THAT THE DEBITS MADE TO THE NET
PROFITS ACCOUNT PURSUANT TO THIS SUBSECTION (AND, TO THE EXTENT APPLICABLE,
PURSUANT TO THE OTHER APPLICABLE PROVISIONS OF THIS CONVEYANCE) WITH RESPECT TO
ANY SUBJECT INTEREST SHALL BE MADE ON THE SAME BASIS AS SUCH COSTS ARE CHARGED
UNDER THE OPERATING AGREEMENT (IF ANY) APPLICABLE TO SUCH SUBJECT INTEREST AT
THE TIME THE TRANSACTION GIVING RISE TO SUCH DEBIT OCCURRED, EXCEPT THAT (I) IN
THE CASE WHERE GRANTOR, A RELATED PARTY OR ONE OF GRANTOR'S AFFILIATES ACTS AS
OPERATOR OF ANY SUBJECT INTEREST, THE COSTS (INCLUDING OVERHEAD CHARGES) DEBITED
TO THE NET PROFITS ACCOUNT WITH RESPECT TO SUCH SUBJECT INTEREST SHALL NOT
EXCEED THE CHARGES DETERMINED IN ACCORDANCE WITH THE APPLICABLE PROVISIONS OF
THE FIRST AMENDED AND RESTATED OPERATING AGREEMENT OF MV PARTNERS LLC DATED
SEPTEMBER 1, 2006 BETWEEN MV ENERGY, LLC AND VAP-1, LLC, AS CURRENTLY IN EFFECT
(THE "LLC AGREEMENT"); AND (II) IN THE EVENT A SUBJECT INTEREST IS OPERATED AT
SUCH TIME BY A NON-AFFILIATE OF GRANTOR BUT IS NOT SUBJECT TO AN OPERATING
AGREEMENT, SUCH DEBIT SHALL BE MADE ON THE SAME BASIS AS GRANTOR IS CHARGED BY
SUCH NON-AFFILIATE OF GRANTOR; PROVIDED, FURTHER, IF GRANTOR ELECTS TO PAY THE
COSTS OF A NONCONSENTING PARTY OR NONPARTICIPATING PARTY WITH RESPECT TO WHICH
THE NET PROFITS ACCOUNT IS NOT CREDITED PURSUANT TO SECTION 3.1(A), GRANTOR
SHALL BE SOLELY RESPONSIBLE FOR SUCH COSTS;
(II)
ALL COSTS (INCLUDING WITHOUT
LIMITATION OUTSIDE LEGAL, ACCOUNTING AND ENGINEERING SERVICES) ATTRIBUTABLE TO
THE SUBJECT INTERESTS OF (A) HANDLING, INVESTIGATING AND/OR SETTLING LITIGATION,
ADMINISTRATIVE PROCEEDINGS AND CLAIMS (INCLUDING WITHOUT
12
LIMITATION LIEN CLAIMS OTHER THAN LIENS FOR BORROWED FUNDS) AND (B) PAYMENT OF
JUDGMENTS, PENALTIES AND OTHER LIABILITIES (INCLUDING INTEREST THEREON), PAID BY
GRANTOR (AND NOT REIMBURSED UNDER INSURANCE MAINTAINED BY GRANTOR OR OTHERS) AND
INVOLVING ANY OF THE SUBJECT INTERESTS, OR INCIDENT TO THE DEVELOPMENT,
OPERATION OR MAINTENANCE OF THE SUBJECT INTERESTS, OR REQUIRING THE PAYMENT OR
RESTITUTION OF ANY PROCEEDS OF SUBJECT MINERALS, OR ARISING FROM TAX OR ROYALTY
AUDITS, EXCEPT THAT THERE SHALL NOT BE DEBITED TO THE NET PROFITS ACCOUNT ANY
EXPENSES INCURRED BY GRANTOR IN LITIGATION OF ANY CLAIM OR DISPUTE ARISING
HEREUNDER BETWEEN GRANTOR AND GRANTEE OR AMOUNTS PAID BY GRANTOR TO GRANTEE
PURSUANT TO A FINAL ORDER ENTERED BY A COURT OF COMPETENT JURISDICTION RESOLVING
ANY SUCH CLAIM OR DISPUTE OR AMOUNTS PAID BY GRANTOR TO GRANTEE IN CONNECTION
WITH THE SETTLEMENT OF ANY SUCH CLAIM OR DISPUTE;
(III)
ALL TAXES (EXCEPT FEDERAL AND STATE
INCOME, TRANSFER, MORTGAGE, INHERITANCE, ESTATE, FRANCHISE AND LIKE TAXES)
INCURRED, ACCRUED OR PAID BY GRANTOR WITH RESPECT TO THE OWNERSHIP OF THE
SUBJECT INTERESTS OR THE EXTRACTION OF THE SUBJECT MINERALS, INCLUDING WITHOUT
LIMITATION PRODUCTION, SEVERANCE, AND/OR EXCISE AND OTHER SIMILAR TAXES ASSESSED
AGAINST, AND/OR MEASURED BY, THE PRODUCTION OF (OR THE PROCEEDS OR VALUE OF
PRODUCTION OF) SUBJECT MINERALS, OCCUPATION TAXES, SALES AND USE TAXES, AND AD
VALOREM TAXES ASSESSED AGAINST OR ATTRIBUTABLE TO THE SUBJECT INTERESTS OR ANY
EQUIPMENT USED IN CONNECTION