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Home My WebLink About949347When recorded, please return to: Gary-Williams Production Company 370 17"' Street, Suite 5300 Denver, CO 80202 Attn: Tim Howard RECEIVED 9/8/2009 at 3:53 PM RECEIVING # 949347 BOOK: 731 PAGE: 393 JEANNE WAGNER LINCOLN COUNTY CLERK, KEMMERER, WY 0&&393 STATE OF WYOMING ) ) H COUNTY OF LINCOLN ) ASSIGNMENT OF OVERRIDING ROYALTY INTEREST THIS ASSIGNMENT OF OVERRIDING ROYALTY INTEREST (this "Assignment"), dated August 25, 2009, is from GARY-WILLIAMS PRODUCTION COMPANY, a Delaware corporation ("Assignor"), 370 Seventeenth Street, Suite 5300, Denver, Colorado 80202, to ROBERT ZIMMERMAN, JR. doing business as ZIMMERMAN RESOURCES COMPANY ("Zimmerman"), P.O. Box 570174, Houston, Texas 77257-0174, and SARLAN RESOURCES, INC. ("Sarlan"), 6052 South Lima Way, Englewood, Colorado 80111. Zimmerman and Sarlan shall be referred to herein, collectively, as "Assignee". Assignor and Assignee shall be referred to herein, collectively, as the "Parties". Recitals A. Assignor owns the entire oil and gas leasehold estates created by the leases (the "Leases") described in Exhibit "A" hereto, insofar as the Leases cover the land (the "Land") described in Exhibit "A". B. Assignor and Assignee desire Assignor to assign to Assignee an overriding royalty interest burdening the Leases in accordance with the terms and conditions hereof. PARTI Assignment IN CONSIDERATION OF TEN DOLLARS ($10.00), and other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the Parties hereby agree as follows: 1.1 Assignment. Assignor hereby sells, assigns, transfers and conveys to Assignee an overriding royalty interest (the "Override") equal to three percent (3.00% of 8/8ths) of all oil, gas and other hydrocarbons produced, saved and marketed from the Land described in Exhibit "A" hereto covered by the Leases described in Exhibit "A" hereto; provided, however, that the Override shall be reduced, on a lease-by-lease basis, to the extent that the Override burdening a Lease exceeds the difference between a 15.50% and the sum of all landowners' royalties and overriding royalties burdening such Lease which are recorded in the real property records on or before the date of this Assignment (excluding any such overriding royalties owned by Assignor or any of Assignor's affiliates), but in no event shall the Override be less than one percent (1.00% of 8/8ths). The Override shall be owned by Zimmerman and Sarlan one- half each. Pagel of 3 G0VA94 1.2 Warranty. Assignor warrants title to the Override against all liens, encumbrances and defects of title arising by, through or under Assignor, but not otherwise. EXCEPT FOR THE FOREGOING, THIS ASSIGNMENT IS "AS IS, WHERE IS, WITH ALL FAULTS AND WITHOUT RECOURSE". THE PARTIES HEREBY EXPRESSLY DISCLAIM ALL WARRANTIES, EXPRESS, IMPLIED, STATUTORY OR OTHERWISE, INCLUDING, WITHOUT LIMITATION, THE IMPLIED WARRANTY OF MERCHANTABILITY AND FITNESS FOR A PARTICULAR PURPOSE. 1.3 Payment. The Override shall be free and clear of all costs of drilling, development and operations. The Override shall not be paid or accrued on oil, gas or other hydrocarbons unavoidably lost, or used at the property for operations, development or production purposes including, without limitation, repressuring or recycling operations or pressure maintenance, until such time that said hydrocarbons are produced and marketed. In addition, the Override shall bear its proportionate share of costs for transportation, taxes, gas gathering and processing to the same extent that such costs are deductible from the lessor's royalty interest under the Leases under applicable laws and regulations. 1.4 Proportionate Reduction. The Override shall be proportionately reduced on a lease-by-lease basis to the extent a Lease covers less than the entire undivided oil and gas mineral fee estate in and under the Land covered by such Lease, and to the extent that the interest in a Lease owned by Assignor as of the date of this Assignment is less than the entire oil and gas leasehold estate created by such Lease. 1.5 Extensions and Renewals. The Override shall burden all extensions and renewals of the Leases acquired by Assignor, or Assignor's successors or assigns. For purposes of this Assignment, an "extension or renewal" shall mean any amendment, extension, renewal or new lease covering the Land covered by an expiring Lease which is acquired (and, with respect to a federal or state lease, for which an offer to lease has been filed) by Assignor or Assignee, or Assignor's or Assignee's successors or assigns, on or before the expiration of such Lease or on or before one year thereafter. TO HAVE AND TO HOLD the Override, subject to the terms and conditions hereof, unto Assignee, and Assignee' successors and assigns, forever. PART I Miscellaneous 2.1 Exhibits. All exhibits attached hereto are hereby incorporated herein and made a part hereof for all purposes, as if set forth in full herein. References in such exhibits to instruments on file in the public records are hereby incorporated by reference herein for all purposes. 2.2 Headings. Headings are included in this Assignment for convenience of reference and shall in no way define, limit, extend, or describe the scope or intent of any provision of this Assignment. 2.3 Severability. In the event any court invalidates any provision of this Assignment, all other provisions shall remain binding and in full force and effect with respect to the Parties. 2.4 Third Party Rights. The references in this Assignment or in the exhibits hereto to liens, encumbrances, agreements and other burdens shall not be deemed to recognize or create any rights in third parties. 2.5 No Merger. The Parties hereby acknowledge and agree that the Override shall not be deemed to merge with any leasehold interests now owned or hereafter acquired by any of the Parties. Page 2 of 3 0V395 2.6 Successors and Assigns. This Assignment shall be binding upon and inure to the benefit of Assignor and Assignee, and their respective heirs, devisees, personal representatives, successors and assigns. 2.7 Further Assurances. Assignor agrees to take all such action and to execute, acknowledge and deliver all such instruments necessary or advisable to consummate the transactions contemplated by this Assignment. Assignor agrees to execute, acknowledge, and deliver to Assignee all such other additional instruments, notices, division orders, transfer orders, and other documents, and to do all such other and further acts and things as may be necessary or useful to more fully and effectively transfer, convey, and assign to Assignee the Override conveyed hereby or intended so to be. 2.8 Governmental Assignments. Separate assignments of the Override may be executed on officially approved forms by Assignor to Assignee in sufficient counterparts to satisfy applicable statutory and regulatory requirements. Those assignments shall be deemed to contain all of the agreements, rights, titles, disclaimers, limitations, powers and privileges set forth herein as fully as though they were set forth in each such assignment. The interests conveyed by such separate assignments are the same, and not in addition to, the Override conveyed herein. 2.9 Counterparts. This Assignment may be executed in one or more counterparts, each of which shall be deemed to be an original, but all of which shall be deemed to be one assignment. EXECUTED effective on the date first above written, to be effective for all purposes as of the Effective Date. ASSIGNOR: GARY-WILLIAMS PRODUCTION COMPANY Tim Howard, Vice President STATE OF COLORADO ) CITY AND COUNTY OF DENVER ) The foregoing instrument was acknowledged before me this 2 day ofC 2009, by Tim Howard, as Vice President of Gary-Williams Production Company, a Deli e corporation, on behalf of said corporation. Witness my hand and official seal. 41~ C missioxC 4C~ es: M 24 20 • G .a cOLOFRI p /i~ a4~~ Notary Publ c Page 3 of 3 C.OV396 Exhibit "A" Attached to and made a part of that certain Assignment of Overriding Royalty Interest dated August 25, 2009 between Gary-Williams Production Company, Robert Zimmerman, Jr. doing business as Zimmerman Resources Company and Sarlan Resources, Inc. Lincoln County, Wyoming 1. Lessor, Federal Serial USA, WYW-163124 Lease Effective Date: May 1, 2005 Original Lessee: Henkle and Associates, Inc. Recorded: Unrecorded Description: Township 22 North - Range 116 West, 6`h P.M. Section 5: All Section 6: Lots 1(28.40), 2(7.13), 3(24.04), 4(24.27), 5(24.48), E/2E/2 Section 7: Lots 3(33.27), 4(29.57), 14(24.79), 15(24.85), E/2NE/4, NEASEA Containing 1140.80 acres, more or less. 2. Lessor, Federal Serial USA, WYW-173286 Lease Effective Date: March 1, 2007 Original Lessee: Baseline Minerals, Inc. Recorded: Unrecorded Description: Township 21 North - Range 117 West, 6`h P.M. Section 1: Lots 5(40.02), 6(40.07), 7(40.11), 8(40.16), S/2N/2, S/2 Section 2: Lots 5(40.16), 6(40.13), 7(40.09), 8(40.06), SWANEA, S/2NW/4, N/2SW/4, NWASEA, S/2SW/4 (excluding 5.51 ac. in RR ROW WYW-032749) Section 3: Lots 5(40.06), 6(40.12), 7(40.16), 8(40.22), S/2N/2, S/2 (excluding 24.79 ac. in RR ROW WYW-032749) Section 11: W/2NW/4, SEANWA, SWA, NEANWA (excluding 5.05 ac. in RR ROW WYW-032749) Containing 2046.01 acres, more or less. 3. Lessor, Federal Serial USA, WYW-173287 Lease Effective Date: March 1, 2007 Original Lessee: Baseline Minerals, Inc. Recorded: Unrecorded Description: Township 22 North - Range 117 West 6`h P.M. Section 18: Lots 5(40.00), 6(40.00), 7(47.46), 8(47.52), 9(40.00), 10(40.00), 11(40.00), 12(40.00), 13(47.56), 14(47.62) Section 19: Lots 5(40.00), 6(40.00), 7(47.67), 8(47.75), 11(40.00), 12(40.00), 13(47.81) Containing 733.39 acres, more or less. Page 1 of 6 4. C"0ki.~397 Lessor, Federal Serial USA, WYW-173643 Lease Effective Date: June 1, 2007 Original Lessee: Baseline Minerals, Inc. Recorded: Unrecorded Description: INSOFAR AS IT COVERS Township 21 North - Range 118 West, 6`h P.M. Section 12: S/2N/2, S/2, N/2N/2 (excluding 23.87 ac. in RR ROWWYW- 0294448) Containing 616.13 acres, more or less. 5. Lessor, Federal Serial USA, WYW-174326 Lease Effective Date: January 1, 2008 Original Lessee: Baseline Minerals, Inc. Recorded: Unrecorded Description: Township, 21 North - Range 117 West, 6 h P.M. Section 11: S/2NE/4, SEA, N/2NE/4 (excluding 12.40 ac. in RR ROW WYW- 032749) Containing 307.60 acres, more or less. 6. Lessor: State of Wyoming, acting by and through its Board of Land Commissioners State of Wyoming Serial 06-0215 Lease Effective Date: February 2, 2006 Original Lessee: Baseline Minerals, Inc. Recorded: Unrecorded Description: INSOFAR AS,IT COVERS: Township 22 North - Range 117 West, 6`" P.M. Section 36: W/2 Containing 320.00 acres, more or less. 7. Lessor: State of Wyoming, acting by and through its Board of Land Commissioners State of Wyoming Serial 06-00714 Lease Effective Date: October 2, 2006 Original Lessee: Joseph W. Thames Recorded: Unrecorded Description: INSOFAR AS IT COVERS: Township 21 North - Range 117 West, 6`h P.M. Section 16: N/2 Containing 320.00 acres, more or less. Page 2 of 6 C-G~)398 8. Lessor: State of Wyoming, acting by and through its Board of Land Commissioners State of Wyoming Serial 06-00715 Lease Effective Date: October 2, 2006 Original Lessee: Joseph W. Thames Recorded: Unrecorded Description: INSOFAR AS IT COVERS: Township 21 North - Range 117 West, 6`i' P.M. Section 17: W/2NE/4, NEANWA, S/2NW/4 Containing 200.00 acres, more or less. 9. Lessor: State of Wyoming, acting by and through its Board of Land Commissioners State of Wyoming Serial 06-00716 Lease Effective Date: October 2, 2006 Original Lessee: Joseph W. Thames Recorded: Unrecorded Description: INSOFAR AS IT COVERS: Township 21 North - Range 117. West, 6th P.M. Section 18: SE/4NE/4 Containing 40.00 acres, more or less. 10. Lessor: State of Wyoming, acting by and through its Board of Land Commissioners State of Wyoming Serial 06-00717 Lease Effective Date: October 2, 2006 Original Lessee: Joseph W. Thames Recorded: Unrecorded Description: Township 22 North - Range 117 West 61h P.M. Section 18: NW/4NE/4 Containing 40.00 acres, more or less. 11. Lessor: John Ronald Thompson, Individually and as Partner of Thompson Land and Livestock Company and John Ronald Thompson, as Attorney-in- Fact for Norene Thompson aka Norene M. Thompson aka Norene Murdock Thompson, Stanley Gene Thompson, Jr., William T. Thompson, Don Mark Thompson, Ted Harold Thompson and Carole Ann Thompson Goodman, Partners of Thompson Land and Livestock Inc. Lease Date: June 30, 2004 Original Lessee: Hanson & Strahn, Inc. Recorded: Book 565, Page 0300 `h Description: P.M. Township 22 North - Range 117 West, 6 Section 22: S/2NE/4, E/2NW/4 Section 29: E/2NE/4, SE/4 Section 32: NEA Section 33: SWANWA, NW/4SW/4 . Containing 640.00 acres, more or less. Page 3 of 6 Goi~399 12. Lessor: Anne L. Bagley, Life Tenant, Robert Bernard Fox and Joy S. Fox, H&W, Remaindermen Lease Date: September 1, 2008 Original Lessee: Gary-Williams Production Company Recorded: Book 729, Page 188 Description: Township 22 North - Range 117 West, 61h P.M. Section 1: Lots 7(32.09), 8(40.00), 12(7.95), Resurvey Tracts 53(120.00), 54(80.00) & 55(160.00) Section 12: Resurvey Tract 50 (80.00), Lots 2(32.01), 3(.07), 4(.11), 5(.12), NE/4SW/4, S/2SW/4 Sections 1 & 12: Resurvey Tracts 51(160.00) and 52(80.00) Section 11: S/2SE/4 Sections 12 & 13: Resurvey Tract 49(160.00) Section 13: Resurvey Tract 48(80.00), Lots 2(32.01), 3(31.93), E/2SE/4 Section 14: NE/4NW/4, NWANE/4 Township 22 North - Range 116 West, 6`h P.M. Section 6 & 7: Resurvey Tract 47(167.35) Section 7: Resurvey Tract 46A(40.00) Sections 7 & 18: Resurvey Tract 46(164.29) Containing 1827.93 acres, more or less 13. Lessor: J. Walter Dimond and Norma C. Dimond, as Trustees under the J. Walter Dimond Inter Vivos Revocable Family Trust dated January 12, 1979 Lease Date: September 8, 2006 Original Lessee: Gary-Williams Production Company Recorded: Book 729, Page 164 Description: Township 22 North - Range 117 West, 6`h P.M. Section 1: Lots 7(32.09), 8(40.00), 12(7.95), Resurvey Tracts 53(120.00), 54(80.00) & 55(160.00) Township 22 North - Range 116 West, 61h P.M. Sections 6 and 7: Resurvey Tract 47(167.35) Containing 607.39 acres, more or less. 14. Lessor: William Edward Sutton, MMDSSP , Lease Date: May 9, 2009 Original Lessee: Gary-Williams Production Company Recorded: Book 729, Page 173 (Memorandum) Description: Township 22 North - Range 117 West, 6th P.M. Sections 1 & 12: Resurvey Tracts 51(160.00), 52(80.00) Section 11: S/2SE/4 Section 12: Lots 2(32.01), 3(.07), 4(.11), 5(.12), NE/4SW/4, S/2SW/4 Sections 12 & 13: Resurvey Tract 49(160.00) Section 13: Lots 2(32.01), 3(31.93), E/2SE/4, Resurvey Tract 48(80.00) Section 14: NEANWA, NW/4NE/4 Containing 936.25 acres, more or less. Page 4 of 6 v&&400 15. Lessor: Ralph S. Sutton, Trustee, or his successor(s) in trust, under the Ralph S. Sutton Living Trust dated August 7, 1990 Lease Date: May 18, 2009 Original Lessee: Gary-Williams Production Company Recorded: Book 729, Page 176 (Memorandum) . Description: Township 22 North - Range 117 West, 6th P.M. Sections 1 & 12: Resurvey Tracts 51(160.00), 52(80.00) Section 11: S/2SE/4 Section 12: Lots 2(32.01), 3(.07), 4(.11), 5(.12), NE/4SW/4, S/2SW/4 Sections 12 & 13: Resurvey Tract 49(160.00) Section 13: Lots 2(32.01), 3(31.93), E/2SE/4, Resurvey Tract 48(80.00) Section 14: NE/4NW/4, NW/4NE/4 Containing 936.25 acres, more or less. 16. Lessor: Carol Jean Sutton Lease Date: May 9, 2009 Original Lessee: Gary-Williams Production Company Recorded: Book 729, Page 179 (Memorandum) Description: Township 22 North - Range 117 West, 6th P.M. Sections 1 & 12: Resurvey Tracts 51(160.00), 52(80.00) Section 11: S/2SE/4 Section 12: Lots 2(32.01), 3(.07), 4(.11), 5(.12), NE/4SW/4, S/2SW/4 Sections 12 & 13: Resurvey Tract 49(160.00) Section 13: Lots 2(32.01), 3(31.93), E/2SE/4, Resurvey Tract 48(80.00) Section 14: NE/4NW/4, NW/4NE/4 Containing 936.25 acres, more or less. 17. Lessor: Richard R. Sutton and Marcia M. Sutton, H&W Lease Date: May 9, 2009 Original Lessee: Gary-Williams Production Company Recorded: Book 729, Page 185 (Memorandum) Description: Township 22 North - Range 117 West, 6th P.M. Sections 1 & 12: Resurvey Tracts 51(160.00), 52(80.00) Section 11: S/2SE/4 Section 12: Lots 2(32.01), 3(.07), 4(.11), 5(.12), NE/4SW/4, S/2SW/4 Sections 12 & 13: Resurvey Tract 49(160.00) Section 13: Lots 2(32.01), 3(31.93), E/2SE/4, Resurvey Tract 48(80.00) Section 14: NEANWA, NW/4NE/4 Containing 936.25 acres, more or less. Page 5 of 6 18. Lessor: Kenneth B. Sutton and Deanne L. Sutton, H&W C° OV401, Lease Date: May 14, 2009 Original Lessee: Gary-Williams Production Company Recorded: Book 729, Page 182 (Memorandum) Description: Township 22 North - Range 117 West, 6`" P.M. Sections 1 & 12: Resurvey Tracts 51(160.00), 52(80.00) Section 11: S/2SE/4 Section 12: Lots 2(32.01), 3(.07), 4(.11), 5(.12), NE/4SW/4, S/2SW/4 Sections 12 & 13: Resurvey Tract 49(160.00) Section 13: Lots 2(32.01), 3(31.93), E/2SE/4, Resurvey Tract 48(80.00) Section 14: NEANW/4, NW/4NE/4 Containing 936.25 acres, more or less. 19. Lessor: Helen R. Snedden, as Trustee of the Helen R. Snedden Revocable Trust dated January 1, 2003 Lease Date: October 6, 2006 Original Lessee: Gary-Williams Production Company Recorded: Book 729, Page 170 Description: INSOFAR AS IT COVERS: Township 22 North - Range 116 West, 6`" P.M. Section 18: Lots 3(11.08) of Resurvey Tract 45, 5(26.75) of Resurvey Tract 45, 7(17.86) of Resurvey Tract 45, 8(25.94) of Resurvey Tract 45, 9(40.17) of Resurvey Tract 45, 10(35.21) of Resurvey Tract 45, 11(39.01) of Resurvey Tract 45, 13(40.17) of Resurvey Tract 45, 14(25.98) of Resurvey Tract 45, 15(6.60) of Resurvey Tract 45, 17(5.26) of Resurvey Tract 45, 19(.43) of Resurvey Tract 45, 12(1.17) of Resurvey Tract 44, 16(19.50) of Resurvey Tract 44, 18(35.07) of Resurvey Tract 44, 20(39.92) of Resurvey Tract 44 Containing 370.12 acres, more or less. 20. Lessor: Marguerite Daneluk, as Trustee of the Marguerite Daneluk Trust dated October 14, 2005 Lease Date: October 6, 2006 Original Lessee: Gary-Williams Production Company Recorded: Book 729, Page 167 Description: INSOFAR AS IT COVERS: Township 22 North - Ranjze 116 West, 6`" P.M. Section 18: Lots 3(11.08) of Resurvey Tract 45, 5(26.75) of Resurvey Tract 45, 7(17.86) of Resurvey Tract 45, 8(25.94) of Resurvey Tract 45, 9(40.17) of Resurvey Tract 45, 10(35.21) of Resurvey Tract 45, 11(39.01) of Resurvey Tract 45, 13(40.17) of Resurvey Tract 45, 14(25.98) of Resurvey Tract 45, 15(6.60) of Resurvey Tract 45, 17(5.26) of Resurvey Tract 45, 19(.43) of Resurvey Tract 45, 12(1.17) of Resurvey Tract 44, 16(19.50) of Resurvey Tract 44, 18(35.07) of Resurvey Tract 44, 20(39.92) of Resurvey Tract 44 Containing 370.12 acres, more or less. Page 6 of 6