IN ANY TRANSACTION PERMITTED BY THIS SECTION 5.1.

(D)           FOR PURPOSES OF COMPUTING NET PROFITS FROM AND AFTER THE EFFECTIVE
DATE OF ANY TRANSFER PURSUANT TO THIS SECTION 5.1, THE TRANSFER SHALL BE
DISREGARDED; PROVIDED HOWEVER, THAT THE DEBITS AND CREDITS TO THE NET PROFITS
ACCOUNT DURING EACH PAYMENT PERIOD IN RESPECT OF THE SUBJECT INTERESTS
TRANSFERRED SHALL REFLECT ITEMS RECEIVED OR INCURRED BY THE TRANSFEREE, SUCH
ITEMS TO BE COMPUTED IN ACCORDANCE WITH THE PROVISIONS OF ARTICLE III HEREOF.

5.2           SALE AND RELEASE OF PROPERTIES.

(A)           GRANTOR MAY FROM TIME TO TIME TRANSFER THE SUBJECT INTERESTS, OR
ANY PART THEREOF OR UNDIVIDED INTEREST THEREIN, FREE OF THE NET PROFITS INTEREST
AND THE CONVEYANCE PROVIDED THAT:

(I)                                          NO SUBJECT INTEREST OR PORTION
THEREOF MAY BE TRANSFERRED PURSUANT TO THIS SECTION 5.2 WHERE THE PRODUCTION OF
SUBJECT MINERALS FROM SUCH SUBJECT INTEREST OR PART THEREOF FOR THE TWELVE (12)
MONTHS IMMEDIATELY PRECEDING THE PROPOSED SALE DATE FOR SUCH SUBJECT INTEREST OR
PART THEREOF EXCEEDS ONE QUARTER OF ONE PERCENT (0.25%) OF THE TOTAL PRODUCTION
OF TOTAL SUBJECT MINERALS PRODUCED FROM ALL OF THE SUBJECT INTERESTS FOR THE
TWELVE (12) MONTHS IMMEDIATELY PRECEDING THE PROPOSED SALE DATE FOR SUCH SUBJECT
INTEREST OR PART THEREOF;

(II)                                       IN CONNECTION WITH ANY SUCH TRANSFER,
GRANTEE SHALL RECEIVE AS COMPENSATION FOR THE RELEASE OF ITS NET PROFITS
INTEREST IN THE SUBJECT INTEREST (OR PORTION THEREOF) SO TRANSFERRED THE FAIR
VALUE OF THE PORTION OF THE NET PROFITS INTEREST SO RELEASED; AND

(III)                                    THE AGGREGATE FAIR MARKET VALUE OF ALL
PORTIONS OF THE NET PROFITS INTEREST RELEASED PURSUANT TO SECTION 5.2(A) DURING
ANY CONSECUTIVE TWELVE (12) MONTH PERIOD SHALL NOT EXCEED $500,000.

(B)           IN CONNECTION WITH ANY TRANSFER PURSUANT TO THIS SECTION 5.2,
GRANTOR SHALL REMIT TO GRANTEE AN AMOUNT EQUAL TO THE FAIR VALUE OF THE PORTION
OF THE NET PROFITS INTEREST BEING RELEASED.  GRANTOR SHALL MAKE SUCH PAYMENT TO
GRANTEE ON THE QUARTERLY RECORD DATE FOR THE PAYMENT PERIOD IN WHICH GRANTOR
RECEIVES THE PAYMENT WITH RESPECT TO ANY SUCH TRANSFER OF THE SUBJECT INTEREST.

(C)           IN CONNECTION WITH ANY TRANSFER PROVIDED FOR IN THIS SECTION 5.2,
GRANTEE SHALL, ON REQUEST, EXECUTE, ACKNOWLEDGE, AND DELIVER TO GRANTOR A
RECORDABLE INSTRUMENT (REASONABLY ACCEPTABLE TO GRANTOR) THAT RELEASES THE NET
PROFITS INTEREST WITH RESPECT TO THE SUBJECT INTERESTS BEING TRANSFERRED.

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(D)           FROM AND AFTER THE ACTUAL DATE OF ANY SUCH TRANSFER BY GRANTOR,
GRANTOR AND ANY ASSIGNEE, PURCHASER, TRANSFEREE OR GRANTEE OF SUCH SUBJECT
INTEREST SHALL BE RELIEVED OF ALL OBLIGATIONS, REQUIREMENTS, AND
RESPONSIBILITIES ARISING UNDER THE NET PROFITS INTEREST OR THIS CONVEYANCE WITH
RESPECT TO THE SUBJECT INTERESTS TRANSFERRED, EXCEPT FOR THOSE THAT ACCRUED
PRIOR TO SUCH DATE.

5.3           RELEASE OF OTHER PROPERTIES.

(A)           IN THE EVENT THAT ANY PERSON NOTIFIES GRANTOR THAT, PURSUANT TO A
PRIOR REVERSIONARY INTEREST, GRANTOR IS REQUIRED TO CONVEY ANY OF THE SUBJECT
INTERESTS TO SUCH PERSON OR CEASE PRODUCTION FROM ANY SUBJECT WELL, GRANTOR MAY
PROVIDE SUCH CONVEYANCE WITH RESPECT TO SUCH SUBJECT INTEREST OR PERMANENTLY
CEASE PRODUCTION FROM ANY SUCH SUBJECT WELL.

(B)           IN THE EVENT THAT GRANTOR RECEIVES COMPENSATION PURSUANT TO ANY
PRIOR REVERSIONARY INTEREST GRANTEE SHALL NOT BE ENTITLED TO ANY SHARE OF SUCH
COMPENSATION.

(C)           IN CONNECTION WITH ANY CONVEYANCE OR PERMANENT CESSATION OF
PRODUCTION PROVIDED FOR IN SECTION 5.3(A) ABOVE, GRANTEE SHALL, ON REQUEST,
EXECUTE, ACKNOWLEDGE, AND DELIVER TO GRANTOR A RECORDABLE INSTRUMENT (REASONABLY
ACCEPTABLE TO GRANTOR) THAT RELEASES THE NET PROFITS INTEREST AND THIS
CONVEYANCE WITH RESPECT TO ANY SUCH SUBJECT WELL OR SUBJECT INTERESTS.

(D)           FROM AND AFTER THE ACTUAL DATE OF ANY CONVEYANCE OR PERMANENT
CESSATION OF PRODUCTION PROVIDED FOR IN SECTION 5.3(A), GRANTOR AND ANY
ASSIGNEE, PURCHASER, TRANSFEREE OR GRANTEE OF SUCH SUBJECT INTEREST SHALL BE
RELIEVED OF ALL OBLIGATIONS, REQUIREMENTS, AND RESPONSIBILITIES ARISING UNDER
THE NET PROFITS INTEREST OR THIS CONVEYANCE WITH RESPECT TO THE SUBJECT
INTERESTS TRANSFERRED, EXCEPT FOR THOSE THAT ACCRUED PRIOR TO SUCH DATE.

5.4           FARMOUTS.

(A)           GRANTOR MAY FROM TIME TO TIME ENTER INTO FARMOUT AGREEMENTS WITH
THIRD PERSONS WITH RESPECT TO A SUBJECT INTEREST.  IN THE EVENT THAT GRANTOR
ENTERS INTO ANY FARMOUT AGREEMENT WITH A THIRD PERSON, THE NET PROFITS INTEREST
AND THIS CONVEYANCE SHALL BURDEN ONLY GRANTOR’S RETAINED INTEREST IN THE SUBJECT
INTEREST AFTER GIVING EFFECT TO ANY INTEREST IN THE SUBJECT INTEREST THAT A
COUNTERPARTY TO THE FARMOUT AGREEMENT MAY EARN UNDER SUCH FARMOUT AGREEMENT.

(B)           IN CONNECTION WITH GRANTOR ENTERING INTO ANY FARMOUT AGREEMENT,
GRANTEE SHALL, UPON REQUEST, EXECUTE, ACKNOWLEDGE, AND DELIVER TO GRANTOR A
RECORDABLE INSTRUMENT (REASONABLY ACCEPTABLE TO GRANTOR) THAT RELEASES THE NET
PROFITS INTEREST AND THIS CONVEYANCE WITH RESPECT TO THE SUBJECT INTERESTS BEING
TRANSFERRED PURSUANT TO SUCH FARMOUT AGREEMENT; PROVIDED, THE NET PROFITS
INTEREST SHALL CONTINUE TO BURDEN THE SUBJECT INTEREST RETAINED BY GRANTOR.

ARTICLE VI
OWNERSHIP OF PROPERTY; LIABLITY OF GRANTEE; NO RIGHT OF OPERATIONS BY GRANTEE

6.1           OWNERSHIP OF CERTAIN PROPERTY.  THE NET PROFITS INTEREST DOES NOT
INCLUDE ANY RIGHT, TITLE, OR INTEREST IN AND TO ANY PERSONAL PROPERTY, FIXTURES,
OR EQUIPMENT AND IS EXCLUSIVELY

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AN INTEREST IN AND TO THE MINERALS IN AND UNDER AND PRODUCED AND SAVED FROM THE
SUBJECT INTERESTS, AND GRANTEE SHALL LOOK SOLELY TO THE SUBJECT MINERALS AND
PAYMENTS IN RESPECT THEREOF (AS PROVIDED HEREIN) FOR THE SATISFACTION AND
REALIZATION OF THE NET PROFITS INTEREST.

6.2           NO PERSONAL LIABILITY.  NOTWITHSTANDING ANYTHING TO THE CONTRARY
CONTAINED IN THIS CONVEYANCE, GRANTEE SHALL NEVER PERSONALLY BE RESPONSIBLE FOR
PAYMENT OF ANY PART OF THE COSTS, EXPENSES OR LIABILITIES INCURRED IN CONNECTION
WITH THE EXPLORING, DEVELOPING, OPERATING AND MAINTAINING OF THE SUBJECT
INTERESTS; PROVIDED, HOWEVER, ALL SUCH COSTS AND EXPENSES SHALL, TO THE EXTENT
THE SAME RELATE TO ACTS, OMISSIONS, EVENTS, CONDITIONS OR CIRCUMSTANCES
OCCURRING FROM AND AFTER THE EFFECTIVE DATE, NEVERTHELESS BE CHARGED AGAINST THE
NET PROFITS ACCOUNT AS AND TO THE EXTENT HEREIN PERMITTED.

6.3           NO IN-KIND RIGHTS.  GRANTEE SHALL HAVE NO RIGHT TO TAKE IN KIND
ANY SUBJECT MINERALS ALLOCABLE TO THE NET PROFITS INTEREST.

6.4           NO OPERATING RIGHTS.  IT IS THE EXPRESS INTENT OF GRANTOR AND
GRANTEE THAT THE NET PROFITS INTEREST SHALL CONSTITUTE (AND THIS CONVEYANCE
SHALL CONCLUSIVELY BE CONSTRUED FOR ALL PURPOSES AS CREATING) A SINGLE, SEPARATE
NON-OPERATING MINERAL RIGHT WITH RESPECT TO THE SUBJECT INTERESTS FOR ALL
PURPOSES AND A FULLY VESTED AND FULLY CONVEYED INTEREST IN PROPERTY (REAL OR
PERSONAL, AS APPLICABLE).  WITHOUT LIMITATION OF THE GENERALITY OF THE
IMMEDIATELY PRECEDING SENTENCE, GRANTOR AND GRANTEE ACKNOWLEDGE THAT GRANTEE HAS
NO RIGHT OR POWER TO PARTICIPATE IN THE SELECTION OF A DRILLING CONTRACTOR, TO
PROPOSE THE DRILLING OF A WELL, TO DETERMINE THE TIMING OR SEQUENCE OF DRILLING
OPERATIONS, TO COMMENCE OR SHUT DOWN PRODUCTION, TO TAKE OVER OPERATIONS, OR TO
SHARE IN ANY OPERATING DECISION WHATSOEVER.  GRANTOR AND GRANTEE HEREBY
EXPRESSLY NEGATE ANY INTENT TO CREATE (AND THIS CONVEYANCE SHALL NEVER BE
CONSTRUED AS CREATING) A MINING OR OTHER PARTNERSHIP OR JOINT VENTURE OR OTHER
RELATIONSHIP SUBJECTING GRANTOR AND GRANTEE TO JOINT LIABILITY.

ARTICLE VII
WARRANTY AND NEGATIVE COVENANT

7.1           WARRANTY.  GRANTOR AGREES TO WARRANT AND FOREVER DEFEND, ALL AND
SINGULAR, THE NET PROFITS INTEREST UNTO GRANTEE, ITS SUCCESSORS AND ASSIGNS,
AGAINST ALL PERSONS WHOMSOEVER CLAIMING OR TO CLAIM THE SAME, OR ANY PART
THEREOF, BY, THROUGH OR UNDER GRANTOR, BUT NOT OTHERWISE, SUBJECT TO THE
PERMITTED ENCUMBRANCES.  SUBJECT TO THE NET PROFITS INTEREST AND THE PERMITTED
ENCUMBRANCES, GRANTOR FURTHER WARRANTS TO GRANTEE THAT WITH RESPECT TO CLAIMS
MADE BY, THROUGH OR UNDER GRANTOR, IMMEDIATELY FOLLOWING THE TRANSFER MADE
PURSUANT TO HIS CONVEYANCE,  GRANTOR IS (I) ENTITLED TO RECEIVE NOT LESS THAN
THE PERCENTAGE SET FORTH IN EXHIBIT A HERETO AS THE “NET REVENUE INTEREST” OF
ALL MINERALS PRODUCED, SAVED AND MARKETED FROM THE LEASE DESCRIBED ON

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EXHIBIT A TO WHICH SUCH NET REVENUE INTEREST CORRESPONDS WITHOUT REDUCTION OF
SUCH INTEREST THROUGHOUT THE DURATION OF THE LIFE OF SUCH LEASE, EXCEPT AS
SPECIFICALLY SET FORTH IN EXHIBIT A, AND (II) OBLIGATED TO BEAR THE PERCENTAGE
OF THE COSTS AND EXPENSES RELATING TO THE MAINTENANCE, DEVELOPMENT AND OPERATION
OF SUCH LEASE NOT GREATER THAN THE “WORKING INTEREST” SHOWN IN EXHIBIT A WITH
RESPECT TO SUCH LEASE, WITHOUT INCREASE THROUGHOUT THE DURATION OF THE LIFE OF
SUCH LEASE, EXCEPT AS SPECIFICALLY SET FORTH IN EXHIBIT A.  GRANTOR ALSO HEREBY
TRANSFERS TO GRANTEE BY WAY OF SUBSTITUTION AND SUBROGATION (TO THE FULLEST
EXTENT THAT SAME MAY BE TRANSFERRED), ALL RIGHTS OR ACTIONS OVER AND AGAINST ALL
PREDECESSOR (OTHER THAN AFFILIATES OF GRANTOR) COVENANTORS OR WARRANTORS OF
TITLE.

7.2           SENIOR OBLIGATION.  GRANTOR AGREES THAT IT SHALL CAUSE EACH
AGREEMENT, INDENTURE, BOND, DEED OF TRUST, FILING, APPLICATION OR OTHER
INSTRUMENT THAT CREATES OR PURPORTS TO CREATE A LIEN, MORTGAGE, SECURITY
INTEREST OR OTHER CHARGE SECURED BY THE SUBJECT INTERESTS, SUBJECT MINERALS OR
THE PROCEEDS FROM THE SALE OF THE SUBJECT MINERALS OR THE EXISTING HEDGES THAT
IS ENTERED INTO ON OR AFTER THE DATE HEREOF TO INCLUDE AN EXPRESS AGREEMENT AND
ACKNOWLEDGEMENT BY THE PARTIES THERETO THAT THE NET PROFITS INTEREST IS SENIOR
IN RIGHT OF PAYMENT AND COLLECTION TO ANY AND ALL OBLIGATIONS CREATED THEREBY IN
RESPECT OF THE SUBJECT INTERESTS, SUBJECT MINERALS OR THE PROCEEDS FROM THE SALE
OF THE SUBJECT MINERALS OR THE EXISTING HEDGES; PROVIDED, HOWEVER, THAT THIS
SECTION 7.2 SHALL NOT APPLY TO (A) ANY AGREEMENT, INDENTURE, BOND, DEED OF
TRUST, FILING, APPLICATION OR OTHER INSTRUMENT THAT CREATES A LIEN, MORTGAGE,
SECURITY INTEREST OR OTHER CHARGE SECURED BY (I) NOT MORE THAN GRANTOR’S
RESIDUAL INTEREST IN THE SUBJECT INTERESTS, SUBJECT MINERALS OR THE PROCEEDS
FROM THE SALE OF THE SUBJECT MINERALS, (IN EACH CASE) SUBJECT AND SUBORDINATE TO
THE NET PROFITS INTEREST (AND THE NET PROFITS INTEREST SHALL NOT BE BURDENED OR
ENCUMBERED BY ANY SUCH LIEN, MORTGAGE, SECURITY INTEREST OR OTHER CHARGE) OR
(II) NOT MORE THAN GRANTOR’S RESIDUAL INTEREST IN THE EXISTING HEDGES, (IN EACH
CASE) SUBJECT AND SUBORDINATE TO GRANTOR’S OBLIGATIONS UNDER THAT THE ASSIGNMENT
OF HEDGE PROCEEDS, AND (B) THE LIEN AND SECURITY INTEREST CREATED BY THE
ASSIGNMENT OF HEDGE PROCEEDS AS IN EFFECT ON THE DATE HEREOF.

ARTICLE VIII
MISCELLANIOUS

8.1           NOTICES.  ALL NOTICES AND OTHER COMMUNICATIONS REQUIRED OR
PERMITTED UNDER THIS CONVEYANCE SHALL BE IN WRITING AND, UNLESS OTHERWISE
SPECIFICALLY PROVIDED, SHALL BE DELIVERED PERSONALLY, BY ELECTRONIC
TRANSMISSION, BY REGISTERED OR CERTIFIED MAIL, POSTAGE PREPAID, OR BY DELIVERY
SERVICE FOR WHICH A RECEIPT IS OBTAINED (EXCEPT FOR QUARTERLY STATEMENTS
PROVIDED FOR UNDER SECTION 3.5 ABOVE WHICH MAY BE SENT BY REGULAR MAIL), AT THE
RESPECTIVE ADDRESSES OF GRANTOR AND GRANTEE SHOWN BELOW, AND SHALL BE DEEMED
DELIVERED ON THE DATE OF RECEIPT.  EITHER PARTY MAY SPECIFY HIS PROPER ADDRESS
OR ANY OTHER POST OFFICE ADDRESS WITHIN THE CONTINENTAL LIMITS OF THE UNITED
STATES BY GIVING NOTICE TO THE OTHER PARTY, IN THE MANNER PROVIDED IN THIS
SECTION, AT LEAST FIFTEEN (15) DAYS PRIOR TO THE EFFECTIVE DATE OF SUCH CHANGE
OF ADDRESS.  FOR PURPOSES OF NOTICE, THE ADDRESSES OF GRANTOR AND GRANTEE SHALL
BE AS FOLLOWS:

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If to Grantor:         MV Partners, LLC

c/o Murfin Drilling Company, Inc.

250 N. Water, Suite 300

Wichita, Kansas 67202

Attention:              David L. Murfin

If to Grantee:         The Bank of New York Trust Company, N.A.

Global Corporate Trust

221 West Sixth Street, 1st Floor

Austin, Texas 78701

Attention:              Mike J. Ulrich

8.2           PAYMENTS.  GRANTOR SHALL TRANSFER OR CAUSE TO BE TRANSFERRED ALL
MONIES TO WHICH GRANTEE IS ENTITLED HEREUNDER BY FEDERAL FUNDS WIRE TRANSFER NOT
LATER THAN THE DATE WHEN DUE, TO GRANTEE AT THE BANK ACCOUNT SPECIFIED BY
GRANTEE IN WRITING TO GRANTOR.

8.3           AMENDMENTS.  THIS CONVEYANCE MAY NOT BE AMENDED, ALTERED, OR
MODIFIED EXCEPT PURSUANT TO A WRITTEN INSTRUMENT EXECUTED BY GRANTOR AND
GRANTEE.

8.4           FURTHER ASSURANCES.  GRANTOR AND GRANTEE SHALL FROM TIME TO TIME
DO AND PERFORM SUCH FURTHER ACTS AND EXECUTE AND DELIVER SUCH FURTHER
INSTRUMENTS, CONVEYANCES, AND DOCUMENTS AS MAY BE REQUIRED OR REASONABLY
REQUESTED BY THE OTHER PARTY TO ESTABLISH, MAINTAIN, OR PROTECT THE RESPECTIVE
RIGHTS AND REMEDIES OF GRANTOR AND GRANTEE AND TO CARRY OUT AND EFFECTUATE THE
INTENTIONS AND PURPOSES OF THIS CONVEYANCE, PROVIDED IN EACH CASE THE SAME DOES
NOT CONFLICT WITH ANY PROVISION OF THIS CONVEYANCE.

8.5           WAIVERS.  THE FAILURE OF GRANTOR OR GRANTEE TO INSIST UPON STRICT
PERFORMANCE OF ANY PROVISION HEREOF SHALL NOT CONSTITUTE A WAIVER OF OR ESTOPPEL
AGAINST ASSERTING THE RIGHT TO REQUIRE SUCH PERFORMANCE IN THE FUTURE, NOR SHALL
A WAIVER OR ESTOPPEL IN ANY ONE INSTANCE CONSTITUTE A WAIVER OR ESTOPPEL WITH
RESPECT TO A LATER BREACH OF A SIMILAR NATURE OR OTHERWISE.

8.6           NO PARTITION.  GRANTOR AND GRANTEE ACKNOWLEDGE THAT GRANTEE HAS NO
RIGHT OR INTEREST THAT WOULD PERMIT GRANTEE TO PARTITION ANY PORTION OF THE
SUBJECT INTERESTS, AND GRANTEE HEREBY WAIVES ANY SUCH RIGHT.

8.7           GOVERNING LAW.  THIS CONVEYANCE SHALL BE GOVERNED BY AND CONSTRUED
IN ACCORDANCE WITH THE LAWS OF THE STATE OF KANSAS UNLESS THE REAL PROPERTY LAWS
OF THE STATE IN WHICH THE SUBJECT INTERESTS ARE LOCATED ARE MANDATORILY
APPLICABLE, AND THEN ONLY TO THE EXTENT OF SUCH MANDATORY APPLICATION.

8.8           RULE AGAINST PERPETUITIES.  IT IS NOT THE INTENT OF GRANTOR OR
GRANTEE THAT ANY PROVISION HEREIN VIOLATE ANY APPLICABLE LAW REGARDING THE RULE
AGAINST PERPETUITIES, THE SUSPENSION OF THE ABSOLUTE POWER OF ALIENATION, OR
OTHER RULES REGARDING THE VESTING OR DURATION OF ESTATES, AND THIS CONVEYANCE
SHALL BE CONSTRUED AS NOT VIOLATING ANY SUCH APPLICABLE LAW TO THE EXTENT THE
SAME CAN BE SO CONSTRUED CONSISTENT WITH THE INTENT OF THE PARTIES.  IN THE
EVENT, HOWEVER, THAT ANY PROVISION HEREOF IS DETERMINED TO VIOLATE ANY SUCH
APPLICABLE LAW, THEN SUCH PROVISION SHALL

25

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NEVERTHELESS BE EFFECTIVE FOR THE MAXIMUM PERIOD (BUT NOT LONGER THAN THE
MAXIMUM PERIOD) PERMITTED BY ANY SUCH APPLICABLE LAW THAT WILL RESULT IN NO
VIOLATION.  TO THE EXTENT SUCH MAXIMUM PERIOD IS PERMITTED TO BE DETERMINED BY
REFERENCE TO “LIVES IN BEING”, GRANTOR AND GRANTEE AGREE THAT “LIVES IN BEING”
SHALL REFER TO THE LIFETIME OF THE LAST TO DIE OF THE NOW LIVING LINEAL
DESCENDANTS OF THE LATE JOSEPH P. KENNEDY (FATHER OF THE LATE PRESIDENT OF THE
UNITED STATES OF AMERICA).

8.9           TAX MATTERS.

(A)           NOTHING HEREIN CONTAINED SHALL BE CONSTRUED TO CONSTITUTE A
PARTNERSHIP OR TO CAUSE EITHER PARTY HERETO (UNDER STATE LAW OR FOR TAX
PURPOSES) TO BE TREATED AS BEING THE AGENT OF, OR IN PARTNERSHIP WITH, THE OTHER
PARTY.  IN ADDITION, THE PARTIES HERETO INTEND THAT THE NET PROFITS INTEREST
CONVEYED HEREBY TO GRANTEE SHALL AT ALL TIMES BE TREATED AS AN INCORPOREAL
(I.E., A NON-POSSESSORY) INTEREST IN REAL PROPERTY OR LAND UNDER THE LAWS OF THE
STATE IN WHICH THE SUBJECT INTERESTS ARE LOCATED, A PRODUCTION PAYMENT UNDER
SECTION 636 OF THE CODE, AND THEREFORE, FOR TAX PURPOSES, DEBT, PAYABLE OUT OF
NET PROFITS (RATHER THAN AS A WORKING OR ANY OTHER INTEREST).

(B)           GRANTOR AND GRANTEE AGREE, AND BY ACQUISITION OF AN INTEREST IN
GRANTEE EACH HOLDER OF AN INTEREST IN GRANTEE SHALL BE DEEMED TO HAVE AGREED,
FOR UNITED STATES FEDERAL INCOME TAX PURPOSES, (1) TO TREAT THE NET PROFITS
INTEREST AS INDEBTEDNESS THAT IS SUBJECT TO TREASURY REGULATIONS SECTION
1.1275-4 (THE “CONTINGENT DEBT REGULATIONS”) AND, FOR PURPOSES OF THE CONTINGENT
DEBT REGULATIONS, TO TREAT PAYMENTS RECEIVED WITH RESPECT TO THE NET PROFITS
INTEREST AS CONTINGENT PAYMENTS, AND (2) TO ACCRUE INTEREST WITH RESPECT TO THE
NET PROFITS INTEREST ACCORDING TO THE “NONCONTINGENT BOND METHOD” SET FORTH IN
TREASURY REGULATIONS SECTION 1.1275-4(B), USING THE COMPARABLE YIELD OF 9.0% PER
ANNUM COMPOUNDED SEMI-ANNUALLY.

(C)           GRANTOR AND GRANTEE ACKNOWLEDGE AND AGREE, AND BY ACQUISITION OF
AN INTEREST IN GRANTEE EACH HOLDER OF AN INTEREST IN GRANTEE SHALL BE DEEMED TO
HAVE AGREED, THAT (I) THE COMPARABLE YIELD AND THE SCHEDULE OF PROJECTED
PAYMENTS ARE NOT DETERMINED FOR ANY PURPOSE OTHER THAN FOR THE DETERMINATION OF
INTEREST ACCRUALS AND ADJUSTMENTS THEREOF IN RESPECT OF THE NET PROFITS INTEREST
FOR UNITED STATES FEDERAL INCOME TAX PURPOSES AND (II) THE COMPARABLE YIELD AND
THE SCHEDULE OF PROJECTED PAYMENTS DO NOT CONSTITUTE A PROJECTION OR
REPRESENTATION REGARDING THE AMOUNTS PAYABLE ON THE NET PROFITS INTEREST.

(D)           GRANTOR MAY CAUSE TO BE WITHHELD FROM ANY PAYMENT HEREUNDER ANY
TAX WITHHOLDING REQUIRED BY LAW OR REGULATIONS, INCLUDING, IN THE CASE OF ANY
WITHHOLDING OBLIGATION ARISING FROM INCOME THAT DOES NOT GIVE RISE TO ANY CASH
OR PROPERTY FROM WHICH ANY APPLICABLE WITHHOLDING TAX COULD BE SATISFIED, BY WAY
OF SET OFF AGAINST ANY SUBSEQUENT PAYMENT OF CASH OR PROPERTY HEREUNDER.

8.10         COUNTERPARTS.

(A)           MULTIPLE COUNTERPARTS OF THE CONVEYANCE HAVE BEEN RECORDED IN THE
COUNTIES OF THE STATES OF KANSAS AND COLORADO WHERE THE SUBJECT INTERESTS ARE
LOCATED.  THE COUNTERPARTS ARE IDENTICAL EXCEPT THAT, TO FACILITATE RECORDATION,
THE COUNTERPART RECORDED IN EACH COUNTY MAY CONTAIN PROPERTY DESCRIPTIONS
RELATING ONLY TO THE SUBJECT INTERESTS LOCATED IN THAT COUNTY.

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A COUNTERPART OF THE CONVEYANCE CONTAINING ALL PROPERTY DESCRIPTIONS OF SUBJECT
INTERESTS WILL BE FILED FOR RECORD IN BUTLER COUNTY, KANSAS.

(B)           IF ANY SUBJECT INTERESTS ARE LOCATED IN MORE THAN ONE COUNTY, THE
DESCRIPTION OF SUCH SUBJECT INTERESTS MAY BE INCLUDED IN ANY ONE OR MORE
COUNTERPARTS PREPARED FOR RECORDATION IN SEPARATE COUNTIES, BUT THE INCLUSION OF
THE SAME PROPERTY DESCRIPTION IN MORE THAN ONE COUNTERPART OF THIS CONVEYANCE
SHALL NOT BE CONSTRUED AS HAVING EFFECTED ANY CUMULATIVE, MULTIPLE, OR
OVERLAPPING INTEREST IN THE SUBJECT INTERESTS IN QUESTION.

8.11         BINDING EFFECT.  ALL THE COVENANTS AND AGREEMENTS OF GRANTOR HEREIN
CONTAINED SHALL BE DEEMED TO BE COVENANTS RUNNING WITH GRANTOR’S INTEREST IN THE
SUBJECT INTERESTS AND THE LANDS AFFECTED THEREBY.  ALL OF THE PROVISIONS HEREOF
SHALL INURE TO THE BENEFIT OF GRANTEE AND ITS SUCCESSORS AND ASSIGNS AND SHALL
BE BINDING UPON GRANTOR AND ITS SUCCESSORS AND ASSIGNS AND ALL OTHER OWNERS OF
THE SUBJECT INTERESTS OR ANY PART THEREOF OR ANY INTEREST THEREIN.

27

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EXECUTED effective for all purposes as of the Effective Time.

GRANTOR:

 

 

 

MV PARTNERS, LLC

 

 

 

By:

MV Energy, LLC,

 

 

its Manager

 

 

 

 

By:

Murfin, Inc.,

 

 

Member

 

 

 

 

 

 

 

By:

/s/ David L. Murfin

 

Name:

David L. Murfin

 

Title:

President

 

 

 

 

 

 

 

GRANTEE:

 

 

 

MV OIL TRUST

 

 

 

By its Trustee, The Bank of New York

 

Trust Company, N.A.

 

 

 

 

 

 

 

By:

/s/ Mike J. Ulrich

 

Name:

Mike J. Ulrich

 

Title:

Vice President

 

Signature Page to Conveyance of Net Profits Interest

--------------------------------------------------------------------------------

STATE OF

§

 

§

COUNTY OF

§

 

BE IT REMEMBERED, THAT I, the undersigned authority, a notary public duly
qualified, commissioned, sworn and acting in and for the county and state
aforesaid, and being authorized in such county and state to take
acknowledgments, hereby certify that, on this            day of
                          , 2007, there personally appeared before me
                                              ,
                                               of MV Partners, LLC, a Kansas
limited liability company, known to me to be such officer, such limited
liability company being a party to the foregoing instrument and duly
acknowledged the execution of same.

IN WITNESS WHEREOF, I have hereunto set my hand and official seal in the City of
            ,                    County,               , on the day and year
first above written.

 

 

Notary Public in and for

 

the State of

 

Printed Name of Notary:

 

Commission Expires:

 

 

STATE OF

§

 

§

COUNTY OF

§

 

BE IT REMEMBERED, THAT I, the undersigned authority, a notary public duly
qualified, commissioned, sworn and acting in and for the county and state
aforesaid, and being authorized in such county and state to take
acknowledgments, hereby certify that, on this            day of
                          , 2007, there personally appeared before me
                                              ,
                                               of The Bank of New York Trust
Company, N.A., as trustee of MV Oil Trust, known to me to be such officer of
such trustee being a party to the foregoing instrument and duly acknowledged the
execution of same.

IN WITNESS WHEREOF, I have hereunto set my hand and official seal in the City of
            ,                    County,               , on the day and year
first above written.

 

 

Notary Public in and for

 

the State of

 

Printed Name of Notary:

 

Commission Expires:

 

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EXHIBIT A

SUBJECT INTERESTS

A-1

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