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Janjary 29, 19d7

2166-30

BY HAND

United st-ato z S e r a n .ont ot In *.ei i e r r—

Minerals Ma. i...errant Serv

•> S§i 1201 21mwoou i i r k 3 o u l „ v : rd a-, n as -a

New Orleans, u o l i s i an 2394 rn

A t t e n t i o n : Ma. I ' l e mm '

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Dear Ms. floe iim: 5 c -

On benalf of our c l i e n t , Mark Producing, Inc . , we are submitting for f i l i n g in the appropriate MMS f i l e s tn i r t / -one (31) copies of a document en t i t l ed "Fi rs t Supplemental Notice of Lis Pend i s . " Please f i l e a copy of th i s .ocu-nent in tne fol lowing leas" f i l e s :

OCS -G 6643 OCS -G 6650 OCS -G 6655 OCS -G 7660 OCS <-

-J 7661 OCS -G 7663 OCS -G 7664 OCS — L l 7675 OCS -G 5351 OCS -G 5354 OCS -G 6599 OCS -G 6603 OCS /•» 6601

United States Department a r i . . January 29, 1987 Page Two

OCS-3 7624 OCS-G 77U2 OCS-G 7 70 3 OCS-G 7704 OCS-G 7706 OCS-G 7707 OCS-G 7716 OCS-G 3^13 OCS-G 5519 OCS-G t>52l OCS-G 7 7 42 OCS-G 8435 OCS-G 84 36 OCS-G 34 37 0C3-G 7754 OCS-G 7755 OCS-G 7756 OCS-G 520C

We are also enclosing a xerox cop/ of this l e t t e r and of the enclosad document so that 3.1 me can be stamped and returned to us.

Our .eck in the amount of $775.00 i3 enclosed, to cover the costs of yjut f i l i n g 1. Thank you for your assistance.

Sincerely^ ,4 s

Udoert C. Soniat

ftUS/sd/7902x Enclosures

cc: Mark Producing, Inc. Sewell & iUggs

MARK PRODUCING, INC.

VERSUS

C. L. BARNEY

16th JUDICIAL DISTRICT COURT

FOR THE PARISH OF IBERIA

STATE OF LOUISIANA

SUIT NO. C2710

DIVISION "H" r- X m r> m

5 , m "2 o

FIRST SUPPLEMENTAL NOTICE OF LIS PENDERS1

CO

NOTICE IS HEREBY GIVEN of the f i l i n g of the above

en t i t l e d and numbered suit irt the 16th Judicial D i s t r i c t Court

in and for the Parish of Iberia. State of Louisiana, on January

26, 1987, the object of which is to obtain a declaratory

judgment and other r e l i e f recognizing the rights of the

p l a i n t i f f in and to certain net p r o f i t s interests in and to

those certain o i l and gas leases described on Exhibit "A,"

attached hereto, which cover and are applicable to property in

the Outer Continental Shelf 3 Gulf of Mexico, Offshore Louisiana,

proximate to the Parishes of Cameron, Iberia, St. Mary,

Terrebonne, Vermilion, and Lafourche.

New Orleans, Louisiana, on this 29th day of January,

1987.

PHELPS, DUNBAR, MARKS, CLAVERIE & SIMS

By: RUTLEDGE'C. CLEMENT, JR. ROBERT U. SONIAT T h i r t i e t h Floor - Texaco Center 400 Poydras Street New Orleans, Louisiana 70130-3245 Telephone: (504) 566-1311

ATTORNEYS FOR PLAINTIFF, MARK PPODUCING, INC.

EXHIBIT A

I . EAST CAMERON AREA

Lease No. I - O i l and Gas Lease of S'j'.imerg d Lands bearing s e r i a l number OCS-G 6643, la._d e f f e c t i v e as of June 1, 1984, between the United Sri.es of America, as lessor, and Mark Producing, Inc., as lessee, covering f 1 1 of Block ?G0, East Carreron Area, South A d d i t i o n , as shown on OCS Leasing Map, Louisiana flap No. 2A, con t a i n i n g 5,000 acres, more or less, a* more f u l l y described in said lease;

Lease No. 2 - O i l and Gas Lease of Submerged Lands bearing s e r i a l number OCS-G 6650, dated e f f e c t i v e as of June 1, 1984, between the United States of America, as lessor, and Mark Producing, Inc., as lessee, covering a l l of Block 315, East Cameron Area, South A d d i t i o n , as shown on OCS Leasing Map, Louisiana Map No. 2A, conta i n i n g 5,000 acres, more or less, as more f u l l y described in said lease;

Lease No. 3 - O i l and Gas Lease of Submerged ands bearing s e r i a l number OCS-G 6655. dated effee ive as of June 1, 1984, between the United States of America, as lessor , and Mark Producing, Inc., as lessee, covering ?11 of Block 346, East Cameron Area, South A d d i t i o n , as shown on OCS Leasing Map, Louisiana Map No. 2A, con t a i n i n g 5,000 acres, more ~ r less, as more f u l l y described i n said lease;

'c-'se No. 4 - O i l and Gas Lease of Submergeo ands bearing s e r i a l number OCS-G 7660, dated e f f e i ive as of Ju l y 1 , 1985, between the United States of Arr -ca, as les s o r , and Mark Producing, Inc., as lessee, covering a l l of Block 282, East Cameron Area, South A d d i t i o n , as shown on OCS Leasing Map, Louisiana Map No. 2A, con t a i n i n g 5,000 acres, more or less, as mu.e f u l l y described i n said lease;

Leasa No. 5 - O i l and Gas Lease of Submerged Lands bearing s e r i a l number OCS-G 7661, dated e f f e c t i v e as of September 1, 1985, between the United States of America, as lessor, and Mark Producing, Inc., as lessee, covering a l l of Block 283, East Cameron Area, South A d d i t i o n , as shown on OCS Leasing Map, Louisiana Map No. 2A, containing 5,000 acres, more or less, as more f u l l y described i n said lease;

Lease No. 6 - O i l and Gas Lease of Submerged Lands bearing s e r i a l number OCS-G 7663, dated e f f e c t i v e as of Ju l y 1, l i a s , hjtween the United States of Ameri :n, as les s o r , and Mf.k Producing, Inc., as lessee, covering a l l of Block 29/. East Cameron Area, South A d d i t i o n , as shown on OCS Leabing Map, Louisiana Map No. 2A, con t a i n i n g 5,000 acres, more or less, as more f u l l y described i n said lease;

Lease No. 7 - Oi1 and Gas Lease of Submerged Lands bearing s e i i a l number OCS-G 76b4, dated e f f e c t i v e as of September 1, 1985, between the United States of America, as lessor, and Mark Producing, Inc., as lessee, covering a l l of Block 301, East Cameron Area, South A d d i t i o n , as shown on OCS Leasing Map, Louisiana Map No. 2k, containing 5,000 acres, more or less, as more f u l l y described i n sa>d lease; and

Iea-,e No. 8 - O i l and Gas Lease of Submerged Lands bearing s e r i a l number OCS-G 7675, dated e f f e c t i v e as of September L, 1985, between the United States of America, as lessor, and Mark Producing, Inc., a lessee, covering a l l of Biock 375, East Cameron Area, South A d d i t i o n , as shown on OCS Leasing Map, Louisiana " j p No. 2A, containing 5,000 acres, more or less, as II j r e f u l l y described i n said leas* 3.

1 I . WEST CAMERON AREA

L^ase No. 1 - O i l and Gas Lease of Submerged Lands bearing s e r i a l number OCS-G 5351, dated e f f e c t i v e as of July 1, 1983, between the United States of America, as lessor, and Mark Producing, Inc. and CNG Producing Company, as lessees, covering a l l of Block 588, West Cameron Area. South A d d i t i o n , as shown on OCS Leasing Map, Louisiana Map No. IB, containing 5,000 acres, more or less, as more f u l l y described i n said lease;

Lease No. 2 - O i l and Gas Lease of Submerged Lands bearing s e r i a l number OCS-G 5354, dated e f f e c t i v e as of Jul y 1, 1983, between the United States of America, as lessor, and Mark Producing, Inc., as lessee, covering a l l of Block 600, West Cameron Area, South A d d i t i o n , as shown on OCS Leasing Map, Louisiana Map No. IB, containing f 000 acres, more or less, as more f u l l y described i n said lease;

Lease No. 3 - O i l and Gas Lease oi Submerged Lands bearing s e r i a l number OCS-G 6599, dated e f f e c t i v e as of June 1, 1984, between the United States of America, as lessor, and Union Texas Petroleum Corporation and Agip Petroleum Co., Inc., as lessees, covering a l l of Block 579, West Cameron Area, South A d d i t i o n , as shown on OCS Leasing Map, Louisiana Map No. IB, containing 5,000 acres, more or less, as more f u l l y described i n said lease;

Lease No. 4 - O i l and Gas Lease of Submerged Lands bearing s e r i a l number OCS-G 6600, dated e f f e c t i v e as of July 1, 1984, between the United States of America, as lessor, and Mark Producing, Inc., as lessee, covering a l l of Block 591, West Cameron Area, South A d d i t i o n , as shown on OCS Leasing Map, Louisiana Map No. IB, containing 3,242.38 acres, more or less, as mere f u l l y described i n said lease;

Lease No. 5 O i l and Gas Lease of Submerged Lands bearing s e r i a l number OCS-G 6601, dated e f f e c t i v e as of July 1, 1984, between the United States of America, as lessor, and Mark Producing, Inc., as lesse*:, covering a l l of Block 592, West Cameron Area, South A d d i t i o n , as shown on OCS Leasing Map, Louisiana Map No. IB, conta i n i n g 5,000 acres, more or less, as more f u l l y described i n said lease; and

- 2

Lease No. 6 - Oi! and Gas Lease of Submerged Lands bearing s e r i a l numner OCS-G 7624, dated e f f e c t i v e as of September 1, 1985, between the United States of America, as lessor, and Mark Producing, Inc , as lessee, covering a l l of Block 461, West Cameron Area, South Additi o n , as shown on OCS Leasing Map, Louisiana Map No. IB, containing 5,000 acres, more or less, as more f u l l y described i n sa i d lease.

I I I . SOUTH MARSH ISLAND AREA

Lease No. 1 - Oi1 and Gas Lease of Submerged Lands bearing s e r i a l number OCS-G 7702, dated e f f e c t i v e as of August 1, 1985, between the United States of America, as lessor, and Mark Producing, Inc., as lessee, covering a l l of Block 65, South Marsh Island Area, South A d d i t i o n , as shown on OCS Leasing Map, Louisiana Map No. 3C, containing 5,000 acres, more or less, as more f u l l y described i n sa i d lease;

Lease No. 2 •• O i l and Gas Lease of Submerged Lands bearing s e r i a l number OCS-G 7703, dated e f f e c t i v e as of August 1, 1985, between the United States of America, as lessor, and Mark Producing, inc., as lessee, covering a l l of Block 77, South Marsh Island Area, South A d d i t i o n , as shown on OCS Leasing Map, Louisiana Map No. 3C, containing 5,000 acres, more or less, as more f u l l y described i n sa i d lease;

Lease No 3 - Oi1 and Gas Lease of Submerged Lands bearing s e r i a l number OCS-G 7704, dated e f f e c t i v e as of September 1, 1985, between the United States of America, as lessor, and Mark Producing, Inc., as lessee, covering a l l of Block 79, South Marsh Islat.d Area, South Additi o n , as shown on OCS Leasing Map, Louisiana Map No. 3C, cont a i n i n g 2,919.67 acres, more or less, as more f u l l y described in said lease;

Lease No. 4 - O i l and Gas Lease of Submerged Lands bearing s e r i a l number OCS-G 7706, dated e f f e c t i v e as of September 1, :)85, between the United States of America, as lessor, and Mark Producing, Inc., as lessee, covering a l l of Block 84, South Marsh Island Area, South A d d i t i o n , as hown on OCS Leasing Map, Louisiana Map No. 3C, co n t a i n i n g 5,000 acres, more or less, as more f u l l y described i n said lease;

Lease No. 5 - O i l and Gas Lease of Submerged Lands bearing s e r i a l number OCS-C 7707, dated e f f e c t i v e as of September 1, 1985, between the United States of America, as lessor, and Mark Producing, Inc., as lessee, coveting a l l of Block 85, South Marsh Island Area, South Additi o n , as shown on OCS Leasing Map, Louisiana Map No. 3C, co n t a i n i n g 2,500 acres, more or less, as more f u l l y described i n said lease; and

Lease No. 6 - O i l and Gas Lease of Submerged Lands bearing s e r i a l number OCS-G 7716, dated e f f e c t i v e as cf August 1, 1985, between the United States of America, as lessor, and Mark Producing, Inc., as lessee, covering a l l of Block 187, South Marsh Island Area, South A d d i t i o n , as shown on OCS Leasing Map, Louisiana Map No. 3C, containing 5,000 acres, more or less, as more f u l l y described i n sa i d lease.

- 3 -

IV. EUGENE ISLAND AREA

Lease No. 1 - O i l and Gas Lea.se of Submerged Lands besring s e r i a l number OCS-G 5513, dated e f f e c t i v e as of July 1 # 1983, between the United States of America, as lessor, and Mark Producing, Inc., as lessee, covering a l l of Slock 290, Eugene Island Area, South A d d i t i o n , as shown on OCS Leasing Map, Louisiani. Map No 4A, containing 5,000 acres, more or less, as more c u l l y described i n sai d lease;

Lease No. 2 - O i l and Gas Lease of Submerged Lands bearing s e r i a l number OCS-G 5519, dated e f f e c t i v e as of July 1, 1983, between the United States of America, as lessor, and Mark Producing, Inc., as lessee, covering a l l of Block 334, Eigene Island Area, South A d d i t i o n , as shown on OCS Leasing Map, Louisiana Map No. 4A, containing 5,000 acres, more or less, as more f u l l y described i n sai d lease;

Lease No. 3 - O i l and Gas Lease of Submerged Lands bearing s e r i a l number OCS-G 5521, dated e f f e c t i v e as of July 1, 1983, between the United States of America, as lessor, and Mark Producing, Inc., as lessee, covering a l l of Block 336, Eugene Island Area, South A d d i t i o n , as shown on OCS Leasing Map, Louisiana Map No. 4A, containing 5,000 acres, more or less, as more f u l l y described i n said lease;

Lease No. 4 - O i l and C s Lease of Submerged Lands bearing s e r i a l number OCS-G 7742, dated e f f e c t i v e as of August 1, 1985, between the United States of America, as lessor, and Mark Producing, Inc., as lessee, covering a l l of Block 371, Eugene Islan d Area, South Addition , as shown on OCS Leasing Map, Louisiana Map No. 4A, containing 5,000 acres, more or les s , as more r u l l y described i n said lease;

Lease No. 5 - O i l and Gas Lease of Submerged Lands bearing s e r i a l number OCS-G 8435, dated e f f e c t i v e as of June 1, 1986, between the United States of America, as lessor, and Mark Producing, Inc., as lessee, covering a l l of Block 232, Eugene Island Area, as shown on OCS Leasing Map, Louisiana Map No. 4, cont a i n i n g 5,000 acres, more or les s , as more f u l l y described i n said lease;

Lease No. 6 - O i l and Gas Lease of Submerged Lands bearing s e r i a l number OCS-G 8436, dated e f f e c t i v e as of June 1, 1986, between tne United States of America, as lessor, and Mu i k P-oducing, Inc., as lessee, covering a l l of Block 234, Eugene Island Area, as shown on OCS Leasing Map, Louisiana Map No. 4, containing 5,000 acres, more or less, as more f u l l y described i n said lease- and

Lease No. 7 - O i l and Gas Lease of Submerged Lands bearing s e r i a l number OCS-G 8437, dated e f f e c t i v e as of June 1, 1986, between uhe United States of America, as lessor, and Mark Producing, Inc., as lessee, covering a l l of Block 235, Eugene Island Area, as shown on OCS Leasing Map, Louisiana Map No. 4, containing 5,000 acres, more or less, as more f u l l y described i n said lease.

- 4 -

V. SHIP SHOAL AREA

Lease No. J - O i l and Gas Lease of Submerged Lands bearing s e r i a l number OCS-G 7754, dated e f f e c t i v e as of July 1, 1985, between the United States of America, as lessor, and Mark Producing, Inc., as lessee, covering a l l of Block 196, Ship Shoal Area, as shown on OCS Leasing Map, ouisiana Map No. 5. containing 5,000 acres, more or less, as more f u l l y described in said lease;

Lease No. 2 - O i l and Gas Lease of Submerged Lands bearing s e r i a l number OCS-G 7755, dated e f f e c t i v e as of August 1, 1985, between the United States of America, as lesser, and Mark Producing, Inc., as lessee, covering a l l of Block 203, Ship Shoal Area, as shown on OCS Leasing Map, Louisiana Map No. 5, containing 5,000 acres, more or less, as more f u l l y described in said lease; and

Lease No. 3 - O i l and Gas Lease of Submerged Lands bearing s e r i a l number OCS-G 7756, dated e f f e c t i v e as of August 1, 1985, between the United St3tcs of America, as lessor, and Mark Producing, Inc., as lessee, covering a l l of Block 220, Ship Shoal Area, as shown on OCS Leasing Map, Louisiana Map No. 5, containing 5,000 acres, more or less, as more f u l l y described i n said lease.

VI . SOUTH TIMBALIER AREA

Lease No. 1 - O i l and Gas Lease of Submerged Lands bearing s e r i a l number OCS-G 5208. dated e f f e c t i v e as of January 1, 1983, between the United States of America, as lessor, and Mark Producing, Inc., as lessee, covering a l l of Block 263, South Timbaiier Area, South A d d i t i o n , as shown on OCS Leasing Map, Louisiana Map No. 6A, containing 5,000 acres, more or less, as more f u l l y described i n said lease.

Certified Mail Item No. 653 465 090

•Junuary 5, 1987

Minerals Management Service Gulf of Mexieo OCS Region 1201 Wholesalers Parkway New Orleans, LA 70123-2394

A t in : Ms. La Nelle Boehm

Dear Ms. Boehm:

R E C E I V E D

JAN 8 -967

Minerals Manapement Service Leasing & Envifonnsnt

Enclosed ure two (2) originals of a blanket assignment entitled Partial Assignment of Overriding Royalty Interest-effective Mareh 19, 1986. Please *,r>mp one of the originuls with the date received and return to this offiee nt your earliest convenience.

Please file the second original in the case file listed below marked with an asterisk and an original of this letter in the remaining case files listed below.

West Cameron Area South Addition OCS-G 5138, Block 570 OCS-G 5354, OCS-G 5347, Block 557 OCS-G (3600, OCS-G 5348, Biock 560 OCS-G 6601, OCS-G 5351, Block 588 OCS-G 7624,

Fust Cameron Area, South Addition OCS-G 5391, Block 299 OCS-G 7C61, OCS-G 6643, Block 300 OCS-G 7663, OCS-G 6650, Block 315 OCS-G 766-1, OCS-G 6655, Block 346 OCS-G 7675, OCS-G 7660, Block 282

South Marsh Island Area, North Addition OCS-G 2306, Block 261

South Marsh Isiand Area OCS-G 7702, Block 65

South Marsh Island Area, South Addition OCS-G 4809, Block 161 OCS-^ 7703, Block 77 OCS-J 7704, Block 79

Eugene Island Area, South Addition OCS^G"3408, B'ock 311 OCS-G 5513, Block 290 OCS-G 5519, Block 334 OCS-C 5521, Block 336

ocs- u 7706, Block 84

ocs- G 7707, Block 85 OCS- G 7716, Block 187

OCS- G b o 13 31 Block 35fc

ocs- G 5524, Block 359

ocs- G 7742, Block 373

THESE DOCUMENTS WILL LE FOUND AT MORTGAGE FILE M. 7

Minerals Management Service January 5, 1987 Page 2

Ship Shoal Area ~CS G 7754, Block 196 OCS-G 7756, Block 220 OCS-G 775b, Block 203

South Timbalier Area, South Addition OCS-G 5238, Block 263

Enclosed is Mark Producing, Inc.'s check number 2341 in the amount of $900.00 for the filing fee.

Thank you ve.y much for your assistance in this matter.

Very truly yours,

/ ... ... I (,/ A. . Duane It. Bartels Land Manager

DRB.clk Enclosures

*. * mm* t •>

P H E L P S , D U N B A R . M A R K S . C L A V E R I E & S I M S

C O U N S E L L O R S AT LAW

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• L C A I C « a » L y T O N CW 0 ° L t A N 5 O F F I C C

September 19. 1985

Ms. Lanelle Boehm 2166-18 United Sta tes Minerals Management Service 3301 N. Causeway Boulevard Meta i r ie , Louis iana

Re: Recordation o f Conveyance of O v e r r i d i n g Royalty I n t e r e s t

Dear Ms. Boehm,

On behalf of our c l i e n t , Mark Producing, Inc., I am enclosing f o r recordation i n the Conveyance Records of St. Mary Parish the f o l l o w i n g documents:

Sixteen (16) Conveyances of Overriding Royalty n t e r e s t , executed September 5, 1985, but e f f e c t i v e

as of the date and time stated t h e r e i n , from Mark Producing, Inc. to the F i r s t National Bank of Lafayette, as t r u s t e e of the Mark Employee Incentive T r u s t . These Conveyances cover the f o l l o w i n g Federal Leases:

Please record t h i s document i n the f o l l o w i n g Federal Lease f i l e s :

1. OCS-G 7702 2. OCS-G 7716 3 . OCS-G 770 4 . OCS-G 7742 S . OCS-G 7704 6. OCS-G 7706 7 . OCS G 7707 B. OCS-G 7754 9. OCS-G 7755

10. OCS-G 7756

September 19, 1985 Page 2

11. OCS-G 7675 12. OCS-C 7624 13. OCS-G 7660 14. OCS-G 7664 15. OCS-G •JJET* 16. OCS-G 76TI

Thank you f o r your help.

Yours t r u l y ,

David M. Hunter

225/225 BOEHMBB

CONVEYANCE OF OVERi^ii "NG ROYALTY INTER'

KNOW At ! PLllSONS 1 I THESE . Pi "ENTS TII AT:

MARK PRODUC"•'(}-, t C, • Delavufu cr. porai' j . i with offices ut 675 Bering Drive, Houston, Harris Couv •• . 77057 '"Assignor"), f o s and it. consideration of Ten Uo'.'ars ($10.10) y:«d oth' '1 u.id -'ai .able consideration to it paid by FIRST NATION VL L \NK OF LAi WT ; E a* o«.!«!an,i 1 ru>tee of the MARK L.MPLOYEE INCENTIVE T.tUST, At* cypres ITv. in tne me'ining of Section ?. of thc Texas Trust Act, formed pursuant to th .•e.tnr. Truy' Agreement, dated as of March 15, 1982, between M*rk Producing, Ire. anc First City National 3unk ')f Houston, as Trustee, with offices Suite 753, Two Houstun Center, Houston, Harris County, Texas ("Assignee"), the rec ipt und sufficiency of which n.c hereby lcknowledged, has Burguined, Sold, Grant ' J , "c.-'evod, Tfai ?rred, Assigned, Sot ver and Pelivered, and, by these nrese *ts4 <; •• xreby Burguir, Sell, Grant, Corn y, Transfer, Assign, Set Over ana Deliver u:. digu'- , effective MS of the "Effective Date" set forth hereinafter, an overriaing royulty i.rlcr*.-st (collectively thc "Overriding Royalty Interest") in and to the (a) oil, (h) gas, (c) associated nydrocurhons, sulfur and other minerals produced with gas, whether similar oi 'Ji ->. .''.ar, and (d) all other minerals of every type and description, including without t i t i t i on , eoui, lignite, uranium and other fissionable materials, geuthermal energy .Including entrained gas, hydrostatic pressure und thermul energy), hurdroek minerals -.ivd >. ase mid precious metals tc the extent that such min :-als ii-uve to the benefit of Vssignor 'e-der the leases described below (collectively, the ".Minerals";, in and under and producer and saved from the lands covered by those ^entn.j;! leases described in Section I of Exhibit "A" attached hereto and mad. c part hereof and any und all renewals <;nd extensions thereof (collect!»oly, the "Lease"), in the percentage set forth in Section Ii of Exhibit. "A" w ;th respect to iiu ' .Via ("s>.id percentage").

Notwithstanding anything to the contrar. "ontuined herein, Assignee shall not have the right to take-in-k'nd the production of Minerals attributable to thc Overriding Royalty Inter .•>*, "nd As-ignor shall account to Assignee Tor the production of Minerals attributable ic the Ove:-ldhg Royalty Intorest on tne following basis:

(a) On oil, conden: a ;e d oti e, liquid hydrocarbons recovered by conventional field-type separation i -es Uoll. • lively, the ' ,iquids"V produced pursuant to the Leuse, ^ N wh^r ' e •. ;-<v eUa^e of the , rocecd. received by Assignor frorv s's h sale, • • •' \ i vl ; • ;>ed of. :}>.c Lease premises, said percentage of thc amount so used payable .. tl a same r ;anner as i f said Liquids h«:d been sold unde" th . contract then in v>>ce between Assignoi- and thc purchaser of Liquids froi.. tha Leas?, or .n tht. c «'«*••• t there is no such contract, ^aid percentage of the market vo'ue thereof at 'he wellhead, in each case iree of all •:c.ts ard expenses of pioduoiion. tr oat ing and tranuocrtation prior to the point ot eelivcry fo che purchaser thereof or ts agent;

(b) On r

6as, incusing casinghead ga; or othe. gaseous substance, remaining after separation of the associu' d Liquids ("Gasi, produced pursuant to the Lease, (i) when sold, said perc^nta^ of the proceeds received by Assignor "rom such sale, or (ii) when used o f t i n :,ease premises, said percent-^ u f the an ount so used, oeyuble in the same manner as if stid Gas had hoeri r-old under the cord.r/» •. men ;n

dstencc between Assignor nd the purchaser of Ga.-: from the Lcusi , . r in tne rv ."it there i ; r.o contract. s t 'd pcr^entag.' of the mar i t t value thvi tol ai the v.ellhead, in ; a on case free of all costs anc' expenses of produetion, .reuMng and transportation prior to '.he peir.t deliver., to thc purchuscr thereof or its gent; provided, however, that in the event at any time Assignor elects 4o process, o. have processed, Gas produce d from the Lease in u Gas processing plun', ( vhether or eot uwr>ed hy AFjignT). which r'gh is expressly reserved to Assigno. . no Overriding Royilty Interert Wi'i be paid on gasc 'ne or otner l.quid hydrocarbons or other products manufactured or extracted from such Gas as a re. i of such processing, and in such event Assignor will install a meter prior to the poi-it at which die Gas enters thc processing plu.it, the Assignee will be entitled to receive .aid percentage ct ihe proceed? which Assignor would hav eceived under its applicable Gas sales contract if sue: Gas had not been processed in a plant, or in tho event then ro contract, said pcroent;>ge of the r.iarket value: thereof at the wellheud; und

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(c) On sjifur and >. *•>• i Minerals -therwisc provided fo r in paragraphs (a) and 'b) above) (collectively, "Additional 'inerals"), produced oursuant to the !.?nse, (i) w.ien sold, ;>aid percentage of i.;r proceeds received by Assignor from st.ai, '»°, or ii i i w^er used off the Lease . remises .J percentage of ihe arnoun. usee

. yaffle • i the same manner as if Sb. d Additional Minerals from the Lease, or in the event there is no such contract, saio porter.tage of the market value thereof at the v ellhead or oti.w- poi. t of production, in each case Tree and clear of all costs anu expanses cf produclion, *;e**lP.z ".nd transportation prior to the point of delivery to .tit, purchaser thereoi c its a., nt.

TO HAVE AND IO HOLD tne Overriding Royalty Interest, together with all and u'ug'lar the ligrts anc* apj •"•tantes tbareto in anywite belonging unto Assignee, its • .. lessors an! assign.:, huTJEi r, HOWEVER, TO THE FOLLOWING TERMS AND n REVISIONS: "~

i .

'.'he Overriding Royalty M erest shall be paid free of, a. d in no event shell Assignee ever be liable or responsible in any way for payment of a y part of, any lease bonus and -Iclay re-Hal payment cr any exploration, drilling, development, o'-erating or production et-~>t. In addition:

(u) Minerals used in all coeraUws cn the L-ase, including but not limited to, fuel for operating the Lea«-e r, rcn.se. or for gj.s injection, secondary recovery, pressure maintenance, repressaring or ' v t ing operations, shall be deducted before the Overriding Royalty merest is computed.

(b) The Overriding Royalty Interest she.il not be paid, and shall not accrue, upon aiy Minerals lost ir. production from the Lease.

(c, / Tiounti reoeiv o , Assignor as payments from a purchaser if Minerals pursuant tc a contractual pre 'i. 'on providing for "take-or-pay" payiponts (including pre-.nitial aelivfry oayr.ent.- but excluding penalty amounts) shall be considered amounts recoil • ' fror. the sale of Minerals; provided that amojnts subsequently received from Ui sele of Minerals i ..:e time of later delivery pursuant to any such provision sh 1 be reduced by amounts previously eoi .'Hered to have been received from tiv. He Min- -als pursuant to tii*. .w-"t el.uSc of this paragraph (c). As used in this parcgraph (c), the term "penalty amoui'-s" means amounts in excess of (i) the then current contract price multiplied by (ii) the dlfierer.ee oetween the amount of Minerals required to be taken uncer the contract ar.d tii*". r.mount actually taker.

(d) t i cd valorem, production and other taxes • harget.ble against and all windfall pi of if. and similar taxes payable in respect to the Overriding Royalty Inter st shall oe paid by Assignee.

n. Assignor shall have the right and power to commit its leasehold working in erest

in the Lease, out of which the Overriding Royalty Interest is carved, to future operr ; ng agreements, contracts for development or other similar agreements affecting '•• pertaining to Lie Lease, and the Overriding Royalty Interest shall be bo..-" v>y ar i subjeet to the terms and provisions thereof. In the event Assignor elects not to pa-tiOi-pate in any drilling or other opt-rations under any prcsenv or future operating agreemnt, contract for development or other similar agreement affecting or pertaining to the Lease, or any portion thereof, which allows parties who elect to so participet i lo conduct those operations ("nonconsent operations"), then the Overriding Royalty Interest shall not be payable to Assignee with respect to production resulting from or arising out of those nonconsen. op°'",':«>n',, until such time, if ever, that Assignor shall receive proceeds attributable *o or derived from production resulting from t >e nonconsent operations in which it did not participate.

.11.

Nothing herein contained shall obligate Assignor to conduct any drilling operations whatsoever upon the Lease, o* to continue to ope ate any well oe to operate or maintain in force or attempt to maintain in force the Lease, or to maintain the Lease in effect bv payment of delay rental payments or otherwise, and the extent tnd duration of a.>

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operations, as v e.5 as the preservation oi the Lease by deny ro . 'u l pay.r.nts or otherwise, shall . • solely at the will of Assignor. Assignor shah' have the right at any

; iit to surrender, abandon or terminate me Lease in whole or in part without liab'li ty tc Assignee and, where legally obligated, free of the Overriding Royalty Interest, ana in the case of such surrender, abandonment or termination, Assignor release the surrendered, abandoned or terminated Lease directly to the lessor tne cf without further authorization by Assignee.

IV.

Assignor shall have thc "ifc"h* and power, without farther approval oy Assignee, to pool, unitize or jointly develop t >• Lease or any por lion \ hereof and to alter change or amend or terminate any pooling, unitization or joint devei ipment ogreer. c r i heretofore or hereafter entered into, as to all or any part of thc ' i.i". covered b* t'.e ! • r.-.t, us io any one or more of the formations or horizons thereunder, md as to any -.. inn M'nera!* upon such terms and provisioi. .5 Assignor shall in its so'c- discretion determine, if ana whc vor through the exercise pf such right und power, or pursuent to any law now existir-sj or hereafter enacted, or any rule, regulatior. or order of any governniTdal body now existing or hereafter ?;omulgf.ted, the Lease is pooled, unitized or jointly de /eloped in any manner, the Overriding Royaltj Interest shall also bo pooled, unitized or jointly developed, as the case may be, and in si.eh event Assignee shali be entitled to receive the Overriding Royalty Interest eh a c ues to the Leas under and by virtue of the pooling, unitization or jvyint deveiopmer t.

V.

(a) Assignor shall use i t ; best efi'orts to pay the Assignee f i e Overriding Royalty Interest attn'i . i t^ble co thc amounts which Assignor has received in any month on or prior to . _ >asc day of t! at month ("Payment Amounts") from the pu -nosers of Minerals r fJuced from tht Lease ("Purchasers") on the f i f t t ^"th (15th) day of the second month i.evt following; provided, however, tii & t if the . ,/teenlh ( 5 th) day of thai second month next folicwv g is not a "Business Day", then '"'ci o: /ment shall be made on thc first "Business Day" following the fifteenth d ' t h i day 61 that month (such day ol payment being hereinafter referred to ns thc "Month'.y it '- crd rate**), A "Business Day" is any day other than Saturday, Sunduy or any other <.iy on -hich national banking institutions in the City of Houston, Texas u-e closed as av1 -ized or required by law.

(b) If at any time Assignor pays Assignee the Overdoing Royalty Interest bascu upon Payment Amounts as to which *> -.signor is subsequently requir'.'d to make any lefund payments (including any sue!, ref md payments mace pursuant to settlements entered into by Assignor), Vssignee shall not b 1 obligated t" return any ;uch amoun .s paid •'• Assignee based upon such Ptiy."hr.nt Amo" 's, the Overriding Royalty Interc.--. hall not be payai.de to fl -signee on tho succor "'..v; Monthly Recc-d Dates following the month in which .-v . ;:>or is so required to inaki such refund pavrnents until such time as Assip,. >c has recovered the portion ol such refund payments uttributuble to thc Overrid ig Royalty Interest (including interest thereon only to the extent required by govt nmental authority, or required pursuant to a settlement jgreement entered into by Assignor with respect to the specific refund

ayment obligation).

(.ft) Amounts withheld from Assignor by Purchasers of Minerals produced from the . cose or deposited bv such Purchasers with an independent escrow agent shall not

considered tc be received by Assignor (and therefore not be deemed to be ? yment Amounts), and the Overriding Royalty Interest attributable to such unpaid or withheld amoun.s shall not be payable to Assignee until such amounts are p. tualh r.'- "ived b> Ar-i/nor; provided, however, that Assignor shall use reasonable e f f i . t s t(.- colioct sue!: ' .reid or withheld amounts in a timely manner. At such C*—< ; ys Assignor has teen . ud th^se unpaid or withheld amounts (including any '• 'e.ost. penalty or other L .lount paid by thc Purchasers to Assignor with respect • here*. the Assignor shall treat such amounts is newly received Payment .Amounts and shail pay e Ov rriding Royalty Interest thereon, in accordance vi th the provision of paragraph (a) of this Article V.

(d) If in the si.U jut' 'ment of Assignor an a ^ e i t , oty or controversy crisis concerning the sales price charged to any Purchaser r or u'«.; "i which the Payment Amounts have been co'lected by Assignor, the ri Assi moh, ; t its option, may seiect an indcDeiident escrow agent ::r.J cause the o. ount which \ssignor deems tc he

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uncertain or 'bier* to controversy (together with amounts whieh Assignor estimates may l e payable in penalties with respect to such amounts and in interest with respect to such amounts throi-g i the date of deposit) to he deposited with such escrow agent, and ULon the dcpc.'it escrow") of such funds (the "Escrowed Funds"), the Overriding Ro>» tv 'r.er^st shall not be puyublc with resp -t lo >uch escrowed Funds during th" ' . . r r ^d o" ti .ie they are held in esc-ow. j \ e '^pository agent pgrccment r r ej-crc** * i rcement ("escrow agreement") between . ...ign^r nnd the escrow n-,ent shall J o^ide 'h»t th«: escrow agent shull place the I'.scnwed Funos in co.'tnieiUv.- of depcs'.i or Uhi ed Stat ;s government securities havhltf mulunlic:; i ot to exc^d thirty (30) days, that tha escrow agent shull, upon thc request of \ssig"0.\ release such Escrow-?'! Funds from escrow ami that ony interest earned on such E&ovowed Funds from r.scrow und that any interest earned on such I" TJW«**! Funds shu'» Se paid to Assignor monthly and shall be decuv d - have been I ived by Assignor l ioni the sale cf Minerals. When thc uncerif"''*.} or controversy l« settled or Assignor determines (in its sole discretion un 1 for whatever rv:.&jn»i 'hut there no longer exists a need for the escrow ing of all or any part i " dir F scrc.-.cu Funds, Assignor will so inform the escrow ugent, md the escrow ;.»<i *hokl pay to Assignor 'he amount of such Escrowed Funds with .espee. in whieh i ich uncertain v or controversy no k i g c r -ists or with rcspeci to wh.-'i Assignor hps determined there no longer exis i a need for funds to oe ost r*»««CJ ("Released Funds"). To thc extent that Released Tunu.; are not required »o tx refunded to Purchaser or a ny subsequent purchasers (no matter how dista- '1 f i ->m Pn.-c baser, o r

to any governmental authority (collectively "Refund Recipient*"), then \ssigncr sh' .1 treat such Released runds as newly received Payment Amoun .s and shall paj thc Overriding Royi l tv Int est attributable thereto to Assignee, together with the accrued interest toercon, in accordance with the provisions of pr.. iaph (a) of th,^ Article V. To t i e intent that Released Funds arc required to oe refunded to Refund Recipients, any interest of Assignee in such Released Funds shall i i minate.

VI.

This Conveyance ir made and accepted subject to all orders, rules and "epilations ana ordinance of federaL state ano ether governmental agencies having jurisd'etion; to the terms * vc orovisions of the 1 > to the terms and provisions of all of ihe agreements cc c-ibed in Section I of Exhibit "A" hereto and to all pooling, unitization and joint development agreements r rd other agree ••• nts, encumbrances, easements, and restrictions, whether or not filed of record, to the extent .ne same are valid and in full force and effect and apply o the Lease; ; /ided, how eve. it is understood and agreed that (a) the Overiiding Royalty Interest constitutes an interest in the Minerals in and under the produced and saved from the lands covered by the L e e, pursuant to thc terms and prcvuioai of the Lease, (b) the Overriding Royalty ir terest shull be reduced proportionately by the exercise by uny third parties of their options to acyj-rc Cf increase their n terests in the Lease and the lands covered thereby und (c) the Overriding Royalty Interest shall be increased proportionately by (i) the exercise by thc AssigfOT of i v option to acquire or increase its interest in the Lease und the lands covered thereby a:. J (i 5) the operation of any contract relating thereto.

VII.

In the event of a loss or failure in t i t le to any I Assignor's interval in the Lease, the Overriding Royalty Interest shall be reduced in 'lie- same proportion that thc i iterest of Assi: toi in ;iroduction from thc Lease is reduced.

VIII.

'.^signor shall maintain true and correct boo- i una . coeds sv'.leient to enable Assign.^ U. verify the correctness of the amounts paid and payable to Assignee as thc owne of the Overriding Royalty Interest.

IX.

Assignor hall market or cause to be marketed thc Minerals at the best price? and on the b\sk te. s that Assignor shall deem rcasonaoiy obtainable under the cir i n ­stances, f o such purpose Assignor may amend any existing Minerals sales contrttiu or enter Imo 'w Mineral 1 sales contracts v^.nout prior consent or approval of Assignee.

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X.

Assr r <: s'lall have the right to assign, sell, transfer, convey, mortgage or pledge its interest .1 t'v.e Lease, or any part .Hereof, subject to the Overriding Royalty Interest and the terms and provisions of this Conveyance.

In the event Assignor enters into a f innout agreement with respect to thc Lease, or any portion thereof, i f Assignor's i n t e r c l i reduced pursuant thereto, the Overriding Royalty Interest shall bt reduced proportionally.

XI.

Assignor he re by binds and obligates itself, iu> successors a <: isigns, io warrant and forever defend all and singular the Overriding Royalty Interest en to Assignee, its successors and assigns, against every person whomsoever lawfully claiming or to claim che same e. any part thereof, by, through or under Assignor, but not otherwise.

Assignor v 11 maintain or cause to be maintained, such worker's compensation, employer's liab.lity, comprehensive general liability, automobile, hull, urcraft, indemnity, pollution, property and other insurance coverage relating .o oil and gas apere*' ns on the Lease as it considers prudent and appropriate ueder the circumstances. Aznigr-'V wi'l use all reasonable efforts to include the Assignee os an addition)'.] insured party on any policies of insurance maintained by Assignor rela'.ing to il a..d pas operations un the Lease.

Assignor hereby agrees to indemnify Assignee against and hold Assigne I armless from any loss, liability, damage and expense ^including reasonable legal fees) incurred by Assignee as a result of or arising out of oil and gas operations on the Lease.

XIII.

Assignor sr.&Lw

(a) provide Assignee. «." his agent, with such information concerning the Overriding Royalty Interor, as Assignee, or his agent, may reosonably request and to which Assignor hPo access to permi' Assignee, or his agent, to prepare all Accessary federal, mate, and other income tax reti: z, and

(b) provide the Assignee, or his agent, with access at the ot f ee of Assignor during normal busine 3 hours, to Assignor', books und records, wh'ch books shall be true and correct in a", material respects and sufficient to enabie thc Assignee, or his agent, to verify the correctness of the amounts paid and payable to Assignee as the owner of the Overriding Royalty Interest; p-ovided that Assignee and his agent shall keep the information therein confidential except for ir.formation which Assign e i j required b** jc-nlrac' or by law to disclose.

Ail reas *M ble costs incurred by Assignee or its agent in securing the information set forth in thi:. ArxJcle XIII shall be paid by y.ssignor.

XIV.

This Conveyance shall be bindng upon and inure to the benefit of the. parties hereto, their successors and assigns.

XV.

. his Conveyance is made with ful l substitution and subrogation of Assignee in and to all covenants of warranty by others heretofore given or made with respect to the Leas.* or to any pr r t thereof or interest the. i i n .

::v:.

This Conveyance covers an .nteresi ,n Federal Outer Continental Se.e)f in thc Gulf of Mexico, Cameron Parish, I juisiana. "his Conveyance shall be governed by and construed in accordance with tne laws o* * ie State of Texas, except to the extent that the laws of the jurisdiction in which thr 1 . ase is located govern questions involving title to th * Leasr;.

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, -/C / w / WITNESS THE EXECUTION HEREOF, as of the ^ day of y JL T( , A . » * L ,

1985 in multiple originals, but effective as of the date the Assignor acquired the Lease at 7:00 a.m. local time in effect at the location of the Lease ("Effective Date").

WITNESSES:

1ELISSA G. MfLNE

ASSIGNOR:

BY

MARK PRODUCING, INC.

C. L. Barney President

ATTESTr-

ASSIGNEE:

WITNESSES:

Helen B. Royer J

d-A hut Ai 7/V->"^' •' Shii-ley M. Thomp i

ut / / . — Ltley M.

STAT)* OF TEXAS

FIRST NATIONAL BANK OF LAFAYETTE as Louisiana Trustee of the Mark Employee Incentive Trust

Tnist Officer / Jerry W. Reynolds

COUNTY OF HARRIS f

On this C J day of s . y f f ^ d / 'L <- ~£t_ , 1985, before me, the undersigned authority, appeared C. L. Barney, who, being by me duly sworn, did say that he is the President of MARK PRODUCING, INC., that the seal affixed to said instrument is the Corporate seal of said corporation, thr t said instrument was signed on behalf of said corporation by authority of its Board of Directors for thc purpose and consideration therein expressed and said C. L. Barney, President of MARK PRODUCING, INC. acknowledged said instrument to be the free act and deed^of said corporation.

Notary Public in and for The State of Texas

(Seal) Name: GAYLE 6RIE!

STATE OF LOUISIANA

PARISH OF

On this authority appeared "JgA/y W(%CA'4*cV * w n ° » D e i n S °y , n e duly sworn, did say

My CommissionuBmifgeBc in «ndlor ttw StsUOJlys** My Commission tapirs* V ' h i /

1985, before me the undersigned

S ^ y s / K ^ y T f f i . y of FIRST NATIONAL BANK OF LAFAYI. TE, I ban King association is tf Louisiana Trustee of the Mark Employee

that he is the which national - banRing Incentive Trtist, an express trust within the meaning of Section 2 of the Texas Trust Act, and that the foregoing instrument was signed and delivered in behalf of said national banking association by authority of its Board of Directors or pursuant to its bylaws, in the capacity therein stated, end as the free act and deed of said national banking association in its capacity as Trustee of said Trust.

*7- c/eM* lie in and for

(Se\0

Notary Public The State of Louisiana

Name: /j&U 7" I j z B / u n V j My commission expires: jUi-z, f/f**-

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EXHIBIT "A" to

Conveyance of Overriding Royalty Interests, effective as of the Effective Date,

from Mark Producing, Inc. as Assignor to First City National Bank of Houston as Trustee

I . Description of Ltases

An undivided 100% leasehold interest in that certain Oil and Gas Lease of Submerged Lands (Lease), Federal No. OCS-G 7663, dated effective July 1, 1985, by and between the United States of America, as Lessor, and Mark Producing, Inc., as Lassee, covering all of Block 297, East Cameron Area, South Addition, as shown on OCS Leasing Mop, Louisiana Map No. 2A, containing 5,000 acres, more or less, as described the Lease.

H. Percentage Amount of Overriding rtoyalty Interest

Eight percent (8%) of Assignor's net revenue interest in the Lease.

EXHIBIT "A" - Page 1

< / / 2

P H E L P S , D U N B A R . M A R K S , C L A V E R I E & S I M S

.- — - * -»

- - - ! . * » i ' t C O U N S E L L O R S A T L A W ;C

" " * ' * N E W O R L E A N S . L O U I S I A N A ° « f £ '« ^ J . *

r r : z v t 7 0 1 3 0 - 3 1 0 0 - "

. . . w . . . . I O O O ' M i B ' i f - ' L C O K ' t « » C O C C ' t B n o o - , l - o « » o »

» I ' O H ' C C « . « D • « " I L C C C " I " 9 0 « 5 » 8 » ' 1 0 o « ? V ? "

i«?«**. 6*2152«'" T C L M M i m i «ui >.*.".'• ""* . - • • O N o • * - • « • C A M L C » 0 * | P C « . ' . t « f " " . " V i

• i i C ' - o t c I O « - I * V O I M

* L t A S C H C P L V T O N E W O H I I A H S O F F I C E

September 19, 1985

Ms. Lanelle Boehm 2166-18 United States Minera l s Management Service 3301 N, Causeway Boulevard M e t a i r i e , Louis iana

Re: Recordation of Conveyance of Net P r o f i t s I n t e r e s t

Dear Ms. Boehm,

On behalf of our c l i e n t , Mark Producing, Inc., I am enclos ig for recordation in the Conveyance Records of St. Mary Paris v the following documents:

Sixteen (16) Conveyances of Net Profits Interests, executed September 5, 1985, but effective as of the date and time stated therein, from Mark Producing, Inc. to C. L. Barney. These Conveyances cover the following Federal Leases:

Please record this document in the following Federal Lease f i l e 8 :

1. OCS-G 7706 2. OCS-G 7742 Z . OCS-G 7716 4. OCS-G 7704 5. OCS-G 7707 6. OCS-G 7703 7 . OCS-G 7702 8. OCS-G 77 56 9. OCS-G 7755

10. OCS-G 7754

September 19, 1985 Page 2

11. OCS -G 7675 12. OCS -G 7664 13. OCS -G 766? 14. OCS -G 7661 15. OCS -G 7660 16. OCS -G 7624

Thank you for your help.

Yours truly,

David M. Hunter 225/225 BOEHMAA

CONVEYANCE OF NET PROFITS INTERESTS

KNOW ALL PERSONS BY THESE PRESENTS THAT:

MARK PRODUCING, INC., a Delaware corporation with offices at 675 Bering Drive, Houston, Harris: County, Texas 77057 ("Assignor"), for and in consideration of Ten Dollars ($10.00) und other good and valuable consideration to i l paid by C. L. BARNEY, an individual residing at 259 Chimney Rock, Houston, Harris County, Texas 77024 ("Assig.iee"), 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, effective as of the Effective Date, a net profits interest ("Net Profits Interest") in and to the Minerals in and under and produced and saved from the lands covered by each of thc Leases described in Exhibit "A" attached hereto and made a part hereof, and any and all renewals and extensions thereof, equal to five percent (5%) of the Net Proceeds attributable to the Subject Interests, calculated on a Lease-by-Leusc basis, as each of the above underlined terms is defined in Article I and all as more fully provided herein.

TO HAVE AND TO HOLD the Net Profits Interests, together with all and singular the rights and appurtenances thereto in anywise belonging unto Assignee, his heirs, personal 'epresentatives and assigns, subject, however, to the following terms and provi­sions, to-wi.;

ARTICLE I .

As used herein, the following words, terms and phrases shall have the following meanings:

Section 1.01. "Assignor" means Mark Producing, Inc. while it owns all or part of the Subject Interests and any other Person or Persons who acquire all or any part of the Subject Interests.

Section 1.02. "Business Day" means any day other than Saturday, Sunday, or any other day on which national banking institutions in the City of Houston, Texas are closed us authorized or required by law.

Section 1.03. "Conveyance" means this Conveyance of Net Profits Interests.

Section 1.04. "Declaration of Trust" means the Trust Agreement made as of the 15th day of March, 1982, between Mark, as grantor and trustor, and First City National Bank of Houston, as trustee, creating the Mark Employee Incenti*-' Trust.

Section 1.05. "Effective Date" means date thc Assignor acquired each of the Leases shown on Exhibit "A"at 7:00 o'clock a.m., local time <n effect at the location of each such Lease.

Section 1.03. "Employee Incentive Plan" means the Employee Incentive Plan of Mark approved by its Board of Directors as of March 15, 1982.

Section 1.07. "Excess Production Cost Reductions" at the end of any month means an amount, if any, equal to the excess of the amounts set forth in para­graph (b) ol Section 1.19 for such month over the amounts set forth in paragraph (a) of Section 1.19 for such month, calculated on a Lease-by-Lease basis.

Section 1.08. "Execution Month" means the month in which this Conveyance is executed and delivered by the Assignor.

Section 1.09. "Excess Production Costs" at the end of any month means an amount, if any, equal to thc excess of Production Costs for such month over Gross Proceeds for such month, calculated on a Lease-by-Lease basis.

Section 1.10. "Gross Proceeds" for any month means, on the cash receipts and disbursements method of accounting and calculated on a Lease basis, the amount received as revenues from the sale of Subject Minerals produced after the Effective Date (determined before calculating the Net Profits Interests hereunder and before giving effect to any overriding royalty or other interest awarded to or created for the benefit of employees of Mark pursuant to the Employee Incentive Plan), subject to the following:

(a) On oil, condensate and other liquid hydrocarbons recovered by con­ventional field-type primary separation processes (collectively, the "Liquids"),

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(i) when sold, Gross Proceeds shall mean the amounts received by Assignor frcm the sale of such Liquids on the Lease or at the central field point of delivery; and

(ii) when used off the Lease premises, Gross Proceeds shall mean the amount so used, calculated in the same manner as if said Liquids had been sold under the contract then in exisience between Assignor and th': Purchaser of Liquids from the subjeet Lease, or, in the event there is no such contract, Gross Proceeds shall mean the fair market value of such Liquids at thc point and date of delivery thereof on the Lease.

(b) On gas, including casinghead gas or other gaseous substances, remaining after separation of the associated Liquids by conventional, field-type primary separation processes ("Gas"),

(i) when sold, Gross Proceeds shall mean the amounts reeeived by As­signor from such saie on the Lease or at the central field point of delivery; and

(ii) when used ofi" the Lease premises, Gross Proceeds shall mean the amount so used, calculated in the same manner as if said Gas had been sold under the contract then in existence between Assignor and the Purchaser of Gas from the subject Lease or, in the event there is no such contract, Gross Proceeds shall mean the fair market value thereof at the point and date of delivery thereof on the Lease;

provided, however, that in the event at any time Assignor elects to process, or to have processed, Gas produced from the Lease in a gas processing plant, whether or not owned by Assignor, Gross Proceeds shall mean the amounts determined in accordance with paragraphs (c) and (d) below.

(c) On liquid or liquefiable hydrocarbons or other products manufactured or extracted from Gas as a result of processing of Gas at a gas processing plant (collectively, the "Products"),

(i) when sold, Gross Proceeds shall mean the amounts received by Assignor at the tailgate of the plant from the sale by Assignor of such Products allocable to the subject Lease; and

(ii) when used other than as fuel for operating the plant, Gross Proceeds shall mean the amount so used, calculated in the same manner as if said Products had been sold under the contract then in existence between Assignor and the Purchaser of such Products or, in the event there is no such contract, Gross Proceeds shall mean the fair market value at the plant on the date of processing or extraction of the Products so used applied to the volume of such Products allocable to the subject Lease.

(d) On the residue gas remaining after the removal of Products at a gas processing plant ("Residue Gas"),

(i) when sold, Gross Proceeds shall mean the amounts received by Assignor at the tailgate of the plant from the sale of such Residue Gas allocable to the subject I t se; and

(ii) when used other <han as fue! for operating the plant, Gros3 Proceeds shall mean the amount c used, calculated in the same manner as if said Residue Gas had been sold under the contract then in existence between Assignor and the Purchaser of such Residue Gas or, in the event there is no such contract, Gross Proceeds shall mean the fair market value at the plant of the Residue Gas so used on the date of use aUocable to the subject Lease;

provided, however, that nothing herein shall obligate Assignor to process, or to have processed, Gas from the Lease.

(e) On sulfur and other Minerals (not otherwise provided for in paragraphs (a), (b), (c) and (d) above) (collectively, "Additional Minerals"), (i) when sold, Gross Proceeds shall mean the amounts received by Assignor from such sale, or (ii) when used off the Lease premises, Gross Proceeds shall mean the amount so used, calcu­lated in the same manner as if said Additional Minerals had been sold under the contract then in existence between Assignor and the Purc.iaser of the Additional Minerals from the subject Lease, or in the event there is no such contract, Gross Proceeds shall mean the market value thereof at the point and date of production.

(0 Present or future opereting egreements, contracts lor development or other similar agreements affecting or pertaining to any of the Subject Interests, or

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portion thereof, may permit the parties thereto to cleet not to participate in drilling or other operations ("nonconscnt operations"). In the event Assignor elects to parti­cipate in nonconscnt operations in which other parties elect not to so participate, Gross Proceeds shall include all amounts received by Assignor with icspcet to produetion resulting from or arising out of such nonconsent operations.

(g) If u controversy or possible controversy o i s t s (whether by reason of any statute, order decree, rule, regulation, contract or otherwise) between Assignor and any Purchaser us to the correct sales price cf any Subject Minerals, then amounts received by Assignor and deposited by it with an escrow agent in accordance with thc provisions of Section 7.4 hereof shall not be considered to have been received by Assignor (and amounts of interest earned thereon shall nol be included as Gross Proceeds), but all amounts thereafter repaid to Assignor by such escrow agent out of the escrowed umounts (exclusive of interest earned by Assignor thereon) shall be included as Gross Proceeds.

(h) There shall be excluded from Gross Proceeds any amount received by Assignor as (i) a bonus for any Lease or thc assignment of any Subject Interest, (ii) a payment in connection with the drilling or deferring of drilling of any well on any of the Subject Interests, (iii) a payment made as an adjustment of, or payment for, any well and leasehold equipment upon unitization of uny of the Subject Interests, (iv) a dry hole or bottom hole payment, (iv) proceeds from the sale of surplus equipment, (v) a rental payment from a third party for thc use of separation, compression, dehy­dration and other facilities and platform space used in connection wth the Subject Interests and (vi) proceeds of insurunce or other payments with respect to damage to, loss of, or as payments on disposition of property (other than Subject Minerals) used in connection with the Subject Interests.

(i) There shell be excluded fron. Gross Proceeds any amount for Subject Minerals flared or unavoidably lost 11. t h c production thereof or used by Assignor for drilling and oroduetien (including '" • secondary recovery, pressure; mainte­nance, reoressurng, cycling ope * "ouduotcd for thc purpose of producing Subject Minerals fror; . u;iit to which any of the Sub­ject Interests are committed, bu . - uocfi Subjeet Minerals are so used.

(j) Amounts received by Assignor as payment om a Purchaser of Subjeet Minerals pursuant to contractual provisions providing Mr "take-or-pay" payments (including prc-initial dc.ivery payments but excluding pi unity amounts) shall b~ con­sidered to be received from the sule of Subject Minerals; provided that amounts received from the sale of Subject Minerals at the time " i later delivery pursuant to any such provisions shall be reduced by amounts previously considered to be received as Gross Proceeds pursuant to the first clause of this paragraph (j). As used in this paragraph (j) the term "penalty amounts" means amounts in excess of (i) the then current contract price multiplied by (ii) the difference hetwecn the amount of Sub­ject Minerals required to be taken under the contract and the actual amount taken.

(k) There shall be excluded from Gross Proceeds amounts received by Assignor as production payment loans, advance gas payments or similar payments, provided that i f sucn produetion payment loans, advance gas paymcn»s or similar"**" payments are extinguished or repaid through the future delivery of Subjecl Minerals, there shall be included in Gross Proceeds ut the time of ?uch delivery an amount for the Subject Minerals from the subject Lease or, in the event there is no such contract, calculated at the fair market vulue of suid Subject Minerals at thi ooint and date of delivery thereof on the Lease.

Section 1.11. "Incentive Committee" means the comn "ft^n vested with the respon­sibility of administering the F.mployec Incentive plan p *agraph 5 thereof.

Section 1.12. "Leased Lands" means the lauds c - o.

Section 1.13. "Lease" means each of the deeds -nces and the oil, gas and mineral leases described in Exhibit "A" attacht d all renewals and extension thereof.

Section 1.14. "Mark" means Mark Producing, Inc.

Section 1.15. "Minerals" means (a) oil, (b) gas, (c) associated hydrocarbons, sulfur and ether minerals produced with gus, whether similar or dissimilar, and (d) ull other minerals of eve^ type and description, including without limitation, coal, lignite, uranium and other fissionable materials, geothermal energy (including entrained gas, hydrostatic pressure and thermal energy), hnrdrock minerals and base and precious metals to the extent that such minerals inure to the benefit of Assignor under thc Lease.

Section 1.16. "Monthly Record Date" means the fifteenth (15th) day of eaeh month beginning with the second month following thc Execution Month provided thut i f the

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fifteen*'. 115th) day of any such month is not a Business Day, then the Monthly Record Date shall be the fust Business Day following the fifteenth (15th) day of such month.

fjeclLm 1.17. "N?t Proceed*" nr .ans the following:

(a) For the period fro- ffective Date respecting the Lease to the end of the Execution Month N'v eds means the excess, if any, of the Gross Proceeds for sucl period J • . roduction Costs for such period (such period to be treated as one month',; and

(b) For ooeh month after the Execution Month respecting the Lease, Net Proceeds mew. the excess, if any, of ;he Gross proceeds for such month over Production Co?ts of such month.

Section 1.19. "Person" means any individual, coiporation, partnership, tru. . estate or other entity or organization.

Section 1.19. "Production Costs" for any month mean*, on the cash receipts and disbursements method of accounting and calculated on a Lease-by-Let .e basis, am' whether capital or non-cupital in nature,

(a) the sum of (to the extent not deducted for purposes of calculating Gro*« Proceeds)

(i) Excess Production Costs at the end of the preceding month;

(ii) the costs paid by Assignor under any operating agreement relating to a Subject Interest or otherwise in connection wilh the operation of a Subject Interest, including L>ut not limited to, delay rentals, the costs of drilling and equipping wells, lease operating costs, severance, ad valorem and similar taxes the costs of production facilities (including offshore platforms) and related leasehold equipment, and the costs of plugging and abandoning wells and dismantling offshore platforms; provided that interest paid on indebtedness of any tyne shall not be included in Production Costs;

iii) if Gas produced from thc Subject Interests is processed by Assignor at any Gas processing plant, the co-is, if any, paid by Assignor in processing Gas pursuant to the applicable r.-ocessing agreement or contract (or if there exists no such agreement or contract an amount equal to costs paid under processing agreements or contracts then available in the market from unaffiliated parties relating to similar Gas processing arrangements);

(iv) any amounts paid by Assignor, whether as refund, inter< t, or penalty, to a Purchuser or any governmental agency or other Person as a refund of any "take-or-pay" payment or because the amount initially received by Assignor as thc sales price was more, or allegedly more, than permitted by the terms of any applicable contract, statute, regulation, order, decree or other obligation; provided such amounts (in the case of a refund), or the amounts with respect to which the interest or penalty was paid, were previously included in Gross Proceeds;

(v) any amount paid by Assignor as (A) a bonus for the Lease or the assignment of any Subject Interest, (B) a paym nt in connection with the drilling or deferring of drilling on any of tl Subject Interests, (C) an adjustment of, or payment for, any well and leasehold equipment upon unitization of any of the Subject Interests, (D) as a dry hole or bottom hole payment, (E) as a rental payment to a "bird party for the use of separation, compression, dehydration and other- facilities and platform space used in connection with the Subject Interests and (F) as insurance premiums paid or self-insurance costs incurred or other payments made with respect to damage to, loss of, or payments on disposition of property (other than Subject Minerals) used in connection with the Subject Interests; and

(vi) any amount equal to the Windfall Profit Tax withheld on or otherwise paid in respect of Subject Minerals removed from the Subject Interests, plus any WPT deficiency (including interest and penalties) paid with respect to Subject Minerals removed from the Subject Interests;

(b) reduced by the sum of

(i) Excess Production Cost Reductions at the end of the preceding month;

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(ii) amounts r'.-eeived t 'om purchasers of Subject Minerals as reim­bursement for severi ice or sin ilar taxes (tc thc extent not included in Gross Proceeds);

(iii) amounts received by Assignor as (A) a bonus for the Lease or the assignment of any Subject Interest, (B) payments in connection with the drilling or deferring of drilling of any well on any of the Subject Interests, (C) payments made as on adjustment of, or payment for, any well and leasehold equipment uoon unitization of any of the Subjeet Interests, (D) dry hole or bottom hole payments, (E) proceeds from sales of surplus equipment, (F) rental payments f-om third parties for the use of separation, compression, dehydra­tion and other facilities and platform space used in connection with Subject Interests and (G) proceeds of insurance, the premiums or self-insurance costs of which have been included in Production Costs, or other payments made with respect to damage tc, loss of, or payments on disposition of property (other than Subject Minerals) used in connection with the Subjeet Interests;

(iv) amounts attributable to personal property, equipment or supplh:. acquired j r held for use on or in connection with thc Subject Interests tb_ Lease aid transferred by Lhe Assignor from, or removed from JSC . connection with, the Subject Interests on the Lease;

(v) amounts receive, as refunds for overpayments of WPT previously paid in respect of Subject Minerals removed from the Subject Interests; and

(vi) amounts of interest or penalty paid to Assignor in respect of amou its referred to in paragraph (g) of Section 1.10 hereof, and amounts of interest earned on amounts placed in escrow in accordance with the provisions of Section 7.4 hereof.

Section L-O. "Purchaser' J "Purchasers" shall mean, respectively, each or all purchasers of Minerals produced rom tne Subjeet Interests.

Sectior 1,21. "Sale" includes ^ACh. nges and other dispositions for value.

Scc t jn 1.22. "Subject ln tc rests" means each kind and character of right, title, claim or interest which Mark has m Pn Effective bate in the Lease or portions thereof which ar; described in Exhibit A' and all the right, title, claim or interest which Mark has at the Effective Date in and tv the Leased Lands whether such right, title, claim or interest he under and by virtue of a lease, a mineral deod, a royalty deed, an operating agreement, a division order, a transfer order or any other type of contract, conveyance or instrum ' or under any other type of claim or title, legal or equitable, recorded or unrecorded, •< m ti jgh the Assignor's interests be incorrectly or incompletely described in, or a description thereof be omitted from, Exhibit "A"', ull as the same shall be (a) enlarged or diminished by virtue of the provisions of Articles VI, VIII and XIII hereof and (b) enlarged by the discbarge of any payments out of production or by the removal of any charges or encumbrances to which any of the same were subject on the Effective Date and any and all renewals and extensions of any of the same.

Section 1.23. "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 from and after the Effective Date.

Section 1.24. "Winofall Profit Tax" and "WPT" each mea, ; the tax imposed by the Crude Oil Windfall Profit Tax Act of 1980, as amended, or any excise tax to the same or similar effect.

ARTICLE I I .

Notwithstanding anything to the contrary contained herein, Assignee, and his heirs, personal representatives and assigns, shall not have the right to take in kind the production of Minerals attributable to the Net P r ofi ts Interests.

ARTlcr c TU.

In no event shall Assignee ever be liable or responsible in any way for payment of any part of an\ Production Costs or any other costs, expenses or liabilities incurred by \ssign' >• o' other lessees attributable to the Subject Interests or to the Subject Minerals

, ruduecd the-efron. .t being the intent of the parties that the Net Profits Interests shall constitut • non-o;.\ r..ting mineral interests for all purposes.

ARTICLE IV.

Assign r shall have the right and power to commit its leasehold working interest in the Leese, out of which the Net Profits Interests are carved, to future operating

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agreements, contracts for development or other similar agreements affecting or pertaining tc lhe Subject Interests, and the Net Profits Interests shall be bound jy and subject tc the terms an:1 provisions thereof

VTICJ.E V.

Nothing herein contained shall obligate Assignor to conduct any drilling operations whatsoever upon thc Subject Interests, or to continue to operate any well or to operate or maintain in force or attempt to maintain in force the I ase or to maintain ihe Lease in effect by payment of delay rental payments j r otherwise, and the extent and duration of all operations, as well as the preservation of the Lease by delay rental payments or otherwise, shall be solely at the will of Assignor; and Assignor shall have the right at any time to surrender, abandon or otherwise terminate the Subject Interests in whole or in part without liability to Assignee, and in case of any such surrender, abandonment or termination, Assignor may releaso the surrendered, abandoned or terminated Lease directly to the lessor thereof.

ARTICLE VI.

Assignor shall have the righi and power, without any approval by Assignee, lo pool, unitize or jointly develop the Lease and to alter, change or amend or terminate any pooling, unitization or joint development agreement heretofore or hereafter entered into, as to aU or any part of the Leased Lands, as to any one or more of the formations or horizons 'hereunder, end as to any of the Subject Minerals, upon such terms and provis'ons as Assignor shall in its soie discretion determine. If and whenever through the exerois* of suea. right and power, or pursuant to any law now existing or hereafter enacted, or \u\ -ule, regulation or order of any governmental body hereafter promulgated, the Lease is pooled, unitized or jointly developed in any manner, the Net Profits Interests shall also be pooled, unitized or jointly developed, as the ease may be, and in such event assignee shall be entitled to receive the Net Profits Interests which accrue to the Lease under and by virtue of the pooling, unitization or joint development.

ARTICLE VD.

Section 7.1. Assignor shall use its best efforts to pay to Assignee the amounts attributable to the Net Profits Interests (the "Payment Amounts") as follows:

(a) Payment Amounts with respect to the Net rroeeeds for the pe 1 from the Effective Date to the end of the Execution MOT»V **-'U be payable on the Monthly Record Date of the second month following th Month; and

(b) Payment Amounts with respect to the each month thereafter shall be pcyable on the Monthly Recora * eond month foUowing such month.

Section 7.2. If at any time Assignor has previously paid Assignee amounts a t t r i ­butable to the Net Profits Interests based upon Payment Amounts as to which Assignor is subsequently required to make any repayment referred to in paragraph (a)(iv) of Section 1.19, Assignee shaU not be obligated to return any such amounts previously paid to Assignee (such payment to be included in Production Costs pursuant to Section 1.19).

Section 7.3. Amounts deposited by Purchasers of Minerals produced from the Subject Interests with an independent depository or escrow agent (thc "escrow agent") shall not be considered to be received by Assignor (and therefore not be deemed to be Gross Proceeds); provided, however, that Assignor shall use its best efforts to collect such unpaid or withheld amounts in a timely manner. At such time as Assignor has been paid such unpaid or withheld amounts, such amounts (including the amount of any interest or penalty paid by the Purchaser to Assignor with respect to such previously unpaid or withheld amounts), shall be considered Gross Proceeds unless placed in escrow by Assignor in accordance with the provision of Section 7.4.

Section 7.4. If an uncertainty or controversy exists concerning the sales price-charged to any Purchaser for sales of Subject Minerals from the Lease, ther Assignor, at its option, may select an independent escrow agent and cause the amount which Assignor deems to be uncertain or subject to controversy (together with amounts which Assignor estimates may be payable in penalties with respect to such amounts and in interest with respect to such amounts through the date of deposit) to be deposited with such escrow agent, and upon the deposit (the "escrow") of such funds ("Escrowed Funds", which term shall not include any interest earned thereon) the amounts of such Escrowed Funds shall not be included as Gross Proceeds from such Lease during the period of time they are held in escrow. The depository agent agreement or escrow agreement (the "escrow agreement") between Assignor and the escrow agent shaU provide that the escrow agent shall place such Escrowed Funds in certificates of deposit or United States government securities having maturities not to exceed thirty (30) days, that the escrow agent shall,

6

upon trie request or Assignor, release such escrowed Funds from escrow and that any inte.-est earned on s u n Escrowed Funds shall be paid to Assignor monthly. When the uncertainty or controversy is settled or Assignor d< rrr.inc. 'in its sole discretion and for whatever reason';) that there no longer exists a need for the escrow ing of all or any purt of the Escrowed Funds, Assignor will so inform the escrow agent, 'ind the escrow agent shall pay to Assignor thc amount of such Escrowed Funds with rasped to which such uncertainty or controversy no long- r exists or with i >pect to which Assignor has determine ! there no longer exists a need for funds to bt escrowed ("Released Funds"). To thc extent that Released Funds are not required to be refunded to Purchasers or uny subsequent purchasers (no matter how distant) from Purchaser, or to uny governmental authority oi uny other Person (collectively "Refund Recipients"), then Assignor shull treat such Released l ands as Gross proceeds. To the extent that such Released Fends are required to be refunded to Refund Recipients, any interest of \ssignce in such Released Funds shai. terminate.

\ RTICLE VIII.

This Conveyance is made and accepted subject to all orders, rules and regulations and ordinances of federal, stat-- and other governmental agencies having jurisdiction; to the terms and provisions of the Lease; to the terms and provisions of all of the agree­ments described in Exhibit "A" hereto and to pooling, unitization agreements and other agreements, encumbrances, easements, and restrictions, whether or not filed of record, to the extent the same are valid and in full force and effect and apply to the Lease; pro­vided, however, i t is understood und ugreed that thc Net Profits Interest constitutes an interest in the Minerals in and under the produced and saved from the lands covred by the Lease, pursuant to the terms and provisions of the Lease, and it being further under­stood that said interest shall be reduced proportionately by the exercise by any third parties of their options to acquire or increase their interests in the Lease and the Leased Lands, or by the operation of the terms of any contract relating thereto: provided, further, it is understood and agreed that the Net profits Interest shall be increased proportionately by (a) the exercise by the Assignor of any option to acquire or increase its interest in the Lease and the Leased Lands an I (b) the operation of the terms of any contract relating thereto.

ARTICLE IX.

In the event of a loss or failure in title to any of Assignor's interest in any of the Leases, the Net Profits Interest attributable to the Lease shall be reduced in the same proportion that the interest of Assignor in production from said Lease is reduced.

ARTICLE X.

Without affecting the respective obligations of Assignor and Assignee under the Windfall Profit Tax Act of 1980, as amended, and the regulations promulgated there­under, Assignor, as an accommodation to Assignee, agrees to be responsible for securing the withholding and/or depositing of the WPT attributable to Assignee's Net Profits Int rests, computed in accordance with Section 150.4996.1(b)(3) of the Temporary Excise Tax Regulations, or any successor provision of similar import. Assignor recognizes that the allocation of the WPT withheld or paid in respect of Subject Minerals removed from the Subject Interests may differ from the amount of WPT payable by Assignee un .er the Windfall Profit Tax Act of 1980, as amended, and the regulations promulgated there­under. Assignor agrees that as long as any of the Net Profits Interests is outstanding, it will not use any overpayment of WPT applicable to Subject Minerals removed from the Subject Interests as a credit against its tax liability under the iederal income tax laws.

ARTICLE XI.

Assignor shall maintain true and correct books and records sufficient to enable Assignee to verify the correctness of the amounts paid and payable to Assignee as the owner of the Net Profits Interests.

ARTICLE XU.

Assignor shall mar'<et or cause to be marketed the Subject Minerals at the best prices and on the best terms that Assignor shall deem reasonably obtainable under the circumstances. For such purpose Assignor may amend any existing Minerals sales contracts or "--nter into new Minerals sales contracts without prior consent or approval of Assignee.

ARTICLE XIII

Assignor shaU have the right to assign, sell, transfer, convey, mortgage or pledge its interest in the Subject Interests, or any part thereof, subject to the Net Profits Interest and the terms and provisions of this Conveyance.

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In the event Assignor enters into a farmout agreement with respect to any Subject Interests, if Assignor's interest is reduced pursuant thereto, the Net Profits Interest shall be reduced proportionately.

ARTICLE XIV.

Assignor hereby oinds and obligates itself, its succev.ors and assigns, to warrant and forever defend all and singular the Net Profits Interests unto Assignee, his heirs, per­sonal representatives 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 XV.

Assignor will maintain or cause to be maintained, such worker's compensation, employer's liability, comprehensive general liability, automobile, hull, aircraft, indem­nity, pollution, property and other insurance coverage relating to oil and gas operations on the Subject Interests as it considers prudent and appropriate under the circumstances. Assignor will use all reasonable efforts to include the Assignee as an additional insured party on any policies of insurance maintained by Assignor relating to oil and gas opera­tions on the Leases.

Assignor hereby agrees to indemnify Assignee against and hold Assignee harmless from any loss, liability, damage and expense (including reasonable legal fees) incurred by Assignee as a result of or arising out of oil and gas operations on the Leases.

ARTICLE XVI.

Assignor shall: (a) provide Assignee, or his agent, with such information concerning the Net

Profits Interests as Assignee, or his agent, may reasonably request and to which Assignor has access to permit Assignee, or his agent, to prepare all necessary federal, state, and other income tax returns; and

(b) provide the Assignee, or his agent, w«th access at the office of Assignor dur'ng normal business hours, to Assignor's book? and records, which books shall be true and correct in all material respects and sufficient to enable the Assignee, or his agent, to verify the correctness of the amounts paid and payable to Assignee as the owner of the Net Profits Interest; provided that Assignee and his agenl shall keep the information therein confidential except for information which Assignee is required by contract or by law to disclose.

All reasonable costs incurred by Assignee or its agent in securing th<* information set forth in this Art icle XVI shall be paid by Assignor.

ARTICLE XVR.

This Conveyance shall be binding upon and inure to the benefit of the parties hereto, their heirs, personal representatives, successors and assigns.

ARTICLE XVID.

This Conveyance 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 Lease or to any part thereof or interest therein.

ARTICLE XIX.

Pursuant to Section 2(c) of the Employment Agreement effective July 1. 1981, as amended, by and among Veba Oel AG, Mark and C. L. Barney, M has (a) the right of first refusal to purchase the Net Profits Interest in each Subject ' rest in the event of a proposed sale by C. L. Barney while he is employed by Mar jnd (b) an option to purchase the Net Profits Interest in each Subject Interest for a period of ninety (90) days after the termination of C. L. Barney's employment by Mark for any reason.

ARTICLE XX.

This Conveyance covers an interest in Federal Outer Continental Shelf in the Gulf of Mexico, Cameron Parish, Louisiana. This Conveyance may be executed in several ori­ginal counterparts, each of which shall for aU purposes be deemed to be an original, and all such counterparts shall together constitute but one and the same Conveyance. This Conveyance shall be governed by and construed in accordance with the laws of the State of Texas, except to the extent that thc laws of the jurisdiction in which any Subject In­terest is located govern questions involving ti t le to i Subject Interest

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WITNESS THE EXECUTION AND DELIVERY HEREOF, as of the 5*^day of fftt

Lea cas of the Effective Date. 1985 in multiple originals, but effective with respect to the

ASSIGNOR:

WITNESSES: MARK PRODUCING, INC.

MELW-'U'G. MH.N

BY NAME TITLE

/ > --A ! )

t . f

(Seal)

WITNESSES:

^J6hn E. LeaTsecretary

ASSIGNEE:

STATE OF TEXAS

COUNTY OF HARRIS

C. L. BARNEY

On this S da - of authority, personally appeared m

1985, before me, the undersigned ( j f e i / i i yy} , >, , who, being by me duly

sworn, c;d say that he is the Vice President ai Mark Producing, Inc., that the seal affixed to said instrument is the Corporate seal of said corporation, that said instrument was signed and sealed OT 1 17 of said corporation by authority of its Board of Directors for the purpose rnd coruscat ion therein expressed, and said Vice President of Mark Producing, Inc. acknowledged said instrument 'o be the free act and deed of said corpora*, x

GIVEN UNDER MY HAND AND OFFICIAL SEAL on the date first above written.

(Seal)

STATE OF TEXAS

COUNTY OF HARRIS

On this c O i y of

Notary Pgfclic in and for The State of Texas GAYLE GfllES

Name: Notary Public t.. anfl let tha SUitt ol Tfiai My Commission Expires-My Commimon t»pkf- ' ' f"

/ L i c <~ , 1985, before me the undersigned authority personaUy appeared C. L. BARNEY, known to me to be the person whose name is subscribed to the foregoing instrument, and acknowledged to me that he executed the same for the purposes and considerations therein expressed.

GI\ uN UNDER MY HAND AND OFFICIAL SEAL on the date first above written.

(Seal)

Nota republic hi and for The State of Texas

Name: C "' i : Cr!.?3 My Commission E x p i r e ? * 1 ! ^ 3 u a , , c r SUU of Ttus

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EXHIBIT "A" to

Conveyance of Net Profits Interest effective as of tiie Effective Date,

by Mark Producing, Inc., as Assignor and C. L. Barney, as Assignee

I . Description of Leases

An undivided 100% leasehold interest in that certain Oil and Gas Lease of Submerged Lands (Lease), Federal No. OCS-G 7663, dated effective July 1, 1985, by and between the United States of America, as Lessor, and Mark Producing, Inc., as Lessee, covering all of Block 297, East Cameron Area, South Addition, as shown on OCS Leasing Map, Louisiana Map No. 2a, containing 5,000 acres, more or less, as described in the Lease.

II . Date of Acquisition

July 1, 1985

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