Exhibit 10.1
 

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CONTRIBUTION AND EXCHANGE AGREEMENT
 
by and among
 
DORCHESTER MINERALS, L.P.
 
DODGE JONES FOUNDATION
 
THE LEGETT FOUNDATION
 
KICKAPOO SPRINGS FOUNDATION
 
THE KARAKIN FOUNDATION
 
STILL WATER FOUNDATION
 
XETTAM MINERALS, L.P.
 
2MW LIMITED PARTNERSHIP
 
JULIA JONES MATTHEWS, TRUSTEE OF
THE JULIA JONES MATTHEWS LIVING TRUST
 
AND
 
JOHN A. MATTHEWS, JR.
 

 
March 31, 2010
 
 
 
 

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TABLE OF CONTENTS
 

 

     
Page
       
ARTICLE 1 CLOSING; CONTRIBUTION
2
       
1.1
 
Closing
2
1.2
 
Contribution and Exchange
2
       
ARTICLE 2 REPRESENTATIONS AND WARRANTIES OF THE PARTNERSHIP
2
2.1
 
Organization and Existence
2
2.2
 
Governing Documents
2
2.3
 
Capitalization of the Partnership.
3
2.4
 
Authority Relative to this Agreement
3
2.5
 
Noncontravention
4
2.6
 
Governmental Approvals
4
2.7
 
Partnership Financial Statements
4
2.8
 
Absence of Undisclosed Liabilities
5
2.9
 
Absence of Certain Changes
5
2.10
 
Compliance With Laws
5
2.11
 
Brokerage Fees
5
2.12
 
Listing
5
2.13
 
SEC Filings
5
2.14
 
Legal Proceedings
6
       
ARTICLE 3 REPRESENTATIONS AND WARRANTIES  OF THE CONTRIBUTORS
6
       
3.1
 
Organization and Existence
6
3.2
 
Authority Relative to This Agreement
7
3.3
 
Noncontravention
7
3.4
 
Governmental Approvals
7
3.5
 
Capitalization
8
3.6
 
Subsidiaries
8
3.7
 
Maecenas Records
8
3.8
 
Maecenas Income Statements
8
3.9
 
Title to Maecenas Properties
8
3.10
 
Absence of Undisclosed Liabilities
8
3.11
 
Material Contracts
8
3.12
 
Employees; Employee Benefit Plans
9
3.13
 
Absence of Certain Changes
9
3.14
 
Tax Matters
9
3.15
 
Compliance with Laws
10
3.16
 
Legal Proceedings
10
3.17
 
Permits
10
3.18
 
Environmental Matters
10
3.19
 
Revenue and Expense Information; Records
11

 
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3.20
 
No Alienation
11
3.21
 
Make-Up Rights
11
3.22
 
Imbalances
11
3.23
 
Basic Documents
11
3.24
 
Commitments, Abandonments or Proposals
12
3.25
 
Production Sales Contracts
12
3.26
 
Area of Mutual Interest
12
3.27
 
Payment of Expenses
12
3.28
 
Reserve Report Information
12
3.29
 
Oral Contracts
12
3.30
 
Preferential Rights and Consents to Assign
12
3.31
 
Brokerage Fees
13
3.32
 
Investment Intent
13
       
ARTICLE 4 CONDUCT OF THE CONTRIBUTORS PENDING CLOSING;  CERTAIN ACTIONS RELATING
TO CLOSING
14
       
4.1
 
Conduct and Preservation of the Business of Maecenas
14
4.2
 
Restrictions on Certain Actions of the Contributors
14
       
ARTICLE 5 ADDITIONAL AGREEMENTS
15
       
5.1
 
Pre-Closing Actions Concerning Working Interests
15
5.2
 
Access to Information; Confidentiality
15
5.3
 
Notification of Certain Matters
16
5.4
 
Reasonable Best Efforts
16
5.5
 
Public Announcements
16
5.6
 
Amendment of Schedules
16
5.7
 
Fees and Expenses
17
5.8
 
Taxes
17
5.9
 
Post-Closing Assurances
19
       
ARTICLE 6 CONDITIONS
19
       
6.1
 
Conditions to Obligations of the Parties
19
6.2
 
Conditions to Obligation of the Contributors
19
6.3
 
Conditions to Obligation of the Partnership
20
       
ARTICLE 7 TERMINATION, AMENDMENT AND WAIVER
21
       
7.1
 
Termination
21
7.2
 
Effect of Termination
22
7.3
 
Amendment
22
7.4
 
Waiver
22
       
ARTICLE 8 INDEMNIFICATION
22
       
8.1
 
Survival of Representations, Warranties, Covenants and Agreements
22
8.2
 
Indemnification
22
8.3
 
Indemnification Procedures
24

 
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ARTICLE 9 MISCELLANEOUS
25
       
9.1
 
Notices
25
9.2
 
Entire Agreement
26
9.3
 
Binding Effect; Assignment; Third Party Benefit
26
9.4
 
Severability
27
9.5
 
Governing Law; Consent to Jurisdiction
27
9.6
 
Descriptive Headings
27
9.7
 
Gender
27
9.8
 
References
27
9.9
 
Counterparts
27
9.10
 
Injunctive Relief
28
       
ARTICLE 10 DEFINITIONS
28
       
10.1
 
Certain Defined Terms
28
10.2
 
Certain Additional Defined Terms
31

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INDEX TO EXHIBITS AND SCHEDULES
 
Exhibits
 
Exhibit A
Subject Units Allocation Table
Exhibit B
Contributors’ Working Interests
Exhibit C
Form of Contributors’ Conveyances
Exhibit D
Form of Assignment, Conveyance and Assumption Agreement
Exhibit 3.8
Maecenas Income Statements
Exhibit 6.3(e)
Form of Assignment of Maecenas Interests

 
Schedules
   
Partnership Schedules
Schedule 2.5
Noncontravention
Schedule 2.6
Governmental Approvals
Schedule 2.7
Partnership Financial Statements
Schedule 2.8
Absence of Undisclosed Liabilities
Schedule 2.9
Absence of Certain Changes
Schedule 2.10
Compliance With Laws
     
Contributors Schedules
Schedule 3
Maecenas Properties
Schedule 3.10
Liabilities
Schedule 3.11
Material Contracts
Schedule 3.16
Legal Proceedings

 

iv
 
 

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CONTRIBUTION AND EXCHANGE AGREEMENT
 
THIS CONTRIBUTION AND EXCHANGE AGREEMENT (“Agreement”) is executed as of March
31, 2010 by and among Dorchester Minerals, L.P., a Delaware limited partnership
(the “Partnership”), Dodge Jones Foundation, a Texas nonprofit corporation
(“Dodge Jones”), The Legett Foundation, a Texas nonprofit corporation
(“Legett”), Kickapoo Springs Foundation, a Texas nonprofit corporation
(“Kickapoo Springs”), The Karakin Foundation, a Texas nonprofit corporation
(“Karakin”), Still Water Foundation, a New Mexico nonprofit corporation (“Still
Water”), Xettam Minerals, L.P., a Texas limited partnership (“Xettam Minerals”),
2MW Limited Partnership, a Texas limited partnership (“2MW”), Julia Jones
Matthews, Trustee of the Julia Jones Matthews Living Trust (“Julia Jones
Matthews, Trustee”), and John A. Matthews, Jr. (“Matthews”, and collectively
with Dodge Jones, Legett, Kickapoo Springs, Karakin, Still Water, Xettam, 2MW
and Julia Jones Matthews, Trustee, the “Contributors”).
 
W I T N E S S E T H:
 
WHEREAS, the Contributors own all of the issued and outstanding partnership
interests in Maecenas Minerals, L.L.P., a Texas limited liability partnership
(“Maecenas”), as set forth on Exhibit A attached hereto (the “Maecenas
Interests”); and
 
WHEREAS,  the Contributors also own certain working interests  in various oil
and gas properties that are described more fully on Exhibit B attached hereto
(the “Contributors’ Working Interests”); and

WHEREAS, prior to the closing of the transactions contemplated hereby, the
Contributors desire to (i) contribute all of their right, title and interest in
and to the Contributors’ Working Interests to Maecenas pursuant to conveyances
in the form attached hereto as Exhibit C (the “Contributors’ Conveyances”) and
(ii) subsequent to such transfer, cause Maecenas to transfer all of its right,
title and interest in and to the Contributors’ Working Interests and any other
working interests that Maecenas may beneficially own (together with the
Contributors’ Working Interests, the “Maecenas Working Interests”) to Dorchester
Minerals Operating LP, a Delaware limited partnership (“Dorchester Minerals
Operating”) or its designee, retaining a net profits interest (the “Maecenas
NPI”) pursuant to an Assignment, Conveyance and Assumption Agreement in the form
attached hereto as Exhibit D (the “Assignment, Conveyance and Assumption
Agreement”); and

WHEREAS, the Contributors desire to contribute the Maecenas Interests to the
Partnership in exchange for 835,000 Common Units of the Partnership (the
“Subject Units”);

WHEREAS, the Partnership desires to accept the Maecenas Interests and in
exchange therefor issue to the Contributors the Subject Units; and
 
WHEREAS, the transfer of the Maecenas Interests shall be treated as a
contribution under Code Section 721(a) as more specifically provided herein.
 

 
 
 

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NOW, THEREFORE, in consideration of the premises and the mutual covenants and
agreements herein contained, and intending to be legally bound hereby, the
parties hereto hereby agree as follows:
 
ARTICLE 1
 
CLOSING; CONTRIBUTION
 
1.1           Closing. The closing of the transactions contemplated by this
Agreement (the “Closing”) shall take place at the offices of Thompson & Knight
LLP, One Arts Plaza, 1722 Routh Street, Suite 1500, Dallas, Texas 75201, at 9:00
a.m., local time, on March 31, 2010, or at such other time or place or on such
other date as the parties hereto shall agree (the “Closing Date”).
 
1.2           Contribution and Exchange.  At the Closing and effective as of
9:00 a.m. local time on the Closing Date, and on the terms and subject to the
conditions set forth in this Agreement:
 
(a)           the Contributors shall transfer, assign and contribute, or cause
to be transferred, assigned and contributed, to the Partnership or its designee,
and the Partnership or its designee shall acquire from the Contributors, the
Maecenas Interests, free and clear of any and all Encumbrances;
 
(b)           the Partnership shall deliver to the Contributors the Subject
Units as set forth on Exhibit A, free and clear of any and all Encumbrances.
 
ARTICLE 2
 
REPRESENTATIONS AND WARRANTIES OF THE PARTNERSHIP
 
The Partnership represents and warrants to the Contributors that:
 
2.1           Organization and Existence.  The Partnership is a limited
partnership duly organized, validly existing and in good standing under the laws
of the State of Delaware.  The Partnership has full power and authority to own,
lease or otherwise hold and operate its properties and assets and to carry on
its business as presently conducted.  The Partnership is duly qualified and in
good standing to do business as a foreign limited partnership in each
jurisdiction in which the conduct or nature of its business or the ownership,
leasing, holding or operating of its properties makes such qualification
necessary, except such jurisdictions where the failure to be so qualified or in
good standing, individually or in the aggregate, would not have a Material
Adverse Effect on the Partnership.
 
2.2 Governing Documents. The Partnership Agreement has been duly authorized,
executed and delivered by the Partnership and is, and will be, a valid and
legally binding agreement of, enforceable against the Partnership in accordance
with its terms; provided that the enforceability thereof may be limited by
bankruptcy, insolvency, fraudulent transfer, reorganization, moratorium and
similar laws relating to or affecting creditors’ rights generally
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and by general principles of equity (regardless of whether such enforceability
is considered in a proceeding in equity or at law).
 
2.3           Capitalization of the Partnership.
 
(a)           All of the outstanding Common Units have been duly authorized and
validly issued in accordance with the Partnership Agreement, are fully paid and
nonassessable.  Dorchester Minerals Management LP, a Delaware limited
partnership (the “Partnership GP”), is the sole general partner of the
Partnership.  On the date hereof, the issued and outstanding limited partner
interests of the Partnership consist of 29,840,431 Common Units.
 
(b)           The Subject Units (and the limited partner interests represented
thereby), will be duly authorized in accordance with the Partnership Agreement,
and, when issued and delivered to the Contributors in accordance with the terms
hereof, will be validly issued, fully paid (to the extent required under the
Partnership Agreement) and nonassessable and will be issued free and clear of
any lien, claim or Encumbrance.
 
(c)           Except for the Subject Units or as described in the Partnership
Agreement, there are no preemptive rights or other rights to subscribe for or to
purchase, nor any restriction upon the voting or transfer of, any interests in
the Partnership pursuant to the Partnership Agreement or any other agreement or
instrument to which the Partnership is a party or by which it may be
bound.  Neither the offering nor the sale of the Subject Units, as contemplated
by this Agreement, gives rise to any rights for or relating to the registration
of any Common Units or other securities of the Partnership.  Except for the
Subject Units or as described in the Partnership Agreement, no options, warrants
or other rights to purchase, agreements or other obligations to issue, or rights
to convert any obligations into or exchange any securities for, Common Units or
other securities of the Partnership are outstanding.
 
(d)           The Subject Units when issued and delivered against payment
therefor as provided herein, will conform in all material respects to the
description thereof contained in the Partnership Agreement.  The Partnership has
all requisite power and authority to issue, sell and deliver the Subject Units
in accordance with and upon the terms and conditions set forth in this Agreement
and the Partnership Agreement.  As of the Closing Date, all partnership action
for the authorization, issuance, sale and delivery of the Subject Units shall
have been validly taken, and no other authorization by any of such parties is
(or will be) required therefor.
 
2.4           Authority Relative to this Agreement.  The Partnership has full
partnership power and authority to execute and deliver this Agreement and to
consummate the transactions contemplated hereby.  The execution, delivery and
performance by the Partnership of this Agreement, and the consummation by it of
the transactions contemplated hereby, have been duly authorized by the
Partnership GP, and no other partnership proceedings on the part of the
Partnership are necessary to authorize the execution, delivery and performance
by the
 
3 
 

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Partnership of this Agreement and the consummation by it of the transactions
contemplated hereby.  This Agreement has been duly executed and delivered by the
Partnership and constitutes, and each other agreement, instrument or document
executed or to be executed by the Partnership in connection with the
transactions contemplated hereby has been, or when executed will be, duly
executed and delivered by the Partnership and constitutes, or when executed and
delivered will constitute, a valid and legally binding obligation of the
Partnership enforceable against the Partnership in accordance with their
respective terms, except that such enforceability may be limited by
(i) applicable bankruptcy, insolvency, reorganization, moratorium and similar
laws affecting creditors’ rights generally and (ii) equitable principles which
may limit the availability of certain equitable remedies (such as specific
performance) in certain instances.
 
2.5           Noncontravention.  Except as otherwise indicated on Schedule 2.5,
the execution, delivery and performance by the Partnership of this Agreement and
the consummation by it of the transactions contemplated hereby do not and will
not (i) conflict with or result in a violation of any provision of the
Partnership Agreement or the certificate of limited partnership of the
Partnership, (ii) conflict with or result in a violation of any provision of, or
constitute (with or without the giving of notice or the passage of time or both)
a default under, or give rise (with or without the giving of notice or the
passage of time or both) to any right of termination, cancellation or
acceleration under, any bond, debenture, note, mortgage, indenture, lease,
contract, agreement or other instrument or obligation to which the Partnership
is a party or by which the Partnership or any of its properties may be bound,
(iii) result in the creation or imposition of any Encumbrance upon the
properties of the Partnership or (iv) assuming compliance with the matters
referred to in  Section 2.6, violate any Applicable Law binding upon the
Partnership, except, in the case of clauses (ii), (iii) and (iv) of this Section
2.5, for any such conflicts, violations, defaults, terminations, cancellations,
accelerations or Encumbrances which would not, individually or in the aggregate,
have a Material Adverse Effect on the Partnership or the properties of the
Partnership.
 
2.6           Governmental Approvals.  No consent, approval, order or
authorization of, or declaration, filing or registration with, any Governmental
Entity is required to be obtained or made by the Partnership in connection with
the execution, delivery or performance by the Partnership of this Agreement or
the consummation by it of the transactions contemplated hereby, other than
(i) compliance with any applicable state securities or takeover laws, (ii) as
set forth on Schedule 2.6, (iii) filings with Governmental Entities to occur in
the ordinary course following the consummation of the transactions contemplated
hereby, and (iv) such consents, approvals, orders or authorizations which, if
not obtained, and such declarations, filings or registrations which, if not
made, would not, individually or in the aggregate, have a Material Adverse
Effect on the Partnership or the properties of the Partnership.
 
2.7           Partnership Financial Statements.  Attached as Schedule 2.7 or
filed with the SEC Filings are copies of the Partnership’s audited consolidated
balance sheet as of December 31, 2009 (the “Partnership Latest Balance Sheet”),
and the related audited consolidated statements of income, partnership capital
and cash flows for the year then ended, and the notes and schedules thereto,
together with the report thereon of Grant Thornton LLP, independent certified
public accountants (the “Partnership Financial Statements”).  The Partnership
Financial Statements (A) have been prepared from the books and records of the
Partnership in conformity with generally accepted accounting principles applied
on a basis
 
4 
 

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consistent with preceding years throughout the periods involved, and (B)
accurately and fairly present the Partnership’s consolidated financial position
as of the respective dates thereof and its consolidated results of operations
and cash flows for the periods then ended.
 
2.8           Absence of Undisclosed Liabilities.  To the Knowledge of the
Partnership, as of the date of this Agreement, the Partnership has no liability
or obligation with respect to the property held by the Partnership (whether
accrued, absolute, contingent, unliquidated or otherwise), except
(i) liabilities reflected on the Partnership Latest Balance Sheet,
(ii) liabilities described in the notes accompanying the Partnership Financial
Statements, (iii) liabilities which have arisen since the date of the
Partnership Latest Balance Sheet in the ordinary course of business (none of
which is a material liability for breach of contract, tort or infringement),
(iv) liabilities arising under executory provisions of contracts entered into in
the ordinary course of business (none of which is a material liability for
breach of contract), (v) liabilities disclosed on Schedule 2.8 and (vi) other
liabilities which, in the aggregate, are not material to the Partnership.
 
2.9           Absence of Certain Changes.  Except as disclosed on Schedule 2.9,
since the date of the Partnership Financial Statements, (i) to the Knowledge of
the Partnership there has not been any Material Adverse Effect on the
Partnership or any event or condition that might reasonably be expected to
result in any Material Adverse Effect on the Partnership, (ii) the business of
the Partnership has been conducted only in its ordinary course of business,
(iii) the Partnership has not incurred any material liability, engaged in any
material transaction or entered into any material agreement outside the ordinary
course of business, and (iv) the Partnership has not suffered any material loss,
damage, destruction or other casualty to any of its assets (whether or not
covered by insurance).
 
2.10           Compliance With Laws.  Except as disclosed on Schedule 2.10, to
the Knowledge of the Partnership, the Partnership has complied in all respects
with all Applicable Laws, except for noncompliance with such Applicable Laws
which, individually or in the aggregate, do not and will not have a Material
Adverse Effect on the Partnership.  Except as disclosed on Schedule 2.10, the
Partnership has not received any written notice from any Governmental Entity,
which has not been dismissed or otherwise disposed of, that the Partnership has
not so complied.  The Partnership has not been charged or, to the Knowledge of
the Partnership, threatened with, or under investigation with respect to, any
violation of any Applicable Law relating to any aspect of the business of the
Partnership, other than violations which, individually or in the aggregate, do
not and in the reasonable judgment of the Partnership will not have a Material
Adverse Effect on the Partnership.
 
2.11           Brokerage Fees.  The Partnership has not retained any financial
advisor, broker, agent or finder or paid or agreed to pay any financial advisor,
broker, agent or finder on account of this Agreement or any transaction
contemplated hereby.
 
2.12           Listing.  The outstanding Common Units are listed for trading on
the NASDAQ Global Select Market.
 
2.13           SEC Filings.  Since January 1, 2009, the Partnership has filed
with the Securities and Exchange Commission all forms, reports, schedules,
statements, and other
 
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documents required to be filed by it under the Securities Act of 1933, as
amended, and the rules and regulations promulgated thereunder, the Securities
Exchange Act of 1934, as amended, and the rules and regulations promulgated
thereunder, and all other federal securities laws.  All forms, reports,
schedules, statements, and other documents (including all amendments thereto)
filed by the Partnership with the Securities and Exchange Commission since such
date are herein collectively referred to as the “SEC Filings.”  The Partnership
has delivered or made available to the Contributors accurate and complete copies
of all the SEC Filings in the form filed by the Partnership with the Securities
and Exchange Commission.  The SEC Filings, at the time filed, complied in all
material respects with all applicable requirements of federal securities
laws.  To the Knowledge of the Partnership, none of the SEC Filings, including,
without limitation, any financial statements or schedules included therein, at
the time filed, contained any untrue statement of a material fact or omitted to
state any material fact required to be stated therein or necessary in order to
make the statements contained therein, in light of the circumstances under which
they were made, not misleading.  All material contracts of the Partnership have
been included in the SEC Filings, except for those contracts not required to be
filed pursuant to the rules and regulations of the Securities and Exchange
Commission.  The Partnership shall deliver or make available to the Contributors
as soon as they become available accurate and complete copies of all forms,
reports, and other documents furnished by it to its limited partners generally
or filed by it with the Securities and Exchange Commission subsequent to the
date hereof and prior to the Closing Date.
 
2.14           Legal Proceedings.  There are no Proceedings pending or, to the
Knowledge of the Partnership, threatened against or involving the Partnership or
the properties of the Partnership which, individually or in the aggregate, in
the reasonable judgment of the Partnership will have a Material Adverse Effect
on the Partnership or the properties of the Partnership.  There are no
Proceedings pending or, to the Knowledge of the Partnership, threatened against
the Partnership or the properties of the Partnership, seeking to restrain,
prohibit, or obtain damages or other relief in connection with this Agreement or
the transactions contemplated hereby or which could reasonably be expected to
affect the Partnership’s ability to consummate the transactions contemplated
hereby.
 
ARTICLE 3
 
REPRESENTATIONS AND WARRANTIES
OF THE CONTRIBUTORS
 
Each Contributor hereby severally represents and warrants to the Partnership as
to (a) such Contributor only, (b) the Maecenas Interest contributed by such
Contributor (the “Contributed Maecenas Interest”), (c) Maecenas and (d) the
assets owned by Maecenas, including without limitation, the properties,
leaseholds and other interests listed on Schedule 3 (collectively with the
Contributors’ Working Interests and the Maecenas NPI (as of the Closing Date),
the “Maecenas Properties”, and each a “Maecenas Property”) as follows:
 
3.1             Organization and Existence.  The Contributor (if the Contributor
is a natural person or is acting in such person’s capacity as trustee of a
trust) has the requisite capacity required to enter into this Agreement and
consummate the transactions contemplated hereby.  The Contributor (if the
Contributor is not a natural Person or a trustee acting in its capacity as
 
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trustee of a trust) and Maecenas are duly organized, validly existing and in
good standing under the laws of the State of each entity’s organization.  The
Contributor and Maecenas have full power and authority to own, lease or
otherwise hold and operate their properties and assets and to carry on their
business as presently conducted.  The Contributor (if the Contributor is not a
natural Person) and Maecenas are duly qualified and in good standing to do
business in each jurisdiction in which the conduct or nature of their business
or the ownership, leasing, holding or operating of their properties makes such
qualification necessary, except such jurisdictions where the failure to be so
qualified or in good standing, individually or in the aggregate, would not have
a Material Adverse Effect on the Contributor, Maecenas or the Maecenas
Properties.
 
3.2    Authority Relative to This Agreement. The Contributor has full power and
authority to execute and deliver this Agreement and to consummate the
transactions contemplated hereby. The execution, delivery and performance by the
Contributor of this Agreement, and the consummation by it of the transactions
contemplated hereby, have been duly authorized by all necessary action. This
Agreement has been duly executed and delivered by the Contributor and
constitutes, and each other agreement, instrument or document executed or to be
executed by the Contributor in connection with the transactions contemplated
hereby has been, or when executed will be, duly executed and delivered by the
Contributor and constitutes, or when executed and delivered will constitute, a
valid and legally binding obligation of the Contributor enforceable against the
Contributor in accordance with their respective terms, except that such
enforceability may be limited by (i) applicable bankruptcy, insolvency,
reorganization, moratorium and similar laws affecting creditors’ rights
generally and (ii) equitable principles which may limit the availability of
certain equitable remedies (such as specific performance) in certain instances.
 
       3.3           Noncontravention.  The execution, delivery and performance
by the Contributor of this Agreement and the consummation by it of the
transactions contemplated hereby, do not and will not (i) conflict with
or  result in a violation of any provision of the respective governing
instruments of the Contributor or Maecenas, (ii) conflict with or result in a
violation of any provision of, or constitute (with or without the giving of
notice or the passage of time or both) a default under, or give rise (with or
without the giving of notice or the passage of time or both) to any right of
termination, cancellation or acceleration under, any bond, debenture, note,
mortgage, indenture, lease, contract, agreement or other instrument or
obligation to which the Contributor or Maecenas are a party or by which the
Contributor, Maecenas or any of the Maecenas Properties may be bound,
(iii) result in the creation or imposition of any Encumbrance upon the
Contributed Maecenas Interest or the Maecenas Properties or (iv) assuming
compliance with the matters referred to in Section 3.4, violate any Applicable
Law binding upon the Contributor or Maecenas, except in the case of clauses
(ii), (iii) and (iv) of this Section 3.3, for any such conflicts, violations,
defaults, terminations, cancellations, accelerations or Encumbrances which would
not, individually or in the aggregate, have a Material Adverse Effect on the
Contributor, Maecenas or the Maecenas Properties.
 
3.4          Governmental Approvals.  To the Knowledge of the Contributor, no
consent, approval, order or authorization of, or declaration, filing or
registration with, any Governmental Entity is required to be obtained or made by
the Contributor or Maecenas in connection with the execution, delivery or
performance by the Contributor of this Agreement or the consummation by it of
the transactions contemplated hereby, other than (i) compliance with any
applicable state
 
7 
 

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securities or takeover laws, (ii) filings with Governmental Entities to occur in
the ordinary course following the consummation of the transactions contemplated
hereby and (iii) such consents, approvals, orders or authorizations which, if
not obtained, and such declarations, filings or registrations which, if not
made, would not, individually or in the aggregate, have a Material Adverse
Effect on the Contributor, Maecenas or the Maecenas Properties.
 
       3.5             Capitalization.  The Maecenas Interests constitute all of
the authorized, issued and outstanding partnership interests in
Maecenas.  Immediately prior to the Closing, Contributor will be the record and
beneficial owner and holder of, and will have good title to, the Contributed
Maecenas Interest, free and clear of any Encumbrance.  The Contributed Maecenas
Interest has been duly authorized and validly issued, with no preemptive
rights.  There are no existing agreements, options, warrants, rights, calls or
commitments of any character providing for the issuance of any equity or other
interest in Maecenas, or for the repurchase or redemption of equity or other
interests, of Maecenas, and there are no outstanding securities or other
instruments convertible into or exchangeable for equity or other interests in
Maecenas and no commitments to issue such securities or instruments.
 
3.6             Subsidiaries.  Maecenas has no subsidiaries.
 
3.7    Maecenas Records. Maecenas has delivered to the Partnership true, correct
and complete copies of its application for registration as a registered limited
liability partnership and that certain Partnership Agreement dated December 16,
1999 by and among the Contributors or those Persons through which the
Contributors acquired or accrued the Maecenas Interests (the “Maecenas
Partnership Agreement”), in each case as amended and in effect on the date
hereof. The Contributors have duly executed that certain Special Power of
Attorney dated July 1, 2008 designating Joseph Edwin Canon as Maecenas’ agent
and attorney-in-fact (the “Special Power of Attorney”). The Special Power of
Attorney is in full force and has not been revoked. Maecenas has no minute book.
 
       3.8             Maecenas Income Statements.  Maecenas has provided the
Partnership copies of its unaudited statements of income for the periods ended
December 31, 2006, 2007, 2008 and 2009 attached hereto as Exhibit 3.8 and its
books, records and accounts, including without limitation, records of its cash
receipts and disbursements.  To the Knowledge of the Contributor, all books,
records and accounts of Maecenas are materially accurate and complete and have
been maintained in all material respects in accordance with good business
practice and Applicable Law.
 
       3.9             Title to Maecenas Properties.  Maecenas has good title to
the Maecenas Properties, free and clear of any Encumbrances created by, through
or under Maecenas or any Contributor, except for the Permitted Encumbrances.
 
       3.10             Absence of Undisclosed Liabilities.  To the Knowledge of
the Contributor, Maecenas has no liability or obligation (whether accrued,
absolute, contingent, unliquidated or otherwise) other than those specifically
reflected on Schedule 3.10.
 
3.11             Material Contracts.  Except as set forth on Schedule 3.11 or
any Basic Document, Maecenas is not a party to or bound by any agreement or
contract, lease, credit
 
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facility or other financing agreement or other arrangement, in each case either
written or oral, that is used or necessary to the operation or conduct of the
business of Maecenas.
 
       3.12             Employees; Employee Benefit Plans.  Maecenas has no
employees and has never had any employees.  Maecenas has not adopted, nor has it
ever been a party to, any employee benefit plan, program, agreement, policy,
arrangement or pension plan.

 
       3.13           Absence of Certain Changes.  Since the Reference Date,
(i) to the Knowledge of the Contributor, there has not been any Material Adverse
Effect on Maecenas or the Maecenas Properties or any event or condition that
might reasonably be expected to result in any Material Adverse Effect on
Maecenas or the Maecenas Properties, (ii) the business of Maecenas has been
conducted only in its ordinary course of business with respect to the Maecenas
Properties, (iii) Maecenas has not incurred any material liability, engaged in
any material transaction or entered into any material agreement outside the
ordinary course of business with respect to the Maecenas Properties,
(iv) Maecenas has not suffered any material loss, damage, destruction or other
casualty to any of the Maecenas Properties (whether or not covered by insurance)
and (v) the Contributor and Maecenas have not taken any of the actions set forth
in Section 4.2(a)-(n) except as permitted thereunder.
 
         3.14    Tax Matters. All Tax Returns relating to Maecenas and the
Maecenas Properties required to be filed by the Contributors or Maecenas have
(and as of the Closing Date will have) been duly and timely filed (taking into
account any extension of time to file granted or obtained) with the applicable
Taxing authority, and such Tax Returns are true, correct, and complete in all
material respects. All Taxes due from the Contributors or from Maecenas relating
to the Maecenas Properties have (and as of the Closing Date will have) been
fully and timely paid. There are no liens for Taxes (other than for Taxes not
yet due and payable) upon Maecenas or any of the Maecenas Properties. There has
been no issue raised or adjustment proposed (and to the Knowledge of the
Contributors, none is pending) by the IRS or any other Taxing authority in
connection with any such Tax Returns, nor have the Contributors or Maecenas
received any written notice from the IRS or any such other Taxing authority that
any such Tax Return is being audited or may be audited or examined. Neither the
Contributors nor Maecenas have agreed to the waiver or extension of any statute
of limitations on the assessment or collection of any such Tax or with respect
to any such Tax Return. No Contributor is a “foreign person” within the meaning
the Section 1445(f)(3) of the Code and the Treasury Regulations thereunder. None
of the Maecenas Properties is an interest in any joint venture, partnership, or
other entity, arrangement, or contract that could be treated as a partnership
for federal income Tax purposes. No Contributor is a party to any Tax allocation
or sharing agreement with respect to the Maecenas Properties. Maecenas has
complied with all Applicable Laws relating to the payment and withholding of
Taxes, and has duly and timely withheld and paid over to the appropriate Taxing
authority all amounts required to be so withheld and paid under all Applicable
Laws. The Contributors and Maecenas have made all deposits required with respect
to Taxes due and payable with respect to the Maecenas Properties. Maecenas has
always been treated as a partnership for federal income Tax purposes, and
Maecenas has not made (and will not make before the Closing Date) any election
to be treated as an association taxable as a corporation for federal income Tax
purposes. The income derived by Maecenas from the Maecenas Properties is
“qualifying income” as that term is defined under Section 7704 of the Code.
Maecenas has properly identified all hedging transactions as required by
Treasury
 
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Regulation Section 1.1221-2(f). Neither Maecenas nor any of the Contributors
have participated in any “reportable transaction” within the meaning of Section
1.6011-4 of the Treasury Regulations.
 
       3.15             Compliance with Laws.  To the Knowledge of the
Contributor, the Contributor and Maecenas have complied in all respects with all
Applicable Laws relating to the ownership or operation of the Maecenas
Properties, except for noncompliance with such Applicable Laws which,
individually or in the aggregate, do not and will not have a Material Adverse
Effect on the Contributor, Maecenas or the Maecenas Properties.  The Contributor
and Maecenas have not received any written notice from any Governmental Entity,
which has not been dismissed or otherwise disposed of, that the Contributor or
Contributed Entities have not so complied.  The Contributor and Maecenas have
not been charged or, to the Knowledge of the Contributor, threatened with, or
under investigation with respect to, any violation of any Applicable Law
relating to any aspect of the ownership or operation of the Maecenas Properties,
other than violations which, individually or in the aggregate, do not and in the
reasonable judgment of the Contributor will not have a Material Adverse Effect
on the Contributor, Maecenas or the Maecenas Properties.
 
       3.16    Legal Proceedings. Except as set forth on Schedule 3.16, there
are no Proceedings pending or, to the Knowledge of the Contributor, threatened
against or involving the Contributor, the Contributed Maecenas Interest,
Maecenas or the Maecenas Properties that, individually or in the aggregate, in
the reasonable judgment of the Contributor will have a Material Adverse Effect
on Maecenas or the Maecenas Properties. Neither the Contributor nor Maecenas are
subject to any judgment, order, writ, injunction, or decree of any Governmental
Entity which has had or is reasonably likely to materially affect title to or
the value of the Contributed Maecenas Interest or any of the Maecenas
Properties. There are no Proceedings pending or, to the Knowledge of the
Contributor, threatened against the Contributor, the Contributed Maecenas
Interest, Maecenas or the Maecenas Properties, seeking to restrain, prohibit, or
obtain damages or other relief in connection with this Agreement or the
transactions contemplated hereby or which could reasonably be expected to affect
the Contributor’s ability to consummate the transactions contemplated hereby.
 
       3.17             Permits.  The Contributor and Maecenas have not received
any written notice from any Governmental Entity and no Proceeding is pending or,
to the Knowledge of the Contributor, threatened with respect to any alleged
failure by the Contributor or Maecenas to have any Permit the absence of which
would have a Material Adverse Effect on the Contributor, Maecenas or the
Maecenas Properties.
 
       3.18    Environmental Matters. The Contributor and Maecenas have not
received any written notice of any investigation or inquiry regarding the
Maecenas Properties from any Governmental Entity under any Applicable Law
pertaining to the environment, Hazardous Substances or Hazardous Wastes
(“Applicable Environmental Laws”), including, without limitation, the
Comprehensive Environmental Response, Compensation, and Liability Act of 1980,
as amended by, inter alia, the Superfund Amendments and Reauthorization Act of
1986 (“CERCLA”), and the Resource Conservation and Recovery Act of 1976, as
amended by, inter alia, the Used Oil Recycling Act of 1980, the Solid Waste
Disposal Act Amendments of 1980, and the Hazardous and Solid Waste Amendments of
1984 (“RCRA”).  The term “Hazardous
 

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Substance” as used herein shall have the meaning specified in CERCLA, and the
terms “Hazardous Waste” and “Disposal” shall have the meanings specified in
RCRA.
 
       3.19             Revenue and Expense Information; Records.  To the
Knowledge of the Contributor, all proceeds of production from the Maecenas
Properties are being, and have been, properly paid and accounted for under
appropriate division orders, transfer orders or similar documents.  In addition,
to Contributor’s Knowledge, Maecenas has been correctly and timely paid by all
third parties for the proceeds of Production from all Maecenas Properties.
 
       3.20   No Alienation. Within 120 days of the date hereof, Maecenas has
not sold, assigned, conveyed, or transferred or contracted to sell, assign,
convey or transfer any right or title to, or interest in, the Maecenas
Properties, other than in the ordinary course of business.
 
       3.21    Make-Up Rights. To Contributor’s Knowledge, neither Maecenas, nor
any Contributor, has received prepayments (including, but not limited to,
payments for gas not taken pursuant to “take-or-pay” or similar arrangements)
for any oil or gas produced from the Maecenas Properties as a result of which
the obligation does or may exist to deliver oil or gas produced from the
Maecenas Properties after the Reference Date without then receiving payment (or
without then receiving full payment) therefore or to make repayments in cash
(and the Contributors have not, since the Reference Date, so delivered any oil
or gas from the Maecenas Properties or so made any such repayment in cash).
 
       3.22    Imbalances. To Contributor’s Knowledge, there are no imbalances
among the owners of the interests in any wells and units included in the
Maecenas Properties that could have a Material Adverse Effect on the net
revenues that Maecenas will be entitled to receive from the Maecenas Properties
from the then current month’s production.
 
       3.23            Basic Documents.
 
(a)           To the Contributor’s Knowledge, (i) the Contributor and Maecenas
are not in breach or default (and no situation exists which with the passing of
time or giving of notice would create a breach or default) of its obligations
under any Basic Documents, and (ii) no breach or default by any third party (or
situation which with the passage of time or giving of notice would create a
breach or default) exists under any Basic Documents, to the extent such breach
or default (whether by the Contributor, Maecenas or such third party) could
reasonably be expected to have a Material Adverse Effect on the Maecenas
Properties after the Closing Date;
 
(b)           No Basic Document involves an assumption by the Partnership or its
successors of any pre-closing liabilities or claims; and
 
(c)           None of the Basic Documents or other contracts or agreements that
comprise part of the Maecenas Properties contain terms, or conditions that are
not generally customary in the oil and gas industry.
 
For the purposes of the representations contained in this Section 3.23 (and
without limitation of such representations), the non-payment of an amount, or
non-performance of an obligation,
 
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where such non-payment, or non-performance, could result in the forfeiture or
termination of rights of the Contributor under a Basic Document, shall be
considered material.
 
3.24             Commitments, Abandonments or Proposals.
 
(a)           Maecenas has incurred no expenses, and has made no commitments to
make expenditures in connection with (and no other obligations or liabilities
have been incurred which would adversely affect) the ownership or operation of
the Maecenas Properties by Maecenas on or after the Reference Date, other than
routine expenses incurred in the normal operation of existing wells on the
Maecenas Properties.
 
(b)           No proposals to Maecenas in excess of $10,000 are currently
outstanding to drill additional wells, or to deepen, plug back, or rework
existing wells, or to conduct other operations for which consent is required
under the applicable operating agreement, or to conduct any other operations, or
to abandon any wells, on the Maecenas Properties.
 
       3.25             Production Sales Contracts.  To the Knowledge of the
Contributor, there exist no agreements or arrangements for the sale of
production from the Maecenas Properties (including calls on, or other rights to
purchase, production, whether or not the same are currently being exercised)
other than agreements or arrangements which are cancelable on 90 days notice or
less without penalty or detriment.
 
       3.26             Area of Mutual Interest.  Maecenas is not a party to any
area of mutual interest agreement.
 
       3.27    Payment of Expenses. All expenses (including all bills for labor,
materials and supplies used or furnished for use in connection with the Maecenas
Properties, and all severance, production, ad valorem, windfall profit and other
similar taxes) relating to the ownership or operation of the Maecenas
Properties, have been, and are being, paid (timely, and before the same become
delinquent) by Maecenas, except such expenses and taxes as are disputed in good
faith by Maecenas and for which an adequate accounting reserve has been
established by Maecenas.
 
       3.28   Reserve Report Information. To the Knowledge of the Contributor,
all information furnished by the Contributor, Maecenas, or representatives
thereof, to the Partnership in connection with the preparation of a reserve
report with respect to the Maecenas Properties and all information set forth on
the exhibits or schedules hereto are true and correct in all material respects
and production has not decreased other than normal decline in production rates
over time, individually, on a property-by-property or well-by-well basis or in
the aggregate, from the production information furnished in connection with the
preparation of the reserve report.
 
       3.29   Oral Contracts. The Contributor and Maecenas have not entered into
any oral contract with respect to the Maecenas Properties.
 
       3.30   Preferential Rights and Consents to Assign. To the Contributor’s
Knowledge, there are no consents to assignment or waivers of preferential rights
to purchase that must be
 
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obtained from third parties in order for the Contributor to consummate the
transactions contemplated by this Agreement.
 
3.31             Brokerage Fees.  The Contributor and Maecenas have not retained
any financial advisor, broker, agent or finder or paid or agreed to pay any
financial advisor, broker, agent or finder on account of this Agreement or any
transaction contemplated hereby.
 
3.32             Investment Intent.
 
(a)           The Contributor is an “accredited investor” within the meaning of
Securities and Exchange Commission Rule 501 of Regulation D, because the
Contributor is:
 
    (i)           an organization described in Section 501(c)(3) of the Code, a
corporation, a Massachusetts or similar business trust, or a partnership,
not formed for the specific purpose of acquiring the Maecenas Interests, with
total assets in excess of $5,000,000;
 
    (ii)           a natural person whose individual net worth, or joint net
worth with such person’s spouse, at the time hereof and at the Closing exceeds
$1,000,000;
 
    (iii)           a natural person who had an individual income in excess of
$200,000 in each of the two most recent years or joint income with such person’s
spouse in excess of $300,000 in each of those years and has a reasonable
expectation of reaching the same income level in the current year;
 
    (iv)           a trust, with total assets in excess of $5,000,000, not
formed for the specific purpose of acquiring the Maecenas Interests, whose
purchase is directed by a sophisticated person (as used in this Section
3.32(a)(iv), “sophisticated person” means a person that has the knowledge and
experience in financial and business matters such that the person is capable of
evaluating the merits and risks of the investment in the Maecenas Interests); or
 
    (v)           an entity in which all of the equity owners are accredited
investors, because such equity owners are persons described in this Section
3.32(a).
 
(b)           The Contributor is acquiring the Partnership Interest for its own
account for investment and not with a view to, or for sale or other disposition
in connection with, any public distribution of all or any part thereof.
 
(c) The Contributor has carefully reviewed this Agreement, the Partnership
Agreement and other documentation relating to the Partnership and has had such
opportunity as deemed necessary by the  Contributor and its advisors and
affiliates to ask questions of the Partnership and their affiliates, officers
and
 
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 employees to enable such Contributor to make an informed investment decision
concerning the receipt of the Partnership Interest pursuant to the transactions
contemplated by this Agreement, the operation of the Partnership, and the
investment risks associated with the Contributor’s investment in the
Partnership.
 
ARTICLE 4
 
CONDUCT OF THE CONTRIBUTORS PENDING CLOSING;
CERTAIN ACTIONS RELATING TO CLOSING
 
4.1           Conduct and Preservation of the Business of Maecenas.  The
Contributors hereby covenant and agree with the Partnership that, except as
contemplated by this Agreement, during the period from the date hereof to the
Closing Date, the Contributors (i) shall cause Maecenas to conduct its
operations according to the ordinary course of its business and in material
compliance with all Applicable Laws and (ii) shall use their reasonable best
efforts to preserve, maintain and protect the Maecenas Properties.
 
4.2           Restrictions on Certain Actions of the Contributors.  Except as
otherwise expressly provided in this Agreement, prior to the Closing Date, the
Contributors shall not, without the consent of the Partnership (which consent
shall not be unreasonably withheld), cause Maecenas to:
 
(a)           effect any change in the capitalization of Maecenas;
 
(b)           mortgage or pledge any of the Maecenas Properties or create or
suffer to exist any Encumbrance thereupon, other than Permitted Encumbrances;
 
(c)           sell, lease, transfer or otherwise dispose of, directly or
indirectly, any of the Maecenas Properties, except in the ordinary course of
business;
 
(d)           issue, create, incur, assume, guarantee, endorse or otherwise
become liable or responsible with respect to (whether directly, contingently or
otherwise) any liability, obligation or indebtedness outside the ordinary course
of business of Maecenas;
 
(e)           amend, modify or change (i) any existing lease or contract with
respect to the Maecenas Properties (other than in the ordinary course of the
business of Maecenas), (ii) the application for registration as a registered
limited liability partnership of Maecenas or (iii) the Maecenas Partnership
Agreement;
 
(f)           waive, release, grant or transfer any rights of value relating to
the Maecenas Properties, other than in the ordinary course of business;
 
(g)           delay payment of any account payable or any known or accrued
liability relating to the Maecenas Properties beyond the earlier of thirty (30)
days or its due date or the date when such liability would have been paid in the
ordinary course of business, unless such delay is due to a good faith dispute as
to liability or amount;
 
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(h)           permit any current insurance or reinsurance or continuation
coverage to lapse if such policy insures risks, contingencies or liabilities
(including product liability) related to the Maecenas Properties other than in
connection with any advance renewal or replacement of an existing insurance
policy;
 
(i)           except as set forth in this Section 4.2, take any action which
would make any of the representations or warranties of the Contributors untrue
as of any time from the date of this Agreement to the Closing Date, or would
result in any of the conditions set forth in this Agreement not being satisfied;
 
(j)           merge into or with or consolidate with any other Person or acquire
all or substantially all of the business or assets of any other Person;
 
(k)           declare, set aside, make or pay any distribution in respect of the
Maecenas Interests, except that immediately prior to the Closing, Maecenas shall
distribute to the Contributors cash in the amount of net cash receipts and
disbursements attributable to the Contributors’ Working Interests from the
Reference Date to the Closing Date, as mutually agreed by the parties;
 
(l)           enter into any commitment for capital expenditures of Maecenas;
 
(m)           take any action which would adversely affect the ability of the
parties to consummate the transactions contemplated by this Agreement; or
 
(n)           agree in writing or otherwise take any actions (i) described in
this Section 4.2, or (ii) that would be reasonably expected to cause a Material
Adverse Effect on the Contributor, the Contributed Maecenas Interest, Maecenas
or the Maecenas Properties.
 
ARTICLE 5
 
ADDITIONAL AGREEMENTS
 
5.1           Pre-Closing Actions Concerning Working Interests.  Prior to the
Closing, the Contributors shall contribute all of their right, title and
interest in and to the Contributors’ Working Interests to Maecenas pursuant to
the Contributors’ Conveyances.  Subsequent to such transfer, Maecenas shall
transfer all of its right, title and interest in and to the Maecenas Working
Interests to Dorchester Minerals Operating or its designee, retaining the
Maecenas NPI, pursuant to the Assignment, Conveyance and Assumption Agreement.
 
5.2   Access to Information; Confidentiality. The Contributors agree to cause
Maecenas to afford the Partnership and its accountants, counsel, financial
advisors and other representatives, full access, during normal business hours
upon reasonable notice throughout the period prior to the Closing, to the
Maecenas Properties and Records. During such period, Maecenas shall furnish
promptly such information concerning the Maecenas Properties and the business of
Maecenas as the Partnership shall reasonably request; provided, however, such
investigation shall not unreasonably disrupt the operations of Maecenas. Prior
to the Closing, the
 
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Contributors shall cause Maecenas to generally keep the Partnership informed as
to all material matters involving the operations and business of Maecenas. The
Contributors shall discuss matters involving the operations and business of
Maecenas with representatives of the Partnership. All nonpublic information
provided to, or obtained by, the Partnership and its representatives or the
Contributors in connection with the transactions contemplated hereby shall be
“Confidential Information” for purposes of that certain Nondisclosure Agreement
dated September 3, 2009 between the Partnership and Dodge Jones (the
“Confidentiality Agreement”), the terms of which shall continue in force until
the Closing.

        5.3           Notification of Certain Matters.   Each party shall give
reasonably prompt notice to the other parties of (i) any fact or circumstance
which would be likely to cause any representation or warranty of such party
contained in this Agreement to be untrue or inaccurate in any material respect
and (ii) any material failure of such party to comply with or satisfy any
covenant, condition or agreement to be complied with or satisfied by it
hereunder.  The delivery of any notice pursuant to this Section 5.3 shall not be
deemed to (i) modify the representations or warranties hereunder of the party
delivering such notice, (ii) modify the conditions set forth in ARTICLE 6 or
(iii) limit or otherwise affect the remedies available hereunder to any party
receiving such notice.
 
5.4           Reasonable Best Efforts.  Each party hereto agrees that it will
not voluntarily undertake any course of action inconsistent with the provisions
or intent of this Agreement and will use its reasonable best efforts to take, or
cause to be taken, all action and to do, or cause to be done, all things
reasonably necessary, proper or advisable under Applicable Laws to consummate
the transactions contemplated by this Agreement, including, without limitation,
(i) cooperating in determining whether any other consents, approvals, orders,
authorizations, waivers, declarations, filings or registrations of or with any
Governmental Entity or third party are required in connection with the
consummation of the transactions contemplated hereby, (ii) using its reasonable
best efforts to obtain any such consents, approvals, orders, authorizations and
waivers and to effect any such declarations, filings and registrations,
(iii) using its reasonable best efforts to cause to be lifted or rescinded any
injunction or restraining order or other order adversely affecting the ability
of the parties to consummate the transactions contemplated hereby, (iv) using
its reasonable best efforts to defend, and to cooperate in defending, all
lawsuits or other legal proceedings challenging this Agreement or the
consummation of the transactions contemplated hereby and (v) executing of any
additional instruments necessary to consummate the transactions contemplated
hereby.
 
5.5           Public Announcements.  The Partnership may from time-to-time make
such press releases or otherwise make public statements with respect to this
Agreement of the transactions contemplated hereby as the Partnership deems
appropriate, in its sole discretion.  No Contributor shall issue any press
release or otherwise make any public statement with respect to this Agreement or
the transactions contemplated hereby without the prior written consent of the
Partnership.
 
5.6 Amendment of Schedules. Each party hereto agrees that, with respect to the
representations and warranties of such party contained in this Agreement, such
party shall have the continuing obligation until the Closing to supplement or
amend the Schedules hereto with respect to any matter hereafter discovered
which, if known at the date of this Agreement,
 
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would have been required to be set forth or described in the Schedules. For all
purposes of this Agreement, including without limitation for purposes of
determining whether the conditions set forth in Sections 6.2(a) and 6.3(a) have
been fulfilled, the Schedules hereto shall be deemed to include only that
information contained therein on the date of this Agreement and shall be deemed
to exclude all information contained in any supplement or amendment thereto.
 
5.7           Fees and Expenses.  All fees and expenses, including fees and
expenses of counsel, financial advisors and accountants, incurred in connection
with this Agreement and the transactions contemplated hereby shall be paid by
the party incurring such fee or expense, whether or not the Closing shall have
occurred.
 
5.8           Taxes.
 
(a)           The Partnership and each Contributor agree to treat the
contribution of the Maecenas Interests pursuant to Section 1.2 as a contribution
by Contributors to the Partnership in exchange for the Subject Units pursuant to
Section 721(a) of the Code and the Treasury Regulations thereunder.
 
(b)           The parties shall agree to a value of the Maecenas Interests and
the allocation of such agreed value among the Maecenas Properties prior to the
Closing Date (the “Allocation”).  The Contributors and the Partnership shall
report the transactions contemplated hereby on all Tax Returns, including, but
not limited to, for purposes of future allocations under Section 704(c) of the
Code, in a manner consistent with the Allocation.  If, contrary to the intent of
the parties hereto as expressed in this Section 5.8(b), any Taxing authority
makes or proposes an allocation different from the Allocation, the Contributors
and the Partnership shall cooperate with each other in good faith to contest
such Taxing authority’s allocation (or proposed allocation); provided, however,
that, after consultation with the party (or parties) adversely affected by such
allocation (or proposed allocation), the other party (or parties) hereto may
file such protective claims or Tax Returns as may be reasonably required to
protect its (or their) interests.
 
(c)           Each Contributor agrees to report to the Partnership its tax basis
in each Maecenas Property within 30 days after the Closing Date.
 
(d)           The Contributors shall timely file all Tax Returns required to be
filed by or with respect to Maecenas, the Maecenas Properties and the Maecenas
Working Interests for any Tax period ending on or before the Closing Date
(including, for the avoidance of doubt, the final federal income Tax Return for
Maecenas on IRS Form 1065 for the period that ends on the Closing Date).  The
Contributors shall pay all federal and state income Taxes (excluding Texas
franchise taxes) due or claimed by any Taxing authority to be due from such
party with respect to Maecenas (including income Taxes attributable to the
income shown on the aforementioned final IRS Form 1065), the Maecenas
Properties, the Maecenas Working Interests and any production therefrom for all
periods ending on or before the Closing Date.  The Partnership shall file all
other Tax Returns required to be filed by or with respect to Maecenas and the
Maecenas Properties
 

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and shall pay or cause to be paid all other Taxes owed with respect to Maecenas
or any of the Maecenas Properties. For purposes of this Section 5.8(d), any
franchise Tax paid or payable with respect to Maecenas shall be allocated to the
taxable period during which the income, operations, assets or capital comprising
the base of such Tax is measured, regardless of whether the right to do business
for another taxable period is obtained by the payment of such Tax. The parties
shall each provide each other with all information reasonably necessary to
prepare a Tax Return. Notwithstanding anything in this Agreement to the
contrary, each party to this Agreement shall be responsible for their own
federal, state and local income tax liabilities (and, except as set forth above,
any franchise tax liabilities calculated with respect to net income).
 
(e)           The Contributors shall control and bear the cost of any audit or
contest relating to Maecenas or the Maecenas Properties with respect to a Tax
period (or portion thereof) ending on or before the Closing Date, and the
Partnership shall control and bear the cost of any other audit or contest.  The
party in control of an audit or controversy shall keep the other party informed
of the status of the audit or controversy (including providing copies of
correspondence and pleadings).  Neither the Partnership nor any Contributor
shall settle any audit or contest in a way that would in such party’s reasonable
judgment adversely affect the other party without the other party’s written
consent, which the other party shall not unreasonably withhold.  The Partnership
and the Contributors shall each provide the other with all information
reasonably necessary to conduct an audit or contest with respect to Taxes.
 
(f)           The Contributors shall be entitled to any refund of Taxes for
which they are responsible for payment pursuant to the provisions of Section
5.8(d) above.  The Partnership shall be entitled to any refund of Taxes for
which it is responsible for payment pursuant to the provisions of Section 5.8(d)
above.  If a party receives a refund to which the other party is entitled, the
party receiving the refund shall pay it to the party entitled to the refund
within five (5) Business Days after receipt.
 
(g)           The Contributors and the Partnership shall be jointly responsible
for state or local transfer, sales, use, stamp, registration or other similar
Taxes resulting from the transactions contemplated by this Agreement.
 
(h)           To the extent, and only to the extent, reasonably necessary to
comply with applicable securities laws and tax laws and notwithstanding anything
in this Agreement to the contrary or in any other agreement to which the
Partnership or any Contributor is bound, the parties hereto (and each employee,
representative, or other agent of any of the parties) are expressly authorized
to disclose the U.S. federal income “tax treatment” and “tax structure” (as
those terms are defined in Sections 1.6011-4I(8) and (9) of the Treasury
Regulations, respectively) of the transactions contemplated by this Agreement
and those materials (including opinions or other tax analyses) that are provided
to such parties relating to such “tax treatment” and “tax structure” of the
transactions
 

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contemplated by this Agreement.  For these purposes, “tax structure” is limited
to facts relevant to the U.S. federal income tax treatment of the transaction
described herein.
 
5.9           Post-Closing Assurances.  After the Closing, the Contributors and
the Partnership shall execute, acknowledge and deliver or cause to be executed,
acknowledged and delivered such instruments and take such other action as may be
necessary or advisable to carry out their obligations under this Agreement and
under any exhibit, document, certificate or other instrument delivered pursuant
hereunto.
 
ARTICLE 6
 
CONDITIONS
 
6.1           Conditions to Obligations of the Parties.  The obligations of the
parties to consummate the transactions contemplated by this Agreement shall be
subject to the fulfillment on or prior to the Closing Date of each of the
following conditions:
 
(a)           Legal Proceedings.  No preliminary or permanent injunction or
other order, decree, or ruling issued by a Governmental Entity, and no statute,
rule, regulation, or executive order promulgated or enacted by a Governmental
Entity, shall be in effect which restrains, enjoins, prohibits, or otherwise
makes illegal the consummation of the transactions contemplated hereby; and no
Proceeding by a Governmental Entity shall have been commenced or threatened (and
be pending or threatened on the Closing Date) against the Partnership, any
Contributor, Maecenas or the Maecenas Properties, or any of their respective
affiliates, associates, directors, or officers seeking to prevent or challenging
the transactions contemplated hereby.
 
(b)           Consents.  All consents, approvals, orders, authorizations and
waivers of, and all declarations, filings and registrations with, third parties
(including Governmental Entities) required to be obtained or made by or on the
part of the parties hereto, or otherwise reasonably necessary for the
consummation of the transactions contemplated hereby, shall have been obtained
or made, and all such consents, approvals, orders, authorizations, waivers,
declarations, filings or registrations shall be in full force and effect at the
time of Closing, unless the failure to obtain or make any such consent,
approval, order, authorization, waiver, declaration, filing or registration
would not have a Material Adverse Effect on the Partnership or the Contributors.
 
6.2           Conditions to Obligation of the Contributors.  The obligation of
the Contributors to consummate the transactions contemplated by this Agreement
shall be subject to the fulfillment on or prior to the Closing Date of each of
the following conditions:
 
(a)    Representations and Warranties. All the representations and warranties of
the Partnership contained in this Agreement and in any agreement, instrument or
document delivered pursuant hereto or in connection herewith on or
 
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prior to the Closing Date, shall be true and correct in all material respects on
and as of the Closing Date as if made on and as of such date, except to the
extent that any such representation or warranty is made as of a specified date,
in which case such representation or warranty shall have been true and correct
in all material respects as of such specified date.
 
(b)           Covenants and Agreements.  The Partnership shall have performed
and complied with in all material respects all covenants and agreements required
by this Agreement to be performed or complied with by it on or prior to the
Closing Date.
 
(c)           No Material Adverse Effect.  Since the date of this Agreement,
there shall not have occurred any Material Adverse Effect with respect to the
Partnership.
 
(d)           Certificates.  The Contributors shall have received a certificate
from the Partnership, dated the Closing Date, representing and certifying that
the conditions set forth in Sections 6.1 and 6.2 have been fulfilled and a
certificate as to the incumbency of the officer(s) executing this Agreement on
behalf of the Partnership.
 
6.3           Conditions to Obligation of the Partnership.  The obligation of
the Partnership to consummate the transactions contemplated by this Agreement
shall be subject to the fulfillment on or prior to the Closing Date of each of
the following conditions:
 
(a)           Representations and Warranties.   All the representations and
warranties of the Contributors contained in this Agreement and in any agreement,
instrument  or document delivered pursuant hereto or in connection herewith on
or prior to the Closing Date, shall be true and correct in all material respects
on and as of the Closing Date as if made on and as of such date, except to the
extent that any such representation or warranty is made as of a specified date,
in which case such representation or warranty shall have been true and correct
in all material respects as of such specified date.
 
(b)           Covenants and Agreements.  Each Contributor shall have performed
and complied with in all material respects all covenants and agreements required
by this Agreement to be performed or complied with by it on or prior to the
Closing Date.
 
(c)           No Material Adverse Effect.  Since the date of this Agreement,
there shall not have occurred any Material Adverse Effect with respect to the
Maecenas Properties.
 
(d)           Certificates.  The Partnership shall have received a certificate
from the Contributors, dated the Closing Date, representing and certifying that
the conditions set forth in Sections 6.1 and 6.3 have been fulfilled and a
certificate as to the incumbency of the officer(s) executing this Agreement on
behalf of each Contributor.
 
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(e)           Assignments of Maecenas Interests.  The Contributors shall have
delivered to the Partnership duly executed assignments of the Maecenas
Interests, in the form of the assignment attached as Exhibit 6.3(e) hereto.
 
(f)           Pre-Closing Transaction Documents.  The Contributors shall have
executed and delivered to the Partnership the Contributors’ Conveyances and the
Assignment, Conveyance and Assumption Agreement.
 
(g)           Due Diligence.  In consideration of the time and expense to be
incurred by the Partnership in connection with the transactions contemplated
hereby, the due diligence investigation of the Partnership with respect to the
Maecenas Properties shall have been completed to the satisfaction of the
Partnership, in its sole discretion, including but not limited to confirmation
of the accuracy of information described in Sections 3.8 and 3.19 of this
Agreement.
 
ARTICLE 7
 
TERMINATION, AMENDMENT AND WAIVER
 
7.1           Termination.  This Agreement may be terminated and the
transactions contemplated hereby abandoned at any time prior to the Closing in
the following manner:
 
(a)           By unanimous written consent of the parties hereto;
 
(b)           By the Contributors or the Partnership, if:
 
(i)           The Closing shall not have occurred on or before March 31, 2010,
unless such failure to close shall be due to a material breach of this Agreement
by the party seeking to terminate this Agreement pursuant to this Section
7.1(b)(i); or
 
(ii)           There shall be any Applicable Law that makes consummation of the
transactions contemplated hereby illegal or otherwise prohibited or a
Governmental Entity shall have issued an order, decree or ruling or taken any
other action permanently restraining, enjoining or otherwise prohibiting the
consummation of the transactions contemplated hereby, and such order, decree,
ruling or other action shall have become final and nonappealable;
 
(c)           By the Contributors, if (i) any of the representations and
warranties of the Partnership contained in this Agreement shall not be true and
correct such that the condition set forth in Section 6.2(a) would not be
satisfied, or (ii) the Partnership shall have failed to fulfill in any material
respect any of its material obligations under this Agreement, which failure is
material to the obligations of such party under this Agreement, and, in the case
of each of clauses (i) and (ii) of this Section 7.1(c), such misrepresentation,
breach of warranty or failure (provided it can be cured) has not been cured
within 30 days of notice thereof by the Contributors.
 
 
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(d)           By the Partnership, if (i) any of the representations and
warranties of any  Contributor contained in this Agreement shall not be true and
correct such that the condition set forth in Section 6.3(a) would not be
satisfied or (ii) any Contributor shall have failed to fulfill in any material
respect any of their material obligations under this Agreement, which failure is
material to the obligations of such party under this Agreement, and, in the case
of each of clauses (i) and (ii) of this Section 7.1(d), such misrepresentation,
breach of warranty or failure (provided it can be cured) has not been cured
within 30 days of notice thereof by the Partnership.
 
7.2           Effect of Termination.  In the event of the termination of this
Agreement pursuant to Section 7.1 by the Partnership or the Contributors,
written notice thereof shall forthwith be given to the Partnership or the
Contributors, as applicable, specifying the provision hereof pursuant to which
such termination is made, and this Agreement shall become void and have no
effect, and there shall be no liability hereunder on the part of any party
hereto or the general partner of the Partnership, or any of their respective
directors, officers, employees, shareholders, unitholders or representatives,
except that the agreements contained in this Section 7.2 and ARTICLE 9 shall
survive the termination hereof.  Nothing contained in this Section 7.2 shall
otherwise relieve any party from liability for damages actually incurred as a
result of any breach of this Agreement.
 
7.3           Amendment.  Any provision of this Agreement (including the
Exhibits hereto) may be amended, to the extent permitted by law, prior to the
Closing Date if, and only if, such amendment is in writing and signed by the
parties hereto.
 
7.4           Waiver.  Any of the parties to this Agreement may (i) waive any
inaccuracies in the representations and warranties of the other parties
contained herein or in any document, certificate or writing delivered pursuant
hereto or (ii) waive compliance by the other parties with any of the other’s
agreements or fulfillment of any conditions to its own obligations contained
herein.  Any agreement on the part of a party hereto to any such waiver shall be
valid only if set forth in an instrument in writing signed by or on behalf of
such party.  No failure or delay by a party hereto in exercising any right,
power or privilege hereunder shall operate as a waiver thereof nor shall any
single or partial exercise thereof preclude any other or further exercise
thereof or the exercise of any other right, power or privilege.

ARTICLE 8
 
INDEMNIFICATION
 
8.1           Survival of Representations, Warranties, Covenants and
Agreements.  All of the representations and warranties of the Partnership in
ARTICLE 2 and the Contributors in ARTICLE 3 shall survive the Closing and
continue in full force and effect through and including the first anniversary of
the Closing Date.  All other covenants and agreements contained in this
Agreement shall survive the Closing until fully performed.
 
8.2           Indemnification.

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(a)           Subject to Section 8.1, the Contributors hereby agree to indemnify
and hold the Partnership and its Affiliates and their respective directors,
managers, officers, employees, stockholders, unitholders, members, partners,
agents, attorneys, representatives, successors and assigns (collectively, the
“Partnership Indemnified Parties”) harmless from and against, and pay to the
applicable Partnership Indemnified Parties the amount of, any and all losses,
liabilities, claims, obligations, deficiencies, demands, judgments, damages
(including incidental and consequential damages), interest, fines, penalties,
claims, suits, actions, causes of action, assessments, awards, costs and
expenses (including attorneys’ and other professionals’ fees), or any diminution
in value, whether or not involving a third party claim (individually, a “Loss”
and, collectively, “Losses”):
 
(i)           based upon, attributable to or resulting from the failure of any
of the representations or warranties made by the Contributors in the Transaction
Documents to be true and correct in all respects at and as of the date hereof
and at and as of the Closing Date; and
 
(ii)           based upon, attributable to or resulting from the breach of any
covenant or other agreement on the part of any Contributor under any Transaction
Document.
 
(b)           Each Contributor’s indemnity shall be several and limited to the
fair market value on the Closing Date of the Subject Units received by the
Contributor at the Closing.
 
(c)           Subject to Section 8.1, the Partnership hereby agrees to indemnify
and hold the Contributors and their Affiliates and their respective
stockholders, unitholders, directors, managers, employees, members, partners,
agents, attorneys, representatives, successors and permitted assigns
(collectively, the “Contributors’ Indemnified Parties”) harmless from and
against, and pay to the applicable Contributors’ Indemnified Parties the amount
of, any and all Losses:

(i)           based upon, attributable to or resulting from the failure of any
of the representations or warranties made by the Partnership in any Transaction
Document to be true and correct in all respects at the date hereof and as of the
Closing Date; and
 
(ii)           based upon, attributable to or resulting from the breach of any
covenant or other agreement on the part of the Partnership under any Transaction
Document.
 
(d)           The remedy of indemnification set forth in this ARTICLE 8 shall be
in addition to any other remedies that any indemnified party may have under
Applicable Laws (whether asserted in a proceeding at law or in equity).
 
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8.3           Indemnification Procedures.

(a)           A claim for indemnification for any matter not involving a third
party claim must be asserted by notice to the party from whom indemnification is
sought.
 
(b)           In the event that any Proceedings shall be instituted or that any
claim or demand shall be asserted by any third party in respect of which
indemnification may be sought under Section 8.2 (“Third Party Claim”), the
indemnified party shall promptly cause written notice of the assertion of any
Third Party Claim of which it has knowledge which is covered by this indemnity
to be forwarded to the indemnifying party.  The failure of the indemnified party
to give reasonably prompt notice of any Third Party Claim shall not release,
waive or otherwise affect the indemnifying party’s obligations with respect
thereto unless the indemnifying party can demonstrate actual loss and prejudice
as a result of such failure.  Subject to the provisions of this Section 8.3, the
indemnifying party shall have the right, at its sole expense, to be represented
by counsel of its choice and to defend against, negotiate, settle or otherwise
deal with any Third Party Claim which relates to any Losses indemnified against
by it hereunder; provided that the indemnifying party shall have acknowledged in
writing to the indemnified party its unqualified obligation to indemnify the
indemnified party as provided hereunder.  If the indemnifying party elects to
defend against, negotiate, settle or otherwise deal with any Third Party Claim
which relates to any Losses indemnified against by it hereunder, it shall within
ten days of the indemnified party’s written notice of the assertion of such
Third Party Claim (or sooner, if the nature of the Third Party Claim so
requires) notify the indemnified party of its intent to do so; provided that the
indemnifying party must conduct its defense of the Third Party Claim actively
and diligently thereafter in order to preserve its rights in this regard.  If
the indemnifying party elects not to defend against, negotiate, settle or
otherwise deal with any Third Party Claim which relates to any Losses
indemnified against by it hereunder, fails to notify the indemnified party of
its election as herein provided or contests its obligation to indemnify the
indemnified party for such Losses under this Agreement, the indemnified party
may defend against, negotiate, settle or otherwise deal with such Third Party
Claim.  If the indemnified party defends any Third Party Claim, then the
indemnifying party shall reimburse the indemnified party for the expenses of
defending such Third Party Claim upon submission of periodic bills.  If the
indemnifying party shall assume the defense of any Third Party Claim, the
indemnified party may participate, at his or its own expense, in the defense of
such Third Party Claim; provided that such indemnified party shall be entitled
to participate in any such defense with separate counsel at the expense of the
indemnifying party if (i) so requested by the indemnifying party to participate
or (ii) in the reasonable opinion of counsel to the indemnified party a conflict
or potential conflict exists between the indemnified party and the indemnifying
party that would make such separate representation advisable; and provided,
further, that the indemnifying party shall not be required to pay for more than
one such counsel (plus any appropriate local counsel) for all indemnified
parties in
 
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connection with any Third Party Claim.  Each party hereto agrees to provide each
other party with reasonable access to such documents and information as may
reasonably be requested in connection with the defense, negotiation or
settlement of any such Third Party Claim.  Notwithstanding anything in this
Section 8.3 to the contrary, neither the indemnifying party nor the indemnified
party shall, without the written consent of the other party, which shall not be
unreasonably withheld, settle or compromise any Third Party Claim or permit a
default or consent to entry of any judgment unless the claimant (or claimants)
and such party provide to such other party an unqualified release from all
liability in respect of the Third Party Claim.  If the indemnifying party makes
any payment on any Third Party Claim, the indemnifying party shall be
subrogated, to the extent of such payment, to all rights and remedies of the
indemnified party to any insurance benefits or other claims of the indemnified
party with respect to such Third Party Claim.
 
(c)           After any final decision, judgment or award shall have been
rendered by a Governmental Entity of competent jurisdiction and the expiration
of the time in which to appeal therefrom, or a settlement shall have been
consummated, or the indemnified party and the indemnifying party shall have
arrived at a mutually binding agreement, in each case with respect to an Third
Party Claim hereunder, the indemnified party shall forward to the indemnifying
party notice of any sums due and owing by the indemnifying party pursuant to
this Agreement with respect to such matter and the indemnifying party shall pay
all of such remaining sums so due and owing to the indemnified party by wire
transfer of immediately available funds within 20 Business Days after the date
of such notice.
 
ARTICLE 9
 
MISCELLANEOUS
 
9.1           Notices.  All notices, requests, demands and other communications
required or permitted to be given or made hereunder by any party hereto shall be
in writing and shall be deemed to have been duly given or made if (i) delivered
personally, (ii) transmitted by first class registered or certified mail,
postage prepaid, return receipt requested, (iii) sent by prepaid overnight
courier service or (iv) sent by telecopy or facsimile transmission, answer back
requested, to the parties at the following addresses (or at such other addresses
as shall be specified by the parties by like notice):
 
(a)           If to the Contributors:
 
Dodge Jones Foundation
P.O. Box 176
Abilene, Texas 79604
Attention: Joseph Edwin Canon
Fax:           325.673.2028

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with a copy to:

McMahon Surovik Suttle, PC
400 Pine Street, Suite 800
Abilene, Texas 79601
Attention: Paul L. Cannon
Fax:           325.676.8836

and

Beckham Rector & Eargle
400 Pine Street, Suite 1020
Abilene, Texas 79601
Attention: John L. Beckham
Fax:           325.673.3504

(b)           If to the Partnership:
 
Dorchester Minerals, L.P.
3838 Oak Lawn Avenue, Suite 300
Dallas, Texas  75219
Attention: William Casey McManemin
Fax:           214.559.0933

with a copy to:

Thompson & Knight LLP
One Arts Plaza
1722 Routh Street, Suite 1500
Dallas, Texas 75201
Attention: Joe Dannenmaier
Fax:           214.969.1393

Such notices, requests, demands and other communications shall be effective
(i) if delivered personally or sent by courier service, upon actual receipt by
the intended recipient, (ii) if mailed, the date of delivery as shown by the
return receipt therefor or (iii) if sent by telecopy or facsimile transmission,
when the answer back is received.
 
9.2           Entire Agreement.  This Agreement, together with the Schedules,
Exhibits and other writings referred to herein or delivered pursuant hereto,
constitute the entire agreement between the parties hereto with respect to the
subject matter hereof and supersede all prior agreements and understandings,
both written and oral, between the parties with respect to the subject matter
hereof.
 
9.3 Binding Effect; Assignment; Third Party Benefit. This Agreement shall be
binding upon and inure to the benefit of the parties hereto and their respective
successors and permitted assigns; provided that neither this Agreement nor any
of the rights, interests or
 
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obligations hereunder shall be assigned by any of the parties hereto (by
operation of law or otherwise) without the prior written consent of the other
parties. Nothing in this Agreement, express or implied, is intended to or shall
confer upon any person other than the parties hereto any rights, benefits or
remedies of any nature whatsoever under or by reason of this Agreement.
 
9.4           Severability.  If any provision of this Agreement is held to be
unenforceable, this Agreement shall be considered divisible and such provision
shall be deemed inoperative to the extent it is deemed unenforceable, and in all
other respects this Agreement shall remain in full force and effect; provided
that if any such provision may be made enforceable by limitation thereof, then
such provision shall be deemed to be so limited and shall be enforceable to the
maximum extent permitted by Applicable Law.
 
9.5           Governing Law; Consent to Jurisdiction.   This Agreement shall be
governed by and construed and enforced in accordance with the laws of the State
of Texas.  Each of the parties submits to the jurisdiction of any state or
federal court sitting in the State of Texas, County of Dallas, or, if it has or
can acquire jurisdiction, in the United States District Court for the Northern
District of Texas, in any action or proceeding arising out of or relating to
this Agreement, agrees that all claims in respect of the action or proceeding
shall be heard and determined only in any such court, and agrees not to bring
any action or proceeding arising out of or relating to this Agreement in any
other court.  Each of the parties waives any defense of inconvenient forum to
maintenance of any action or proceeding so brought.
 
9.6           Descriptive Headings.  The descriptive headings herein are
inserted for convenience of reference only, do not constitute a part of this
Agreement and shall not affect in any manner the meaning or interpretation of
this Agreement.
 
9.7           Gender.  Pronouns in masculine, feminine and neuter genders shall
be construed to include any other gender, and words in the singular form shall
be construed to include the plural and vice versa, unless the context otherwise
requires.
 
9.8           References.  All references in this Agreement to Articles,
Sections and other subdivisions refer to the Articles, Sections and other
subdivisions of this Agreement unless expressly provided otherwise.  The words
“this Agreement,” “herein,” “hereof,” “hereby,” “hereunder” and words of similar
import refer to this Agreement as a whole and not to any particular subdivision
unless expressly so limited.  Whenever the words “include,” “includes” and
“including” are used in this Agreement, such words shall be deemed to be
followed by the words “without limitation.”  Each reference herein to a Schedule
or Exhibit refers to the item identified separately in writing by the parties
hereto as the described Schedule or Exhibit to this Agreement.  All Schedules
and Exhibits are hereby incorporated in and made a part of this Agreement as if
set forth in full herein.
 
9.9           Counterparts.  This Agreement may be executed by the parties
hereto in any number of counterparts, each of which shall be deemed an original,
but all of which shall constitute one and the same agreement.  Each counterpart
may consist of a number of copies hereof each signed by less than all, but
together signed by all, the parties hereto.  Signature pages to this Agreement
delivered by facsimile or other electronic means shall be valid and effective
for all purposes.
 
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9.10           Injunctive Relief.  The parties hereto acknowledge and agree that
irreparable damage would occur in the event any of the provisions of this
Agreement were not performed in accordance with their specific terms or were
otherwise breached.  It is accordingly agreed that the parties shall be entitled
to an injunction or injunctions to prevent breaches of the provisions of this
Agreement, and shall be entitled to enforce specifically the provisions of this
Agreement, in any court of the United States or any state thereof having
jurisdiction, in addition to any other remedy to which the parties may be
entitled under this Agreement or at law or in equity.
 

ARTICLE 10

DEFINITIONS
 
10.1           Certain Defined Terms.  As used in this Agreement, each of the
following terms has the meaning given it below:
 
“Affiliate” shall mean, with respect to any Person, any other Person that,
directly or indirectly, through one or more intermediaries, controls, is
controlled by or is under common control with, such person.
 
“Applicable Environmental Law” shall mean all Applicable Laws pertaining to
the  protection of the environment (e.g., prevention of pollution and
remediation of contamination) and human heath and safety, including, without
limitation, the Clean Air Act, 42 U.S.C. § 7401 et seq.; the Clean Water Act, 33
U.S.C. § 1251 et seq.; the Oil Pollution Act of 1990, 33 U.S.C. § 2702 et seq.;
the Marine Protection, Research, and Sanctuaries Act, 33 U.S.C. § 1401 et seq.;
the National Environmental Policy Act, 42 U.S.C. § 4321 et seq.; the Noise
Control Act, 42. U.S.C. § 4901 et seq.; the Occupational Safety and Health Act,
29 U.S.C. § 651 et seq.; the Resource Conservation and Recovery Act (“RCRA”), 42
U.S.C. § 6901 et seq., as amended by the Hazardous and Solid Waste Amendments of
1984; the Safe Drinking Water Act, 42 U.S.C. § 300f et seq.; the Comprehensive
Environmental Response, Compensation and Liability Act (“CERCLA”), 42 U.S.C. §
9601 et seq., as amended by the Superfund Amendments and Reauthorization Act;
the Emergency Planning and Community Right-to-Know Act, 42 U.S.C. § 11001 et
seq.; the Toxic Substances Control Act, 15 U.S.C. § 2601 et seq.; the Hazardous
Materials Transportation Act, 49 U.S.C. § 1801 et seq.; the Atomic Energy Act,
42 U.S.C. § 2011 et seq.; and the Nuclear Waste Policy Act of 1982, 42 U.S.C. §
10101 et seq.; and all analogous applicable state and local Applicable Laws,
including, without limitation, Tex. Nat. Res. Code, Title 3 (Oil and Gas) and 16
Tex. Admin. Code. Pt. 1 (Railroad Commission of Texas).
 
“Applicable Law” shall mean any federal, state, local, or municipal statute,
law, common law, constitution, ordinance, rule or regulation or any judgment,
order, writ, injunction or decree of any Governmental Entity, or any treaty or
other legally enforceable directive or requirement, to which a specified person
or property is subject.
 
“Basic Documents” shall mean (i) all Oil and Gas Leases, and (ii) all contracts
and agreements that are reasonably necessary to own, explore, develop, operate,
maintain or use the Maecenas Properties in the manner in which they are
currently being owned, explored,
 
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developed, operated, maintained or used and in accordance with the prudent
practices of the oil and gas industry; provided however that “Basic Documents”
shall not include that portion of contracts or agreements which relate to the
ownership and operation of the surface of the Maecenas Properties.
 
“Business Day” shall mean a day on which banks are open for the transaction of
business in Dallas, Texas.
 
“Code” shall mean the Internal Revenue Code of 1986, as amended.

“Common Unit” shall mean a Common Unit, as defined in the Partnership Agreement.
 
“Encumbrances” shall mean liens, charges, pledges, options, mortgages, deeds of
trust, security interests, claims, restrictions (whether on voting, sale,
transfer, disposition or otherwise), easements and other encumbrances of every
type and description, whether imposed by law, agreement, understanding or
otherwise.
 
“Environment” shall mean surface water, groundwater, drinking water supply, land
surface or subsurface strata or ambient air.
 
“Governmental Entity” shall mean any court or tribunal in any jurisdiction
(domestic or foreign) or any public, governmental, or regulatory body, agency,
department, commission, board, bureau or other authority or instrumentality
(domestic or foreign).
 
“Hazardous Materials” shall mean any (i) chemical, constituents, material,
pollutant, contaminant, substance or waste that is regulated by any Governmental
Entity or may form the basis of liability under any Applicable Environmental
Law; (ii) asbestos containing material, lead-based paint, polychlorinated
biphenyls, or radon; and (iii) petroleum, Oil and Gas, or petroleum products.
 
“IRS” shall mean the Internal Revenue Service of the United States.
 
“Knowledge” shall be deemed to exist (i) if used in the context of a
Contributor, when Joseph Edwin Canon, Linda S. Buckner or any individual serving
as an officer of such Contributor (or in any similar capacity) is actually aware
of the fact or other matter in question; or (ii) if used in the context of the
Partnership, when any individual who is serving as an officer of the Partnership
is actually aware of the fact or other matter in question.
 
“Material Adverse Effect” shall mean with respect to any person, property or
asset any adverse change or adverse condition in or relating to the financial
condition of such person, including its subsidiaries, property or asset that is
material to such person, its subsidiaries, property or asset; provided that any
prospective change or changes in the conditions listed above or relating to or
resulting from (i) the transactions contemplated by this Agreement (or the
announcement of such transactions), (ii) any change or changes in the prices of
oil, gas, natural gas liquids or other hydrocarbon products or (iii) general
economic conditions or local, regional, national or international oil and gas
industry conditions, shall not be deemed to constitute a Material Adverse
Effect.
 
29 
 

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

 
“Oil and Gas” shall mean oil, gas, casinghead gas, drip gasoline, natural
gasoline, condensate, distillate and all other liquid hydrocarbons, associated
gases, vaporous substances or minerals.
 
“Oil and Gas Lease” shall mean an Oil and Gas lease relating to the Maecenas
Properties and the real and personal property related thereto.
 
“Other Minerals” shall mean sulphur, lignite, coal, uranium, thorium, iron,
geothermal steam, water, carbon dioxide, helium and all other minerals, ores or
substances of value whether or not generally produced from a wellbore in
conjunction with the production of Oil and Gas.

“Partnership Agreement” shall mean the Amended and Restated Partnership
Agreement of the Partnership, as currently in effect.
 
“Permits” shall mean licenses, permits, franchises, consents, approvals,
variances, exemptions, waivers and other authorizations of or from Governmental
Entities or pursuant to any Applicable Law or Environmental Applicable Law.
 
“Permitted Encumbrances” shall mean (i) liens for Taxes not yet due and payable,
(ii) statutory liens (including materialmen’s, mechanic’s, repairmen’s
landlord’s, and other similar liens) arising in connection with the ordinary
course of business securing payments not yet due and payable and (iii) such
defects, imperfections or irregularities of title, if any, as are not
substantial in character, amount or extent and do not materially impair the
conduct of normal operations of the Maecenas Properties.
 
“Person” (whether or not capitalized) shall mean any individual, corporation,
partnership, limited liability company, joint venture, association, joint-stock
company, trust, enterprise, unincorporated organization or Governmental Entity.
 
“Proceedings” shall mean all proceedings, actions, claims, suits, investigations
and inquiries by or before any arbitrator or Governmental Entity.
 
“Property Tax” shall mean any ad valorem, property (real, personal or mixed) or
similar tax.
 
“reasonable best efforts” shall mean a party’s best efforts in accordance with
reasonable commercial practice and without the incurrence of unreasonable
expense.
 
“Records” shall mean all data, files or records in the control or possession of
a Contributor or Maecenas pertaining to the ownership of the Maecenas
Properties, including but not limited to all abstracts of title, accounting
records, property tax records, financial reports and projections, escrow
reports, books, contract files, division order files, documents evidencing the
prices currently being paid for production, engineering data, geological and
geophysical reports, lease files, logs, maps, pressure data, production records,
supplemental abstracts of title, title curative materials, title opinions, title
reports, notices, evidence of payment, correspondence and other data related to
the Maecenas Properties.
 
“Reference Date” shall mean January 1, 2010.
 
  30
 

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

 
“Release” shall mean release as defined under CERCLA § 101(22), 42 U.S.C. §
9601(22).
 
“Tax” shall mean any and all taxes, assessments, charges, duties, fees, levies,
imposts or other similar charges imposed by a Governmental Entity, including all
income, franchise, profits, margins, capital gains, capital stock, transfer,
gross receipts, sales, use, transfer, service, occupation, ad valorem, real or
personal property, excise, severance, windfall profits, customs, premium, stamp,
license, payroll, employment, social security, unemployment, disability,
environmental, alternative minimum, add-on, value-added, withholding and other
taxes, assessments, charges, duties, levies, imposts or other similar charges of
any kind, and all estimated taxes, deficiency assessments, additions to tax,
penalties and interest, whether disputed or otherwise.
 
“Tax Return” shall mean any report, return, election, document, estimated tax
filing, declaration, claim for refund, extensions, information returns, or other
filing with respect to any Taxes provided to any Governmental Entity including
any schedules or attachments thereto and any amendment thereof.
 
“Transaction Documents” shall mean this Agreement and any agreement or
certificate delivered pursuant hereto.
 
“Treasury Regulations” shall mean the regulations promulgated by the United
States Treasury Department under the Code.
 
10.2           Certain Additional Defined Terms.  In addition to such terms as
are defined in Section 10.1, the following terms are used in this Agreement as
defined in the Sections set forth opposite such terms:
 
Defined Term
Section Reference
2MW
Introduction
Agreement
Introduction
Allocation
Section 5.8(b)
Applicable Environmental Laws
Section 3.18
Assignment, Conveyance and Assumption Agreement
Recitals
CERCLA
Section 3.18
Closing
Section 1.1
Closing Date
Section 1.1
Contributed Maecenas Interest
Preamble of ARTICLE 3
Contributors
Introduction
Contributors’ Conveyances
Recitals
Contributors’ Indemnified Parties
Section 8.2(c)
Contributors’ Working Interests
Recitals
Dodge Jones
Introduction
Dorchester Minerals Operating
Recitals
Disposal
Section 3.18
Hazardous Substance
Section 3.18
Hazardous Waste
Section 3.18

 
31 
 

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

 
Julia Jones Matthews, Trustee
Introduction
Karakin
Introduction
Kickapoo Springs
Introduction
Legett
Introduction
Loss
Section 8.2(a)
Maecenas
Recitals
Maecenas Interests
Recitals
Maecenas NPI
Recitals
Maecenas Partnership Agreement
Section 3.7
Maecenas Properties
Preamble of ARTICLE 3
Maecenas Working Interests
Recitals
Matthews
Introduction
Partnership
Introduction
Partnership Financial Statements
Section 2.7
Partnership GP
Section 2.3(a)
Partnership Indemnified Parties
Section 8.2(a)
Partnership Latest Balance Sheet
Section 2.7
RCRA
Section 3.18
SEC Filings
Section 2.13
Special Power of Attorney
Section 3.7
Still Water
Introduction
Straddle Period
Section 5.8(d)
Subject Units
Recitals
Third Party Claim
Section 8.3(b)
Transfer
Section 1.2
Xettam Minerals
Introduction

[Signature Pages Follow]

32
 
 

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

 

IN WITNESS WHEREOF, the undersigned has caused this Agreement to be executed as
of the date first above written.
 

THE PARTNERSHIP:

DORCHESTER MINERALS, L.P.

By:           Dorchester Minerals Management LP,
its general partner

By:           Dorchester Minerals Management GP LLC,
its general partner

By:          /s/ William Casey McManemin
William Casey McManemin,
Chief Executive Officer and Manager

Partnership’s Signature Page to Contribution and Exchange Agreement
 
 

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

 

IN WITNESS WHEREOF, the undersigned has caused this Agreement to be executed as
of the date first above written.
 

CONTRIBUTOR:

DODGE JONES FOUNDATION

By:   /s/ Joseph Edwin Canon                                                   
Joseph Edwin Canon, Executive Director
 

 
Contributor’s Signature Page to Contribution and Exchange Agreement
 
 

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

 

IN WITNESS WHEREOF, the undersigned has caused this Agreement to be executed as
of the date first above written.

CONTRIBUTOR:

THE LEGETT FOUNDATION

By:    /s/ Kade L. Matthews                                                    
      Kade L. Matthews, President
 

 
Contributor’s Signature Page to Contribution and Exchange Agreement

 
 

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

 

IN WITNESS WHEREOF, the undersigned has caused this Agreement to be executed as
of the date first above written.
 
 

   CONTRIBUTOR:        KICKAPOO SPRINGS FOUNDATION

 
 

   By:  /s/ John A. Matthews, Jr.      John A. Matthews, Jr., President

 
 

Contributor’s Signature Page to Contribution and Exchange Agreement

 
 

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

 

IN WITNESS WHEREOF, the undersigned has caused this Agreement to be executed as
of the date first above written.
 
 

   CONTRIBUTOR:        THE KARAKIN FOUNDATION

 
 

   By:  /s/ Leroy Bolt      Leroy Bolt, Vice President

 
 
 
 
Contributor’s Signature Page to Contribution and Exchange Agreement

 
 

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

 

IN WITNESS WHEREOF, the undersigned has caused this Agreement to be executed as
of the date first above written.
 
 
 

   CONTRIBUTOR:        STILL WATER FOUNDATION

 
 

   By:  /s/ Julia M. Wilkinson      Julia M. Wilkinson, President

 

 
Contributor’s Signature Page to Contribution and Exchange Agreement

 
 

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

 

IN WITNESS WHEREOF, the undersigned has caused this Agreement to be executed as
of the date first above written.
 
 

   CONTRIBUTOR:        XETTAM MINERALS, L.P.

 
 

   By: Texas Xettam, L.L.C.,     its general partner

 

   By: /s/ Julia M. Wilkinson     Julia M. Wilkinson, Manager

 

Contributor’s Signature Page to Contribution and Exchange Agreement

 
 

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

 

IN WITNESS WHEREOF, the undersigned has caused this Agreement to be executed as
of the date first above written.
 
 

   CONTRIBUTOR:       2MW LIMITED PARTNERSHIP

 
 

   By: KLM Oil Properties, L.L.C.,     its general partner

 

   By: /s/ Kade L. Matthews     Kade L. Matthews, Manager

 
Contributor’s Signature Page to Contribution and Exchange Agreement

 
 

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

 

IN WITNESS WHEREOF, the undersigned has caused this Agreement to be executed as
of the date first above written.
 
 
 

   CONTRIBUTOR:       JULIA JONES MATTHEWS LIVING TRUST

 
 

   By: /s/ Julia Jones Matthews     Julia Jones Matthews, Trustee

 
                                                 
Contributor’s Signature Page to Contribution and Exchange Agreement

 
 

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

 

IN WITNESS WHEREOF, the undersigned has caused this Agreement to be executed as
of the date first above written.
 

   CONTRIBUTOR:       /s/ John A. Matthews, Jr.

 

Contributor’s Signature Page to Contribution and Exchange Agreement

 
 

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

 

EXHIBIT A

SUBJECT UNITS ALLOCATION TABLE

Contributor
Maecenas Interest
Subject Units
 
Dodge Jones Foundation
 
14.401482%
 
120,252
 
The Legett Foundation
 
14.401482%
 
120,252
 
Kickapoo Springs Foundation
 
14.401482%
 
120,252
 
The Karakin Foundation
 
14.401482%
 
120,252
 
Still Water Foundation
 
14.401482%
 
120,252
 
Xettam Minerals, L.P.
 
6.350000%
 
53,023
 
2MW Limited Partnership
 
6.350000%
 
53,023
 
Julia Jones Matthews, Trustee of the Julia Jones Matthews Living Trust
 
8.944970%
 
74,691
 
John A. Matthews, Jr.
 
6.347620%
 
53,003

 
 
 

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

 

EXHIBIT B

DESCRIPTION OF CONTRIBUTORS’ WORKING INTERESTS

 
STATE
 
COUNTY
 
WELL NAME
         
LA
 
Bienville
 
Loe 12#1D
LA
 
Bienville
 
Loe 12-1Alt
LA
 
Bienville
 
M.E. Jordan 12#1
LA
 
Bienville
 
M.E. Jordan 12#2D Alt
NM
 
Chaves
 
Horse Creek Com #2
NM
 
Eddy
 
Floyd RI Com #1
NM
 
Eddy
 
Floyd RI Federal Com #2
NM
 
Eddy
 
Higgins Trust Inc. No. 2
NM
 
Rio Arriba
 
Lindrith Unit Com 87
NM
 
Rio Arriba
 
Lindrith Unit Com 88
NM
 
Rio Arriba
 
Lindrith Un Com 91
NM
 
Rio Arriba
 
Lindrith Unit Com 92
ND
 
Stark
 
Dickinson Heath Sand Unit
ND
 
Williams
 
Galaxy #16-1
ND
 
Williams
 
Otto Seel #4-1
ND
 
Williams
 
Pederson #5-24
ND
 
Williams
 
Skurdal #2-24HR
PA
 
Clearfield
 
Rachel Garland #1
TX
 
Ector
 
Grayburg Gas Unit #13
TX
 
Gaines
 
AFG - Giebel Field Unit
TX
 
Gaines
 
East Siminole San Andres Unit (5)
TX
 
Gaines
 
Lindos Unit
TX
 
Midland
 
Moreland #1
TX
 
Midland
 
Moreland #2
TX
 
Upton
 
Hope #1
TX
 
Upton
 
Hope #2
TX
 
Upton
 
Hope #3
TX
 
Upton
 
Hope #7
TX
 
Val Verde
 
Bunger 5 #2
TX
 
Val Verde
 
Deaton 123 #4
TX
 
Val Verde
 
Hackberry Canyon 122-1#1
TX
 
Val Verde
 
Hackberry Canyon 122-2#1
TX
 
Val Verde
 
Hackberry Canyon 122-4#1
TX
 
Val Verde
 
Meadows #1101
TX
 
Val Verde
 
Meadows #1103
TX
 
Val Verde
 
Meadows #1104
TX
 
Val Verde
 
Meadows #1106
TX
 
Val Verde
 
Meadows #1107
TX
 
Val Verde
 
Meadows #1172
TX
 
Val Verde
 
Meadows #1173R
TX
 
Val Verde
 
Meadows #1174
TX
 
Val Verde
 
Meadows #1175
TX
 
Val Verde
 
Meadows #1176
TX
 
Val Verde
 
Meadows #1177
TX
 
Val Verde
 
Meadows #1181
TX
 
Val Verde
 
Meadows #1183
TX
 
Ward
 
W.E. Crump #1
TX
 
Ward
 
W.E. Crump #2
TX
 
Winkler
 
Felmont #1
TX             Crockett   M. Elliott #2H (Sec. 16)

 
 

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

 

EXHIBIT C

FORM OF CONTRIBUTORS’ CONVEYANCES

 
NOTICE OF CONFIDENTIALITY RIGHTS:  IF YOU ARE A NATURAL PERSON, YOU MAY REMOVE
OR STRIKE ANY OF THE FOLLOWING INFORMATION FROM THIS INSTRUMENT BEFORE IT IS
FILED FOR RECORD IN THE PUBLIC RECORDS:  YOUR SOCIAL SECURITY NUMBER OR YOUR
DRIVER'S LICENSE NUMBER.

ASSIGNMENT, BILL OF SALE AND CONVEYANCE

STATE OF __________________                 §
§         KNOW ALL MEN BY THESE PRESENTS THAT:
COUNTY OF ________________                  §

WHEREAS, by virtue of that certain Assignment, Bill of Sale and Conveyance dated
effective January 1, 2000, at 7:00 a.m., and recorded as Document No.
_____________, ______________ Records of __________________ County,
__________________ (the “Original Assignment”), DODGE JONES FOUNDATION, a Texas
non-profit corporation; JULIA JONES MATTHEWS, Trustee of The Julia Jones
Matthews Living Trust; MATT-TEX, L.L.P., a Texas limited liability partnership;
and, JOHN A. MATTHEWS, JR., acquired certain oil and gas mineral, royalty,
overriding royalty and leasehold interests in the properties set forth and
described in Exhibit “A,” attached hereto and made a part hereof (the
“Properties”), from MAECENAS MINERALS, L.L.P., a Texas limited liability
partnership, whose address is P. O. Box 176, Abilene, Texas  79604-0176
(hereinafter referred to as “Assignee”); and,

WHEREAS, MATT-TEX, L.L.P., subsequently assigned the interest acquired by it in
the Properties pursuant to the Original Assignment to XETTAM MINERALS, L.P., a
Texas limited partnership, and 2MW LIMITED PARTNERSHIP, a Texas limited
partnership; and,

WHEREAS, DODGE JONES FOUNDATION, a Texas non-profit corporation; JULIA JONES
MATTHEWS, Trustee of The Julia Jones Matthews Living Trust; XETTAM MINERALS,
L.P., a Texas limited partnership; 2MW LIMITED PARTNERSHIP, a Texas limited
partnership; and, JOHN A. MATTHEWS, JR., whose collective address is P. O. Box
176, Abilene, Texas  79604-0176 (hereinafter collectively referred to as
“Assignors”), desire to reconvey to Assignee all of the oil and gas mineral,
royalty, overriding royalty and leasehold interests in the Properties,
originally acquired in the Original Assignment, together with any and all other
real property interests, contract rights and choses in action currently held by
Assignors in and to the Properties.

NOW THEREFORE, in consideration of TEN DOLLARS ($10.00) and other good and
valuable consideration, the receipt of which is hereby acknowledged by Assignee,
Assignors do hereby BARGAIN, SELL, CONVEY, ASSIGN, TRANSFER and DELIVER unto
Assignee, all Assignors’ real property interests in and to the Properties,
including, but not limited to, all Assignors’ oil and gas mineral, royalty,
overriding royalty and leasehold interests in the Properties, together with all
equipment, personal property and appurtenant rights relating thereto.

Assignors covenant with Assignee that Assignors are the lawful owners of the
interests herein conveyed, and that Assignors will warrant and defend the title
thereto to Assignee and its successors and assigns, against the lawful claims
and demands of all persons claiming by, through or under Assignors, but not
otherwise.

IN WITNESS WHEREOF, this Assignment, Bill of Sale and Conveyance is executed on
the date or dates reflected in the acknowledgments hereto, but effective for all
purposes as of 7:00 a.m., on March 31, 2010; said hour to be determined as to
the local time observed in the county where the Properties are located.

ASSIGNMENT, BILL OF SALE AND CONVEYANCE
Page 1
 

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

 

ASSIGNORS:

DODGE JONES FOUNDATION

By:  _______________________________________
Joseph Edwin Canon
Executive Vice President

JULIA JONES MATTHEWS, Trustee of The Julia Jones Matthews Living Trust

By:  _______________________________________
Joseph Edwin Canon
Agent and Attorney-in-Fact

XETTAM MINERALS, L.P.

By:         Texas Xettam, L.L.C., its general partner

By:  __________________________________                                                            
Printed
Name:___________________________                                                         
Title:__________________________________

2MW LIMITED PARTNERSHIP
 
By:         KLM Oil Properties, L.L.C., its general partner

By:  __________________________________                                                            
Printed
Name:___________________________                                                         
Title:__________________________________

 

JOHN A. MATTHEWS, JR.

By:  _______________________________________
Joseph Edwin Canon
Agent and Attorney-in-Fact

ASSIGNEE:

MAECENAS MINERALS, L.L.P.

By:  _______________________________________              
Joseph Edwin Canon
Agent and Attorney-in-Fact

 
ASSIGNMENT, BILL OF SALE AND CONVEYANCE
Page 2
 

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

 

STATE OF TEXAS
§

 
§

COUNTY OF TAYLOR
§

This instrument was acknowledged before me on the _______ day of
_________________, 20____, by JOSEPH EDWIN CANON, Executive Vice President of
DODGE JONES FOUNDATION,  a Texas non-profit corporation, personally known to me
or identified by the oath of a credible witness personally known to me or by
current identification card or other document qualifying as satisfactory
evidence of the identity of this person under §121.005(a), Texas Civil Practice
and Remedies Code, to be the person whose name is subscribed to the foregoing
instrument and acknowledged to me that he executed the same for the purpose and
consideration therein expressed and in the capacity therein stated on behalf of
said corporation.

GIVEN UNDER MY HAND AND SEAL of office on the _______ day of
___________________, 20____.

                    ______________________________________________
Notary Public, State of Texas

STATE OF TEXAS                              §
§
COUNTY OF TAYLOR                       §

This instrument was acknowledged before me on the _______ day of
_________________, 20____, by JOSEPH EDWIN CANON, Agent and Attorney-in-Fact for
JULIA JONES MATTHEWS, Trustee of The Julia Jones Matthews Living Trust,
personally known to me or identified by the oath of a credible witness
personally known to me or by current identification card or other document
qualifying as satisfactory evidence of the identity of this person under
§121.005(a), Texas Civil Practice and Remedies Code, to be the person whose name
is subscribed to the foregoing instrument and acknowledged to me that he
executed the same for the purpose and consideration therein expressed and in the
capacity therein stated on behalf of said Trust.

GIVEN UNDER MY HAND AND SEAL of office on the _______ day of
___________________, 20____.
         

                     ______________________________________________
Notary Public, State of Texas

 
ASSIGNMENT, BILL OF SALE AND CONVEYANCE
Page 3
 

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

 

STATE OF _____________             §
§
COUNTY OF ___________              §

This instrument was acknowledged before me on the _______ day of
_________________, 20____, by ___________________________, as
_____________________ of TEXAS XETTAM, L.L.C., general partner of XETTAM,
MINERALS, L.P., a Texas limited partnership, personally known to me or
identified by the oath of a credible witness personally known to me or by
current identification card or other document qualifying as satisfactory
evidence of the identity of this person under §121.005(a), Texas Civil Practice
and Remedies Code, to be the person whose name is subscribed to the foregoing
instrument and acknowledged to me that he executed the same for the purpose and
consideration therein expressed and in the capacity therein stated on behalf of
said partnership.

GIVEN UNDER MY HAND AND SEAL of office on the _______ day of
___________________, 20____.
 

                     ______________________________________________
Notary Public, State of _____________________________

STATE OF _____________             §
§
COUNTY OF ___________              §

This instrument was acknowledged before me on the _______ day of
_________________, 20____, by ___________________________, as
_____________________ of KLM Oil Properties, L.L.C., general partner of 2MW
LIMITED PARTNERSHIP, a Texas limited partnership, personally known to me or
identified by the oath of a credible witness personally known to me or by
current identification card or other document qualifying as satisfactory
evidence of the identity of this person under §121.005(a), Texas Civil Practice
and Remedies Code, to be the person whose name is subscribed to the foregoing
instrument and acknowledged to me that he executed the same for the purpose and
consideration therein expressed and in the capacity therein stated on behalf of
said partnership.

GIVEN UNDER MY HAND AND SEAL of office on the _______ day of
___________________, 20____.
 
 
                         ______________________________________________
                         Notary Public, State of _____________________________

ASSIGNMENT, BILL OF SALE AND CONVEYANCE
Page 4

 
 

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

 

STATE OF TEXAS                              §
§
COUNTY OF TAYLOR                       §

This instrument was acknowledged before me on the _______ day of
_________________, 20____, by JOSEPH EDWIN CANON, Agent and Attorney-in-Fact for
JULIA JONES MATTHEWS, Trustee of The Julia Jones Matthews Living Trust,
personally known to me or identified by the oath of a credible witness
personally known to me or by current identification card or other document
qualifying as satisfactory evidence of the identity of this person under
§121.005(a), Texas Civil Practice and Remedies Code, to be the person whose name
is subscribed to the foregoing instrument and acknowledged to me that he
executed the same for the purpose and consideration therein expressed and in the
capacity therein stated on behalf of said Trust.

GIVEN UNDER MY HAND AND SEAL of office on the _______ day of
___________________, 20____.
 
                         ______________________________________________
                         Notary Public, State of Texas

STATE OF TEXAS                              §
§
COUNTY OF TAYLOR                       §

This instrument was acknowledged before me on the _______ day of
_________________, 20____, by JOSEPH EDWIN CANON, Agent and Attorney-in-Fact for
JOHN A. MATTHEWS, JR., personally known to me or identified by the oath of a
credible witness personally known to me or by current identification card or
other document qualifying as satisfactory evidence of the identity of this
person under §121.005(a), Texas Civil Practice and Remedies Code, to be the
person whose name is subscribed to the foregoing instrument and acknowledged to
me that he executed the same for the purpose and consideration therein expressed
and in the capacity therein stated.

GIVEN UNDER MY HAND AND SEAL of office on the _______ day of
___________________, 20____.
 
                         ______________________________________________
                         Notary Public, State of Texas

 
ASSIGNMENT, BILL OF SALE AND CONVEYANCE
Page 5
 

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

 

STATE OF TEXAS                              §
§
COUNTY OF TAYLOR                       §

This instrument was acknowledged before me on the _______ day of
_________________, 20____, by JOSEPH EDWIN CANON, Agent and Attorney-in-Fact for
MAECENAS MINERALS, L.L.P., a Texas limited liability partnership, personally
known to me or identified by the oath of a credible witness personally known to
me or by current identification card or other document qualifying as
satisfactory evidence of the identity of this person under §121.005(a), Texas
Civil Practice and Remedies Code, to be the person whose name is subscribed to
the foregoing instrument and acknowledged to me that he executed the same for
the purpose and consideration therein expressed and in the capacity therein
stated on behalf of said partnership.

GIVEN UNDER MY HAND AND SEAL of office on the _______ day of
___________________, 20____.
 
                         ______________________________________________
                         Notary Public, State of Texas

AFTER RECORDING, PLEASE RETURN TO:

_______________________________________________________________________ 

_______________________________________________________________________

_______________________________________________________________________ 

ASSIGNMENT, BILL OF SALE AND CONVEYANCE
Page 6

 
 

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

 

EXHIBIT D

FORM OF ASSIGNMENT, CONVEYANCE AND ASSUMPTION AGREEMENT

This Assignment, Conveyance and Assumption Agreement (this “Assignment”) is by
and between MAECENAS MINERALS, L.L.P., a Texas limited liability partnership
(“Assignor”), and DORCHESTER MINERALS OPERATING LP, a Delaware limited
partnership (“Assignee”).
PART I
 
Assignor, for good and valuable consideration, the receipt and sufficiency of
which are hereby acknowledged, does, subject to the exceptions and reservations
hereinafter set forth, hereby GRANT, BARGAIN, ASSIGN, TRANSFER, CONVEY, AND
DELIVER, without warranties or covenants of title, express or implied, except as
hereinafter set forth, unto Assignee, its successors and assigns, effective as
of 8:00 a.m. local time of the location of the properties herein assigned, on
March 31, 2010 (such date and time being referred to herein as the “Effective
Date”), the following properties, rights and interests (the “Subject
Properties”):
 
(a)           All right, title and interest of Assignor in and to the properties
described in Exhibit A attached hereto and made a part hereof for all purposes;

(b)           All right, title and interest of Assignor in and to the oil, gas
and/or mineral leases described on Exhibit A hereto (and any ratifications
and/or amendments to such leases, whether or not such ratifications or
amendments are described on Exhibit A);

(c)           Without limitation of the foregoing, all other right, title and
interest (of whatever kind or character, whether legal or equitable, and whether
vested or contingent) of Assignor in and to the lands described on Exhibit A
hereto or described or referenced in any of the leases or other instruments
described on Exhibit A, even though Assignor's interest therein may be
incorrectly described in, or omitted from, such Exhibit A;

(d)           All of Assignor’s rights, title and interest in, to or under or by
virtue of all unitization, communitization and/or pooling agreements,
declarations and/or orders (including, but not limited to, all units formed
under orders, regulations, rules or other official acts of any federal, state or
other governmental agency) which cover or affect the properties, rights and
interests described or referred to in Clauses (a), (b) or (c) above, and in and
to the properties, rights and interests covered by the units, and/or pooled
and/or communitized areas, created thereby;

(e)           All of Assignor’s rights, title and interest in and to rights
under all joint operating agreements, operating agreements, production sales
contracts, processing agreements, transportation agreements, gas balancing
agreements, farmout agreements, farm in agreements, salt water disposal
agreements, area of mutual interest agreements and other contracts and
agreements which cover, affect or otherwise relate to the properties, rights and
interests described in Clauses (a), (b), or (c) above or to the operation of
such properties, rights and interests or to the treating, handling, storing,
processing, transporting or marketing of oil, gas or other minerals produced
from (or allocated to) such properties, rights and interests;

 
 

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(f)           All of Assignor’s interest in and to all real property (including
any value derived therefrom), improvements, fixtures, movable or immovable
property and other real or personal property (including, without limitation, all
wells, pumping units, wellhead equipment, tanks, pipelines, flow lines,
gathering lines, compressors, dehydration units, separators, meters, buildings,
injection facilities, salt water disposal facilities, and power, telephone and
telegraph lines), and all easements, servitudes, rights-of-way, surface leases,
licenses, permits and other surface rights, which are now or hereafter used, or
held for use directly in connection with, the properties, rights and interests
described in Clauses (a), (b) or (c) above, or directly in connection with the
operation of such properties, rights and interests, or directly in connection
with the treating, handling, storing, processing, transporting or marketing of
oil, gas or other minerals produced from (or allocated to) such properties,
rights and interests;

(g)           All oil, gas and other minerals produced from or allocated to the
properties, rights and interests described in Clauses (a), (b) and/or (c) above,
and any products processed or obtained therefrom (herein collectively called the
“Production”), together with (i) all proceeds of Production (regardless of
whether the severance of the Production to which such proceeds relates occurred
on, before or after the Effective Date hereof), other than proceeds of
Production that are attributable to periods prior to the Effective Date and that
are actually received by Assignor prior to the Effective Date, and (ii) all
liens and security interests securing payment of the proceeds from the sale of
such Production, including, but not limited to, those liens and security
interests provided for under statutes enacted in the jurisdictions in which the
Properties are located, or statutes made applicable to the Properties under
federal law (or some combination of federal and state law);

(h)           All payments of any type received and payments received in lieu of
production from the properties, rights and interests described in Clauses (a),
(b) and/or (c) above (regardless of whether such payments accrued, and/or the
events which gave rise to such payments occurred, on, before or after the
Effective Date hereof, other than payments attributable to periods prior to the
Effective Date and are actually received by Assignor prior to the Effective
Date), including, without limitation, (i) “take or pay” payments and similar
payments, (ii) payments received in settlement of or pursuant to a judgment
rendered with respect to take or pay or similar obligations or other obligations
under a production sales contract, (iii) payments received in buyout or buydown
or other settlement of a production sales contract, (iv) payments received under
a gas balancing agreement or similar written or oral arrangement, as a result of
(or received otherwise in settlement of or pursuant to judgment rendered with
respect to) rights held by Seller as a result of Seller (and/or its predecessors
in title) taking or having taken less gas from lands covered by a property right
or interest described in Clauses (a), (b) and/or (c) above, than their ownership
of such property right or interest would entitle them to receive and (v) shut-in
rental or royalty payments (the payments described in this Clause (h) being
herein called “Payments in Lieu of Production”);
 
(i)           All contract rights and choses in action (i.e., rights to enforce
contracts or to bring claims thereunder) related to the properties, rights and
interests described in
 
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Clauses (a) through (h) above (to the extent that the same arise, and/or the
events which gave rise to the same occur after the Effective Date hereof, and
further regardless of whether same arise under contract, the law or in equity);
 
(j)           All rights, estates, powers and privileges appurtenant to the
foregoing rights, interests and properties, including without limitation the
right to explore for and develop minerals, the executive right (i.e., the right
to execute leases), the right to receive bonuses and delay rentals (but not
royalties or shut-in royalties) and the right to pool or unitize the properties,
rights and interests described in Clauses (a) or (b), above; and
 
(k)           All rights, estates, powers and privileges of Assignor appurtenant
to any and all of the foregoing rights, interests and properties.
 
SAVE AND EXCEPT, the Subject Properties do not include, and there is hereby
excepted and reserved unto Assignor, its successors and assigns forever, the
following:
 
(a)           All right, title and interest of Assignor in and to royalties,
non-participating royalties, overriding royalties, carried interests, net
profits interests and other cost-free interests in and to the leases and
properties described above, as well as the Production therefrom and the Proceeds
of such Production; and
 
(b)           The Overriding Royalty Interest described in Part II hereof.
 
TO HAVE AND TO HOLD, all and singular, the Subject Properties, unto Assignee,
its successors and assigns forever. This Assignment made hereunder is made with
full substitution and subrogation of Assignee in and to all warranties
heretofore given or made, but is otherwise without warranties or covenants of
title, express or implied. All tangible equipment and personal property is
assigned “AS IS, WHERE IS.” ASSIGNOR HEREBY EXPRESSLY DISCLAIMS AND NEGATES ANY
OTHER REPRESENTATION OR WARRANTY, EXPRESS, IMPLIED, COMMON LAW, STATUTORY OR
OTHERWISE RELATING TO THE SUBJECT PROPERTIES (INCLUDING, WITHOUT LIMITATION, ANY
WARRANTY OR COVENANT OF TITLE, EXPRESS OR IMPLIED, ANY IMPLIED OR EXPRESS
WARRANTY OF MERCHANTABILITY, FITNESS FOR A PARTICULAR PURPOSE, OR CONFORMITY TO
MODELS OR SAMPLES OF MATERIALS) OR ENVIRONMENTAL CONDITION, OR ANY INFRINGEMENT
BY ASSIGNOR OF ANY PATENT OR PROPRIETARY RIGHT OF ANY THIRD PERSON.
 
This Assignment is made and accepted subject to the terms and provisions of that
certain Contribution and Exchange Agreement dated March __, 2010 by and among
Dorchester Minerals, L.P., Dodge Jones Foundation, The Legett Foundation,
Kickapoo Springs Foundation, The Karakin Foundation, Still Water Foundation,
Xettam Minerals, L.P., 2MW Limited Partnership, Julia Jones Matthews Living
Trust and John A. Matthews, Jr. Assignor agrees to execute, acknowledge and
deliver or cause to be executed, acknowledged and delivered such instruments,
and take such other actions, as may be necessary or advisable to more fully and
effectively grant, convey and assign the Subject Properties unto Assignee as
contemplated by the Contribution Agreement.

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PART II
 
THERE IS EXCEPTED FROM THIS ASSIGNMENT, and reserved unto Assignor, its
successors and assigns, as a present vested property right, an overriding
royalty interest (the “Overriding Royalty Interest”) in and to the Subject
Minerals if, as and when produced and saved from the Subject Interests, payable
solely out of Gross Proceeds from the Sale of Subject Minerals, in an amount
equal to 96.97% of the Net Proceeds attributable to the Subject Interests. The
Overriding Royalty Interest shall be determined and administered in accordance
with the provisions of Sections 1 through 3 of this PART II.
 
SECTION 1
 

 
Definitions
 
As used in this PART II, the following words, terms or phrases shall have the
following meanings:
 
Section 1.1. “Business Day” means a day on which none of the banks to or from
which a payment authorized hereunder may be made are closed as authorized or
required by law.
 
Section 1.2. “Conveyance” means this Assignment, Conveyance and Assumption
Agreement.
 
Section 1.3. “Excess Production Costs” at any point in time means an amount
equal to the excess of Production Costs over Gross Proceeds for the period
ending with such point and beginning with the end of the most recent Period in
which there were Net Proceeds.
 
Section 1.4. “General and Administrative Costs” means those additional costs, of
whatever nature, deemed necessary by Assignee to properly operate and/or manage
the Subject Properties under this Conveyance and that are not properly
classified as Production Costs.  Initially, General and Administrative Costs
will be charged on a cents-per-mile or dollars-per-well basis utilizing surveys
and escalators normally used in the oil and gas industry; provided, however,
that the use of such surveys and escalators shall not act to place a floor or
cap on such costs.
 
Section 1.5. “Gross Proceeds” means the amounts received on or after the
Effective Date, generally on the cash method of accounting, by WI Owner, without
duplication, from the sale or other disposition of Subject Minerals, subject to
the following:
 
(a) There shall be included any amount which WI Owner shall receive as a result
of net profits interests, overriding and other royalty interests owned by WI
Owner and included as part of the Subject Interests.
 
(b) There shall be excluded any amount for Subject Minerals attributable to
nonconsent operations conducted with respect to the Subject Interests (or any
portion thereof) as to which WI Owner shall be a nonconsenting party and which
is dedicated to the recoupment or reimbursement of costs and expenses of the
consenting party or parties
 
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by the terms of the relevant operating agreement, unit agreement, contract for
development or other agreement providing for such nonconsent operations.
 
(c) If a controversy exists (whether by reason of any statute, order, decree,
rule, regulation, contract or otherwise) between WI Owner and any purchaser from
WI Owner or any other third party as to the correct sales price or sales volume
of any Subject Minerals, then
 
(i) amounts withheld by the purchaser or any such third party or deposited by it
in an interest bearing account with a commercial bank as escrow agent shall not
be considered to be received by WI Owner and shall not be credited to the Net
Proceeds Account (as defined in Section 2.4 below) until actually collected by
WI Owner, and the proceeds of such account less the interest earned thereon, if
any, shall thereafter be distributed in accordance with this Conveyance and the
interest earned thereon, if any, allocable to the Royalty Owner shall (if agreed
upon by depositor and escrow agent) be paid directly to the Royalty Owner by any
such escrow agent upon resolution of such controversy, and such interest shall
not be deemed to constitute a portion of Gross Proceeds; and
 
(ii) amounts received by WI Owner and held in suspense (not paid) or promptly
deposited by it in an interest bearing account with a commercial bank as escrow
agent shall not be considered to have been received by WI Owner and shall not be
credited to the Net Proceeds Account until removed by WI Owner from suspense or
until disbursed to WI Owner by such escrow agent, and the proceeds of such
account less the interest earned thereon, if any, shall thereafter be
distributed in accordance with this Conveyance and the interest earned thereon,
if any, allocable to the Royalty Owner shall be paid directly to the Royalty
Owner by such escrow agent upon resolution of such controversy, and such
interest shall not be deemed to constitute a portion of Gross Proceeds.
 
(d) During any Period when WI Owner is, for any Subject Interest, an
Overproduced Party or an Underproduced Party under any gas balancing
arrangement, there shall be included in Gross Proceeds amounts (other than those
for cash balancing) received by WI Owner from a purchaser of Subject Minerals or
an Overproduced Party as and when paid to WI Owner.
 
(e) If any portion of the amounts described in Section 1.5(d) above are in good
faith determined by WI Owner to be subject to cash balancing and WI Owner
determines in good faith that the potential cash balancing amount may exceed
future Net Proceeds when the cash balancing contingency occurs, then:
 
(i) an amount up to the amount subject to cash balancing (or a reasonable
estimate thereof) shall be excluded from future Gross Proceeds, shall be held in
suspense (not paid) or deposited by WI Owner in an interest bearing escrow
account with an escrow agent and shall not be credited to the Net Proceeds
Account until disbursed in accordance with the provisions of (ii) below; and
 
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(ii) amounts held in suspense (not paid) or placed in interest bearing escrow
accounts as provided above shall be distributed either to (a) Royalty Owner and
WI Owner in accordance with this Conveyance when WI Owner determines in good
faith that the potential for cash balancing no longer exists as to all or a
portion of the funds in suspense or in such account, provided, that interest
earned, if any, on any such escrow account allocable to the Royalty Owner shall
be paid directly to the Royalty Owner by the escrow agent, and such interest
shall not be deemed to constitute either a portion of Gross Proceeds or a
reduction to Production Costs as described in Section 1.14(c), or (b) WI Owner
for the cash balancing due to any party due such cash balancing.
 
(f) There shall be excluded any amount for Subject Minerals unavoidably lost or
used in the production thereof and any imputed or calculated amount for domestic
gas delivered but not sold or for line loss or fuel gas used in the production
of Subject Minerals or used by WI Owner in conformity with prudent practices for
drilling, production, operation or plant operations (including gas injection,
compression, gathering, treating, conditioning, transporting, dehydration,
secondary recovery, pressure maintenance, repressuring, recycling operations,
plant fuel or shrinkage) (i) conducted for the purpose of producing Subject
Minerals or marketing or making marketable the Subject Minerals or (ii) from any
unit to which the Subject Interests are committed, but only so long as such
Subject Minerals are so used and the cost thereof is not borne by others and
paid to WI Owner.
 
(g) Gross Proceeds shall not include any amounts described in Section 1.14(c)
hereof.
 
(h) Gross Proceeds shall not include any amounts received by WI Owner from third
parties as the result of cash balancing obligations relating to underproduced
positions which affect the Subject Interests.
 
(i) Gross Proceeds shall include any amount received as bonus for any oil, gas
and/or mineral lease executed by WI Owner after the Effective Date and covering
any portion of the Subject Interests.
 
(j) Gross Proceeds shall not include amounts attributable to the interests of
parties other than WI Owner and the Royalty Owner in the lands described in
Exhibit A and shall not include any amounts paid that are attributable to
production payments, royalties or overriding royalties payable to such other
parties.
 
Section 1.6. “Lease” or “Leases” means the oil, gas and mineral leases (or
portions thereof or interests therein, including, without limitation, any
royalty interests, overriding royalty interests and similar interests) described
in Exhibit A attached hereto.
 
Section 1.7. “Minerals” means oil, gas, other liquid and gaseous hydrocarbons
and other minerals, whether similar or dissimilar.
 
Section 1.8. “Net Proceeds” for any Period after the Effective Date means the
excess of Gross Proceeds received by WI Owner during such Period over the sum of
(a) Production Costs
 
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paid during such Period and (b) Excess Production Costs as of the end of the
immediately preceding Period, as such Net Proceeds are computed in accordance
with Section 2.4 hereof.
 
Section 1.9. “Overproduced Party” means a party to a gas balancing arrangement
who, as a result of producing, in addition to its own share of production, that
portion of another party’s share of production which such other party is unable
or unwilling to market or otherwise to dispose of, is in a position of net
over-production with respect to such other party or parties to such gas
balancing arrangement.
 
Section 1.10. “Period” means one calendar month; provided, however, that the
first Period shall run from the Effective Date to the last day of the calendar
month in which the Effective Date falls.
 
Section 1.11. “Person” means any individual, corporation, partnership, trust,
estate or other entity or organization.
 
Section 1.12. “Prime Interest Rate” means the interest rate announced from time
to time by Bank of America at its principal office in Dallas, Texas as its
“prime interest rate.”
 
Section 1.13. “Process” or “Processing” means to manufacture, refine, process,
fractionate, dehydrate, condition, treat, conduct absorption or plant
operations, market (including without limitation gather, transport and exchange)
or compress Subject Minerals in a manner which does not constitute Well
Operations.
 
Section 1.14. “Production Costs” means, to the extent such costs are properly
allocable to the Subject Interests and have been incurred and paid or otherwise
discharged by WI Owner during any Period, on the cash method of accounting (or
accrued, even if not paid or otherwise discharged, to the extent provided in
this Section 1.14), and whether capital or non-capital in nature, without
duplication:
 
(a) the sum of
 
(i) the maintenance, drilling, completing, equipping and operating costs for
such Period and all other costs for such Period incurred by WI Owner applicable
to the Subject Interests, including budgeted capital expenditures and/or unusual
items of material cost;
 
(ii) an amount equal to all general property (ad valorem), production,
severance, sales, gathering, energy, BTU and similar state, federal or other
taxes (except income taxes) assessed or levied on or in connection with the
Subject Interests, the Overriding Royalty Interest or the production therefrom
or equipment thereon, or the processing, gas exchange or marketing of production
attributable thereto, and which taxes (as adjusted or as finally determined) are
deducted or excluded from proceeds of Sale received by WI Owner or paid by WI
Owner and attributable to both WI Owner’s and Royalty Owner’s share in the
Subject Minerals or the Subject Interests; provided, however, that in the case
of any such taxes that accrue ratably over any period, such taxes shall be
deemed to be Production Costs as they accrue;
 
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(iii) all amounts borne by WI Owner in such Period as to any of the following:
(a) to the extent allocable to the Subject Interests, payments made to others in
the area in connection with the drilling or deferring of drilling of any well on
or in the vicinity of any of the Subject Interests (including dry hole and
bottom hole payments and payments made to others for refraining from drilling an
offset well) or in connection with any cost adjustments with respect to any well
and/or leasehold equipment upon unitization of any of the Subject Interests; (b)
to the extent allocable to the Subject Interests, rent and other consideration
paid for use of or damage to the surface and (c) all direct charges applicable
to the Subject Interests relating to lease renewals, geological and geophysical,
seismic, engineering and preparation for drilling costs (including without
limitation the cost of securing any seismic or geophysical permits or options);
 
(iv) to the extent allocable to the Subject Interests, all other costs, expenses
and liabilities of, in connection with, arising out of or relating to operating
any well on the Subject Interests and producing Subject Minerals and sale and
marketing thereof for such Period, including without limitation: (a) costs of
equipping, plugging back, reworking, recompleting, plugging and abandoning and
surface restoration and other related costs as required by law and in accordance
with the terms of the Leases (or instruments covering lands pooled with any
Lease) and of making the Subject Minerals ready or available for market; (b) the
costs of Well Operations and of Processing, together with any construction costs
associated with facilities utilized in connection with Well Operations or
Processing; (c) the costs of secondary recovery, pressure maintenance,
repressuring, recycling and other operations commonly used in the oil and gas
industry which are recognized as reputable methods of enhancing production; (d)
the costs of claims or litigation concerning marketing the Subject Minerals or
delivery of production from, title to, taxation (limited to ad valorem or any
other property taxes and severance or any other taxes payable out of or measured
by production) of or operation of the Subject Interests, including claims or
litigation relating to the drilling, testing and completing of any well on the
Subject Interests, and any other acts or omissions of WI Owner consistent
herewith (as a prudent owner or operator) or brought by WI Owner to protect the
Subject Interests as a prudent owner or operator; (e) the cost of insurance
incurred for the protection of the Subject Interests, the Royalty Owner or WI
Owner; (f) delay rentals and shut-in royalties, (g) the costs (including without
limitation any reasonable legal fees) of negotiating and preparing oil, gas
and/or mineral leases to be executed covering any of the Subject Interests, and
(h) payments to others for production of Subject Minerals produced but not sold
by WI Owner; provided, however, that in the case of any such costs and expenses
in clauses (a) through (h) of this subsection (iv) that accrue ratably over any
period, such costs and expenses shall be deemed to be Production Costs as they
accrue;
 
(v) the costs incurred by WI Owner for audits, if any, conducted by or on behalf
of the Royalty Owner, and the costs incurred for any statements and reports
provided by WI Owner to the Royalty Owner, to the extent not otherwise included
as a Production Cost hereunder;
 
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(vi) to the extent allocable to the Subject Interests, refunds of revenues
previously included as Gross Proceeds required to be made by WI Owner (including
any interest thereon or penalties) as a result of the bankruptcy, insolvency or
similar condition of a purchaser of production or other party, an order of the
Federal Energy Regulatory Commission or other governmental unit or any other
legal reason;
 
(vii) to the extent allocable to the Subject Interests, any amounts paid by WI
Owner after the Effective Date as a prudent owner or operator, whether as
refund, interest or penalty, to (A) a purchaser because the amount initially
received by WI Owner as sales price attributable to operations after the
Effective Date was more or allegedly more than permitted by the terms of any
applicable contract, statute, regulation, order, decree or other obligation, (B)
any third party because an amount initially paid by such third party relating to
the exploration, development, operation, production, maintenance or protection
of the Subject Interests (or any part thereof) was in excess of that otherwise
owing under the terms of any applicable contract or agreement, or (C) any third
party royalty owner because the amount initially paid by WI Owner with respect
to a Lease was less or allegedly less than required under such Lease; and
 
(viii) to the extent allocable to any Subject Interest which includes or
consists of any surface estate, all costs, expenses and liabilities of, in
connection with, arising out of or relating to the ownership, operation,
maintenance and management of such surface estate.
 
(b) Production Costs shall not include depletion, depreciation and other
non-cash deductions.
 
(c) Production Costs (to the extent thereof for any Period subsequent to the
Period in which amounts described in this Section 1.14(c) are received) and/or
Excess Production Costs (to the extent thereof) shall be reduced by the amount
received by WI Owner to the extent allocable to the Subject Interests as a
result of (i) delay rentals, (ii) damages to, or condemnation by a governmental
authority of, the Subject Interests, (iii) shut-in gas well royalty or payments,
(iv) sale of fixtures and equipment used with respect to the Subject Interests,
(v) rentals from reservoir use, (vi) dry hole and bottom hole payments, (vii)
any payments made to WI Owner in connection with the drilling or deferring of
drilling of any well on any of the Subject Interests, (viii) any amounts which
WI Owner shall receive in connection with any adjustment of any well and
leasehold equipment constituting part of the Subject Interests upon pooling or
unitization of any of the Subject Interests, (ix) recoveries for breaches of
drilling contracts and recoveries in connection with other proceedings
pertaining to or affecting the Subject Interests or operations thereon, (x)
insurance proceeds received as a result of damage to the Subject Interests or to
the fixtures and equipment used with respect to the Subject Interests, (xi) any
bonuses or payments made by third parties in connection with farmout
transactions, if any, (xii) any amounts received by WI Owner as rental or use
fees for personalty, platform, equipment or gathering lines located on the
Subject Interests, (xiii) any amounts referred to in this subsection (c) not so
applied to reduce Production Costs or Excess
 
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Production Costs in prior Periods, (xiv) amounts received by WI Owner from a
purchaser of Subject Minerals as advance payments and payments pursuant to
take-or-pay and similar provisions of Sales Contracts as and when paid to WI
Owner, (xv) if WI Owner is an Underproduced Party under any gas balancing
arrangement, the receipt by WI Owner of a settlement in cash for any net
underproduced position, regardless of whether such underproduced position arose
before or after the Effective Date, (xvi) any interest that accrues on the
credit balance in the Net Proceeds Account from time to time, such interest to
be net of any applicable third party service charge, (xvii) with respect to any
surface estate included in the Subject Interests, all lease or rental payments
received from third parties, all receipts from the sale of livestock, crops and
timber and all other income attributable to such surface estate, and (xviii) to
the extent not otherwise included in Gross Proceeds, the excess of any revenues
received by WI Owner from Processing Subject Minerals over the Processing costs
incurred by WI Owner to the extent not otherwise treated as a Production Cost.
With respect to item (xvi), above, it is hereby expressly agreed and understood
that WI Owner shall not be obligated to secure any particular interest rate or
other return on credit balances from time to time existing, and any investment
of such credit balances shall be made in the sole discretion of WI Owner.
 
(d) Other than any amounts placed in escrow pursuant to Section 1.5(e) hereof,
if WI Owner is an Overproduced Party under any gas balancing arrangement and WI
Owner is required to make settlement in cash for any net over-production
accruing after the Effective Date, such payment shall be included in Production
Costs.
 
(e) The General and Administrative Costs relating to any particular Period shall
be considered a Production Cost which shall be debited to the Net Proceeds
Account for such Period.
 
Section 1.15. “Royalty Owner” means Assignor, while Assignor owns an interest in
the Overriding Royalty Interest, and any other Person or Persons who
subsequently acquire legal title to all or any portion of or any interest in the
Overriding Royalty Interest.
 
Section 1.16. “Sale” includes sale, exchanges and other dispositions for value.
 
Section 1.17. “Sales Contracts” means all contracts and agreements for the offer
sale of, or commitment to offer or sell, or right of first refusal to purchase,
Subject Minerals after production.
 
Section 1.18. “Subject Interests” means, prior to giving effect to this
Conveyance, each kind and character of right, title, claim or interest which the
Assignor has (i) in, on and under the lands described in and covered by the
Leases which are described in Exhibit A, and (ii) in, on and under any lands
which are described in Exhibit A and the unitization and pooling agreements and
the units created in connection therewith, whether such right, title, claim or
interest be under and by virtue of a Lease, a unitization or pooling agreement,
a unitization or pooling order, a mineral deed, a royalty deed, an operating
agreement, a division order, a transfer order or any other type of contract,
conveyance or instrument or under any other type of title, legal or equitable,
recorded or unrecorded, even though the Assignor’s interests be incorrectly or
incompletely described in Exhibit A, all as the same shall be enlarged by the
discharge of any
 
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payments out of production, by the removal of any charges or encumbrances to
which any of the same are or become subject or by the entering into of
non-consent operations and any and all renewals and extensions thereof acquired
by Assignor within one year after the termination of the prior Subject Interest.
 
Section 1.19. “Subject Minerals” means all Minerals in and under, and which may
be produced, saved and sold from, and which shall accrue and be attributable to,
the Subject Interests.
 
Section 1.20. “Underproduced Party” means a party to a gas balancing arrangement
who, as a result of its inability or unwillingness to market or otherwise
dispose of a portion of its share of production and another party’s producing
such share of production, is in a position of net underproduction with respect
to such other party or parties to such gas balancing arrangement.
 
Section 1.21. “Well Operations” means pumping, gas lifting and gravity
separation of Minerals and other operations (including without limitation
compression, treatment, separation, storage, dehydration, metering, gathering,
and/or transportation) in the immediate vicinity of the well but does not
include compression or transportation of the Minerals beyond the immediate
vicinity of the well, or absorption or fractionation and other plant operations.
 
Section 1.22. “WI Owner” means Assignee, while it owns all or part of the
Subject Interests or any interest therein and any other Person or Persons who,
as permitted herein, subsequently acquire legal title to all or any part of the
Subject Interests or any interest therein other than the Overriding Royalty
Interest reserved hereby.
 
SECTION 2
 
Payment
 
Section 2.1. Payment. On the 10th day of each Period (or, if such day is not a
Business Day, on the Business Day next preceding such day), WI Owner shall pay
to the Royalty Owner as an overriding royalty hereunder an amount equal to
96.97% of the Net Proceeds for the preceding Period, computed in accordance with
Section 2.4 hereof.
 
Section 2.2. Interest on Past Due Payments.  Any amount not paid by WI Owner to
the Royalty Owner when due shall bear, and WI Owner will pay, interest at the
weighted average Prime Interest Rate in effect during the period of
underpayment; provided that such interest shall not be in excess of the maximum
amount allowed by law. Under no circumstances, however, shall WI Owner willfully
withhold payment properly due the Royalty Owner hereunder.
 
Section 2.3. Overpayment.  If at any time WI Owner inadvertently pays the
Royalty Owner more than the amount due, the Royalty Owner shall not be obligated
to return any such overpayment, but the amount or amounts otherwise payable for
any subsequent Period or Periods shall be reduced by such overpayment.
 
Section 2.4. Net Proceeds Account.  A Net Proceeds account (the “Net Proceeds
Account”) shall be maintained by WI Owner for each Period after the Effective
Date. The Net
 
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Proceeds Account shall be credited with the aggregate of any Gross Proceeds
received during such Period, and shall be debited with the aggregate of any
Production Costs paid during such Period. The amounts provided for in Section
1.14(c) hereof shall be taken into account for the sole and only purpose of
reducing amounts that would otherwise be debited to the Net Proceeds Account in
accordance herewith, and Royalty Owner shall have no right, title or claim to
such amounts.
 
On or before the date of payment as set forth in Section 2.1 hereof, WI Owner
shall furnish to the Royalty Owner a detailed statement clearly reflecting the
credits and debits against and the balance of the Net Proceeds Account for the
applicable Period. Any Excess Production Cost reflected by any such statement
shall be carried forward to the next and succeeding Period or Periods until the
Excess Production Costs shall have been liquidated. If, at the end of any
Period, there are Excess Production Costs which have not been liquidated in
accordance with the preceding sentence, then an amount equal to interest at the
Prime Interest Rate in effect on the last day of such Period shall be computed
on the unliquidated balance of the Excess Production Costs from the last day of
such Period to the last day of the following Period, and such amount shall be
treated as a Production Cost in such following Period.
 
In the event that Net Proceeds exist in the Net Proceeds Account at the end of
any month, payment to the Royalty Owner of the amount of the Net Proceeds
pursuant to Section 2.1 shall be paid promptly by WI Owner to the Royalty Owner.
 
WI Owner shall maintain the Net Proceeds Account in accordance with good
accounting practice and in a manner to minimize accounting difficulties but
accomplish on a fiscal year basis the overall goal of this Conveyance, and the
books and records relating thereto shall at all reasonable times be open to
inspection, examination, copying and audit by the Royalty Owner and its duly
authorized agents and representatives.
 
Section 2.5. Limitation.  All payments made to Royalty Owner shall be made
entirely and exclusively out of amounts received from the sale or other
disposition of Subject Minerals produced from Subject Interests after the
Effective Date, and in no event shall such payments exceed 100% of the value of
such production at the wellhead (based upon the terms upon which such production
is marketed by WI Owner) before the application of any Processing. Should the
payments to Royalty Owner, computed in accordance herewith ever exceed such
amount (such excess amount being herein referred to as the “Overage”), such
Overage shall be suspended and accrued; and if the payments calculated in
accordance herewith are ever again less than 100% of the value of such
production at the wellhead before the application of any Processing, the Overage
shall be added to subsequent payments but not in an amount which would then
cause payments to exceed 100% of the value of such production at the wellhead
before the application of any Processing, so that Royalty Owner, if possible,
shall be entitled to receive the total amount to be distributed hereunder as if
the limitation imposed by this Section had not been in effect.
 
12 
 

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SECTION 3
 
Miscellaneous
 
Section 3.1. Non-Liability of Royalty Owner.  In no event shall the Royalty
Owner be liable or responsible in any way for payment of any Production Costs or
other costs or liabilities incurred by WI Owner or other lessees attributable to
the Subject Interests or to the Minerals produced therefrom.
 
Section 3.2. Intention of the Parties.  Nothing herein contained is intended to
create, nor shall the same be construed as creating (under state law or for tax
purposes), any mining partnership, commercial partnership or other partnership
relation or joint venture. If, however, the parties hereto are deemed to
constitute a partnership for federal or state income tax purposes, the parties
elect to be excluded from the application of Subchapter K, Chapter 1, Subtitle A
of the Internal Revenue Code of 1986, as amended (the “Code”) or any similar
state law, and agree not to take any position inconsistent with such election.
In addition, the parties hereto intend that the Overriding Royalty Interest
conveyed hereby by WI Owner to the Royalty Owner shall at all times be treated
as a nonoperating “economic interest” in the Subject Minerals within the meaning
of the Code (or any corresponding provisions of succeeding law) and a
non-operating mineral right for state law purposes.
 
THE OVERRIDING ROYALTY INTEREST CREATED BY THIS CONVEYANCE IS A RIGHT AFFECTING
AND BURDENING THE SUBJECT INTERESTS. THIS CONVEYANCE CREATES AN INTEREST IN REAL
PROPERTY, AND THE COVENANTS CONTAINED IN THIS CONVEYANCE ARE COVENANTS RUNNING
WITH AND BURDENING THE LAND.
 
PART III
 
In connection with the foregoing transfer of the Subject Properties to the
Assignee, the Assignee agrees, upon the terms and subject to the conditions set
forth herein, to assume, at the Effective Date, and thereafter to pay (i) all
Production Costs, as defined in PART II of this Conveyance, and any other costs,
expenses, and liabilities relating to the Subject Properties, which are incurred
on or after the Effective Date or relate to the period on or after the Effective
Date, and (ii) all Production Costs which are incurred in the Period prior to
the Effective Date and which are payable after the Effective Date in the
ordinary course of business (collectively, the “Assumed Liabilities”).
 
The Assignor agrees to pay all those Production Costs which are incurred prior
to the Effective Date other than those referred to in clause (ii) of the
preceding paragraph.
 

 
PART IV
 
This Assignment, Conveyance and Assumption Agreement is being executed in
several counterparts, all of which are identical, except that, to facilitate
recordation, a counterpart hereof being filed or recorded in a particular
jurisdiction may have omitted therefrom those portions of
 
13 
 

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

 
 
 
Exhibit A which describe properties, rights or interests located in other
jurisdictions. All of such counterparts together shall constitute one and the
same instrument. Complete copies of this Assignment have been retained by
Assignor and Assignee.
 
This Assignment shall bind and shall inure to the benefit of the parties hereto
and their respective successors and assigns.
 
[Signature Page Follows.]
 

 

 

 

14
 
 

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

 

IN WITNESS WHEREOF, this Assignment, Conveyance and Assumption Agreement is
executed this March 31, 2010 but effective as of the Effective Date.
 

WITNESSES:                                                                     MAECENAS
MINERALS, L.L.P,
                                                                 Texas limited
liability partnership,

_______________________                                                      By:____________________________________
    Joseph Edwin Canon,
    Agent and Attorney-in-Fact
________________________  

    DORCHESTER MINERALS OPERATING LP

    By:           Dorchester Minerals Operating GP LLC,
    its general partner

    By:  ____________________________________                                                            
    William Casey McManemin,
    Chief Executive Officer

 
Assignor's Address:
c/o Dodge Jones Foundation
P.O. Box 176
Abilene, Texas 79604
Assignee's Address:
3838 Oak Lawn Avenue, Suite 300
Dallas, Texas 75219
When recorded return to:
3838 Oak Lawn Avenue, Suite 300
Dallas, Texas 75219
This instrument prepared by:
Thompson & Knight, LLP
One Arts Plaza
1722 Routh Street, Suite 1500
Dallas, Texas 75201
 

 

Assignment, Conveyance and Assumption Agreement
Signature Page
 
 

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STATE OF TEXAS                                          §
                      §
COUNTY OF DALLAS                                   §

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 31st day of March, 2010 there
personally appeared before me and known to me (or satisfactorily proven) to be
the person described in the foregoing instrument:
 
Joseph Edwin Canon, as attorney in fact on behalf of MAECENAS MINERALS, L.L.P.,
a Texas limited liability partnership, such limited liability partnership being
party to the foregoing instrument.
 
NEW MEXICO, NORTH DAKOTA, and TEXAS
The foregoing instrument was acknowledged before me on this day, by Joseph Edwin
Canon, as attorney in fact on behalf of MAECENAS MINERALS, L.L.P., a Texas
limited liability partnership.
 
LOUISIANA
On this date before me, the undersigned authority, personally came and appeared
such person, to me personally known and known by me to be the person whose
genuine signature is affixed to the foregoing document as the attorney in fact
of the limited liability partnership specified following such person's name, who
signed said document before me in the presence of the two witnesses, whose names
are thereto subscribed as such, being competent witnesses, and who acknowledged,
in my presence and in the presence of said witnesses, that he signed the above
and foregoing document as the free act and deed of such limited liability
partnership by authority of its general partners and for the uses and purposes
therein set forth and apparent.
 
THUS DONE AND PASSED as of the date set forth above in my presence and in the
presence of said witnesses who hereunto sign their names with the above
Intervenor and me Notary after reading of the whole.
PENNSYLVANIA
On this date, before me March 31, 2010, the undersigned officer, personally
appeared Joseph Edwin Canon, known to me (or satisfactorily proven) to be the
person whose name is subscribed as attorney in fact for MAECENAS MINERALS,
L.L.P., a Texas limited liability partnership, and acknowledged that he executed
the same as the act of his principal for the purpose therein contained.

 
 

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

 

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

   
 

       NOTARY PUBLIC, State of Texas               (printed name)   My
commission expires:            [SEAL]  

 

 
 

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Exhibit A

 
 
 

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EXHIBIT 3.8

MAECENAS INCOME STATEMENTS

[See Attached.]

 
 
 

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

 

MAECENAS MINERALS, LLP
INCOME STATEMENT
DECEMBER 31, 2009 AND 2008
INCOME STATEMENT

             
Current Year
 
Prior Year
 
Variance
ACCT
 
DESCRIPTION
   
Year to Date
 
Year to Date
 
Year to Date
                         
REVENUES
               
3040
 
ROYALTY INTEREST - OIL
 
915,955.90
 
1,701,415.42
 
(785,459.52)
3050
 
ROYALTY INTEREST - GAS
 
357,893.01
 
739,503.45
 
(381,610.44)
3100
 
OIL LEASE BONUS
 
52,844.50
 
53,691.98
 
(847.48)
3110
 
OIL LEASE RENTALS
 
3.73
 
3.73
 
0.00
                           
GROSS OIL & GAS REVENUES
 
1,326,697.14
 
2,494,614.58
 
(1,167,917.44)
                       
4040
 
PRODUCTION TAXES - OIL ROYALTY
 
50,927.14
 
96,057.30
 
(45,130.16)
4050
 
PRODUCTION TAXES - GAS ROYALTY
 
26,508.37
 
49,542.30
 
(23,033.93)
4100
 
STATE INCOME W/H
 
648.87
 
2,700.39
 
(2,051.52)
4105
 
STATE INCOME TAX PAID
 
2,101.00
 
0.00
 
2,101.00
                             
OIL AND GAS EXPENSE
 
80,185.38
 
148,299.99
 
(68,114.61)
                               
NET OIL & GAS REVENUE
 
1,246,511.76
 
2,346,314.59
 
(1,099,802.83)
                       
3500
 
INTEREST INCOME
 
555.40
 
802.57
 
(247.17)
   
OTHER INCOME
   
555.40
 
802.57
 
(247.17)
                           
NET REVENUE
   
1,247,067.16
 
2,347,117.16
 
(1,100,050.00)
                         
OPERATING EXPENSE
             
6040
 
AD VALOREM TAXES
 
962.38
 
(105.60)
 
1,067.98
6041
 
AD VALOREM TAXES BY STATE
 
72,595.96
 
75,306.50
 
(2,710.54)
7040
 
ACCOUNTING EXPENSE
 
7,685.00
 
3,795.00
 
3,890.00
7055
 
DATA IMPORT EXPENSE
 
4,924.92
 
5,342.56
 
(417.64)
7068
 
INTEREST EXPENSE
 
210.81
 
0.00
 
210.81
7070
 
LEGAL AND PROFESSIONAL EXPEN
 
1,882.50
 
2,800.00
 
(917.50)
7080
 
MISCELLANEOUS EXPENSE
 
390.30
 
458.38
 
(68.08)
                           
TOTAL EXPENSES
 
88,651.87
 
87,596.84
 
1,055.03
                           
NET INCOME (LOSS)
 
1,158,415.29
 
2,259,520.32
 
(1,101,105.03)

 
 

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

 
 
 

MAECENAS MINERALS, LLP
INCOME STATEMENT
DECEMBER 31, 2008
INCOME STATEMENT

ACCT
 
DESCRIPTION
   
Curr Period
 
Year to Date
                     
REVENUES
           
3040
 
ROYALTY INTEREST - OIL
 
1,701,415.42
 
1,701,415.42
3050
 
ROYALTY INTEREST - GAS
 
739,503.45
 
739,503.45
3100
 
OIL LEASE BONUS
 
53,691.98
 
53,691.98
3110
 
OIL LEASE RENTALS
 
3.73
 
3.73
                       
GROSS OIL & GAS REVENUES
 
2,494,614.58
 
2,494,614.58
                   
4040
 
PRODUCTION TAXES - OIL ROYALTY
 
96,057.30
 
96,057.30
4050
 
PRODUCTION TAXES - GAS ROYALTY
 
49,542.30
 
49,542.30
4100
 
STATE INCOME W/H
 
2,700.39
 
2,700.39
                         
OIL AND GAS EXPENSE
 
148,299.99
 
148,299.99
                           
NET OIL & GAS REVENUE
 
2,346,314.59
 
2,346,314.59
                   
3500
 
INTEREST INCOME
 
802.57
 
802.57
   
OTHER INCOME
   
802.57
 
802.57
                       
NET REVENUE
   
2,347,117.16
 
2,347,117.16
                     
OPERATING EXPENSE
         
6040
 
AD VALOREM TAXES
 
(105.60)
 
(105.60)
6041
 
AD VALOREM TAXES BY STATE
 
75,306.50
 
75,306.50
7040
 
ACCOUNTING EXPENSE
 
3,795.00
 
3,795.00
7055
 
DATA IMPORT EXPENSE
 
5,342.56
 
5,342.56
7068
 
INTEREST EXPENSE
 
0.00
 
0.00
7070
 
LEGAL AND PROFESSIONAL EXPEN
 
2,800.00
 
2,800.00
7080
 
MISCELLANEOUS EXPENSE
 
458.38
 
458.38
                       
TOTAL EXPENSES
 
87,596.84
 
87,596.84
                       
NET INCOME (LOSS)
 
2,259,520.32
 
2,259,520.32
                   

 
 

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

 
 

 
MAECENAS MINERALS, LLP
INCOME STATEMENT
DECEMBER 31, 2007
INCOME STATEMENT

ACCT
 
DESCRIPTION
   
Curr Period
 
Year to Date
                     
REVENUES
           
3040
 
ROYALTY INTEREST - OIL
 
1,019,520.80
 
1,019,520.80
3050
 
ROYALTY INTEREST - GAS
 
478,160.81
 
478,160.81
3100
 
OIL LEASE BONUS
 
19,592.46
 
19,592.46
                                           
GROSS OIL & GAS REVENUES
 
1,517,274.07
 
1,517,274.07
                   
4040
 
PRODUCTION TAXES - OIL ROYALTY
 
54,896.46
 
54,896.46
4050
 
PRODUCTION TAXES - GAS ROYALTY
 
31,930.47
 
31,930.47
4100
 
STATE INCOME W/H
 
1,976.18
 
1,976.18
                                             
OIL AND GAS EXPENSE
 
88,803.11
 
88,803.11
                           
NET OIL & GAS REVENUE
 
1,428,470.96
 
1,428,470.96
                   
3500
 
INTEREST INCOME
 
1,045.23
 
1,045.23
   
OTHER INCOME
   
1,045.23
 
1,045.23
                       
NET REVENUE
   
1,429,516.19
 
1,429,516.19
                     
OPERATING EXPENSE
         
6040
 
AD VALOREM TAXES
 
682.95
 
682.95
6041
 
AD VALOREM TAXES BY STATE
 
54,474.36
 
54,474.36
6045
 
OKLAHOMA ROYALTY TAX WITHHEL
 
25.75
 
25.75
7040
 
ACCOUNTING EXPENSE
 
3,400.00
 
3,400.00
7050
 
BANK CHARGES
   
5.00
 
5.00
7055
 
DATA IMPORT EXPENSE
 
4,514.51
 
4,514.51
7070
 
LEGAL AND PROFESSIONAL EXPEN
 
2,127.00
 
2,127.00
7080
 
MISCELLANEOUS EXPENSE
 
390.00
 
390.00
                       
TOTAL EXPENSES
 
65,619.57
 
65,619.57
                       
NET INCOME (LOSS)
 
1,363,896.62
 
1,363,896.62

 
 

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

 
 

MAECENAS MINERALS, LLP
INCOME STATEMENT
DECEMBER 31, 2006
INCOME STATEMENT

ACCT
 
DESCRIPTION
   
Curr Period
 
Year to Date
                     
REVENUES
           
3040
 
ROYALTY INTEREST - OIL
 
920,763.90
 
920,763.90
3050
 
ROYALTY INTEREST - GAS
 
568,247.93
 
568,247.93
3100
 
OIL LEASE BONUS
 
11,691.25
 
11,691.25
3110
 
OIL LEASE RENTALS
 
3.73
 
3.73
                                           
GROSS OIL & GAS REVENUES
 
1,500,706.81
 
1,500,706.81
                   
4040
 
PRODUCTION TAXES - OIL ROYALTY
 
46,838.49
 
46,838.49
4050
 
PRODUCTION TAXES - GAS ROYALTY
 
37,711.43
 
37,711.43
4100
 
STATE INCOME W/H
 
401.65
 
401.65
                                             
OIL AND GAS EXPENSE
 
84,951.57
 
84,951.57
                           
NET OIL & GAS REVENUE
 
1,415,755.24
 
1,415,755.24
                   
3500
 
INTEREST INCOME
 
1,345.25
 
1,345.25
   
OTHER INCOME
   
1,345.25
 
1,345.25
                       
NET REVENUE
   
1,417,100.49
 
1,417,100.49
                     
OPERATING EXPENSE
         
6041
 
AD VALOREM TAXES BY STATE
 
57,211.50
 
57,211.50
7040
 
ACCOUNTING EXPENSE
 
2,500.00
 
2,500.00
7050
 
BANK CHARGES
   
3.00
 
3.00
7055
 
DATA IMPORT EXPENSE
 
4,924.92
 
4,924.92
7070
 
LEGAL AND PROFESSIONAL EXPEN
 
2,050.00
 
2,050.00
7080
 
MISCELLANEOUS EXPENSE
 
475.46
 
475.46
                       
TOTAL EXPENSES
 
67,164.88
 
67,164.88
                       
NET INCOME (LOSS)
 
1,349,935.61
 
1,349,935.61

 
 

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

 

EXHIBIT 6.3(e)

FORM OF ASSIGNMENT OF MAECENAS INTERESTS
 
ASSIGNMENT OF LIMITED LIABILITY PARTNERSHIP INTEREST

THIS ASSIGNMENT OF LIMITED LIABILITY PARTNERSHIP INTEREST (this “Assignment”),
effective as of March 31, 2010 (the “Effective Date”), is made by and among
Dorchester Minerals, L.P., a Delaware limited partnership (the “Partnership”)
and ____________________ (the “Partnership Designee” and together with the
Partnership, the “Assignees”) and __________________________ (“Assignor”).

WHEREAS, Assignor owns a __% partnership interest (the “Equity Interest”) in
Maecenas Minerals, L.L.P., a Texas limited liability partnership (“Maecenas”);

WHEREAS, pursuant to that certain Contribution and Exchange Agreement dated
March __, 2010 by and among the Partnership and the owners of all of the
outstanding partnership interests in Maecenas, including Assignor (the
“Contribution and Exchange Agreement”), (i) Assignor desires to transfer, assign
and sell to the Partnership, and the Partnership desires to purchase, 99.9% of
the Equity Interest and (ii) Assignor desires to transfer, assign and sell to
the Partnership Designee, and the Partnership Designee desires to purchase, 0.1%
of the Equity Interest; and

WHEREAS, from and after the Effective Date, Assignees shall be partners of
Maecenas.

NOW, THEREFORE, in consideration of the premises, the mutual covenants and
agreements contained herein, and other good and valuable consideration, the
receipt and sufficiency of which are hereby acknowledged, the parties do hereby
agree as follows:

1.           Assignments and Acceptance.

(a)           Assignor hereby transfers, assigns and sells to the Partnership
all of Assignor’s right, title and interest in and to 99.9% of the Equity
Interest, and the Partnership hereby accepts such transfer, assignment and sale.

(b)           Assignor hereby transfers, assigns and sells to the Partnership
Designee all of Assignor’s right, title and interest in and to 0.1% of the
Equity Interest, and the Partnership Designee hereby accepts such transfer,
assignment and sale.

2.           Compliance with Maecenas Partnership Agreement.  Assignees hereby
accept, and agree to be bound by, the terms and provisions of the Partnership
Agreement of Maecenas dated December 16, 1999 (the “Maecenas Partnership
Agreement”).  Assignor and Assignees agree that the transfers, assignments and
sales contemplated by this Assignment are made in accordance with the terms,
conditions and provisions of the Maecenas Partnership Agreement.

3.           Consideration.  In consideration of the assignments set forth in
Section 1, Assignor shall receive the consideration set forth in the
Contribution and Exchange Agreement.

4.           Successors and Assigns.  This Assignment shall be binding upon and
inure to the benefit of each of the parties hereto and their respective heirs,
legal representatives, successors
 
 
 

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

 
 
and assigns.  Nothing in this Assignment, expressed or implied, is intended to
confer upon any party, other than the parties hereto, and their respective
successors and permitted assigns, any rights, remedies, obligations, or
liabilities under or by reason of this Assignment, except as expressly provided
herein.

5.           Modification and Waiver.  No supplement, modification, waiver or
termination of this Assignment or any provisions hereof shall be binding unless
executed in writing by the parties to be bound thereby.  No waiver of any of the
provisions of this Assignment shall constitute a waiver of any other provision
(whether or not similar), nor shall such waiver constitute a continuing waiver
unless otherwise expressly provided.

6.           Governing Law.  This Assignment shall be governed by and construed
and interpreted in accordance with the laws of the State of Texas, without
regard to the principals of conflict of laws.

7.           Severability.  Every provision in this Assignment is intended to be
severable.  If any term or provision hereof is illegal or invalid for any reason
whatsoever, such illegality or invalidity shall not affect the validity of the
remainder of this Assignment.

8.           Further Assurances; Additional Documents.  Each party, at any time
and from time to time, after the date hereof, upon request of any other party,
will do, execute, acknowledge and deliver all such further reasonable acts,
deeds, assignments, transfers, conveyances, powers of attorney and assurances as
may be reasonably required to accomplish the purposes of this Assignment.

9.           Counterparts.  This Assignment may be executed in one or more
counterparts, including signatures transmitted via facsimile or electronic mail,
each of which shall be an original and all of which shall constitute but one and
the same document.

[Signature Page Follows]

2
 
 

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

 

IN WITNESS WHEREOF, the undersigned have executed this Assignment effective as
of the date first above written.

 
 
“ASSIGNEES”
 
 
 
DORCHESTER MINERALS, L.P.
 
By:           Dorchester Minerals Management LP,
its general partner
 
By:           Dorchester Minerals Management GP LLC
its general partner
 
By:_____________________________                                                                
William Casey McManemin,
Chief Executive Officer and Manager
 
 
    
    _______________________________
 
    By:_____________________________            
    Name:___________________________
   Title:____________________________
 

 

Assignment of Limited Liability Partnership Interest
Assignees’ Signature Page
 
 

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

 

IN WITNESS WHEREOF, the undersigned has executed this Assignment effective as of
the date first above written.

 
 
“ASSIGNOR”
 
 
 
 
    _______________________________
 
    By:_____________________________            
    Name:___________________________
   Title:____________________________
 

Assignment of Limited Liability Partnership Interest
Assignor’s Signature Page
 
 

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