Document:

CONVEYANCE,
      ASSIGNMENT AND BILL OF SALE

    

    

    STATE
      OF
      LOUISIANA          §

    

    PARISHES
      OF FRANKLIN, MADISON   §

    AND
      RICHLAND    §

    

    

    KNOW
      ALL
      MEN BY THESE PRESENTS:

    

    THAT,
      NGS
      SUB CORP., a
      Delaware corporation, whose address is Two Memorial City Plaza, 820 Gessner
      Road, Suite 1340, Houston, TX 77024 (“Assignor”), in consideration of Ten
      Dollars ($10.00) and other good and valuable consideration to it in hand paid,
      the receipt and sufficiency of which are hereby acknowledged, does hereby GRANT,
      BARGAIN, CONVEY, SELL, ASSIGN, TRANSFER and DELIVER unto DENBURY
      ONSHORE, LLC,
      a
      Delaware limited liability company, whose address is 5100 Tennyson Parkway,
      Suite 1200, Plano, Texas 75024 (“Assignee”), effective June 1, 2006 at 7:00 a.m.
      CST (the “Effective Time”), the assets and properties described in Section I
      below, except to the extent constituting Excluded Assets, which, after said
      exclusion, shall be called the “Assets.” This Conveyance, Assignment and Bill of
      Sale (the “Conveyance”) relates to those certain Acts of Purchase and Sale
      Agreement I and Purchase and Sale Agreement II dated as of May 8, 2006, between
      Assignor and Assignee (collectively referred to as the “Purchase and Sale
      Agreement”). Each capitalized term used in this Conveyance that is not otherwise
      defined herein shall have the meaning as set out in the Purchase and Sale
      Agreement.

    

    I.
      ASSETS CONVEYED

    

    The
      Assets shall be comprised of the following,
      except
      to the extent constituting Excluded Assets:

    

    (a) Leases
      -- Any
      and all rights, titles and interests owned by Assignor, including but without
      limitation those set forth on Exhibit “A,” or which Assignor is entitled to
      receive by reason of any participation, joint venture, farmin, farmout, joint
      operating agreement, unitization agreement, or other agreement, in and to the
      oil, gas and/or mineral leases, permits, licenses, concessions, leasehold
      estates, royalty interests, overriding royalty interests, net revenue interests,
      executory interests, net profit interests, working interests, reversionary
      interests, mineral interests, and any other interests of Assignor in
      Hydrocarbons, in the Delhi Holt Bryant Unit, Franklin, Madison and Richland
      Parishes, Louisiana (referred to herein as the “Delhi Holt Bryant Unit as more
      fully described below), and in those lands located within the aerial boundaries
      of the Delhi Holt Bryant Unit (the “Delhi Holt Bryant Unit Lands” as more fully
      described below), it being the intent hereof that the leases, properties and
      interests and the legal descriptions and depth limitations set forth on Exhibit
      “A,” or in instruments described in Exhibit “A,” if any, are for information
      only and the term "Leases" includes all of Assignor's right, title and interest
      in the above described Hydrocarbon interests in the Delhi Holt Bryant Unit
      and
      in the Delhi Holt Bryant Unit Lands, other than the Excluded Assets, including
      but not limited to those described on Exhibit “A,” or in instruments described
      in Exhibit “A,” even though such interests may be incorrectly described in
      Exhibit “A” or omitted from Exhibit “A”.

    

    For
      purposes of this Conveyance, the Delhi Holt Bryant Unit in Franklin, Madison
      and
      Richland Parishes, Louisiana, shall be as described in and governed by Louisiana
      Department of Natural Resources, Office of Conservation Orders Nos.96-F, 96-F-1,
      96-G-4 and 96-G-5, as amended and supplemented. The Delhi Holt Bryant Unit
      Lands, being those lands within the aerial boundaries of the Delhi Holt Bryant
      Unit, as to all depths, are described in Exhibit “A-1”. "Hydrocarbons" shall
      mean crude oil, natural gas, casinghead gas, condensate, sulphur, natural gas
      liquids and other liquid or gaseous hydrocarbons (including CO2),
      and
      shall also refer to all other minerals of every kind and character which may
      be
      covered by or included in the Leases and Assets.

    

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    (b) Real
      Property, Personal Property and Incidental Rights
      -- All
      right, title and interest of Assignor in and to or derived from the following,
      insofar as the same do not constitute Excluded Assets and are attributable
      to,
      appurtenant to, incidental to, or used for the operation of the
      Leases:

    

    (i) All
      interests in the surface estate in Delhi Holt Bryant Unit Lands, including
      but
      not limited to those described on Exhibit “A”; 

    

    (ii) 
      All
      easements, rights-of-way, surface leases, permits, licenses, servitudes or
      other
      interests relating to the use of the surface, including but not limited to
      those
      described on Exhibit “A,” or in instruments described in Exhibit
“A”;

    

    (iii) All
      wells, including but not limited to those listed on Exhibit “A-2" attached
      hereto, whether or not such wells are active or inactive, along with all
      equipment and other personal property, inventory, spare parts, tools, fixtures,
      pipelines, dehydration facilities, platforms, tank batteries, appurtenances,
      and
      improvements situated upon the Leases as of the Effective Time and used or
      held
      for use in connection with the development or operation of the Leases or the
      production, treatment, storage, compression, processing or transportation of
      Hydrocarbons from or in the wells or Leases;

    

    (iv) All
      unit
      agreements, orders and decisions of state and federal regulatory authorities
      establishing units, joint operating agreements, enhanced recovery and injection
      agreements, farmout agreements and farmin agreements, options, drilling
      agreements, exploration agreements, assignments of operating rights, working
      interests, subleases and rights above or below certain footage depths or
      geological formations, to the extent same is attributable to the Assets, as
      of
      the Effective Time, including but not limited to those described on Exhibit
      “A”;

    

    (v) All
      contracts, agreements, and title instruments to the extent attributable to
      and
      affecting the Assets in existence at Closing, including all Hydrocarbon sales,
      purchase, gathering, transportation, treating, marketing, exchange, processing,
      disposal and fractionating contracts, joint operating agreements, including
      but
      not limited to those described on Exhibit “A”; and

    

    (vi) Originals
      of all lease files, land files, well files, production records, division order
      files (including paysheets and supporting files), abstracts, title opinions,
      and
      contract files, insofar as the same are directly related to the Leases;
      including, without limitation, all geological, information and data, to the
      extent that such data is not subject to any third party restrictions, but
      excluding Assignor's proprietary interpretations of same.

    

    (c) Inventory
      Hydrocarbons
      -- All
      right, title and interest of Assignor in and to all merchantable oil and
      condensate (for oil or liquids in storage tanks, being only that oil or liquids
      physically above the top of the inlet connection into such tanks) produced
      from
      or attributable to the Leases prior to the Effective Time which have not been
      sold by Assignor and are in storage at the Effective Time.

    

    II.
      EXCLUDED ASSETS

    

    There
      is
      specifically EXCEPTED and RESERVED from this Conveyance, the following described
      assets and properties, herein called “Excluded Assets.” As used in this
      Conveyance, the term "Excluded Assets" shall mean the following:

    

    (a) Assignor
      saves and excepts from the Conveyance the lessors’ royalty, all overriding
      royalty and other burdens on production encumbering the Delhi Holt Bryant Unit
      as of the Effective Time (including, without limiting the foregoing, that
      certain Act of Sale And Assignment executed on January 31, 2006 but effective
      as
      of December 1, 2005, by and between James H. Jones and Kristi S Jones, as
      Vendors and NGS Sub Corp., as Vendee, it being the intention of the Assignor
      to
      convey to the Assignee a net revenue interest of not less than eighty percent
      (80%) in the Delhi Holt Bryant Unit.

    

    
      
        
        

      

      
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    (b) An
      undivided twenty five percent of eight eighths (25% of 8/8ths) working interest
      in and to the Assets which are not included in the Delhi Holt Bryant Unit.
      It
      being the intent of the Parties that Assignor is hereby conveying to Assignee
      an
      undivided seventy five percent of eight eighths (75% of 8/8ths) working interest
      in the Assets which are not included in the Delhi Holt Bryant Unit,
      proportionately reduced to the interest owned by Assignor, if any. 

    

    (c) Any
      acquisitions of, or agreements to acquire, royalty interests in the Leases,
      made
      by Assignor prior to the Effective Time, which are identified and described
      in
      Exhibit “K” of the Purchase and Sale Agreement, and no additional offers to
      acquire such royalty interest have been or will be made by Assignor after May
      1,
      2006.

    

    (d) An
      undivided reversionary working interest of twenty-five percent of eight eighths
      (25.0% of 8/8ths)) and a net revenue interest of twenty percent of eight eighths
      (20.0% of 8/8ths)), in the Delhi Holt Bryant Unit, (collectively, the
“Reversionary Interests”), at such time as Assignee has achieved “Payout” of the
      Delhi Holt Bryant Unit. “Payout” shall be defined as that point in time when
      Assignee has received “Total Net Cash Flow” from Assignee’s operation in and on
      the Delhi Holt Bryant Unit in the amount of two hundred million and no/100
      dollars ($200,000,000.00). It being the intent of the Parties that Assignor
      is
      hereby conveying to Assignee an undivided one hundred percent (100%) working
      interest and an eighty percent (80%) net revenue interest in the Delhi Holt
      Bryant Unit, subject to Assignor’s Reversionary Interests. Assignor’s
      Reversionary Interests as set forth above will be proportionately reduced in
      the
      event Assignee’s actual working interest and/or net revenue interest,
      respectively, acquired by virtue of this Conveyance are less than those
      interests set forth above. Assignor’s Reversionary Interests shall automatically
      revert to Assignee once “Payout” has been achieved, without any further action
      on the part of Assignor. Assignor’s Reversionary Interests will be effective on
      the first day of the month next succeeding the point in time in which “Payout”
has occurred. Within fifteen (15) days after “Payout” has occurred, Assignee
      shall provide Assignor with an Assignment of the Assignee’s Reversionary
      Interests, which will be free and clear of all liens and encumbrances of any
      kind. Assignor’s Reversionary Interests shall be subject to the following
      additional terms and provisions:

    

    (i) Total
      Net
      Cash Flow for purposes of this Conveyance and as utilized in determining when
      “Payout” has occurred, is defined as being the excess of Net Revenues from the
      Delhi Holt Bryant Unit over all Operating Costs for the Delhi Holt Bryant Unit,
      being all costs and expenses to operate, maintain and produce the Delhi Holt
      Bryant Unit, but excluding capital costs and capital expenditures (including
      those set forth in Section 3.4 of the Purchase and Sale Agreement). Net revenues
      are defined as being gross revenues from the Delhi Holt Bryant Unit operations
      less any applicable federal, state and local taxes (including excise,
      production, severance, sales, and ad valorem taxes, but excluding any income
      based taxes) and less revenue attributable to royalties, and any other
      overriding royalty interests, production payments, net profit interest and
      similar interests or burdens of record prior to or as of the Effective Time.
      Operating Costs used in computing Total Net Cash flow shall be the total Delhi
      Holt Bryant Unit operating costs and expenses (including administrative overhead
      charges) actually incurred and expended by the Operator and charged to the
      joint
      account by the Operator, as set forth in the Accounting Procedure of the Unit
      Operating Agreement, deemed transportation costs to deliver CO2 to the Delhi
      Holt Bryant Unit [being the stipulated and agreed costs set forth in Section
      1.9
      (d)(2) of the Purchase and Sale Agreement], deemed costs for CO2 delivered
      to
      the Delhi Holt Bryant Unit [being the stipulated and agreed costs set forth
      in
      Section 1.9 (d)(2) of the Purchase and Sale Agreement]. An “mcf” of CO2 shall be
      1000 cubic feet of CO2 at standard conditions.

    

    
      
        
        

      

      
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    (ii) If
      CO2 is
      used by Assignee for enhanced oil production from the Delhi Holt Bryant Unit,
      Assignee shall act as a reasonable prudent operator in delivering CO2 to the
      Delhi Holt Bryant Unit in a timely manner and in sufficient quantities to
      efficiently conduct operations to enhance oil production. Assignee will deliver
      CO2 to the Delhi Holt Bryant Unit at a fixed transportation cost as set forth
      in
      Section 1.9 (d)(2) of the Purchase and Sale Agreement. The agreed cost for
      the
      CO2 delivered to the Delhi Holt Bryant Unit will be as set forth in Section
      1.9
      (d)(2) of the Purchase and Sale Agreement. All CO2 injected into the Delhi Holt
      Bryant Unit shall be owned by the working interest owners proportionate to
      their
      interests. Any CO2 delivered to the Delhi Holt Bryant Unit and used by Assignee
      for any purpose other than in the Delhi Holt Bryant Unit shall be credited
      to
      the Total Net Cash Flow calculation as revenue at the same price that the CO2
      is
      charged as provided in Section 1.9 (d)(2) of the Purchase and Sale
      Agreement.

    

    (iii) Costs
      associated with building, owning, operating, and maintaining CO2 pipelines
      used
      by Assignee to deliver CO2 to the Delhi Holt Bryant Unit and within the Delhi
      Holt Bryant Unit, including pipelines from the source field for the CO2, shall
      not be included in the computation of the costs used to determine Total Net
      Cast
      Flow or “Payout”, but shall be used in computing the capital expenditure
      commitment set forth in Section 3.4 of the Purchase and Sale Agreement. All
      such
      CO2 pipelines shall be owned solely by Assignee, and Assignor shall not have
      or
      be entitled to any interest in such pipelines, reversionary or
      otherwise.

    

    (iv) Assignor’s
      Reversionary Interests in the Delhi Holt Bryant Unit, after they revert, shall
      be subject to the terms and provisions of the Unit Operating Agreement. After
      such Reversionary Interests revert to Assignor, Assignor shall be liable for
      and
      shall assume and pay its proportionate working interest share of all subsequent
      costs associated with its working interest in the Delhi Holt Bryant Unit,
      including capital costs.

    

    (v) If
      for
      any reason Assignor desires not to accept the Reversionary Interests provided
      for in this Paragraph (d), and the obligations and liabilities associated with
      such Reversionary Interests, Assignor may decline to accept such Interests
      by
      notifying Assignee in writing on or before fifteen (15) days after the effective
      date of reversion. After receipt of such a notice, Assignor’s right to the
      Reversionary Interests will terminate.

    

    (vi) Prior
      to
      Payout Assignee will deliver to Assignor (aa) on a monthly basis operating
      reports covering revenues, operating expenses, capital expenditures, production
      and injection volumes and product prices received; and (bb) a quarterly
      statement (with all supporting documentation) identifying the status of Total
      Net Cash Flow amounts and Payout Statement for the Delhi Holt Bryant Unit;
      and
      (cc) Assignee shall further provide Assignor with quarterly reports including
      historical and prospective technical information relating to the Delhi Holt
      Bryant Unit including, but not limited to injection and production data on
      a
      field and well basis, well logs, cores, tests and any other data necessary
      for
      Assignor to perform its own technical analysis; and (dd) the right to request
      an
      annual technical presentation to be presented to Assignor by the appropriate
      technical staff of Assignee. Assignor shall have the right to conduct an annual
      audit of the accounts and records of Assignee (at a mutually convenient time
      during Assignor’s normal business hours and in accordance with the Council of
      Petroleum Accountants Society guidelines and practices for audits by working
      interest owners) to verify the accounting for the Total Net Cash Flow amount
      and
      Payout. Such audits may be performed by Assignor directly or through an
      independent accounting firm of its choice, but in each case at the Assignor’s
      sole cost and expense. Notwithstanding the above, all Payout accounting by
      Assignee during any calendar year shall conclusively be presumed true and
      correct after twenty four (24) months following the end of any such calendar
      year, unless within the said twenty four (24) month period, Assignor takes
      written exception thereto and makes claim on Assignee for adjustments.

    

    
      
        
        

      

      
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    (c) All
      trade
      credits, accounts receivable, notes receivable and other receivables
      attributable to Assignor's interest in the Assets with respect to any period
      of
      time prior to the Effective Time; (ii) all deposits, cash, checks in process
      of
      collection, cash equivalents and funds attributable to Assignor's interest
      in
      the Assets with respect to any period of time prior to the Effective Time;
      and
      (iii) all proceeds, benefits, income or revenues accruing with respect to the
      Assets prior to the Effective Time;

    

    (d) All
      corporate, financial, and tax records of Assignor; however, Assignee shall
      be
      entitled to receive copies of any tax records which directly relate to any
      Assumed Obligations, or which are necessary for Assignee's ownership,
      administration, or operation of the Assets;

    

    (e) All
      claims and causes of action of Assignor arising from acts, omissions or events,
      or damage to or destruction of the Assets, occurring prior to the Effective
      Time; provided, however, Assignor shall transfer to Assignee all claims and
      causes of action of Assignor against prior owners of the Assets or third parties
      for Environmental Obligations or Liabilities that are not Retained Environmental
      Obligations or Liabilities;

    

    (f) Except
      as
      otherwise provided in Article 15 of the Purchase and Sale Agreement, all rights,
      titles, claims and interests of Assignor relating to the Assets prior to the
      Effective Time (i) under any policy or agreement of insurance or indemnity;
      (ii)
      under any bond; or (iii) to any insurance or condemnation proceeds or
      awards;

    

    (g) All
      Hydrocarbons produced from or attributable to the Assets with respect to all
      periods prior to the Effective Time, together with all proceeds from or of
      such
      Hydrocarbons, except the Inventory Hydrocarbons and the unsold inventory of
      gas
      plant products, if any, attributable to the Leases as of the Effective
      Time;

    

    (h) Claims
      of
      Assignor for refund of or loss carry forwards with respect to production,
      windfall profit, severance, ad valorem or any other taxes attributable to any
      period prior to the Effective Time, or income or franchise taxes;

    

    (i) All
      amounts due or payable to Assignor as adjustments or refunds under any contracts
      or agreements (including take-or-pay claims) affecting the Assets with respect
      to any period prior to the Effective Time;

    

    (j) All
      amounts due or payable to Assignor as adjustments to insurance premiums related
      to the Assets with respect to any period prior to the Effective
      Time;

    

    (k) All
      proceeds, benefits, income or revenues accruing (and any security or other
      deposits made) with respect to the Assets, and all accounts receivable
      attributable to the Assets, prior to the Effective Time; and

    

    (l) All
      of
      Assignor's intellectual property, including, but not limited to, proprietary
      computer software, patents, trade secrets, copyrights, names, marks and logos.
      

    

    III.
      OBLIGATIONS ASSUMED BY ASSIGNEE

    

    As
      of the
      Effective Time, Assignee expressly assumes and agrees to pay, perform, fulfill
      and discharge the following obligations (the “Assumed Obligations”):

    

    (a) All
      Environmental Obligations or Liabilities, as defined below, arising
      after the Effective Time with respect to the Assets, and any
      Environmental Obligations or Liabilities that (i) relate to naturally occurring
      radioactive material (“NORM”), or (ii) relate to the plugging and abandonment of
      the wells listed on Exhibit “A-2” and any related surface restoration of these
      well sites, or (iii) resulted from or relate to an activity or a condition
      with
      the Assets first occurring after the Effective Time;

    

    
      
        
        

      

      
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    “Environmental
      Obligations or Liabilities” as used in this conveyance shall mean all
      liabilities, obligations, expenses (including, without limitation, all
      attorneys' fees), fines, penalties, costs, claims, suits or damages (including
      natural resource damages) of any nature, associated with the Assets, and
      attributable to or resulting from: (i) pollution or contamination of soil,
      groundwater or air, on, in or under the Assets or lands in the vicinity thereof,
      and any other contamination of or adverse effect upon the environment, (ii)
      underground injection activities and waste disposal, (iii) clean-up responses,
      remedial, control or compliance costs, including the required cleanup or
      remediation of spills, pits, lakes, ponds, or lagoons, including any subsurface
      or surface pollution caused by such spills, pits, lakes, ponds, or lagoons,
      (iv)
      noncompliance with applicable land use, permitting, surface disturbance,
      licensing or notification requirements, including those in a surface or mineral
      lease, whether an express or implied obligation, (v) all obligations, whether
      pursuant to an Environmental Law or a surface or mineral lease obligation,
      whether express or implied, for plugging, replugging and abandoning any wells,
      the restoration of any well sites, tank battery sites and gas plant sites,
      and
      any other surface locations or sites, the proper removal, disposal and
      abandonment of any wastes or fixtures, and the proper capping and burying of
      all
      flow lines, which are included in the Assets; (vi) violation of any federal,
      state or local Environmental Law or land use law, or surface or mineral lease
      obligation, whether an express or implied obligation, and (vii) any other
      violation which could qualify as an Environmental Defect. Notwithstanding
      anything to the contrary set forth in, or implied by, the above, "Environmental
      Obligations or Liabilities" does not include (i) personal injury or wrongful
      death occurring prior to the Effective Time or (ii) offsite waste disposal
      occurring prior to the Effective Time;

    

    (b) All
      obligations with respect to gas production, sales or, subject to processing
      imbalances with third parties; 

     

    (c) All
      liabilities, duties, and obligations that arise out of the ownership, operation
      or use of the Assets after the Effective Time, including, but not limited to,
      all liabilities, duties, and obligations, express or implied, imposed upon
      Assignor herein under the provisions of the Leases and any and all assignments,
      subleases, farmout agreements, assignments of overriding royalty, joint
      operating agreements, easements, rights-of-way, and all other contracts,
      agreements and instruments affecting the Leases, or the premises covered
      thereby, whether recorded or unrecorded, and under all applicable laws, rules,
      regulations, orders and ordinances, excluding, but not limited to, the claims
      and suits set forth in Exhibit “F” of the Purchase and Sale Agreement;
      and

    

    (d) The
      obligations of Assignor under that certain Site Specific Trust Account as
      previously set up for the plugging of abandoned wellbores in the Delhi Holt
      Bryant Unit. Assignee shall within sixty (60) days after the Closing Date
      provide the requested cash or irrevocable stand-by letter of credit sufficient
      to assume all of Assignors’ obligations under the Site Specific Trust Account
      and to cause the Assignor to be released from its financial obligations
      thereunder.

     

    IV.
      OBLIGATIONS RETAINED BY ASSIGNOR

    

    As
      of the
      Effective Time, Assignor expressly retains and agrees to pay, perform, fulfill
      and discharge the following obligations (the “Retained Obligations”):

    

    (a) Any
      Environmental Obligations or Liabilities of any nature related to the Excluded
      Assets;

    

    (b) All
      Environmental Obligations or Liabilities arising
      before the Effective Time, except Environmental
      Obligations or Liabilities that (a) relate to NORM, or (b) relate to the
      plugging and abandonment of the wells listed on Exhibit “A-2” and any related
      surface restoration of these well sites, or (c) resulted from or relate to
      an
      activity or a condition with the Assets first occurring after the Effective
      Time; and 

    

    
      
        
        

      

      
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    (c) All
      liabilities, duties, and obligations that arise out of the ownership, operation
      or use of the Assets prior to the Effective Time, including, but not limited
      to,
      all liabilities, duties, and obligations, express or implied, imposed upon
      Assignor under the provisions of the Leases and any and all assignments,
      subleases, farmout agreements, assignments of overriding royalty, joint
      operating agreements, easements, rights-of-way, and all other contracts,
      agreements and instruments affecting the Leases, or the premises covered
      thereby, whether recorded or unrecorded, and under all applicable laws, rules,
      regulations, orders and ordinances, including but not limited to the claims
      and
      suits set forth in Exhibit “F” to the Purchase and Sale Agreement, except for
      those specifically included in the definition of “Assumed
      Obligations.”

    

    
      
        V.
          INDEMNIFICATIONS,
          WARRANTIES AND 

      

    

    WAIVERS
      OF WARRANTIES

    

    ASSIGNEE
      AGREES TO INDEMNIFY, DEFEND AND HOLD ASSIGNOR AND ASSIGNOR’S EMPLOYEES, OFFICERS
      AND DIRECTORS HARMLESS FROM AND AGAINST ANY AND ALL CLAIMS, DEMANDS, LOSSES,
      DAMAGES, PUNITIVE DAMAGES, COSTS, EXPENSES, CAUSES OF ACTION OR JUDGMENTS OF
      ANY
      KIND OR CHARACTER INCLUDING, WITHOUT LIMITATION, ANY INTEREST, PENALTY,
      REASONABLE ATTORNEYS' FEES AND OTHER COSTS AND EXPENSES INCURRED IN CONNECTION
      THEREWITH OR THE DEFENSE THEREOF (COLLECTIVELY THE “CLAIMS”), WITH RESPECT TO
      ALL LIABILITIES AND OBLIGATIONS OR ALLEGED OR THREATENED LIABILITIES AND
      OBLIGATIONS CAUSED BY, RELATED TO, ATTRIBUTABLE TO, OR ARISING OUT OF THE
      ASSUMED OBLIGATIONS.

    

    ASSIGNOR
      AGREES TO INDEMNIFY, DEFEND AND HOLD ASSIGNEE AND ASSIGNEE’S EMPLOYEES, OFFICERS
      AND DIRECTORS HARMLESS FROM AND AGAINST ANY AND ALL CLAIMS WITH RESPECT TO
      ALL
      LIABILITIES AND OBLIGATIONS OR ALLEGED OR THREATENED LIABILITIES AND OBLIGATIONS
      CAUSED BY, RELATED TO, ATTRIBUTABLE TO, OR ARISING OUT OF THE RETAINED
      OBLIGATIONS.

    

    THE
      INDEMNIFICATION, RELEASE AND ASSUMPTION PROVISIONS PROVIDED FOR IN THIS
      CONVEYANCE SHALL BE APPLICABLE WHETHER OR NOT THE LOSSES, COSTS, EXPENSES AND
      DAMAGES IN QUESTION AROSE SOLELY OR IN PART FROM THE ACTIVE, PASSIVE,
      COMPARATIVE, OR CONCURRENT NEGLIGENCE, STRICT LIABILITY OR OTHER FAULT OF THE
      PARTIES HERETO.

    

    THIS
      CONVEYANCE IS MADE WITHOUT WARRANTY OF TITLE, EITHER EXPRESS, IMPLIED, STATUTORY
      OR OTHERWISE, AND WITHOUT RECOURSE, EVEN AS TO THE RETURN OF THE PURCHASE PRICE
      OR OTHER CONSIDERATION, EXCEPT THAT ASSIGNOR SHALL WARRANT TITLE TO THE ASSETS
      WITHIN THE DELHI HOLT BRYANT UNIT (AND ONLY SUCH ASSETS) AGAINST ALL CLAIMS,
      LIENS, BURDENS AND ENCUMBRANCES ARISING BY, THROUGH OR UNDER ASSIGNOR, BUT
      NOT
      OTHERWISE AND NOT WITH RESPECT TO ANY IMPAIRMENT OR FAILURE OF TITLE RELATED
      TO
      ANY LACK OF PRODUCTION IN PAYING QUANTITIES. THIS CONVEYANCE, ASSIGNMENT AND
      BILL OF SALE SHALL BE MADE WITH FULL SUBSTITUTION AND SUBROGATION TO ASSIGNEE
      IN
      AND TO ALL COVENANTS AND WARRANTIES BY OTHERS HERETOFORE GIVEN OR MADE TO
      ASSIGNOR WITH RESPECT TO THE ASSETS.

    

    THE
      EXPRESS REPRESENTATIONS AND WARRANTIES OF ASSIGNOR CONTAINED IN THIS CONVEYANCE
      ARE EXCLUSIVE AND ARE IN LIEU OF ALL OTHER REPRESENTATIONS AND WARRANTIES,
      EXPRESS, IMPLIED OR STATUTORY, INCLUDING, WITHOUT LIMITATION, ANY REPRESENTATION
      OR WARRANTY WITH RESPECT TO THE QUALITY, QUANTITY OR VOLUME OF THE RESERVES,
      IF
      ANY, OF OIL, GAS OR OTHER HYDROCARBONS IN OR UNDER THE LEASES, OR THE
      ENVIRONMENTAL CONDITION OF THE ASSETS. THE ITEMS OF PERSONAL PROPERTY,
      EQUIPMENT, IMPROVEMENTS, FIXTURES AND APPURTENANCES CONVEYED AS PART OF THE
      ASSETS ARE SOLD HEREUNDER "AS IS, WHERE IS, AND WITH ALL FAULTS" AND NO
      WARRANTIES OR REPRESENTATIONS OF ANY KIND OR CHARACTER, EXPRESS OR IMPLIED,
      INCLUDING ANY WARRANTY OF QUALITY, MERCHANTABILITY, FITNESS FOR A PARTICULAR
      PURPOSE OR CONDITION, ARE GIVEN BY OR ON BEHALF OF ASSIGNOR. IT IS UNDERSTOOD
      AND AGREED THAT PRIOR TO CLOSING ASSIGNEE SHALL HAVE INSPECTED THE ASSETS FOR
      ALL PURPOSES AND HAS SATISFIED ITSELF AS TO THEIR PHYSICAL AND ENVIRONMENTAL
      CONDITION, BOTH SURFACE AND SUBSURFACE, AND THAT ASSIGNEE ACCEPTS SAME IN ITS
      "AS IS, WHERE IS AND WITH ALL FAULTS" CONDITION. ASSIGNEE HEREBY WAIVES ALL
      WARRANTIES, EXPRESS OR IMPLIED, INCLUDING, WITHOUT LIMITATION, ANY IMPLIED
      WARRANTY OF MERCHANTABILITY, FITNESS FOR A PARTICULAR PURPOSE OR CONDITION,
      OR
      CONFORMITY TO SAMPLES.

    

    
      
        
        

      

      
        -7-

        
          

        

      

      
        
        

      

    

    ASSIGNEE
      EXPRESSLY WAIVES THE WARRANTY OF FITNESS FOR INTENDED PURPOSES OR GUARANTEE
      AGAINST HIDDEN OR LATENT REDHIBITORY VICES UNDER LOUISIANA LAW, INCLUDING
      LOUISIANA CIVIL CODE ARTICLES 2520 (1870) THROUGH 2548 (1870), AND THE WARRANTY
      IMPOSED BY LOUISIANA CIVIL CODE ARTICLE 2475; ASSIGNEE WAIVES ALL RIGHTS IN
      REDHIBITION PURSUANT TO LOUISIANA CIVIL CODE ARTICLE 2520, ET SEQ; ASSIGNEE
      ACKNOWLEDGES THAT THIS EXPRESS WAIVER IS A MATERIAL AND INTEGRAL PART OF THIS
      SALE AND THE CONSIDERATION THEREOF; AND ASSIGNEE ACKNOWLEDGES THAT THIS WAIVER
      HAS BEEN BROUGHT TO THE ATTENTION OF ASSIGNEE AND EXPLAINED IN DETAIL AND THAT
      ASSIGNEE HAS VOLUNTARILY AND KNOWINGLY CONSENTED TO THIS WAIVER OF WARRANTY
      OF
      FITNESS AND/OR WARRANTY AGAINST REDHIBITORY VICES AND DEFECTS FOR THE ABOVE
      DESCRIBED PROPERTY.

     

    VI.
      PREFERENTIAL RIGHT TO PURCHASE

    

    This
      Conveyance is made expressly subject to a Preferential Right to Purchase, the
      terms and conditions of which are as follows:

    

    (a) In
      the
      event Assignor or Assignee receives a bona fide offer from a third party to
      purchase all or a part of the interests of Assignor (reserved overriding royalty
      interest or reversionary working interest, before or after reversion) or
      Assignee (the “Selling Party”) in the Delhi Holt Bryant Unit, Delhi Holt Bryant
      Unit Lands, or other jointly owned lands within the Area of Mutual Interest
      (including
      interests hereafter owned or acquired),
      and once
      the Selling Party and a proposed transferee have fully negotiated the principal
      terms and conditions of a transfer (which principal terms shall include
all
      material terms and conditions necessary for a purchaser to make an informed
      decision including, but not necessarily limited to, price, timing, scope,
      character and description of the interests to be transferred, agreed
      indemnities, reservations and exclusions),
      Selling
      Party shall disclose such principal terms and conditions in detail to the other
      party to this Conveyance (the “Receiving Party”) in a written notice. Receiving
      Party shall have the right to acquire the interest proposed to be transferred
      from the Selling Party on the same terms and conditions agreed to by the
      proposed transferee if, within ten (10) Days after receipt of Selling Party’s
      written notice, the Receiving Party delivers to the Selling Party a
      counter-notification that Receiving Party accepts the agreed upon terms and
      conditions of the transfer without reservations or conditions. If the Receiving
      Party does not deliver such counter-notification, the transfer to the proposed
      transferee may be made, subject to the provisions of this Conveyance, under
      terms and conditions no more favorable to the transferee than those set forth
      in
      the notice to Receiving Party, provided that the transfer shall be concluded
      within one hundred eighty (180) days from the date of Assignee’s receipt of
      Selling Party’s written notice. In the event the proposed sale of the interest
      to a third party is timely consummated, the preferential right to purchase
      shall
      no longer attach to the interest transferred to the third party. In the event
      the proposed sale of the interest to the third party is not consummated, then
      the preferential right to purchase such interest shall be reinstated as to
      any
      future offers to purchase the interest.

    

    
      
        
        

      

      
        -8-

        
          

        

      

      
        
        

      

    

    (b) In
      the
      event Selling Party’s proposed transfer of part or all of its interest in the
      Delhi Holt Bryant Unit, Delhi Holt Bryant Unit Lands, or other jointly owned
      lands within the Area of Mutual Interest, involves consideration other than
      cash
      or involves other properties included in a wider transaction (package deal),
      then the interest to be assigned by Selling Party (or part thereof) shall be
      allocated a reasonable and justifiable cash value in the notification to
      Receiving Party. Receiving Party may satisfy the requirements of this Article
      19.1 by agreeing to pay such cash value in lieu of the consideration payable
      in
      the third-party offer.

     

    

    (c) The
      preferential right to purchase shall be applicable to any
      transfer of all or a portion of a Selling Party’s interest in the Delhi Holt
      Bryant Unit, Delhi Holt Bryant Unit Lands, or other jointly owned lands within
      the Area of Mutual Interest, whether directly or indirectly by assignment,
      merger, consolidation, or sale of stock, or other conveyance, other than with
      or
      to an affiliate, subsidiary, or parent company existing as of the date of the
      Purchase and Sale Agreement, and provided further, the preferential right to
      purchase shall not apply if the Selling Party is selling or transferring all
      or
      substantially all of its oil and gas assets, and such oil and gas assets being
      sold include oil and gas assets other than interests in the Delhi Holt Bryant
      Unit, Delhi Holt Bryant Unit Lands, or other jointly owned lands within the
      Area
      of Mutual Interest.

    

    VII.
      MISCELLANEOUS PROVISIONS

    

    Assignor
      and Assignee agree,
      when
      requested,
      to take
      all such further actions and execute, acknowledge and deliver all such further
      documents that are necessary or useful in carrying out the purposes of this
      Conveyance. So long as authorized by applicable law so to do, (i) Assignor
      agrees to execute, acknowledge and deliver to Assignee all such other additional
      instruments, notices, division orders, transfer orders and other documents
      and
      to do all such other and further acts and things as may be necessary to more
      fully and effectively convey and assign to Assignee the Assets conveyed hereby
      or intended so to be conveyed; and (ii) Assignee agrees to execute, acknowledge
      and deliver to Assignor all such other additional instruments, notices, division
      orders, transfer orders and other documents and to do all such other and further
      acts and things as may be necessary to more fully and effectively evidence
      Assignor’s rights in and to the Excluded Assets. Without
      limiting the foregoing, in the event Exhibit “A” incorrectly or insufficiently
      describes or references or omits the description of a property or interest
      intended to be conveyed hereby, Assignor agrees to, within twenty (20) days
      of
      Assignor’s receipt of Assignee’s written request, together with supporting
      documentation satisfactory to Assignor, correct such Exhibit and/or execute
      an
      amended assignment or other appropriate instruments necessary to transfer the
      property or interest intended to be conveyed hereby to Assignee.

    

    All
      exhibits attached to this Conveyance, and the terms of those exhibits which
      are
      referred to in this Conveyance, are made a part hereof and incorporated herein
      by reference. References in such exhibits to instruments on file in the public
      records are made for all purposes. Unless provided otherwise, all recording
      references in such exhibits are to the appropriate records of the parishes
      in
      which the Assets are located.

    

    If
      any
      provision of this Conveyance is found by a court of competent jurisdiction
      to be
      invalid or unenforceable, that provision will be deemed modified to the extent
      necessary to make it valid and enforceable, and if it cannot be so modified,
      it
      shall be deemed deleted and the remainder of the Conveyance shall continue
      and
      remain in full force and effect.

    

    
      
        
        

      

      
        -9-

        
          

        

      

      
        
        

      

    

    All
      the
      terms, provisions, covenants, obligations, indemnities, representations,
      warranties and conditions of this Conveyance shall be covenants running with
      the
      land and shall inure to the benefit of and be binding upon, and shall be
      enforceable by, the parties hereto and their respective successors and assigns.
      Any subsequent transfer of all or any part of the Assets conveyed and assigned
      herein shall be made expressly subject to the terms and provisions of this
      Conveyance.

    

    This
      Conveyance is made subject to the Purchase and Sale Agreement, and all terms
      and
      conditions of said Purchase and Sale Agreement are incorporated herein by
      reference to the same extent and with the same effect as if copied in full
      herein. In the event of a conflict between the terms and conditions of this
      Conveyance and the said Purchase and Sale Agreement, the Purchase and Sale
      Agreement shall govern and control.

    

    TO
      HAVE
      AND TO HOLD unto Assignee, its successors and assigns, forever.

    

    IN
      WITNESS WHEREOF, the undersigned have executed this instrument on the dates
      of
      the respective acknowledgments annexed hereto, but effective as of the
      above-stated Effective Time.

     

    
      
        	 	 	 
	WITNESSES: 	ASSIGNOR:
	 	 
	_________________________ 	NGS SUB CORP.  
	 
_________________________ 	 
 	 
 
	 	By:  	 
	 	
                
Robert
                S. Herlin
	 	President
&
                CEO 

      

       

      
        	 	 	 
	 	ASSIGNEE:
	 	 
	_________________________ 	DENBURY ONSHORE, LLC 
	 
_________________________	 
 	 
 
	 	By:  	 
	 	
                
H.
                Raymond Dubuisson
	 	Vice
                President-Land

      

        

      
        
           

        

        
          -10-

          
            

          

        

        
           

        

      

    

    STATE
      OF
      TEXAS,

    

    COUNTY
      OF
      HARRIS.

    

    On
      this
      _____ day of ______________, 2006, before me personally appeared Robert
      S.
      Herlin, to me personally known, who, being by me duly sworn, did say that he
      is
      the President & CEO of NGS
      SUB CORP.,
      a
      Delaware corporation, and that the foregoing instrument was signed and delivered
      on behalf of the corporation by authority of its Board of Directors and that
      he
      acknowledged the instrument to be the free act and deed of said
      corporation.

     

    IN
      WITNESS WHEREOF, I hereunto set my hand and official seal.

    

    

    ____________________________

    Notary
      Public in and for the State of Texas

    

    

    STATE
      OF
      TEXAS,

    

    COUNTY
      OF
      COLLIN

    

    On
      this
      _____ day of ______________, 2006, before me personally came and appeared H.
      Raymond Dubuisson, to me known, who, being by me duly sworn, did say that he
      is
      the Vice President-Land for DENBURY ONSHORE, LLC, a Delaware limited liability
      company, that he signed the foregoing instrument on behalf of said limited
      liability company and as the free act and deed of said limited liability
      company.

    

    IN
      WITNESS WHEREOF, I hereunto set my hand and official seal.

    

     

    
      ____________________________

      Notary
        Public in and for the State of Texas

       

      
        
           

        

          -11-AGREEMENT

      Reference is made to the demand for rescission, of even date herewith
("Demand"), from Laurus Master Fund, Ltd. to National Investment Managers Inc.,
with respect to that certain Common Stock Purchase Warrant, dated May 30, 2006,
with an exercise price of $0.01 per share. Capitalized terms used but not
defined herein have the meanings given to them in the Demand.

      As consideration for the issuance of the New Warrant, the Company shall
pay to Laurus $105,000, which may be deducted from the Company's restricted
account.

         Dated: June 14, 2006

         NATIONAL INVESTMENT MANAGERS INC.

         By: /s/Leonard A. Neuhaus
             -------------------------
                Leonard A. Neuhaus, COO/CFO

         LAURUS MASTER FUND LTD.

         By: /s/Eugene Grin
             ------------------
                Eugene Grin, Director

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