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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 consideration
of the sum of Ten Dollars ($10.00) and other good and valuable consideration to it paid by The Fort
Worth National Bank, a bank organized under the laws of the United States, acting not in its
individual corporate capacity but solely as trustee under that certain San Juan Basin Royalty Trust
Indenture dated as of November 1, 1980 (“Assignee”), the receipt and sufficiency of which are
hereby acknowledged, has bargained, sold, granted, conveyed, transferred, assigned, set over and
delivered, and by these presents does hereby bargain, sell, grant, convey, transfer, assign, set
over and deliver unto Assignee a net overriding royalty interest (“the Royalty Interest”) in and to
the Minerals in and under, and if, as and when produced, saved and sold from, the Subject Lands
during the term of the Subject Interests equal to Seventy-Five percent (75%) of the Net Proceeds
attributable to the Subject Interests, as each of the above capitalized words are defined in
Article I and all as more fully provided herein.

     TO HAVE AND TO HOLD the Royalty Interest, together with all and singular the rights and
appurtenances 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 bind
and obligate itself, its successors and assigns, to WARRANT and FOREVER defend all and singular the
Royalty Interest unto the said Assignee, its successors and assigns, against every person
whomsoever lawfully claiming or to claim the same or any part thereof by, through or under
Assignor, but not otherwise.

ARTICLE I

DEFINITIONS

     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, controlled
by or under common control with such party, with the concept of control in such context meaning the
possession, directly or indirectly, of the power to direct or cause the direction of the management
and policies of another, whether through the ownership of voting securities, by contract or
otherwise.

     SECTION 1.02. “Assignor” means the Assignor named herein while it owns all or any part of or
interest in the Subject Interests and any other Person or Persons who acquire all or any part of or
interest in the Subject Interests.

 

 

     SECTION 1.03. “Assignee” means the Assignee named herein while it owns all or any part of or
interest in the Royalty Interest and any other Person or Persons who acquire legal title to all or
any 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 location
of each Subject Interest, on November 1, 1980.

     SECTION 1.06. “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 month in which there were Net Proceeds.

     SECTION 1.07. “Gross Proceeds” means the amounts received from and after the Effective Date by
Assignor from the Sale of Subject Minerals sold after the Effective Date, in the aggregate, subject
to 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 (whether
state, federal or otherwise) assessed or levied on or in connection with the Subject
Interests, the Royalty Interest or the production therefrom, or against Assignor as owner of
the Subject Interests or Assignee as owner of the Royalty Interest, and which taxes are
deducted or excluded from proceeds of Sale received by Assignor.

          (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 Assignor shall be a nonconsenting party and which is dedicated to the recoupment or
reimbursement of costs and expenses of the consenting party or parties by the terms of the
relevant operating agreement, unit agreement, contract for development or other instrument
providing for such nonconsent operations, provided Assignor’s election not to participate in
such operations is made in conformity with the provisions of Section 6.01 of this
Conveyance.

          (c) There shall be excluded any amount which Assignor shall receive as any of the
following: consideration for transfer or sale of any of the Subject Interests (subject to
the Royalty Interest) or equipment or other personal property or fixtures on the Subject
Lands; delay rental; shut-in gas well royalty or payment; minimum royalty (to the extent not
attributable to actual production of the Subject Minerals); payments for gas not taken, when
such payments are made (but to the extent such payments are allocated to gas taken in the
future such payments shall be included without interest in Gross Proceeds when such gas is
taken); damages arising from any cause other than drainage or reservoir injury; rental for
reservoir use; payments made to Assignor in connection with the drilling of any well on any
of the Subject Lands or lands in the vicinity (such exclusion including dry and bottom hole
payments, provided that if such well is drilled on the Subject Lands and Assignor incurs
Production Costs in connection therewith such payments shall reduce Production Costs) or in
connection with any adjustment of any well and leasehold equipment upon unitization of any
of the Subject Interests; provided

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there shall be included in Gross Proceeds advance or prepaid payments for future
production received by Assignor to the extent not subject to repayment in the event of
insufficient subsequent production (and to the extent so subject to repayment shall be
included without interest in Gross Proceeds when the Minerals on which such payment was so
advanced or prepaid are actually produced) and payments made to Assignor in connection with
the deferring of drilling of any well on any of the Subject Lands (including payments from
an 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 or
marketing thereof or used by Assignor in conformity with ordinary or prudent practices for
drilling, production and plant operations (including gas injection, secondary recovery,
pressure maintenance, repressuring, cycling operations, plant fuel or shrinkage) conducted
for the purpose of drilling for, producing or processing Subject Minerals or for operations
on any unit or plant to which the Subject Interests are committed, but only so long as such
Subject 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 of
Subject Minerals, provided that the related Sales Contract meets the requirements of Section
4.01 hereof.

          (f) So long as and to the extent that the same may be required by applicable laws and
regulations, in the case of any Subject Interest derived under a lease from the United
States of America from which the average production of oil per well per day averaged on the
monthly basis is 15 barrels or less, the obligation to pay and the right of Assignee to
receive the proceeds of oil produced from such lease shall be suspended until said average
production of oil per well per day exceeds said minimum amount, and such suspension shall
apply separately to any zone or portion of such lease segregated for computing government
royalties.

          (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 purchaser
as to the correct sales price of any Subject Mineral or, for any other reason, as to
Assignor’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 agent
shall not be considered to be received by Assignor until actually collected by
Assignor, but the amounts received by Assignor shall include any interest, penalty
or other amount paid to Assignor in respect thereof;

                    (ii) amounts received by Assignor and promptly deposited by it with an escrow
agent shall not be considered to have been received by Assignor, but all amounts
thereafter paid to Assignor by such escrow agent shall be considered to be amounts
received from the sale of Subject Minerals; and

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                    (iii) amounts received by Assignor and not deposited with an escrow agent shall
be 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 tax
alleged to be due on proceeds included in Gross Proceeds and to seek refunds thereof. In
the event any amounts are required to be paid because of any deficiency in prior payment of
windfall profits tax for periods after the Effective Date, the amounts so paid shall be
included in Production Costs as paid.

     SECTION 1.08. “Minerals” means oil, gas and all other minerals produced in association with
oil 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 day
of such month which is not a Saturday, Sunday or other day on which national banking institutions
in the City of Fort Worth, Texas, are closed as authorized or required by law, unless Assignee
determines that a later date is required to comply with applicable law or the rules of an exchange
pursuant 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 during
such period over the sum of (a) Production Costs incurred during such period and (b) Excess
Production 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 an
Affiliate of such party.

     SECTION 1.12. “Person” means any individual, corporation, partnership, trust, estate or other
entity, organization or association.

     SECTION 1.13. “Prime Interest Rate” means the interest rate per annum charged by Morgan
Guaranty Bank of New York on ninety day loans to its most substantial and responsible commercial
borrowers.

     SECTION 1.14. “Processing Costs” means the costs to Assignor of manufacturing, refining or
processing (all herein referred to as “processing”) gas and casinghead gas included in the Subject
Minerals 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) the
expenses (including depreciation but otherwise not including capital costs) incurred by
Assignor or its Affiliate in processing such Subject Minerals plus an amount equal to a
return of 15% on the depreciated book value of the fixed assets used in such processing (for
which purpose of computing depreciation and the return on depreciated book value the value
of fixed assets owned by Assignor will be their book value as of the date first used in
processing Subject Minerals), or

          (b) if greater, the amount allowed as processing charges by any Federal or State agency
having 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 products
therefrom (or proceeds of sale thereof) for processing such production of others, such share shall
not be included in Subject Minerals (or Gross Proceeds). If Assignor or an Affiliate does not bear
any 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 from
the Subject Minerals (and Gross Proceeds).

     SECTION 1.15. “Production Costs” means, on an accrual accounting method and accruing with
respect to the following from and after the Effective Date, and whether capital or non-capital in
nature,

          (a) the sum of

                    (i) all amounts borne by Assignor as any of the following: royalty; overriding
royalty or other presently existing burden against production or the proceeds of
sale of production attributable to the Subject Interests; delay rental; shut-in gas
well royalty or payment; minimum royalty; payments to lessors or others in the area
in connection with the drilling or deferring of drilling of any well on any of the
Subject Lands or lands in the vicinity (including dry and bottom hole payments and
payments made to others for refraining from drilling an offset well) or in
connection with any adjustment of any well and leasehold equipment upon unitization
of any of the Subject Interests; and rent and other consideration paid for use of or
damage to the surface;

                    (ii) all general property (ad valorem), production, severance, sales, gathering
and windfall profits taxes and other taxes (whether state, federal or otherwise),
except income taxes, assessed or levied on or in connection with the Subject
Interests, the Royalty Interest or the production therefrom or equipment on the
Subject Lands, or against Assignor as owner of the Subject Interests or Assignee as
owner of the Royalty Interest, and which taxes are paid by Assignor, and any income
tax on the Royalty Interest paid by Assignor;

                    (iii) the aggregate costs incurred by Assignor under any joint operating
agreement applicable to the Subject Interests to which Assignor and one or more
Non-Affiliates are parties;

                    (iv) The aggregate costs incurred by Assignor under Schedule B attached hereto
with respect to any Subject Interest not subject to a joint operating agreement
between 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 and
sale and marketing thereof, including without implied limitation: costs of
equipping, plugging back, reworking, completing, recompleting and plugging and
abandoning of any well on the Subject Lands and of making the Subject Minerals ready
or 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 and
marketing the Subject Minerals; the cost of secondary recovery, pressure
maintenance, repressuring, cycling and other operations conducted for the purpose of
enhancing production; and the cost of litigation concerning title to or operation of
the Subject Interests and any other acts or omissions of Assignor consistent
herewith or brought by Assignor to protect the Subject Interests;

                    (vi) Processing Costs;

                    (vii) interest accrued during any month in which there were Excess Production
Costs computed at the Prime Interest Rate in effect at the end of such period on the
amount 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 a
purchaser because the amount initially received by Assignor as sales price was more
or 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 or
operation thereof or sale of production therefrom, whether as refund, fine, interest
or penalty, pursuant to litigation or settlement of threatened litigation or order
of governmental agency, provided that Assignor has not breached Section 6.01 hereof;
and

                    (xi) all consideration hereafter paid and costs and expenses hereafter incurred
by Assignor for any renewals or extensions of leases or other rights hereafter
acquired 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 shall
not be so treated for purposes hereof (until the following amounts have been fully
credited against such costs) equal to amounts reimbursed or credited to Assignor by
insurance from damage to property, by sales of property or transfers of property off
the leases included in the Subject Interests or by proceeds from unitization or
other disposition of property;

                    (ii) the costs incurred in drilling a well to a lower depth than that to which
the Subject Interests are by the definition below limited unless the well is
ultimately completed as a producer within the depths included in the Subject
Interests and is not completed as a producer below such depths and, even in such
event, the cost of drilling below such depths (as allocated by Assignor) shall be
excluded; and

                    (iii) any amounts which would otherwise be Production Costs but which are
attributable 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 or
interest which Assignor has on the Effective Date in the oil, gas or mineral leases, mineral
interests, royalty interests and overriding royalty interests and the unitization and pooling
agreements 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 or
reservation, a royalty deed or reservation, an overriding royalty assignment or reservation, a
unitization or pooling agreement, a unitization or pooling order, an operating agreement, a
division order, a transfer order or any other type of contract, conveyance or instrument or under
any other type of claim or title, legal or equitable, recorded or unrecorded, even though
Assignor’s interests be incorrectly or incompletely described in, or a description thereof be
omitted from, Schedule A, all as the same shall be enlarged by the discharge of any payments out of
production or by the removal of any charges or encumbrances to which any of the same are subject
and any and all renewals and extensions of any of the same, but subject to all burdens to which
Assignor’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 “Subject
Lands” is limited, (ii) limited, as to duration, with respect to each Subject Interest which is a
mineral interest subject on the Effective Date to an oil and gas lease (or oil, gas and mineral
lease), whether or not owned in whole or in part by Assignor, or which is a royalty interest as to
which the underlying mineral estate is subject to such a lease, to the life of that lease or any
renewal or extension thereof (so that if a lease in force on the Effective Date should terminate in
whole or in part for any reason and not be renewed or extended then such Subject Interest, to the
extent same, or the underlying mineral estate in same, is no longer subject to such lease, shall no
longer be subject to this Conveyance and the rights, titles and interests therein hereby conveyed
shall revert to Assignor without necessity of written proof so evidencing) and (iii) limited, if
Assignor’s interest in any Subject Interest should terminate sooner than the reversion provided in
the 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 by
Assignor in and to any of the Subject Lands, except any interest acquired pursuant to existing
agreements for no new consideration and renewals or extensions of leases. For purposes of this
Conveyance “renewals or extensions” of any lease shall be limited to renewals or extensions of an
existing lease obtained by the present owner thereof (or such owner’s successors in interest) while
such lease is in force or within six months after such lease terminates. Assignor shall be under
no 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 to
the oil, gas and mineral leases, mineral deeds, royalty deeds, assignments and other instruments
described 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 rights
in 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 it
covers certain land, no interest in such excepted land or in land other that to which such
reference 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 the
Subject Minerals before sale thereof (but not including products derived from processing oil).

ARTICLE II

RECORDS AND REPORTS

     SECTION 2.01. Books and Records. Assignor shall at all times maintain true and
correct 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 Costs
are credited and charged.

     SECTION 2.02. Inspections. The books and records referred to in Section 2.01 shall be
open for inspection at the office of Assignor during normal business hours.

     SECTION 2.03. Quarterly Statements. Within thirty (30) days next following the close
of each calendar quarter, Assignor shall deliver to Assignee a statement showing the computation of
Net Proceeds attributable to such quarter.

     SECTION 2.04. Assignee’s Exceptions to Quarterly Statements. If Assignee shall take
exception to any item or items included in the quarterly statements rendered by Assignor, Assignee
shall notify Assignor in writing within 180 days after the receipt of the report and annual audit
furnished pursuant to Section 2.06 hereof, setting forth in such notice the specific charges
complained of and to which exception is taken or the specific credits which should have been made
and allowed; and, with respect to such complaints and exceptions as are justified, adjustment shall
be made. If Assignee shall fail to give Assignor notice of such complaints and exceptions prior to
the expiration of such 180 days period, then the statements for such calendar year as originally
rendered by Assignor shall be deemed to be correct as rendered.

     SECTION 2.05. Geological Data. Upon request Assignor shall, subject to the
limitations of confidentiality undertakings with co-owners or other third parties, furnish to
Assignee access to all geological, well and production data which Assignor has on hand relating to
operations on the Subject Interests. Assignor shall also furnish to Assignee quarterly reports
showing the status of development, producing and other operations conducted by Assignor on the
Subject Interests. All information furnished to Assignee pursuant to this section is confidential
and 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 calendar
year, 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 shall
show the information provided for in Section 2.03 on an annual basis.

ARTICLE III

PAYMENT

     SECTION 3.01. Payment. On or before the Monthly Record Date, Assignor shall pay to
Assignee 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 to
Assignee as an advance royalty the sum of $1,000,000. Such amount shall be subtracted from the
amounts otherwise payable under this Section with respect to future periods.

     SECTION 3.02. Interest on Past Due Payments. Any amount not paid by Assignor to
Assignee when due shall bear, and Assignor will pay, interest at the rate of four percentage points
over the Prime Interest Rate, determined at the end of each month, from such due date until such
amount 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 more
than the amount due, Assignee shall not be obligated to return any such overpayment, but the amount
or amounts otherwise payable to Assignee for any subsequent period or periods shall be reduced by
such overpayment, plus an amount equal to interest computed at 120% of the weighted average Prime
Interest Rate in effect during the period of such overpayment.

ARTICLE IV

MARKETING 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 Subject
Minerals may continue to be made pursuant to existing Sales Contracts. Assignor may amend such
existing Sales Contracts and may enter into one or more Sales Contracts in the future at the best
prices and on the best terms Assignor shall deem reasonably obtainable in the circumstances. Gross
Proceeds of Subject Minerals subject to Sales Contracts shall be determined on the basis of amounts
actually received by Assignor from sales under the Sales Contracts regardless of whether at the
time of production or sale market value should be different from proceeds of sale.

     SECTION 4.02. Performance of Sales Contracts. Assignor will duly perform all
obligations binding on it under all Sales Contracts in accordance with the terms thereof and will
take all appropriate and reasonable measures to enforce the performance under each of the Sales
Contracts 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 purchasers
thereof, into the pipelines to which the wells producing such Subject Minerals may be connected or
to such other point of purchase as is reasonably required in the marketing of such Subject
Minerals.

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     SECTION 4.03. Reliance by Third Party. As to any party, the acts of Assignor shall be
binding on Assignee. It shall not be necessary for Assignee to join with Assignor in any division
or transfer order or any Sales Contract, and proceeds of sale of the Subject Minerals shall be paid
by the purchasers thereof (or others disbursing proceeds) directly to Assignor without necessity of
joinder by or consent of Assignee.

ARTICLE V

NON-LIABILITY OF ASSIGNEE

     In no event shall Assignee be liable or responsible in any way for any Production Costs or
other costs or liabilities incurred by Assignor or others attributable to the Subject Interests or
to the Minerals produced therefrom.

ARTICLE VI

OPERATION OF SUBJECT INTERESTS

     SECTION 6.01. Prudent Operator Standard. Assignor agrees, to the extent it has the
legal 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 (or
any portion thereof), that it will conduct and carry on the maintenance and operation of the
Subject Interests with reasonable and prudent business judgment and in accordance with good oil an
gas field practices, and that it will drill such wells as a reasonably prudent operator would drill
from time to time in order to protect them from drainage. However, nothing contained in this
Section 6.01 shall be deemed to prevent or restrict Assignor from electing not to participate in
any operation which is to be conducted under the terms of any operating agreement, unit operating
agreement, contract for development or similar instrument affecting or pertaining to the Subject
Interests (or any portion thereof) and allowing consenting parties to conduct nonconsent operations
thereon, if such election is made by Assignor in good faith. Notwithstanding anything elsewhere
herein to the contrary, Assignor shall never be liable to Assignee for the manner in which Assignor
performs its duties hereunder as long as Assignor has acted in good faith.

     SECTION 6.02. Abandonment of Properties. Nothing herein contained shall obligate
Assignor to continue to operate any well or to operate or maintain in force or attempt to maintain
in force any of the Subject Interests when, in Assignor’s opinion, such well or Subject Interest
ceases to produce or is not capable of producing oil or gas in paying quantities. The expiration
of a Subject Interest in accordance with the terms and conditions applicable thereto shall not be
considered to be a voluntary surrender or abandonment thereof.

     SECTION 6.03. Insurance. Although Assignor is permitted to carry policies of
insurance covering the property upon the Subject Interests and risks incident to the operation
thereof and to charge premiums therefor to the Net Proceeds account, Assignor shall not be required
to carry insurance on such property or covering any of such risks unless it elects so to do. In no
event shall Assignor be liable to Assignee on account of any losses sustained which are not covered
by insurance.

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ARTICLE VII

UNITIZATION

     SECTION 7.01. Pooled Subject Interests. Certain of the Subject Interests may have
been heretofore pooled and unitized for the production of Minerals. Such Subject Interests are and
shall be subject to the terms and provisions of such pooling and unitization agreements, and the
Royalty Interest in each such Subject Interest shall apply to and affect only the production from
such units which accrues to such Subject Interest under and by virtue of the applicable pooling and
unitization 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 of
the Subject Interests and to alter, change or amend or terminate any pooling or unitization
agreements 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) to
commit any of the Subject Interests (including the Royalty Interest attributable thereto) to an
agreement 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 therefrom
or proceeds of the sale thereof as a fee for processing). If and whenever through the exercise of
such right and power, or pursuant to any law hereafter enacted or any rule, regulation or order of
any governmental body or official hereafter promulgated, any of the Subject Interests are pooled or
unitized in any manner, the Royalty Interest insofar as it affects such Subject Interest shall also
be pooled and unitized, and in any such event such Royalty Interest in such Subject Interest shall
apply to and affect only the production which accrues to such Subject Interest under and by virtue
of the pooling and unitization.

     SECTION 7.03. Applicable Period. Assignor’s power and rights in Section 7.02 shall be
exercisable only during the period of the life of the last survivor of the descendants of the
signers 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 period
shall first expire.

ARTICLE VIII

GOVERNMENT REGULATION

     All obligations of Assignor hereunder shall be subject to all applicable provisions of the
Emergency Petroleum Allocation Act of 1973, the Department of Energy Organization Act, the Natural
Gas Act, the Natural Gas Policy Act of 1978 and each other statute purporting to provide regulation
of the sale of Minerals or establishing maximum prices at which the same may be sold and all
applicable laws, orders, rules and regulations thereunder of the Federal Energy Regulatory
Commission, the Department of Energy and each other legislative or governmental body, agency, board
or commission having jurisdiction. Rates permitted under the Natural Gas Act, the Natural Gas
Policy Act of 1978, the Emergency Petroleum Allocation Act of 1973 and each such other statute and
the 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. Assignor
shall be entitled to use its reasonable discretion in making filings, for itself and on behalf of
Assignee, with the Federal Energy Regulatory Commission, the Department of Energy or any other
governmental body, agency, board or commission having jurisdiction, affecting the price or prices
at which Subject Minerals may be sold, and with purchasers of production, operators or others with
respect to the windfall profits tax.

ARTICLE IX

ASSIGNMENTS

     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 the
Royalty Interest and the terms and provisions of this Conveyance. From and after the effective
date of any such assignment, sale, transfer or conveyance by Assignor, the assignee thereunder
shall succeed to all the requirements upon and responsibilities of Assignor hereunder, as to the
interests so acquired by such assignee, and, from and after the said effective date, Assignor shall
be relieved of such requirements and responsibilities, excepting only those accrued or due for
performance prior to such effective date.

     SECTION 9.02. Partial Assignment. If Assignor assigns its interest under the Subject
Interests as to some of such Subject Interests or as to some part thereof, then, effective as of
the date of such assignment, in determining the Royalty Interest payable with respect to production
from such assigned Subject Interests or parts thereof, the Gross Proceeds, Production Costs and Net
Proceeds attributable to such assigned interests will be computed and determined by the assignee of
such assigned interests in the aggregate as to the assigned interests owned by such assignee, but
separate from and not aggregated with the computation and determination made by Assignor as to
unassigned interests.

     SECTION 9.03. Assignment by Assignee. Assignee has the right to assign the Royalty
Interest in whole or in part, but (with respect to the assignee named herein) only as authorized by
the San Juan Basin Royalty Trust Indenture referred to above. However, no such assignment will
affect the method of computing Net Proceeds, and if more than one Person becomes entitled to
participate in the Royalty Interest, Assignor may withhold from such other Person payments to which
such Person would otherwise be entitled hereunder and the furnishing of any data or information
which Assignor is required by the terms hereof to furnish Assignee until Assignor is furnished a
recordable instrument executed by or binding upon all Persons interested in the Royalty Interest
designating one Person who is to receive such payments, data and information. In making
conveyances 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 with
respect 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 payment
of the Royalty Interest, or of any part thereof, however accomplished, shall be binding upon
Assignor 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 consist
of 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 example
by reason of incapacity, death or dissolution) shall consist of certified copies of recorded
documents 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 of
all sums payable on the Royalty Interest may be made in the manner provided herein precisely as if
no such change in interest or ownership or right to receive payment had occurred. The kind of
notice herein provided shall be exclusive, and no other kind, whether actual or constructive, shall
be binding on Assignor.

     SECTION 9.05. Rights of Mortgagee or Trustee. If Assignee shall at any time execute a
mortgage or deed of trust covering all or part of the Royalty Interest, the mortgagee(s) or
trustee(s) therein named or the holder of any obligation secured thereby shall be entitled, to the
extent such mortgage or deed of trust so provides, to exercise all the rights, remedies, powers and
privileges conferred upon Assignee by the terms of this Conveyance and to give or withhold all
consents required to be obtained hereunder by Assignee, but the provisions of this Section 9.05
shall in no way be deemed or construed to impose upon Assignor any obligation or liability
undertaken by Assignee under such mortgage or deed of trust or under the obligation secured
thereby.

ARTICLE X

MISCELLANEOUS

     SECTION 10.01. Proportionate Reduction. In the event of failure or deficiency in
title to any of the Subject Interests, the portion of the production from such Subject Interest out
of which the Royalty Interest attributable to such Subject Interest shall be payable shall be
reduced in the same proportion that such Subject Interest is reduced.

     SECTION 10.02. Term. Subject to the limitations stated in Section 1.18 hereof, this
Conveyance 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 assignment
and conveyance be required to describe more specifically any interests subject hereto, Assignor
agrees to execute and deliver the same. Also, if any other or additional instruments are required
in connection with the transfer of State, Federal or Indian lease interests in order to comply with
applicable laws, regulations or agreements, Assignor will execute and deliver the same.

     SECTION 10.04. Notices. All notices, statements, payments and communications between
the parties hereto shall be deemed to have been sufficiently given and delivered if enclosed in a
post paid wrapper and deposited in the United States Mails directed, or if personally delivered, to
the party to whom the same is directed or to be furnished or made at the respective addresses, as
follows:

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Southland Royalty Company

1000 Fort Worth Club Tower

Fort Worth, Texas 76102

Attention: Treasurer

The Fort Worth National Bank

Post Office Box 2050

Fort Worth, Texas 76101

Attention: Trust Department

     Either party or the successors or assignees of the interest or rights or obligations of either
party hereunder may change its address or designate a new or different address or addresses for the
purposes hereof by a similar notice given or directed to all parties interested hereunder at the
time.

     SECTION 10.05. Binding Effect. This Conveyance shall bind and inure to the benefit of
the successors and assigns of Assignor and Assignee.

     SECTION 10.06. Governing Law. The validity, effect and construction of this
Conveyance shall be governed by the laws of the State of New Mexico.

     SECTION 10.07. Headings. Article and Section headings used in this Conveyance are for
convenience only and shall not affect the construction of this Conveyance.

     SECTION 10.08. Substitution of Warranty. This instrument is made with full
substitution and subrogation of Assignee in and to all covenants of warranty by others heretofore
given or made with respect to the Subject Interests or any part thereof or interest therein.

     SECTION 10.09. Counterpart Execution. This Conveyance may be executed in multiple
counterparts, each of which shall be an original. Certain counterparts may have descriptions
relating to different recording jurisdictions omitted from Schedule A. A counterpart with all such
descriptions is being filed for record in San Juan County, New Mexico.

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     IN WITNESS WHEREOF, each of the parties hereto has caused this agreement to be executed in its
name and behalf and its corporate seal to be affixed hereto and attested by its proper signatory
officers thereunto duly authorized, as of November 1, 1980.

	 	 	 	 	 	 	 	 	 
	ATTEST:	 	 	 	SOUTHLAND ROYALTY COMPANY	 	 
	 
	 	 	 	 	 	 	 	 
	  /s/ Lucy H. Lowry
 

Lucy H. Lowry, Secretary

	 	 	 	By
	 	: /s/ Alton C. Goodrich
 
 Alton
C. Goodrich
	 	 
	 

	 	 	 	 	 	Executive Vice President	 	 
	 
	 	 	 	 	 	 	 	 
	ATTEST:	 	 	 	The Fort Worth National Bank

acting not in its individual capacity

but solely as the Trustee of the

San Juan Basin Royalty Trust
	 	 
	 
	 	 	 	 	 	 	 	 
	  /s/ Palmer S. Haffner, Jr.

	 	 	 	By:
	 	/s/ Bruce Petty	 	 
	 
 Palmer
S. Haffner, Jr.

	 	 	 	 	 	 
 Bruce
Petty
	 	 
	Trust Officer

	 	 	 	 	 	Executive Vice President and	 	 
	 

	 	 	 	 	 	Trust Officer	 	 

-15-

 

THE STATE OF TEXAS                     §

COUNTY OF TARRANT                    §

     The foregoing instrument was acknowledged before me this third day of November, 1980 by ALTON
C. GOODRICH, Executive Vice President of Southland Royalty Company, a corporation, on behalf of
said corporation.

     GIVEN UNDER MY HAND AND SEAL OF OFFICE, this the third day of November, 1980.

	 	 	 	 	 	 	 
	 

	 	 	 	  /s/ Diana Marsh
 
 Notary
Public in and for Tarrant
	 	 
	 

	 	 	 	                    County,Texas	 	 
	My Commission Expires:
	 	 	 	 	 	 
	 
	 	 	 	 	 	 
	     December 31, 1980
 
 
	 	 	 	 	 	 

THE STATE OF TEXAS                     §

COUNTY OF TARRANT                    §

     The foregoing instrument was acknowledged before me this third day of November, 1980 by BRUCE
PETTY, Executive Vice President and Trust Officer of The Forth Worth National Bank, a banking
association organized under the laws of the United States, on behalf of said corporation.

     GIVEN UNDER MY HAND AND SEAL OF OFFICE, this the third day of November, 1980.

	 	 	 	 	 	 	 
	 

	 	 	 	  /s/ Diana Marsh
 
 Notary
Public in and for Tarrant
	 	 
	 

	 	 	 	                    County, Texas	 	 
	My Commission Expires:
	 	 	 	 	 	 
	 
	 	 	 	 	 	 
	     December 31, 1980
 
 
	 	 	 	 	 	 

-16-exv10w37

 

EXHIBIT 10.37

February 23, 2007

John S. Chen

Chairman, CEO, and President

Sybase, Inc.

(Delivered by hand)

Dear John:

This is to inform you of your 2007 compensation as approved by the Sybase, Inc. Board of Directors:

	 	1.	 	Cash Compensation (effective January 1, 2007)

	 	1.	 	Annual base salary: $990,000
	 
	 	2.	 	Incentive bonus target: $1,250,000
	 
	 	3.	 	Total target cash compensation (TTC): $2,240,000

	 	2.	 	Long-Term Incentives

	 	(a)	 	Restricted Stock Grant (3-year performance vest)

	 	•	 	87,600 shares

	 	(b)	 	Restricted Stock Grant (3-year cliff vest)

	 	•	 	58,500 shares

The vesting terms are set out in the relevant equity award grant agreement.

Sincerely,

	 	 	 
	/s/ Richard C. Alberding

	 	 
	Richard C. Alberding
	 	 
	Compensation Committee Chairman
	 	 
	Sybase, Inc.
	 	 

CC: HR File

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