Common use of Overriding Royalty Interest Clause in Contracts

Overriding Royalty Interest. Pursuant to the Participation Agreement dated December 1, 2003, by and among Palace Exploration Company, Z▇▇▇▇ & T▇▇▇▇▇, Inc., The Oxford Oil Company, and the Company concerning the Cumberland, Mallard and Pintail Prospects (the “Participation Agreement”), the Company reserved an overriding royalty interest (“ORRI”) of three percent (3%) of the Leases (as defined in the Participation Agreement) as an employee overriding royalty (the “Employee Overriding Royalty”). Immediately prior to the closing of the acquisition of the Company contemplated by Recital B. (above) (the “Closing”), and as further identified in Exhibit A attached hereto, the Company shall (i) pay to Employee the percentage of the earnings from the Employee Overriding Royalty that have been accrued by the Company as of the Closing (the “Accrued ORRI Earnings”), in the amount identified in Exhibit A, and (ii) assign to Employee the split and percentage amounts of the Employee Overriding Royalty identified in Exhibit A (the “ORRI Assignment”) and pursuant to the Assignment of Overriding Royalty attached hereto as Exhibit B. Except as described otherwise in this Agreement, in the event the Closing does not occur during the term of this Agreement, the Accrued ORRI Earnings shall not be paid to Employee and the Employee shall not receive the ORRI Assignment, but instead the Accrued ORRI Earnings and ORRI Assignment shall be re-allocated in the sole discretion of the Company’s board of directors.

Overriding Royalty Interest. Pursuant Company will pay Employee an Overriding Royalty Interest equal to the Participation Agreement dated December 1% of all oil, 2003gas and related hydrocarbons produced, by saved and among Palace Exploration Company, Z▇▇▇▇ & T▇▇▇▇▇, Inc., The Oxford Oil Company, and the marketed from those Company concerning the Cumberland, Mallard and Pintail Prospects (the “Participation Agreement”), the Company reserved an overriding royalty interest properties (“ORRIRoyalty Properties”) of three percent (3%) of the Leases (as defined in the Participation Agreement) as an employee overriding royalty (the “Employee Overriding Royalty”). Immediately prior to the closing of the acquisition of the Company contemplated by Recital B. (above) (the “Closing”)that are, and as further identified in Exhibit A attached hereto, the Company shall (i) pay to Employee the percentage of the earnings from the Employee Overriding Royalty that have been accrued by the Company as of the Closing (the “Accrued ORRI Earnings”), in the amount identified in Exhibit A, and (ii) assign to Employee the split and percentage amounts of the Employee Overriding Royalty identified in Exhibit A (the “ORRI Assignment”) and pursuant to the Assignment of Overriding Royalty attached hereto as Exhibit B. Except as described otherwise in this Agreement, in the event the Closing does not occur during the term of this Agreement, either (a) acquired by Company primarily as a result of the Accrued ORRI Earnings shall identification and recommendation of such properties by Employee or (b) developed by Company primarily on the basis of Employee’s technical intellectual pursuit of the identification or selection of the geological prospect for drilling and development. In addition, Company will pay Employee an Overriding Royalty Interest equal to 0.1% of all oil, gas and related hydrocarbons produced, saved and marketed from Company properties for which, in Company’s judgment, Employee has been actively, but not be paid primarily, involved in either (i) the identification and recommendation as an acquisition or (ii) the technical intellectual pursuit of identifying or selecting the geologic prospect for drilling and development (“Secondary Royalty Properties”). Payment of an Overriding Royalty Interest to Employee and on Royalty Properties or Secondary Royalty Properties (collectively, “Properties”) shall continue only so long as the Company or its Parent holds the Properties; provided, however, that Employee shall receive 1% of any cash proceeds from the sale, lease, or other disposition of Properties and, in exchange for such payment, Employee shall reassign the portion of the Overriding Royalty Interest attributable to the sold, leased or disposed of Properties; provided further that if any Properties are disposed of by a trade for other property, an Overriding Royalty Interest shall be assigned to Employee with respect to the property received in such trade. Employee can receive only one Overriding Royalty Interest on a single Property. Any Overriding Royalty Interest to which Employee is entitled under this Section 2.3 shall be assigned to the Employee shall not receive the ORRI Assignment, but instead the Accrued ORRI Earnings and ORRI Assignment shall be re-allocated in the sole discretion of the Company’s board of directors.form attached to this Agreement as Exhibit A.