**Exhibit 4(b)**NET OVERRIDING ROYALTY CONVEYANCE(San Juan Basin Royalty Trust)         THE STATE OF NEW MEXICO  §        §  KNOW ALL MEN BY THESE PRESENTS:COUNTIES OF SAN JUAN,  §     RIO ARRIBA AND SANDOVAL  §          THAT, SOUTHLAND ROYALTY COMPANY, a Delaware corporation (“Assignor”), for and in considerationof the sum of Ten Dollars ($10.00) and other good and valuable consideration to it paid by The FortWorth National Bank, a bank organized under the laws of the United States, acting not in itsindividual corporate capacity but solely as trustee under that certain San Juan Basin Royalty TrustIndenture dated as of November 1, 1980 (“Assignee”), the receipt and sufficiency of which arehereby acknowledged, has bargained, sold, granted, conveyed, transferred, assigned, set over anddelivered, and by these presents does hereby bargain, sell, grant, convey, transfer, assign, setover and deliver unto Assignee a net overriding royalty interest (“the Royalty Interest”) in and tothe Minerals in and under, and if, as and when produced, saved and sold from, the Subject Landsduring the term of the Subject Interests equal to Seventy-Five percent (75%) of the Net Proceedsattributable to the Subject Interests, as each of the above capitalized words are defined inArticle I and all as more fully provided herein.     TO HAVE AND TO HOLD the Royalty Interest, together with all and singular the rights andappurtenances thereto in anywise belonging, unto Assignee, its successors and assigns, subject,however, to the terms and provisions of this Conveyance; and Assignor does by these presents bindand obligate itself, its successors and assigns, to WARRANT and FOREVER defend all and singular theRoyalty Interest unto the said Assignee, its successors and assigns, against every personwhomsoever lawfully claiming or to claim the same or any part thereof by, through or underAssignor, but not otherwise.ARTICLE IDEFINITIONS     As herein used the following words, terms or phrases have the following meanings:     SECTION 1.01. “Affiliate” means, as to the party specified, any Person controlling, controlledby or under common control with such party, with the concept of control in such context meaning thepossession, directly or indirectly, of the power to direct or cause the direction of the managementand policies of another, whether through the ownership of voting securities, by contract orotherwise.     SECTION 1.02. “Assignor” means the Assignor named herein while it owns all or any part of orinterest in the Subject Interests and any other Person or Persons who acquire all or any part of orinterest in the Subject Interests.
 

 
     SECTION 1.03. “Assignee” means the Assignee named herein while it owns all or any part of orinterest in the Royalty Interest and any other Person or Persons who acquire legal title to all orany part of or interest in the Royalty Interest.     SECTION 1.04. “Conveyance” means this Net Overriding Royalty Conveyance.     SECTION 1.05. “Effective Date” means 7:00 o’clock A.M., local time in effect at the locationof each Subject Interest, on November 1, 1980.     SECTION 1.06. “Excess Production Costs” at any point in time means an amount equal to theexcess of Production Costs over Gross Proceeds for the period ending with such point and beginningwith the end of the most recent month in which there were Net Proceeds.     SECTION 1.07. “Gross Proceeds” means the amounts received from and after the Effective Date byAssignor from the Sale of Subject Minerals sold after the Effective Date, in the aggregate, subjectto the following:          (a) There shall be excluded from Gross Proceeds all general property (ad valorem),production, severance, sales, gathering and windfall profits taxes and other taxes (whetherstate, federal or otherwise) assessed or levied on or in connection with the SubjectInterests, the Royalty Interest or the production therefrom, or against Assignor as owner ofthe Subject Interests or Assignee as owner of the Royalty Interest, and which taxes arededucted or excluded from proceeds of Sale received by Assignor.          (b) There shall be excluded any amount for Subject Minerals attributable to nonconsentoperations conducted with respect to the Subject Interests (or any portion thereof) as towhich Assignor shall be a nonconsenting party and which is dedicated to the recoupment orreimbursement of costs and expenses of the consenting party or parties by the terms of therelevant operating agreement, unit agreement, contract for development or other instrumentproviding for such nonconsent operations, provided Assignor’s election not to participate insuch operations is made in conformity with the provisions of Section 6.01 of thisConveyance.          (c) There shall be excluded any amount which Assignor shall receive as any of thefollowing: consideration for transfer or sale of any of the Subject Interests (subject tothe Royalty Interest) or equipment or other personal property or fixtures on the SubjectLands; delay rental; shut-in gas well royalty or payment; minimum royalty (to the extent notattributable to actual production of the Subject Minerals); payments for gas not taken, whensuch payments are made (but to the extent such payments are allocated to gas taken in thefuture such payments shall be included without interest in Gross Proceeds when such gas istaken); damages arising from any cause other than drainage or reservoir injury; rental forreservoir use; payments made to Assignor in connection with the drilling of any well on anyof the Subject Lands or lands in the vicinity (such exclusion including dry and bottom holepayments, provided that if such well is drilled on the Subject Lands and Assignor incursProduction Costs in connection therewith such payments shall reduce Production Costs) or inconnection with any adjustment of any well and leasehold equipment upon unitization of anyof the Subject Interests; provided
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there shall be included in Gross Proceeds advance or prepaid payments for futureproduction received by Assignor to the extent not subject to repayment in the event ofinsufficient subsequent production (and to the extent so subject to repayment shall beincluded without interest in Gross Proceeds when the Minerals on which such payment was soadvanced or prepaid are actually produced) and payments made to Assignor in connection withthe deferring of drilling of any well on any of the Subject Lands (including payments froman operator in the vicinity for refraining from drilling an offset well).          (d) There shall be excluded any amount for Subject Minerals lost in the production ormarketing thereof or used by Assignor in conformity with ordinary or prudent practices fordrilling, production and plant operations (including gas injection, secondary recovery,pressure maintenance, repressuring, cycling operations, plant fuel or shrinkage) conductedfor the purpose of drilling for, producing or processing Subject Minerals or for operationson any unit or plant to which the Subject Interests are committed, but only so long as suchSubject Minerals are so used.          (e) Amounts received as a loan by Assignor from a purchaser of Subject Minerals,whether with or without interest, shall not be considered to be derived from the sale ofSubject Minerals, provided that the related Sales Contract meets the requirements of Section4.01 hereof.          (f) So long as and to the extent that the same may be required by applicable laws andregulations, in the case of any Subject Interest derived under a lease from the UnitedStates of America from which the average production of oil per well per day averaged on themonthly basis is 15 barrels or less, the obligation to pay and the right of Assignee toreceive the proceeds of oil produced from such lease shall be suspended until said averageproduction of oil per well per day exceeds said minimum amount, and such suspension shallapply separately to any zone or portion of such lease segregated for computing governmentroyalties.          (g) If a controversy or possible controversy exists (whether by reason of any statute,order, decree, rule, regulation, contract or otherwise) between Assignor and any purchaseras to the correct sales price of any Subject Mineral or, for any other reason, as toAssignor’s right to receive or collect the proceeds of sale of any Subject Minerals, then                    (i) amounts withheld by the purchaser or deposited by it with an escrow agentshall not be considered to be received by Assignor until actually collected byAssignor, but the amounts received by Assignor shall include any interest, penaltyor other amount paid to Assignor in respect thereof;                    (ii) amounts received by Assignor and promptly deposited by it with an escrowagent shall not be considered to have been received by Assignor, but all amountsthereafter paid to Assignor by such escrow agent shall be considered to be amountsreceived from the sale of Subject Minerals; and
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                    (iii) amounts received by Assignor and not deposited with an escrow agent shallbe considered to be received for purposes of this Section 1.07.          (h) Assignor shall have the right to contest the amount of the windfall profits taxalleged to be due on proceeds included in Gross Proceeds and to seek refunds thereof. Inthe event any amounts are required to be paid because of any deficiency in prior payment ofwindfall profits tax for periods after the Effective Date, the amounts so paid shall beincluded in Production Costs as paid.     SECTION 1.08. “Minerals” means oil, gas and all other minerals produced in association withoil or gas, but excluding all other minerals, whether similar or dissimilar.     SECTION 1.09. “Monthly Record Date” for each month means the close of business on the last dayof such month which is not a Saturday, Sunday or other day on which national banking institutionsin the City of Fort Worth, Texas, are closed as authorized or required by law, unless Assigneedetermines that a later date is required to comply with applicable law or the rules of an exchangepursuant to the terms of the San Juan Basin Royalty Trust Indenture referred to above.     SECTION 1.10. “Net Proceeds” for any period means the excess of Gross Proceeds realized duringsuch period over the sum of (a) Production Costs incurred during such period and (b) ExcessProduction Costs as of the end of the immediately preceding period.     SECTION 1.11. “Non-Affiliate” means, as to the party specified, any Person who is not anAffiliate of such party.     SECTION 1.12. “Person” means any individual, corporation, partnership, trust, estate or otherentity, organization or association.     SECTION 1.13. “Prime Interest Rate” means the interest rate per annum charged by MorganGuaranty Bank of New York on ninety day loans to its most substantial and responsible commercialborrowers.     SECTION 1.14. “Processing Costs” means the costs to Assignor of manufacturing, refining orprocessing (all herein referred to as “processing”) gas and casinghead gas included in the SubjectMinerals before the Sale thereof, which costs for purposes hereof shall consist of          (a) the sum of (i) any such processing charges paid to Non-Affiliates and (ii) theexpenses (including depreciation but otherwise not including capital costs) incurred byAssignor or its Affiliate in processing such Subject Minerals plus an amount equal to areturn of 15% on the depreciated book value of the fixed assets used in such processing (forwhich purpose of computing depreciation and the return on depreciated book value the valueof fixed assets owned by Assignor will be their book value as of the date first used inprocessing Subject Minerals), or          (b) if greater, the amount allowed as processing charges by any Federal or State agencyhaving jurisdiction over the sale of such Subject Minerals.
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If Assignor or an Affiliate receives a share of the production of others or of plant productstherefrom (or proceeds of sale thereof) for processing such production of others, such share shallnot be included in Subject Minerals (or Gross Proceeds). If Assignor or an Affiliate does not bearany processing costs but the owners or operators of a plant receive a share of the Subject Minerals(or proceeds of sale thereof) for processing them, such share (or proceeds) shall be excluded fromthe Subject Minerals (and Gross Proceeds).     SECTION 1.15. “Production Costs” means, on an accrual accounting method and accruing withrespect to the following from and after the Effective Date, and whether capital or non-capital innature,          (a) the sum of                    (i) all amounts borne by Assignor as any of the following: royalty; overridingroyalty or other presently existing burden against production or the proceeds ofsale of production attributable to the Subject Interests; delay rental; shut-in gaswell royalty or payment; minimum royalty; payments to lessors or others in the areain connection with the drilling or deferring of drilling of any well on any of theSubject Lands or lands in the vicinity (including dry and bottom hole payments andpayments made to others for refraining from drilling an offset well) or inconnection with any adjustment of any well and leasehold equipment upon unitizationof any of the Subject Interests; and rent and other consideration paid for use of ordamage to the surface;                    (ii) all general property (ad valorem), production, severance, sales, gatheringand windfall profits taxes and other taxes (whether state, federal or otherwise),except income taxes, assessed or levied on or in connection with the SubjectInterests, the Royalty Interest or the production therefrom or equipment on theSubject Lands, or against Assignor as owner of the Subject Interests or Assignee asowner of the Royalty Interest, and which taxes are paid by Assignor, and any incometax on the Royalty Interest paid by Assignor;                    (iii) the aggregate costs incurred by Assignor under any joint operatingagreement applicable to the Subject Interests to which Assignor and one or moreNon-Affiliates are parties;                    (iv) The aggregate costs incurred by Assignor under Schedule B attached heretowith respect to any Subject Interest not subject to a joint operating agreementbetween Assignor and a Non-Affiliate.                    (v) all other costs, expenses and liabilities of investigating, exploring,prospecting, drilling and mining for, operating and producing Subject Minerals andsale and marketing thereof, including without implied limitation: costs ofequipping, plugging back, reworking, completing, recompleting and plugging andabandoning of any well on the Subject Lands and of making the Subject Minerals readyor available for market; the cost of construction of gathering lines, tanks,transmission lines, meters and other production and delivery facilities and of
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transporting, compressing, dehydrating, separating, treating, storing andmarketing the Subject Minerals; the cost of secondary recovery, pressuremaintenance, repressuring, cycling and other operations conducted for the purpose ofenhancing production; and the cost of litigation concerning title to or operation ofthe Subject Interests and any other acts or omissions of Assignor consistentherewith or brought by Assignor to protect the Subject Interests;                    (vi) Processing Costs;                    (vii) interest accrued during any month in which there were Excess ProductionCosts computed at the Prime Interest Rate in effect at the end of such period on theamount of Excess Production costs at the end of such period;                    (viii) the costs of the audits furnished pursuant to Section 2.06 hereof;                    (ix) any amounts paid by Assignor, whether as refund, interest or penalty, to apurchaser because the amount initially received by Assignor as sales price was moreor allegedly more than permitted by the terms of any applicable contract, statute,regulation, order, decree or other obligation;                    (x) any other amounts paid by Assignor with respect to the Subject Interests oroperation thereof or sale of production therefrom, whether as refund, fine, interestor penalty, pursuant to litigation or settlement of threatened litigation or orderof governmental agency, provided that Assignor has not breached Section 6.01 hereof;and                    (xi) all consideration hereafter paid and costs and expenses hereafter incurredby Assignor for any renewals or extensions of leases or other rights hereafteracquired which are included in the definition herein of Subject Interests;          (b) but excluding                    (i) costs which would otherwise be treated as Production Costs but which shallnot be so treated for purposes hereof (until the following amounts have been fullycredited against such costs) equal to amounts reimbursed or credited to Assignor byinsurance from damage to property, by sales of property or transfers of property offthe leases included in the Subject Interests or by proceeds from unitization orother disposition of property;                    (ii) the costs incurred in drilling a well to a lower depth than that to whichthe Subject Interests are by the definition below limited unless the well isultimately completed as a producer within the depths included in the SubjectInterests and is not completed as a producer below such depths and, even in suchevent, the cost of drilling below such depths (as allocated by Assignor) shall beexcluded; and                    (iii) any amounts which would otherwise be Production Costs but which areattributable to periods before the Effective Date.
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     SECTION 1.16. “Sale” includes exchanges and other dispositions for value.     SECTION 1.17. “Sales Contracts” means all contracts and agreements for the offer or sale of,or commitment to offer or sell, or right of first refusal to purchase, Subject Minerals.     SECTION 1.18. “Subject Interests” means each kind and character of right, title, claim orinterest which Assignor has on the Effective Date in the oil, gas or mineral leases, mineralinterests, royalty interests and overriding royalty interests and the unitization and poolingagreements and the units created thereby which are described in Schedule A, and all the right,title, claim or interest which Assignor has on the Effective Date in and to the Subject Lands,whether such right, title, claim or interest be under and by virtue of a lease, a mineral deed orreservation, a royalty deed or reservation, an overriding royalty assignment or reservation, aunitization or pooling agreement, a unitization or pooling order, an operating agreement, adivision order, a transfer order or any other type of contract, conveyance or instrument or underany other type of claim or title, legal or equitable, recorded or unrecorded, even thoughAssignor’s interests be incorrectly or incompletely described in, or a description thereof beomitted from, Schedule A, all as the same shall be enlarged by the discharge of any payments out ofproduction or by the removal of any charges or encumbrances to which any of the same are subjectand any and all renewals and extensions of any of the same, but subject to all burdens to whichAssignor’s such right, title, claim or interest is subject (while same remains so subject),limited, however, as follows: (i) limited to the depths to which the definition below of “SubjectLands” is limited, (ii) limited, as to duration, with respect to each Subject Interest which is amineral interest subject on the Effective Date to an oil and gas lease (or oil, gas and minerallease), whether or not owned in whole or in part by Assignor, or which is a royalty interest as towhich the underlying mineral estate is subject to such a lease, to the life of that lease or anyrenewal or extension thereof (so that if a lease in force on the Effective Date should terminate inwhole or in part for any reason and not be renewed or extended then such Subject Interest, to theextent same, or the underlying mineral estate in same, is no longer subject to such lease, shall nolonger be subject to this Conveyance and the rights, titles and interests therein hereby conveyedshall revert to Assignor without necessity of written proof so evidencing) and (iii) limited, ifAssignor’s interest in any Subject Interest should terminate sooner than the reversion provided inthe foregoing (ii), to the period to which Assignor’s interest in such Subject Interest is limited.There shall be excluded from the term “Subject Interests” any interest hereafter acquired byAssignor in and to any of the Subject Lands, except any interest acquired pursuant to existingagreements for no new consideration and renewals or extensions of leases. For purposes of thisConveyance “renewals or extensions” of any lease shall be limited to renewals or extensions of anexisting lease obtained by the present owner thereof (or such owner’s successors in interest) whilesuch lease is in force or within six months after such lease terminates. Assignor shall be underno duty to seek renewals or extensions of any lease.     SECTION 1.19. “Subject Lands” means the lands which are described in or which are subject tothe oil, gas and mineral leases, mineral deeds, royalty deeds, assignments and other instrumentsdescribed in Schedule A attached hereto from the surface of such lands to the base of the“Basin-Dakota Gas Pool” as defined in Rule 25 of Order No. R-1670-C (as amended to the date hereof)issued by the New Mexico Oil Conservation Commission, provided that if Assignor’s ownership rightsin any such lands are presently limited to depths shallower than such depth the “Subject Lands”shall likewise be subject to such limitation and provided further that
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where the description in Schedule A excepts land or refers to an instrument insofar only as itcovers certain land, no interest in such excepted land or in land other that to which suchreference is limited shall be included in the terms “Subject Lands” or “Subject Interests”.     SECTION 1.20. “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,including plant products attributable thereto from processing gas or casinghead gas included in theSubject Minerals before sale thereof (but not including products derived from processing oil).ARTICLE IIRECORDS AND REPORTS     SECTION 2.01. Books and Records. Assignor shall at all times maintain true andcorrect books and records sufficient to determine the amounts payable to Assignee hereunder,including, but not limited to, a Net Proceeds account to which Gross Proceeds and Production Costsare credited and charged.     SECTION 2.02. Inspections. The books and records referred to in Section 2.01 shall beopen for inspection at the office of Assignor during normal business hours.     SECTION 2.03. Quarterly Statements. Within thirty (30) days next following the closeof each calendar quarter, Assignor shall deliver to Assignee a statement showing the computation ofNet Proceeds attributable to such quarter.     SECTION 2.04. Assignee’s Exceptions to Quarterly Statements. If Assignee shall takeexception to any item or items included in the quarterly statements rendered by Assignor, Assigneeshall notify Assignor in writing within 180 days after the receipt of the report and annual auditfurnished pursuant to Section 2.06 hereof, setting forth in such notice the specific chargescomplained of and to which exception is taken or the specific credits which should have been madeand allowed; and, with respect to such complaints and exceptions as are justified, adjustment shallbe made. If Assignee shall fail to give Assignor notice of such complaints and exceptions prior tothe expiration of such 180 days period, then the statements for such calendar year as originallyrendered by Assignor shall be deemed to be correct as rendered.     SECTION 2.05. Geological Data. Upon request Assignor shall, subject to thelimitations of confidentiality undertakings with co-owners or other third parties, furnish toAssignee access to all geological, well and production data which Assignor has on hand relating tooperations on the Subject Interests. Assignor shall also furnish to Assignee quarterly reportsshowing the status of development, producing and other operations conducted by Assignor on theSubject Interests. All information furnished to Assignee pursuant to this section is confidentialand for the sole benefit of Assignee and shall not be shown by Assignee to any other Person.     SECTION 2.06. Annual Audits and Reports. Within 90 days after the end of the calendaryear, Assignor shall deliver to Assignee a statement which has been audited by a
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nationally recognized firm of independent public accountants selected by Assignor, which shallshow the information provided for in Section 2.03 on an annual basis.ARTICLE IIIPAYMENT     SECTION 3.01. Payment. On or before the Monthly Record Date, Assignor shall pay toAssignee as a royalty and overriding royalty hereunder an amount equal to Seventy-Five percent(75%) of the Net Proceeds for the preceding month. On December 31, 1980, Assignor shall pay toAssignee as an advance royalty the sum of $1,000,000. Such amount shall be subtracted from theamounts otherwise payable under this Section with respect to future periods.     SECTION 3.02. Interest on Past Due Payments. Any amount not paid by Assignor toAssignee when due shall bear, and Assignor will pay, interest at the rate of four percentage pointsover the Prime Interest Rate, determined at the end of each month, from such due date until suchamount is paid, but not in excess of the maximum amount allowed by law.     SECTION 3.03. Overpayment. If at any time Assignor inadvertently pays Assignee morethan the amount due, Assignee shall not be obligated to return any such overpayment, but the amountor amounts otherwise payable to Assignee for any subsequent period or periods shall be reduced bysuch overpayment, plus an amount equal to interest computed at 120% of the weighted average PrimeInterest Rate in effect during the period of such overpayment.ARTICLE IVMARKETING OF SUBJECT MINERALS     SECTION 4.01. Sales Contracts. Assignor, to the extent it has the right to do so,shall market or cause to be marketed the Subject Minerals. For such purpose, sales of SubjectMinerals may continue to be made pursuant to existing Sales Contracts. Assignor may amend suchexisting Sales Contracts and may enter into one or more Sales Contracts in the future at the bestprices and on the best terms Assignor shall deem reasonably obtainable in the circumstances. GrossProceeds of Subject Minerals subject to Sales Contracts shall be determined on the basis of amountsactually received by Assignor from sales under the Sales Contracts regardless of whether at thetime of production or sale market value should be different from proceeds of sale.     SECTION 4.02. Performance of Sales Contracts. Assignor will duly perform allobligations binding on it under all Sales Contracts in accordance with the terms thereof and willtake all appropriate and reasonable measures to enforce the performance under each of the SalesContracts of the obligations of the purchaser thereunder. All Subject Minerals sold by Assignor,whether pursuant to Sales Contracts or otherwise, shall be delivered by Assignor to the purchasersthereof, into the pipelines to which the wells producing such Subject Minerals may be connected orto such other point of purchase as is reasonably required in the marketing of such SubjectMinerals.
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     SECTION 4.03. Reliance by Third Party. As to any party, the acts of Assignor shall bebinding on Assignee. It shall not be necessary for Assignee to join with Assignor in any divisionor transfer order or any Sales Contract, and proceeds of sale of the Subject Minerals shall be paidby the purchasers thereof (or others disbursing proceeds) directly to Assignor without necessity ofjoinder by or consent of Assignee.ARTICLE VNON-LIABILITY OF ASSIGNEE     In no event shall Assignee be liable or responsible in any way for any Production Costs orother costs or liabilities incurred by Assignor or others attributable to the Subject Interests orto the Minerals produced therefrom.ARTICLE VIOPERATION OF SUBJECT INTERESTS     SECTION 6.01. Prudent Operator Standard. Assignor agrees, to the extent it has thelegal right to do so under the terms of any lease, operating agreement, unit operating agreement,contract for development or similar instrument affecting or pertaining to the Subject Interests (orany portion thereof), that it will conduct and carry on the maintenance and operation of theSubject Interests with reasonable and prudent business judgment and in accordance with good oil angas field practices, and that it will drill such wells as a reasonably prudent operator would drillfrom time to time in order to protect them from drainage. However, nothing contained in thisSection 6.01 shall be deemed to prevent or restrict Assignor from electing not to participate inany operation which is to be conducted under the terms of any operating agreement, unit operatingagreement, contract for development or similar instrument affecting or pertaining to the SubjectInterests (or any portion thereof) and allowing consenting parties to conduct nonconsent operationsthereon, if such election is made by Assignor in good faith. Notwithstanding anything elsewhereherein to the contrary, Assignor shall never be liable to Assignee for the manner in which Assignorperforms its duties hereunder as long as Assignor has acted in good faith.     SECTION 6.02. Abandonment of Properties. Nothing herein contained shall obligateAssignor to continue to operate any well or to operate or maintain in force or attempt to maintainin force any of the Subject Interests when, in Assignor’s opinion, such well or Subject Interestceases to produce or is not capable of producing oil or gas in paying quantities. The expirationof a Subject Interest in accordance with the terms and conditions applicable thereto shall not beconsidered to be a voluntary surrender or abandonment thereof.     SECTION 6.03. Insurance. Although Assignor is permitted to carry policies ofinsurance covering the property upon the Subject Interests and risks incident to the operationthereof and to charge premiums therefor to the Net Proceeds account, Assignor shall not be requiredto carry insurance on such property or covering any of such risks unless it elects so to do. In noevent shall Assignor be liable to Assignee on account of any losses sustained which are not coveredby insurance.
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ARTICLE VIIUNITIZATION     SECTION 7.01. Pooled Subject Interests. Certain of the Subject Interests may havebeen heretofore pooled and unitized for the production of Minerals. Such Subject Interests are andshall be subject to the terms and provisions of such pooling and unitization agreements, and theRoyalty Interest in each such Subject Interest shall apply to and affect only the production fromsuch units which accrues to such Subject Interest under and by virtue of the applicable pooling andunitization agreements.     SECTION 7.02. Right to Pool and Process. Assignor shall have the right and power,exercisable only during the period provided in Section 7.03 hereof, (a) to pool and unitize any ofthe Subject Interests and to alter, change or amend or terminate any pooling or unitizationagreements heretofore or hereafter entered into, as to all or any part of the land covered hereby,as to any one or more of the formations or horizons hereunder, and as to any one or more Minerals,upon such terms and provisions as Assignor shall in its sole discretion determine, and (b) tocommit any of the Subject Interests (including the Royalty Interest attributable thereto) to anagreement for processing same (pursuant to which, by way of example and not by way of limitation,the plant owner or operator receives a portion of the Subject Minerals or plant products therefromor proceeds of the sale thereof as a fee for processing). If and whenever through the exercise ofsuch right and power, or pursuant to any law hereafter enacted or any rule, regulation or order ofany governmental body or official hereafter promulgated, any of the Subject Interests are pooled orunitized in any manner, the Royalty Interest insofar as it affects such Subject Interest shall alsobe pooled and unitized, and in any such event such Royalty Interest in such Subject Interest shallapply to and affect only the production which accrues to such Subject Interest under and by virtueof the pooling and unitization.     SECTION 7.03. Applicable Period. Assignor’s power and rights in Section 7.02 shall beexercisable only during the period of the life of the last survivor of the descendants of thesigners of the Declaration of Independence living on the date of execution hereof, plus twenty-one(21) years after the death of such last survivor, or the term of this Conveyance, whichever periodshall first expire.ARTICLE VIIIGOVERNMENT REGULATION     All obligations of Assignor hereunder shall be subject to all applicable provisions of theEmergency Petroleum Allocation Act of 1973, the Department of Energy Organization Act, the NaturalGas Act, the Natural Gas Policy Act of 1978 and each other statute purporting to provide regulationof the sale of Minerals or establishing maximum prices at which the same may be sold and allapplicable laws, orders, rules and regulations thereunder of the Federal Energy RegulatoryCommission, the Department of Energy and each other legislative or governmental body, agency, boardor commission having jurisdiction. Rates permitted under the Natural Gas Act, the Natural GasPolicy Act of 1978, the Emergency Petroleum Allocation Act of 1973 and each such other statute andthe rules and regulations thereunder to be paid for the Subject
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Minerals shall be controlling if lower than prices established in Sales Contracts. Assignorshall be entitled to use its reasonable discretion in making filings, for itself and on behalf ofAssignee, with the Federal Energy Regulatory Commission, the Department of Energy or any othergovernmental body, agency, board or commission having jurisdiction, affecting the price or pricesat which Subject Minerals may be sold, and with purchasers of production, operators or others withrespect to the windfall profits tax.ARTICLE IXASSIGNMENTS     SECTION 9.01. Assignment by Assignor. Assignor shall have the right to assign, sell,transfer, convey, mortgage or pledge the Subject Interests, or any part thereof, subject to theRoyalty Interest and the terms and provisions of this Conveyance. From and after the effectivedate of any such assignment, sale, transfer or conveyance by Assignor, the assignee thereundershall succeed to all the requirements upon and responsibilities of Assignor hereunder, as to theinterests so acquired by such assignee, and, from and after the said effective date, Assignor shallbe relieved of such requirements and responsibilities, excepting only those accrued or due forperformance prior to such effective date.     SECTION 9.02. Partial Assignment. If Assignor assigns its interest under the SubjectInterests as to some of such Subject Interests or as to some part thereof, then, effective as ofthe date of such assignment, in determining the Royalty Interest payable with respect to productionfrom such assigned Subject Interests or parts thereof, the Gross Proceeds, Production Costs and NetProceeds attributable to such assigned interests will be computed and determined by the assignee ofsuch assigned interests in the aggregate as to the assigned interests owned by such assignee, butseparate from and not aggregated with the computation and determination made by Assignor as tounassigned interests.     SECTION 9.03. Assignment by Assignee. Assignee has the right to assign the RoyaltyInterest in whole or in part, but (with respect to the assignee named herein) only as authorized bythe San Juan Basin Royalty Trust Indenture referred to above. However, no such assignment willaffect the method of computing Net Proceeds, and if more than one Person becomes entitled toparticipate in the Royalty Interest, Assignor may withhold from such other Person payments to whichsuch Person would otherwise be entitled hereunder and the furnishing of any data or informationwhich Assignor is required by the terms hereof to furnish Assignee until Assignor is furnished arecordable instrument executed by or binding upon all Persons interested in the Royalty Interestdesignating one Person who is to receive such payments, data and information. In makingconveyances or assignments of any of the Subject Interests (to the extent permitted hereunder),Assignee need not vest in its grantee or assignee all of the rights of Assignee hereunder withrespect to the interest in the Subject Interests so conveyed or assigned.     SECTION 9.04. Change in Ownership. No change of ownership or right to receive paymentof the Royalty Interest, or of any part thereof, however accomplished, shall be binding uponAssignor until notice thereof shall have been furnished by the Person claiming the benefit thereof,and then only with respect to payments thereafter made. Notice of Sale or assignment shall consistof a certified copy of the recorded instrument accomplishing the same; notice of
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change of ownership or right to receive payment accomplished in any other manner (for exampleby reason of incapacity, death or dissolution) shall consist of certified copies of recordeddocuments and complete proceedings legally binding and conclusive of the rights of all parties.Until such notice shall have been furnished Assignor as above provided, the payment or tender ofall sums payable on the Royalty Interest may be made in the manner provided herein precisely as ifno such change in interest or ownership or right to receive payment had occurred. The kind ofnotice herein provided shall be exclusive, and no other kind, whether actual or constructive, shallbe binding on Assignor.     SECTION 9.05. Rights of Mortgagee or Trustee. If Assignee shall at any time execute amortgage or deed of trust covering all or part of the Royalty Interest, the mortgagee(s) ortrustee(s) therein named or the holder of any obligation secured thereby shall be entitled, to theextent such mortgage or deed of trust so provides, to exercise all the rights, remedies, powers andprivileges conferred upon Assignee by the terms of this Conveyance and to give or withhold allconsents required to be obtained hereunder by Assignee, but the provisions of this Section 9.05shall in no way be deemed or construed to impose upon Assignor any obligation or liabilityundertaken by Assignee under such mortgage or deed of trust or under the obligation securedthereby.ARTICLE XMISCELLANEOUS     SECTION 10.01. Proportionate Reduction. In the event of failure or deficiency intitle to any of the Subject Interests, the portion of the production from such Subject Interest outof which the Royalty Interest attributable to such Subject Interest shall be payable shall bereduced in the same proportion that such Subject Interest is reduced.     SECTION 10.02. Term. Subject to the limitations stated in Section 1.18 hereof, thisConveyance shall remain in force so long as any of the Subject Interests are in effect.     SECTION 10.03. Further Assurances. Should any additional instruments of assignmentand conveyance be required to describe more specifically any interests subject hereto, Assignoragrees to execute and deliver the same. Also, if any other or additional instruments are requiredin connection with the transfer of State, Federal or Indian lease interests in order to comply withapplicable laws, regulations or agreements, Assignor will execute and deliver the same.     SECTION 10.04. Notices. All notices, statements, payments and communications betweenthe parties hereto shall be deemed to have been sufficiently given and delivered if enclosed in apost paid wrapper and deposited in the United States Mails directed, or if personally delivered, tothe party to whom the same is directed or to be furnished or made at the respective addresses, asfollows:
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Southland Royalty Company