10000014993

Exhibit B Christianson Affidavit Page 1 of 11
A
L A S
2007-054466-0
Recording
8/27/2007
Dist: 8:07
301
AM
Anchorage
Pages:
1 of 92
K
A
IN$1NNINIIIWIItlNHIrlINll ill
COVER attached
SHEET
to
CONVEYANCE
OF OVERRIDING
ROYALTY
RECORD
THIS
INSTRUMENT
IN THE
FOLLOWING
RECORDING
DISTRICT:
O
[]
[] [] []
Anchorage Recording District, Barrow Recording District, Chitina Recording District, Homer Recording District, Kenai Recording District, Palmer Recording District, and
Talkeetna
[]
INDEX THIS Grantor:
Recording District;
AS FOLLOWS: Alaska
INSTRUMENT
Forest Pacific
Operating LLC Energy Alaska Operating

Alaska A attached THIS LLC hereto
LLC
Grantee: Lands: AFTER PERSON:
SPCP
Group
See Exhibit
RECORDING,
RETURN
INSTRUMENT
TO TIlE
FOLLOWING
Skadden, Arps, Slate, Meagher

Attention: 333 West Seth E. Jacobson Wacker IL 60606
& Flom 2100
LLP
Drive,
Suite
Chicago,
Exhibit C Christianson Affidavit Page 1 of 92
When Skadden, 333 $uile
recorded,
West 2 I0
to: please return Arp, Slate) Meagher & Flora
LLP
Wacker
Drive
Chicago, IL 60606 Seth E. Jaeobson Attention:
CONVEYANCE
THIS time
Forest
.
OF
OVERRIDING OVERFdDING ALASKA

limited Alaska
ROYALTY ROYALTY
dated
as
INTEREST INTEREST
set
CONVEYANCE
or
OF
(as
out
from
time
to
supplemented
from and and
is made
O wn er" ),
amended, this ""), by PACIFIC ENERGY

a
of the date
at the end
hereof
OPERATING
LLC
Alaska
to
Operating LLC),
in favor of SPCP
Delaware
liability
a
Group
LLC,
company, .limited Delaware
(formerly known as (herein called "W__!I liability company,
(herein
called
"").
ARTICLE!
DEFINED 1.1 Defined TERMS used
in
Section schedule have the
Te.
When
to
this
Conveyance
or or
or
in the
any
exhibit
terms
or
hereto
defined (unless otherwise assigned meanings respective referred

as lo or to
in any such exhibit them in this section
schedule),
in the
following
sections,
subsections,
exhibits
and schedules
below:
"Affiliate"
one
or
means,
any
Person,
no
each
other
Person
that
nore intermediaries
such other
otherwise)
in shall
or
controls,
shall
is controlled
directly, or indirectly (through control by, or is under common

and WI Owner be considered
other
with,
such
Person,
of each
Person
provided
other.
that
event
Royalty
to
Owner
"Affiliates"
A Person
be deemed
be
"controlled
by"
any
Person
if
possesses,
directly
indirectly,
power
or
of the securities 20% or more to vote (a) for the election basis) having ordinary voting power or members; or partners or the managing member
other
equity
the
interests
(on
fully
diluted
or
of directors,
managing general partner
whether
(b) by
to contract
direct
or
or
cause
the
direction
of the
management
and
policies
of such
Person
otherwise.
(i) that certain Credit Agreement dated as of November 30, "Ct-edit Agreements" means supplemented or restated) among Pacific Energy 2006, (as from lime to time amended, and agent, lead arranger & Company, as administrative J. Aron Resources Ltd., as borrower, dated as of First Lien Credit Agreement certain syndication agent, and various lenders, (ii) that time amended, supplemented or restated) among the WI August 24, 2007 (as from time to from time lenders Pacific Energy Alaska Holdings, LLC, as Holdings, the Owner, as borrower,
to
time
party thereto,
sole
Silver
Point and Second
Finance,
Lien Credit
LLC,
lead
arranger,
bookrunner
syndication
agent
and (iii) that
certain
agent, sole administrative agent, collateral documentation agent, and J. Aron & Company as from Agreement dated as of August 24, 2007 (as
as
I!I IRItltlIIIlIItl !11111]!!111t

2 of 92
2007-054466-0
time Point and
to
time Alaska
amended, LLC,
agent,
as
supplemented
as
or
restated)
the
Energy
Holdings, LLC,
Ho[dings,
agent,
&
the WI Owner, among from time to time lenders
as
Pacific borrower, party thereto, Silver sole bookrunner
Finance,
administrative and J. Aron

means
collateral
as
syndication
Company
a.m.
agent, sole lead arranger, documentation agent.

at
"Effective
Time"
7:00
local
time
the
locations
of the
Subject Interests,
respectively,
emissions,
on
January
1,200%
Laws" releases
means
or
"Environmental discharges,
toxic
or
any
and
wastes
all
Laws
relating
to
the
environment ambient
or
to
or
threatened
or
releases
of
into
pollutants,
contaminants,
chemicals,
industrial,
surface
hazardous water,
substances
or
water,
use,
or
ground
industrial,
Rate"
land,
distribution,
chemicals,
treatment, storage, toxic or hazardous

means,
including relating to the manufacture, disposal, transport, or handling of pollutants, contaminants,

the environment
or
otherwise
air, processing,
substances
or
wastes.
"Fixed maximum the State

rate
for
any
to
of interest
permitted
day, the lesser of be charged pursuant
the
to
rate
of
11%
per
annum
and the laws
the of
.this
Conveyance
under
of Alaska. "Hazardous
means Materials" pollutants, contaminants,
any
or
substances
or as
regulated
industrial,
under toxic
any
or
Environmental
hazardous
Law,
whether
or
as
chemicals,
substances
wastes,
or
otherwise.
means
"Hydrocarbons"
the
oil, gas
and
all other
minerals,
whether
or
not
similar and substances
to
any
of
easinghead gas, condensate, foregoing (and including without limitation minerals all extracted includes As used herein, the term "'Hydrocarbons" kind, whether organic or inorganic
"Internal amended from Revenue time
to
sulphur,
and
lignite).
of any
Code" time with and
means
the
successor
United
statute
States
or
Internal statutes,
Revenue
Code with
of all
I986,
rules
as
any
together
and
regulations promulgated
"Law"
means
respect
thereto.
law, regulation, ordinance, rule, treaty, judgment, order, decree, of the United franchise, license, agreement or other governmental restriction permit, cone--"-ession, of any foreign country or any department, thereof or or political subdivision or any state States includes to a Law any amendment thereof. Any reference subdivision or other political province
any
statute,
or
modification
Law.
to
such
Law,
and
ale
regulations, rulings,
and
other
Laws
promulgated
under
such
"Market!ng
"Month"
Terms the
and Conditions"
has the 7:00
meaning assigned (local time,

and 7:00
a.m.
to
such
term
in Section of each
3.1.
means
period
of each
between calendar
a.m.
at
the
on
location the first
Subject
the
next
Interest) on succeeding
"Net
the
first
day
month.
month
day
of
calendar Revenue
thereof)
inlerest,
share of the Hydrocarbons (and the proceeds percentage fee mineral produced and saved from or attributable to a particular lease, tract of land, interest or royalty interest, overriding royalty interest, production payment, net profits
Interest."
means
Iltli[llll NN[Iil
3 of 92
2007-054466-0
other
interest
in
Hydrocarbons,
burdens
on
after
deduction
of
royalties, overriding royalties, production

Interest:
to
payments
and similar
production.
with respect
to
,,"
Subject
located
Interest.
means,
each
Subject
with Net
Well
on
located
such
on
such
Subject
WI
Interest
and
(b)
respect
Revenue
Subject
Interest,
Owner's
actual
respect to each each other Subject Well in such Subject Interest (a)
with
"ORRI"
has the
meaning assigned
to
such
term
in Section
2.1. attributable
to
"0RKI Hgdroearbon.s."means
"ORR.I
the oil, gas and other
minerals
the ORRI.
Percentage"
means
2.43823%.
means
-Permitt.ed Encumbrances"
of
each
of the
following,
to the extent
existing
on
the date
delivery (a)
of this the
to
Conveyance:
contracts, certain
agreements,
of the
burdens,
encumbrances in the
and
other of such
matters
set
forth
as on
being applicable Exhibit A hereto.
Subject Interests
descriptions
Subject
Interesls
or other for taxes, assessments in good faith are being contested due or which and for the payment of which diligently conducted
(b)
liens
governmental charges or levies which are by appropriate action promptly initiated

WI Owner
has
not
and
reserved
adequate
funds. laborers for

sums
(c)
or
liens
or
materialmen
are
of contractors, other like liens

or
subcontractors,
carriers,
or
which initiated fundS.
not
due
which
are
arising by law being contested

and
contract in
warehousemen, in the ordinary

faith WI Owner
mechanics,
of business
action
good
by appropriate
promptly
adequate
and
diligently
conducted
for the payment
of which
has reserved
easements, restrictions, encumbrances, minor minor rights, reservations, of reassignment prior to abandonment
(d)
covenants,
servitudes,
minor which
or
exceptions, permits, conditions, in title or conventional irregularities

not
rights
the
do
materially
of their conducted
or
interfere be
with
interests
the in
occupation,
use
and
enjoyment
by
WI
course
Owner
Royalty
as
Owner
respective
or
Subject Interests in the materially impair the value

ORKI.
normal
of business
presently
to
conducted,
of the
thereof
for the
purpose
of such
business,
impair
the value
(e)
arrangements
liens with and

extent
of
operators
to
respect
WI
joint operating agreements Owner's proportionate share of the

under gas and mineral
sums
or
similar of
contractual
development
others,
in to the
operation
that
WI
of
oil,
liens
leasehold which
are
or
expense owned fee interests

or
exploration, jointly with

and for the
such
secure
not
due
which
are
being contested
good
faith
by appropriate
Owner
action
promptly initiated
adequate
funds.
and
diligently
conducted
payment
of which
has reserved
111111111 !tl lllltlll lltlllll/l

4
Qf
S2
2007454466-O
(f)
Affiliates and under subordinate
liens
and
the Credit
to this
to secure obligations owing by security interests that such liens and security Agreements, provided Conveyance.
WI
Owner
are
and
its
interests
subject
limited
executor
"._Lg..q" means liability company,

thereof
court
or
an
partnership, individual, corporation, general partnership, limited or trust or trustee thereof; estate association, joint stock company, unit or any agency or authority thereof, or any other governmental
all and expenses related to:
legally recognizable entity. paid or incurred by or on behalf which its Affiliates are of Royalty Owner or (a) the negotiation, acquisition, or or of the ORRI, this Conveyance, any waivers enforcement, or termination ownership, release or discharge of any adverse hereto or thereto, or (b) any litigation, contest, amendments made or demand claim affecting in any manner or by any Person proceeding instituted defense or the ORRI, any ORRI whatsoever Hydrocarbons, this Conveyance, the enforcement of their rights exercise and its Affiliates' of Royalty Owner's hereof or thereof, or the defense the Reimbursable Included hereunder or thereunder. Expenses are (i) all recording and among and of counsel, engineers, accountants fees and expenses filing fees, (ii) all actual and reasonable of and its Affiliates, and (iii) all costs for Royalty Owner other consultants, experts and advisors hereunder. in exercising any of its remedies Owner Royalty
"Reimbursable
Expenses"
means
costs
"Release"
means
the done material

means
disposition
in material remedial all
or
release
with
of all
Hazardous
Materials,
Laws
other
than WI
dispositions
Owner
and releases has

no
otherwise
compliance obligations.
severance taxes
applicable
and for which
measured
"S_oecified Taxes" by production and
or
similar
or
taxes
assessed thereof.
may
against
or
severance
of ORPJ all
Hydrocarbons
the value
"Subject Hydrocarbons"
after Time the Effective the Time Lands from that
means:
to)
Subject
Hydrocarbons in and under and that pooled or unitized, allocated (or, attributable to the Subject Interests, are
means to
be
the
produced
Effective
the
extent
after
"Sub_ieet Interests" (a)

Exhibit
All
of
the
leasehold and
interests
and
other
property interests
described
in
A attached
hereto;
(b)
whatever that kind be of WI Owner
Without
or on
limitation whether hereof
of the
foregoing,
or
all other
right,
title vested
and
or
interest under
(of
or
character
the date from
legal
equitable
and whether
contingent)
in and
to the
oil, gas and other
minerals
in and
(including interests in oil, gas or mineral produced any may such lands, overriding royalties, production payments the same leases to the extent cover in such lands or such leases, and fee mineral and net profits interests interests, fee royalty in such oil, gas and other minerals) even interests and other interests though WI Owner's be incorrectly described in such oil, gas and other minerals interest in, or omitted may Subject
Lands
from, Exhibit
A; and
Itill HIIllll ItlLIlIill

4
6 of
02
2007-054466-{)
to, rights, titles and interests of WI Owner unitization, mineral pooling, or valid oil, gas or from, all presently existing and the properties covered in and tO communitization agreements, declarations or orders and all units formed under orders, rules, regulations, thereby (including and the units created voluntary acts of any federal, state, or other authority having jurisdiction, other official or and so-calLed "working interest designations or declarations,
(c)
All
in and
or
otherwise
derived
unitization units"
agreements,
under
created in
described
operating agreements subsections (a) or (b) above in this

means
or
otherwise)
relating
to
the
properties
and
definition. referred
to in
"'
other instruments
Lands"
the lands in Exhibit all wells the A.
described
or
Exhibit
A or
in the leases
described
Wells"
means
"Subj.eet
and
now
located
on
on
the
Subject
Lands and
completed or not) or hereafter by is expressly excluded therefrom

now
or
drilled
terms
hereafter
located
on
lands
or
leases
Subject Lands, descriptions on Exhibit A) any pooled, communitized or unitized with

the of the
(whether fully drilled (unless production

other the wells
Subject
Interests. "WI
Percentage"
such words
or
means,
Workinglnterest in
"WI
Percentage"
"Working
all of the WI Owner's respect to the various Subject Lands, "WI," Interest," to "Working Subject Lands, generally by reference of similar import. with
means,
Intere'"
or
with
respect
to
any
Subject Lands,
such
the
interest Lands and the
owned
in oil fee
and
gas leasehold interest.
leaseholds interests,
Hydrocarbon interests pertaining to operating rights interests or other co-bearing

other that determines the
Subject by
(including
or
interests,
borne
mineral
owner
ownership
interests)
percentage
share
of costs
of such
Section
1.2
Rules
of
Construction.
All
to
references
sections,
refer and other subdivisions subsections of this Conveyance unless and other subdivisions are subdivisions at the beginning of any of such
Conveyance articles, sections, corresponding

in this
to
articles,
subsections
expressly provided otherwise. Titles appearing for convenience only and shall not constitute
in
part of such subdivisions.

and its
the
subdivisions
The of unless form other
or
and "this
shall refer
so
be
disregarded
"this the the
to
construing
as a
words
Conveyance",
to
instrument",
context
in such language contained "hereof', "hereunder" "herein", the and is not

versa;
or
words
similar
import
mean
this
Conveyance
without
whole "of" vice
not
to
any
particular
and in
subdivision
expressly
shall
Hmited.
Unless include herein
otherwise
and
requires: "including"
exclusive;
words
grammatical variations
singular
all
"including
to
limitation";
words
be construed it
plural
to
include
instrument references this unless herein with
genders; references
as to to
agreement
herein
Conveyance by
the
nor
any Person and exhibits and made
be from may such Person's include schedules and Owner refer all such
to
any time
instrument time
successors
agreement
or
in any gender to such refer references in
amended
and and schedules
supplemented; and
All this
to
assigns.
are
exhibits and
schedules
Conveyance
expressly provided otherwise,

reference in favor
a
exhibits
part hereof
joint participation
of either
of WI such
This for all purposes. and and Royalty Owner in accordance with
hereby incorporated Conveyance has been drafed

neither construed hereof. the fair meaning shall be
against
party but rather
I[tl|lllltlllllllllllltll[
5
6 of 92
2007-054466-0
ARTICLE GRANTING Section 2.1
II
PROVISIONS
and valuable
consideration, the receipt and BARGAIN, does hereby GRANT, Owner sufficiency of which an to Royalty Owner and DELIVER WARRANT ASSIGN, CONVEY, SEEL, TRANSFER, Interest (collectively, the "ORRI") equal to overriding royalty interest carved out of each Subject WI Percentage of all Hydrocarbons in, under and (and measured by) the ORR_I Percentage of the covered by each such Subject Interest. to the Subject Lands from or allocable
For a good Grant. are hereby acknowledged, WI
produced
TO forever.
HAVE
AND
TO
HOLD
the ORRI with full
This
Conveyance
is made
and
to all covenants
and warranties
by
others
and assigns, Royalty Owner, its successors in of Royalty Owner and subrogation substitution heretofore given or made.
unto
Section
2.2
Non-Cost:Bearing
Interest.
ORPd Hydrocarbons shall be free and clear of or property taxes), (b) all ad valorem limitation
Except (a) all

costs
for
taxes
Specified Taxes,
of
any
the ORRI
and the without
kind
(including
with
and
expenses
associated
acquiring,
and reworking, recompleting, exploring, developing, maintaining, producing, operating, and remediating the Subject Interests, (c) all royalties, overriding royalties, production payments, for separating, gathering, and (d) all costs similar charges burdening the Subject Interests, ORRI Hydrocarbons or of compressing, treating, dehydrating, processing or marketing to meet in a condition pipeline or of sale transporting ORRI Hydrocarbons to the point (excluding only Specified All of the foregoing taxes transporter specifications and qualifications. and similar royalties, overriding royalties, production payments, Taxes), costs and expenses, become the same delinquent dates the on or before charges shall be paid by WI Owner promptly, being diligently pursued and for (unless being disputed in good faith by appropriate proceedings which
any
adequate
event
reserves
have
been after
have
within
30
days
which have Owner until
established). receiving any

been and incurred
In addition, notice and

or are
WI
Owner and bat
will
statement
for will
Reimbursable
Owner
pay amount
on
Expenses
which
unpaid
on
promptly (and in the same) pay all reimburse Royalty

is
for any
Reimbursable
Expenses,
nonetheless
W'I Owner shall bear but not
hereunder,
that of
for any other been paid by

to this
amounts
or
WI Owner of which
obligated paid by
to
behalf
Royalty day
from
Owner. and
Each
or
is to be
paid by
pursuant
interest
Conveyance
Rate
on
is instead
behalf
goyalty
at the Fixed
eaeh
including
the date
of such Section
payment
2.3
including
the date
repaid by
WI Owner,
any which
oil,
are
gas
or or
compression Hydrocarbons
sale, in
are
Measurem.ent: Hydrocarbons Lost or Used. The ORKI shall not apply to in the or minerals that are unavoidably lost in the production thereof other the applicable point of sale or transportation of Subject Hydrocarbons prior to
WI Owner
or
used
or
by
the operator
or
of any
are
Subject
or
Well
for the
compression
the extent and
to
transportation
same
a
thereof used
each
case
only
and
to
to
the in
lost
production of Subject prior to the applicable point of of operations which in the course
for the
manner.
being represents,
and will other
conducted
warrants
prudently
covenants be
good and Royalty Owner

a
workmanlike that
to
WI
each gas,
Owner
hereby
Well
or
production
any
from where other
Subject
oil
is
continue from
or
measured
at
point prior
commingled
Wells.
point
oil
or
other from
Hydrocarbons
any
such
Subject
are
Well
is
with
gas,
Hydrocarbons
well
,,veils that
not
Subject
IL[llMlllLIILlllllll
;'of
92
2007-0544664)
Proportionate Reduction. to Royalty Owner is conveyed by W1 Owner ORRI based the ORR1 Hydrocarbons shall be determined produced from (or, to the gas and other minerals Lands and shall not be adjusted for various Subject such full WI Percentage.
Section 2.4
No
1t is understood
out
and
agreed that, although
the and
Subject Interests, the ORRI Percentage of the oil, on unitized, allocated to) the extent pooled or failure of title to including partial any reason,
of the t 00% of the full WI
Section
2.5 WI
Renewals,
Exten_sions its Affiliates'
and
Acquisitions.
in
shall
similar
apply
1o
Owner's
and
interests
determinable of each lease (or other arrangements been heretofore have or arrangements such renewals, extensions Subject Interests, whether and thereof or any Affiliate obtained by WI Owner or are hereafter obtained by or for WI Owner lease or other property new in Exhibit described A, and (ii) any are the same or not whether interest all
Conveyance and the and renewals, extensions (i) is included which interest)
This all
ORRI other in the
acquired hereafter
defined For the is
by
the
same
WI Owner
or
its Affiliates
in
the
State
of Alaska lease
until
such
time
as
Obligations (as been fully satisfied.

interest
that
covers
in the Credit purposes interest within
Agreements) under each of the preceding sentence,

any
of the Credit
a new
Agreements
or
have
other
or
or
(or
one
part thereo0
interest,
such
or
and
which
or
acquired
prior
lease
property
interest,
shall
year after the be treated as a renewal
by a prior lease expiration, termination,

covered
or
property property of release

lease
extension
of such
prior
property
interest. ARTICLE OF 3. t
or
III AND
MARKETING
Section for the account
not
ORRI HYDROCARBONS
Nature
cause
DISTRIBUTION
Wt Owner shall
OF have
PROCEEDS the
of
to
Marketing ArranRements.
obligation
to
prudently market,
of with
be
prudently marketed,
Royally
each
Owner such
upon compression and processing, to be transportation, favorable that (a) are the best and most and Conditions") conditions (the "Marketing Terms or as W1 Owner least as favorable in the general field or area, (b) are at reasonably obtainable to the attributable share of Hydrocarbons for WI Owner's obtains of WI Owner arty Affiliate field or general area, (c) take other properties in the same attributable to any Subject Interests or of Royalty Owner, and (d) unless otherwise and give due regard to the best interests into account based on spotagreed by Royalty Owner from time to time, provide for floating prices generally ORRI Hydrocarbons market prices plus or minus a basis differential; provided, however, that no sales whereby (i) payment for ORR! arrangement will become or subject to any are for a substantial period afier the month in which the ORRI be deferred is or can Hydrocarbons of 30 days, and in the case of gas in Hydrocarbons are delivered (i.e., in the case ofoil, in excess wire transfer or of 60 days), or (ii) payments may be made other than by checks, drafts, excess shall duly and WI Owner of money. for the immediate payment similar communications by which ORPJ all obligations performable by it under any arrangements prudently perform
terms
Affiliales, sales, treating,
in arm's-length marketing arrangement,
of and the ORRI Hydrocarbons on behalf with reputable purchasers who are transactions
including
those
arrangements
made
relating
to
and
Hydrocarbons are sold the performance under third parties, al] to any
other
or
otherwise
such
marketed, arrangement
and shall of the
take
all
appropriate
measures
to enforce
each
acts
obligations
the ORRI
of the other herewith
of WI Owner executed
marketing agreements
by
in marketing in accordance WI Owner
parties Hydrocarbons and

shall be
thereto. all sales
As
or
on
binding
lt[lllllllllll llll@ll l
a
of
92
2007-05448S-0
Royalty
ORRI
Owner
and
the
ORRI;
it
being
vested
understood
that
the and
Hydrocarbons
is at all times
in WI Owner,
any such right or obligation. Accordingly, it shall not be necessary or amendments or any production sales or marketing agreements WI of Notwithstanding any provision hereof to the contrary, any acts marketing agreements. in entering production sales or marketing in marketing the ORR.I Hydrocarbons or Owner the provisions of this Conveyance shall be void as in compliance with not which agreements
are
right and obligation to market Royalty Owner does not have to join in for Royalty Owner to existing production sales
the any
to
the ORKI Section
Hydrocarbons.
3.2 receive
Distribution
of
Funds.
Until
notified
by Royalty
Owner
to
the
contrary,
or on of) OR.R/Hydrocarbons such payments distribute calendar month, any the on noon before month, net only of Specified Taxes, to Royalty Owner by the previous calendar received during such accounts (or locations) as wire transfer (or, if consented to by Royalty Owner, by check) to received by WI Owner for Royalty Owner may direct from time to time in writing. Any moneys hands. Royalty funds in W1 Owner's trust of ORPd Hydrocarbons shall constitute on account or notice sent to WI Owner, to begin receiving shall have the right at all times, upon written Owner thereof or of) all ORPd Hydrocarbons directly from the purchasers payment for (or on account Owner exercises In the event therefor. Royalty from any other parties obligated to make payment for (or on account of) ORKt Hydrocarbons directly, WI Owner shall receive its right to payment
WI
Owner
shall
all payments for (or on last business day of each
account
and
shall,
immediately
transfer orders, or division such orders, prepared and executed third party) may require from time to time Owner (or any in lieu thereof, as Royalty instructions that, for any reason, be made directly to Royally Owner; in the event to cause to payments shall be collected the same Royalty Owner cannot (or does not) receive such payments directly, hands, to be immediately paid over funds in WI Owner's trust by WI Owner and shall constitute as Royalty Owner may or location to Royalty Owner by wire transfer or check to such account other form of transfer reasonably specified by from time to time in writing (or by such direct
cause to
be
Royalty Owner).
See'rich
true,
3.3 records
Production
Records; Stat_emen.ts
to
and
Pa..Yments. WI
records
Owner from may

or
shall be
keep full,
to
and correct
the
Subject Interests, Royalty Owner or its

On the
not
or
of the oil, gas, and other and the portion attributable authorized
Hydrocarbons produced
the OR_RI. Such made and
attributable
inspected by
before
the
last forth
business
statement
setting
direct
portion
receive
of such
above,
allocable form
as
the gross
production production attributable payment of proceeds from to the proceeds attributable

(i)
the and
thereof at all reasonable times. copies representatives Owner a day of each Month, WI Owner shall send to Royalty for the preceding Month, (it) from the Subject Interests
to
the
ORRt, (iii)
to
the extent
Royalty
Owner
to Section
does 3.2 Taxes
sale of ORP3 sale of ORKI

as
Hydrocarbons pursuant Hydrocarbons and the Specified

may
thereto,
(iv)
may
such
other
data
Royalty
Owner
reasonably
request,
in such
Royalty
Owner
reasonably request.
ARTICLE IV AND COVENANTS of
REPI2gSENTATIONS
WI
WARRANTIES
and covenants
Owner
hereby represents,
warrants
for the benefit
Royalty
Owner
as
follows:
/1tllt//1t/ 1/11/!
90t"
92
200T.054496-0
therewith are and properties unitized Subject Interests could adversely affect the ownership or operation of the being (and, to the extent the same of ownership been) tenure after the date hereof, have during WI Owner's Subject Interests with in accordance manner, maintained, operated and developed in a good and workmanlike with all applicable laws, rules, regulations and prudent industry standards and in conformity authorities having jurisdiction and in conformity with all oil, gas or of all duly constituted orders and agreements forming a part of the other contracts other Hydrocarbon leases, deeds and Section 4.1
Qpeations.
The
Subject
to
own
Interests. and
W1 Owner
has all
governmental
licenses
operate the Subject Interests, and WI Owner or of any such licenses permits. WI Owner in respect Decisions a prudent operator. as would Subject Interests
will be made Interests. WI
or appropriate necessary of any violations notice has not received the shall develop, operate and maintain of operations with regard to the conduct
and
permits
by
WI
As
Owner
to any
Subject operator,
considering the effect of the Subject Interests portions

without all such action
to
of the
as
ORRI which
as
burden
on
the
the
are
to
WI and
Owner such
is not
as
Owner
to
shall it
to
take
and
so
exercise
all such maintain
rights
and
remedies
legally
the
available
cause
the operator
develop,
operate
portions
of
Subject
Interests.
title to WI Owner has good and defensible Section 4.2 Title; Permitted Encumbrances. except for free and dear of all liens, security interests, and encumbrances the Subject Interests, is made for the sole Encumbrances Permitted Such qualification as to Permitted Encumbrances. made herein, and is not of WI Owner of limiting the representations and warranties purpose herein intended that reference intended to restrict the description of the Subject Interests, nor is it or Encumbrance the ORR.I to such Permitted shall subordinate Permitted Encumbrance
to
any
otherwise
to,
or
cause
this
Conveyance
or
any
rights
of
Royalty
Owner
WI
hereunder Owner
to
be made binds
subject
itself
to
Encumbrance. encumbered by, such Permitted alt and singular title DEFEND and FOREVER WAR.R.ANT
successors
to the ORPd
or
hereby unto Royalty Owner,

the
same or
its
and assigns, against
every
Person
lawfully claiming
to
claim
any
part
thereof. Without
to
limitation that the
of the
generality
Owner
a
of the
Royalty
Owner
ownership
WI
of WI Owner and
foregoing, WI of the Subject

Owner
Owner Interests
represents
does
to
and
warrants
and will:
(a)
clear of liens than
entitle
Royalty
or
collectively
net revenue
receive,
that is
free
and of the
to
or
and encumbrances,
decimal
percontage
to, each
interest
share
Hydrocarbons
greater
produced from,
the NRI
cause
or
allocated
Subject
and
a
Interest
equal
Percentage
WI Owner with such
for such
to
Subject Interest,
to
(b)
the costs such
be
obligated
Well is that
not
bear
no
decimal
or
percentage
W1
share forth
associated
Subject
is
greater than the

to increase
Percentage
as
of for
in
Subject lnterest which Exhibit A) without a corresponding

further Owner
share
of costs increase
to
subject
revenue
(except
set
in net
interest. that
and
WI which
Owner Wi is
represents and Royalty

to
and
not
warrants
are
Royalty
to
Owner
such
shares
of
production
which
set
Owner is made
entitled
not
receive,
to
shares
of expenses
as
WI forth
Owner
in
obligated
A.
bear,
are
and will with
be
subject
substitution
change
and
except
expressly
of
Exhibit
This
Conveyance
full
subrogation
Royalty
Owner
IItlIIIIPIIillIIIIlUlI
lOof 92
2007-054466-0
in
and
to to
all
covenants,
representations
Interests.
and
warranties
by
others
heretofore
given
or
made
with
respect
the
Subject
4.3
Section mineral
Leases,Deeds
and
servitudes, leases, contracts, Subject Interests, to the extent the same agrees and effect, and WI Owner full force
extent
a
Performanc..e of Obligations. The oil, gas or forming a part of the fees, deeds, and other agreements in are relate to the Subject Interests, or otherwise cover
Contracts:
to so to
maintain the ORRI
them
or
in full
force
and
effect do
to
so.
the
prudent operator,
Section
4.4
without
giving
with
effect
this Conveyance,
would
and
Compliance proposed operations thereon,

of
Laws, including all Environmental and has determined to determine
Subject Lands, and WI Owner's present in compliance in all ma:erial respects with all applicable are Laws; (b) WI Owner has taken all steps reasonably necessary
Law.s.. (a) The
that
no
Release
on
of Hazardous
Materials
and in any the
use
has
occurred which WI
on
the
Subject
makes best action
Lands and
or
as
resuit make
operations
Subject
state
or
the
Subject Lands,
will
not
Owner
intends
to
of the
Lands
result
such
of WI Owner's is the
knowledge,
of any
none
of such
Lands,
subject
to
federal,
to
a
operations of WI Owner, and local investigation evaluating whether

Hazardous Materials into
Release; (c) to the of the Subject none

any
remedial
or
at offsite locations) of any the improper storage or disposal (including storage or disposal of WI Owner, any other Materials; (d) neither WI Owner nor, to the best knowledge Hazardous is Law indicating that WI Owner under notice any Environmental has filed any Person of any or disposal, the improper storage responsible for the Release into the environment, or removed were from, or are in any way related to located that are now on, Materials Hazardous have been Released, or are improperly Materials Subject Lands, or that any Hazardous any nor WI Owner neither any of its Affiliates stored or disposed ofupon any Subject Lands; and (e) with operations on any Subject has any material contingent liability in connection otherwise or disposal, of any the improper storage or into the environment, for the Release Lands be or will not cause permit the Subject Lands or WI Owner to W1 Owner Materials. Hazardous do Lands or Laws or other Laws with respect to the Subject of any Environmental in violation Owner or the will subject W1 Owner, Royalty anything or permit anything to be done which Laws, assuming in remedial obligations under any Environmental material Subject Lands to any facts, conditions of all relevant to the applicable governmental authorities each ease disclosure will promptly notify if any, pertaining to the Subject Lands, and WI Owner and circumstances, best knowledge of WI Owner, the Royalty Owiaer in writing of any existing, pending or, to nature material affecting any Subject Lands by any of
is needed
respond
Release
of any
the environment
to
threatened
will
or
investigation
or
private party
take
inquiry governmental authority

or
in connection
with that
no
all steps reasonably on or otherwise Released will

not
cause or
Owner Lands
of any Materials any Hazardous would violate any Environmental

in violation Section 4,5
in violation to the Subject or Materials on of any Hazardous permit remediate or to remove and agrees Law and covenants Environmental which in amounts the Subject Lands on has been Released which the Release Laws.
to determine necessary to the Subject Lands
Laws. any Environmental Materials are Hazardous of any Environmental
WI Owner
disposed
Laws.
of
WI
Imbalances.
"undertake" gas
means
As used herein, Definitions. (a) or Well takes a lesser share ofoil Subject
that such
an
owner
of
production
than
from
produced
,0
from
Subject
Well
the share
tlilLlllllllUt lltUll
11of
92
2007.054466-0
which
such
to
owner
is entitled any with

a
to
take
by
virtue
of
its
ownership interest,
or
determined
without
or
regard
rights
ovener
any rights under law under common from of production Well

than
production balancing agreement respect to production balancing

Well such takes
owner a
similar
and
arrangement means "overtake"
any
an
that
Subject
which without
Subject
interest,
the
share
greater share is entitled to take

any
of oil
or
by
any
gas produced from such of its ownership virtue
production balancing respect to production under common or or similar arrangement agreement and is "duction" taken of production not undertakes, the amount balancing. If an owner overtakes, the extra share of production taken is "overprodugtion". if an owner
again
determined
regard to any rights
rights
under
law
with
(b)
a
No Undertakes for
Withgut Conse.
itself
or
WI Owner of
will elect
not
undertake if
an
or
overtake of WI overtake Owner.
from Owner in its
Subject Well (either

overtakes
or
on
behalf
Royalty Owner)
otherwise
to
Affiliate
or
thereby
undertakes.
W1 Owner
may
undertake
of business reasonable judgment exercised for the benefit (b), of this subsection in violation undertake by WI Owner occurs under allowed applicable Law extent be determined (to the maximum
If any itself and Royalty the ORRJ Hydrocarbons shall

and any
applicable
Permitted
Encumbrances) (c)
No
without
regard
thereto. will
not allow
any Ba!aneing_Frorn Other Properties, WI Owner third more or one under which arrangement to any production balanciiag to be subject Interest result as a to such Subject Interest a portion of the production attributable Persons may overtake with respect to properties other than or overtakes (or other actions or inactions) of undertakes all (c), a production unit in which of this subsection For the purposes such Subject Interest.
Subject
parties
other
have
uniform 4.6
to note
interests
shall
be considered
to
to
be
single Subject
Interest.
Section
covenants
or
Royalty Right
Join
in Sales. under W1
Whenever the Credit W1 Owner
(after taking
Agreements
or
into
account other
to
all
loan the
Royaity Owner's
purchase agreement
Affiliates with
any "Sold shall
agreement
Owner) interest (in this section called sell any part of its retained opportunity to W1 Owner this Conveyance, Interest") in any properties and interests subject to to have, the option to sell Owner Royalty Owner has, and shall cause Royalty to be sold (in this section called the properties and interests ORRI that burdens
as a
has, and intends

a
take,
Retained insure
that of the
that
a
portion
"Sold. Royalty")
to WI Owner is as favorable as that available and at a price which part of such transaction is a cost free interest). In exercising such option, (taking into consideration that such Sold Royalty sale on to lhe Sold Royalty to WI Owner (for further Owner may elect to resell the
Royalty purchaser)
to
or
to sell
the
Sold
Royalty directly
or
to
the than
shall be without
the Related
representation
Royalty.
warranty
shall
other
purchaser. Any Royalty Owner's

Owner of
at
such
resale
to
WI
Owner
special warranty
days' notice
such
or
of title
such
was
WI Owner
give Royally
least
30 in
in the terms any potential sale (or of any material modification has no obligation to participate Owner previously given). Royalty
sale of which but if
of any a notice
to
consent
any
such does
transaction
participate in any purchaser in such
made by the of any purchase price allocations and Royalty the Sold Royalty, WI Owner and Interest sale to the Sold Retained received by both, net of the aggregate purchase price themselves between shall divide Owner shall be the separate which taxes, taxes (other than income of sale and any transaction costs receiving A/C and Royalty and Royalty Owner), with WI Owner of WI Owner such
or
otherwise
to
sell
all
then
or
any
part
of
any
ORRI,
Royalty
Owner
transaction,
regardless
obligations
Owner
receiving B/C,
where:
]]
ltll/l[l l illltllLIIll
12of 92
2007-054466-0
"A"
equals
to
the
net
present
value
attributable
to
the
then
reasonably
available
derived
by Royalty Owner using (including the Royalty Owner

furnished
to
any
Retained Interest, as engineering information then

Sold
most recent
independent
their loan
engineering report
agreement
"B"
or
note
Royalty Owner's purchase agreement),

value
Affiliates
under
equals the net present derived by Royalty Owner Royalty Owner (including
furnished
various "C"
to
attributable
any
to
the
Sold
Royalty,
then
as
reasonably
available
to
using
the
engineering
most recent
information
then
Affiliates Royalty Owner's into account purchase agreement), taking

costs
independent engineering report loan agreement or note their under that the Sold Royalty is not subject to
Sold Retained Interest,
and
and expenses the

sum
burdening plus
B.
the
equals
of A
ARTICLE
ASSIGNMENTS
Section
5.1
AND
TRANSFERS
may,
nothing
convey,
(including dispose of the ORR1 to the appurtenant or incident privileges remedies, powers estates, shall be binding upon of ownership of the ORRI Conveyance), in whole or in part. No change evidencing such is furnished with copies of the documents WI Owner, however, until WI Owner lhe rights of Royalty Owner Each Person comprising Royalty Owner may exercise change. of the documents Upon receipt by WI Owner of copies its percentage share. to attributable W1 of the or(R.l, assignment, mortgage or other disposition evidencing a sale, conveyance, the transferring Royalty Owner in ptace of deal with the transferee shall thereafter Owner to be be deemed shall thereafter Owner the Royalty herein to Royalty Owner and references shall Owner Royalty Owner, provided that the transferring Royalty to such transferee references that are reimbursement and from, all rights to indemnification to have, and benefit continue
herein
Assignment shall in contained

or
a.nd Transfer
any way
limit
by Royalty Owner. Royalty Owner the right of Royalty Owner or restrict

ORR1 its
and
assign,mortgage
otherwise
rights, titles,
and
to, sell, interests, this under
provided herein,
conveyance, Any sale, thereof or interest any part or other disposition of the Subject Interests, assignment, mortgage the instrument effecting such this Conveyance, and in therein, by WI Owner shall be subject to other disposition recipient must expressly recognize transfer or other disposition the transferee or Section5.2 Assignment
and Transfer
by
W!
Owner.
or
and
assume
all
obligations,
5,3
WI
covenants
and agreements Rurmin contained

With
of WI Owner
hereunder.
Section
Covenants
the inure
Subiect
to to
Interests. be covenants of
All
covenants
and with the and its
agreements of Subject Interests,

successors
owner
All of the
herein
shall
be deemed
running
Owner
provisions hereof shall
the benefit
Royalty
and
assigns.
12
111t1111111 IWIIIH
13 of 92
2007.054466-0
ARTICLE
Vl
MISCELLANEOUS
Section 6.1
to
PROVISIONS
Owner agrees
to
Further
extent to
Assurances.
WI
WI
to
execute
and
deliver third
to
Royally
Owner,
execute
and,
and
the
it is within
Owner's
power
and
deliver
acts
such
to
further
and
Royalty
or
Owner intended
granted
further
Royalty Owner, all such other or appropriate to more fully vest in and assure things as may be necessary and privileges herein remedies, powers all of the rights, titles, interests, limitation, executing, delivering and recording to be including, without so
to
do so, to cause any instruments additional
parties
to
to
and
do
all
conveyances
effect
the
provisions
failure be
of Section
2.5.
Section of
a
6.2 hereunder
No Waiver.
or
The
not
of
R0yalty
of
Owner
to
insist
covenant
Of any obligation hereunder,

shall
a
irrespective
Royalty
Owner's
to
upon of the of
strict
performance
which
such
failure
continues,
waiver
length of time for right to demand strict

breach
or
any or waiver, express or implied, compliance in the future. No consent to or of any or waiver a consent shall constitute hereunder in the performance of any obligation No other obligation hereunder. or of the same any in the performance default or other breach of any rights granted Owner provision of this Conveyance shall be deemed a waiver by Royalty and the rights of interests to Royalty Owner under applicable Law governing overriding royalty
or
default
the
owners
thereof. Section 6.3
_Aplieable
Law.
This
regard to shail, without parties hereunder in accordance and enforced construed interpreted,
Section 6.4
Conveyance principles of
with
and
the
rights
State
and
be
conflicts
of laws, of the
obligations, of governed by
the
and
the laws
in
of Alaska.
be to Conveyance is intended for unenforceable to be invalid, illegal or or If any term provision hereof is determined severable. such invalidity, illegality or unenforceability shall not affect the validity, whatsoever, any reason of this Conveyance. and enforceability of the remainder legality
Severabilitv.
Every provision
this
Section6.5 under this
Notices.
All
notioes
and
other
communications
Conveyance shall be in writing and, unless otherwise which may be transmission or (except for Monthly Statements delivered personally, by facsimile for which a service sent by email) by registered or certified mail, postage prepaid or by delivery delivered on and shall be deemed below receipt is obtained, at the respective addresses shown address office or post any other the date of receipt. Either party may specify his proper address giving notice to the other party, in the of the United States limits by the continental within date of such change of manner provided in this section, at least t 5 days prior to the effective of W][ Owner and Royalty Owner are as follows: The addresses address.
required or permitted specifically provided, shall be
Itill Iil Iii IIIllllll IlUtl[ illl

14 of 92
13
2007-054466-0
WI
Owner: Ocean
Royalty
Boulevard,
Suite 1240 Two
Owner:
t st Floor
111 West
Long Beach,
wilh Rutan 611 Costa
a
CA 90802
Greenwich Plaza, Greenwich, CT 06830

with
a
copy
to:
copy
to:
& Tucker,
Anton
LLP 14th Floor

333 West Suite
2 t 00
& F[om
LLP
Boulevard,
CA 92626 Amber
Wacker IL 60606
Drive
Mesa,
Atlention:
Gregg
Chicago,
Atlcntion:
Seth E. Jacobson
L.
Byron
Vance
IIt
Section6.6
ROYALTY PART WITH:
OF
NO
LIABIIJTY
OF SHALL OR
R.OYALTY OWNER;
EVER BE
INDEMNITY.
FOR
NO ANY
OWNER THE
INDEMNITEE COSTS, EXPENSES
LIABILITIES
RESPONSIBLE IN CONNECTION INCURRED
(A)
OWNING,
THE OF WI
TIlE
EXPLORING,
OR SUBJECT
DEVELOPING,
MAINTAINING, INTERESTS SUBJECT

OWNER WITH
REWORKING
TO
OPERATING, OF RECOMPLETING OR LANDS, ANY OBLIGATIONS

ANY TAX THE
PARTNERSHIPS PHYSICAL INTERESTS, THE BURDENING SUBJECT THE OR INTERESTS SUBJECT THE OF CONDITION OF OR TRANSPORTING TREATING HANDLING, OR THE LANDS, LANDS SUBJECT THE FROM PRODUCED HYDROCARBONS LIABILITIES OR LOSSES EXPENSES, (INCLUDING ANY COSTS, OR LAW ENVIRONMENTAL AN OF VIOLATION TO RELATED OF THE TO OR REMEDIATION TO DAMAGE RELATED OTHERWISE OUT OF ROYALTY ARISE SAME THE WHETHER ENVIRONMENT, OR OUT OF IN PROPERTY OF AN INTEREST OWNERSHIP OWNER'S RESPECT SUBJECT
THE
ACTIONS
OR.
OF ARISE THE ALL
WI
OWNER
OR
ROYALTY OR
OWNER
OR
OF
THIRD
PARTIES
OTHERWISE),
FAILURE
TO
(B)
DEFENSIBLE
CLEAR OF
BY THE ANY
WI
TITLE
HAVE TO OWNER INTERESTS SUBJECT
GOOD FREE AND LOSSES
AND AND TITLE OR
BURDENS,
DEFECTS LIABILITIES
AS PART THEREOF A
(INCLUDING
LIENS ENCUMBRANCES, EXPENSES, COSTS, ROYALTY THAT PAY SUCH OVER TO OR
RESULT OF
BY ANY SUFFERED ANY CLAIM OF MUST THE AT TO DELIVER ORRI ANY BE OR
OWNER
ANY ANY
INDEMNITEE
OWNER ANY OR OWNER PERSON
ROYALTY
INDEMNITEE
HYDROCARBONS PREVIOUSLY TIME RECEIVED

BY SUCH
PROCEEDS
RECEIVED ROYALTY
THEREAFTER
INDEMNITE,
14
lltllltll llWtlllllllilll
15 of g2
2007-054466-0
AND
OWNER ROYALTY EACH AND HOLD TO INDEMNIFY AGREES OWNER LOSSES ALL COSTS, EXPENSES, AND AGAINST FROM HARMLESS INDEMNITEE INDEMNITEE OWNER (I) IN ROYALTY BY ANY INCURRED LIABILITIES AND WITH OR (ll) IN CONNECTION FOREGOING ANY OF THE WITH CONNECTION EVENTS AND TRANSACTIONS THE OR CONVEYANCE, THIS THE ORRI, AT OR HEREOF) THEREOF DEFENSE OR (INCLUDING THE ENFORCEMENT THE OF ANY IN CONTEMPLATED OR WITH ASSOCIATED TIME ANY PARTNERSHIP TAX ANY WITH CONNECTION IN OR (lII) FOREGOING SHALL INDEMNITY SUCH INTERESTS. THE SUBJECT OF ANY BURDENING ROYALTY OF ANY AND EXPENSES COSTS REASONABLE ALL COVER ALSO AND EXPENSES, FEES LEGAL REASONABLE INCLUDING INDEMNITEE, OWNER AGAINST. INDEMNIFIED MATTERS TO THE INCIDENT ARE INCURRED WHICH MEANS 1NDEMNITEES" OWNER SECTION 6.6, "ROYALTY IN THIS USED AS AND ASSIGNS, ALL SUCCESSORS OWNER'S ROYALTY AND OWNER ROYALTY DIRECTORS, AND ALL OF THE OFFICERS, AFFILIATES, RESPECTIVE OF THEIR OF EMPLOYEES AND ATTORNEYS TRUSTEES, BENEFICIARIES,
Wl
AGENTS,
THEMSELVES THE OUT OR

SHALL ANY
AND
THEIR INDEMNITY
AFFILIATES.
SHALL APPLY
FOREGOING OF THE
WHETHER
OR
NOT
ARISING
SOLE jOINT
LIABILITY
WITHOUT
OR
OF
CONCURRENT
ANY ROYALTY TO AS
A
NEGLIGENCE
OWNER LIABILITY OF
ANY
FAULT
AND
STRICT
APPLY,
ROYALTY
LIMITATION,
ANY OF
INDEMNI'I-'EE IMPOSED
ANY THEORY THAT
UPON OF THE
OWNER
OR LIABILITY STRICT INDEMNITY FOREGOING LOSSES TO THE OR LIABILITIES EXTENT
INDEMNITEE DOCTRINE ANY OTHER

SHALL INCURRED OF NOT
BY
RESULT
LAW,
TO
PROVIDED
APPLY ANY BY
COSTS,
OWNER
EXPENSES,
INDEMNITEE OR
THE
ROYALTY THE ANY OWNER
PROXIMATELY
SHALL
CAUSED
GROSS
NEGLIGENCE
INDEMNITEE. OF
MISCONDUCT WILLFUL INDEMNITY FOREGOING CONVEYANCE.

Section 6.7
SUCH
ROYALTY SURVIVE
TERMINATION
THIS
in several counterparts, being executed hereof only in certain counterparts recordation, all of which are in located of the Subject Interests that portion of Exhibit A which contains specific descriptions be included, and all shall is to be recorded the counterpart the recording jurisdiction in which reference included only. All of such counterparts together A shall be by other portions of Exhibit instrument. and the same Complete copies of this Conveyance, containing one shall constitute by WI Owner and Royalty Owner. Exhibit A, have been retained the entire
Counterparts.. This identical, except that, to
Conveyance
is
faeilitate
in the
the date on IS EXECUTED THIS CONVEYANCE WHEREOF, Time. acknowledgment below, to be effective for all purposes as of the Effective IN WITNESS
set
forth
[Remainder of page
intentionally left blank]
15
Exhibit C 2007.054466-0 Christianson Affidavit Page 16 of 92
WI
OWNER:
OPERATING ALASKA PACIFIC ENERGY LLC (formerly known as Forest Alaska
Operating LLC)
Darren President
Katie
IllUlllilnlll llllUlllll
17 ot 92
20O7-054466-0
ACKNOWLEDGEMENT
STATE COUNTY OFCOLORADO
OF DENVER
Public
On August in and for
24, 2007, before me, the undersigned, said County and State, personally appeared
OA
Darren
/
Katie,
to me
r Y
ol
a
the
President the that
Pacific
Delaware
Energy
limited
Alaska
Operating
LLC
liability
to satisfactory evidence that to me acknowledged the instrument signature ort
company be the person he the person,
(formerly known personally known to

whose the
or name same
as me
Forest
or
Alaska
to the
Operating LLC),
on
proved
basis
of
and his
is subscribed in his authorized
within
instrument,
and
executed
capacity,
the person
by
entity
upon
behalf
of which
acted, executed
the instrument.
WITNESS
my
hand
and official
seal.
IOTARY
PUBLIC
Printed
Name
o.
r-u
My
commission
expires:
5.-
/t.
O&Y
Deborah
State S.
Pottenger
Notary Public
of Colorado
My Commission Expires: May 11, 2008
JO 20O7.054466
ROYALTY
OWNER:
SPCP
Oroup
Alaska
LLC
By:
Name: Title:
RchsrdPrili Auhodzed Signatory
lltllllllIBlllIBll iIllIllllitltllIi
190f 92
2007-054466-O
ACKNOWLEDGEMENT
STATE OF
*'c''tv4 (qOI
OF
COUNTY
'r/'4"/
On

before me, the
August732007,
undersigned,
Notary
in and for said County of sPcP Group Alaska LLC, a Delaware limited liability Company, 0v. ,2Lql the to be the person evidence to me or proved to me on the basis of satisfactory the that he executed to me and acknowledged instrument, to the within is subscribed name whose the person, or entity the instrument in his authorized capacity, and that by his signature on same the instrument. executed the person acted, upon behalf of which Public
,
and State,
personally appeared ..el,,d
Y.... .,,o
,a
....
/'4e4r: I 0
personalS'known
ae-C_,,7,
WITNESS
my
hand
and official
seal.
NOTARY
PUBLIC
Printed
Name
My commission
expires:
Yale Lansky NOTARY PUBLIC State of Connecticut
My Commission
Expires 8/31/2011
ItllflW[Itl Iilllliltliltlllit/
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L A S
2007-054467-0
Recording
8/2712007
Dist: 301 AM
-
Anchorage
8:09
Pages:
1 of
92
K
A
Ill$1tllllRl$1111liLllillllllll l
COVER attached
SHEET
to
CONVEYANCE
OF OVERRIDING
ROYALTY
RECORD
THIS
INSTRUMENT
IN THE
FOLLOWING
RECORDING
DISTRICT:
e,'
ED
[] [] []
[]
Anchorage Recording District, Barrow Recording District, Chitina Recording Dista:ict,

Homer Kenai
Recording District,
[]
INDEX THIS Grantor:
Recording District, Palmer Recording District, and Talkeetna Recording District;

INSTRUMENT
Forest Pacific SPCP See AS FOLLOWS:
Alaska
Operating
Alaska
LLC LLC
Energy Group
Operating
LLC hereto
Grantee; Lands:
I11 Alaska
A attached
Exhibil
AFTER RECORDING, PERSON:
RETURN
THIS
INSTRUMENT
TO THE
FOLLOWING
Skadden, Arps, Slale, Meagher

Attention: 333 West Seth Wacker IL 60606 E. Jacobson
& Flom 2100
LLP
Drive,
Suite
Chicago,
Exhibit D Christianson Affidavit Page 1 of 92
(o: When recorded, please return Skadden, AS, Slale, Meagber &F[om
LLP
333 Sui(e
West
Wacker IL 60606 Seth
Drive
2 [ O0 E. Jacobson
Chicago.
Anenion:
CONVEYANCE
OF OVERRIDING
OF this
ROYALTY ROYALTY
dated
as
INTEREST INTEREST
set out
time
is made
by PACIFIC ENERGY Alaska Operating LLC), a Delaware Forest SPCP Group Ill Owner"), to and in favor of (herein called "R!").
from and
CONVEYANCE supplementedor amended,

THIS
OVERRIDING
(as
at
from the end
time
to
"Conveyance"),
of the date
hereof,
(formerly known as OPERATING ALASKA (herein called "W._]I limited liability company, limited liability company, Alaska LLC, a Delaware
LLC
ARTICLEI
DEFINED TERMS
Section schedule
have the hereto l.l
(unless
respective meanings assigned

and schedules
referred
as
or in any exhibit or in this Conveyance used When Terms. Defined the following terms or schedule), defined in any such exhibit otherwise subsections, in this section or in the sections, them to
exhibits
to
below: Person, each other

Person that
"Affiliate"
one
or
means,
to or
any
more
intermediaries
otherwise) controls,
in no event with, such Person, provided that shall be deemed to A Person of each other. "Affiliates" directly or indirectly, power possesses, such other Person
is controlled shall Royalt3,- Owner

be
directly, or indirectly (through control by, or is under common

and W] Owner
any
be considered other Person if
"controlled
by"
20% or more to vote (a) for the election basis) having ordinary voting power or or members; member partners or the managing
of the
securities
or
other
equity
interests
(on
fully
diluted
or
of directors,
the managing
general partner
whether
(b) by
to
direct
or
or
cause
the
direction
of the
management
and
policies
of such
Person
contract
otherwise.
means
30, Agreement dated as of November Pacific Energy supplemented or restated), among 2006, (as from time to time and agent, lead arranger & Company, as administrative J. Aron Ltd., as borrower, Resources Credit Agreement dated as of lenders, (ii) that certain First Lien agent, and various syndication the WI amended, supplemented or restated) among time to time August 24, 2007 (as from from time the lenders Pacific Energy Alaska Holdings, LLC, as Holdings,
"Credit
Agreements"
(i) that amended,
certain
Credit
Owner,
to
lead
and syndication agent, and J. Aron sole bookrunner arranger, of August Second Lien Credit Agreement dated as certain agent and (iii) that
time
as borrower, party thereto,
Silver
Point
Finance,
LLC,
as
administrative
&
agent,
collateral agent, sole documentation as Company 24, 2007
(as
from
ll]lll]lHl/l JUtltJ]
2 of 92
2007-054467-0
time
Energy
time to time party thereto, Silver Holdings, LLC, as Holdings, the sole bookrunner agent, collateral agent, sole tead arranger, Point Finance, LLC, as administrative agent. and syndication agent, and J. Aron & Company as documentation Alaska "Effective Time"
means
to
time
amended,
supplemented or restated)
the among from lenders
WI
Owner,
as
borrower,
Pacific
7:00
a.m.
local
time
at
the
locations
of the
Subject Interests,
respectively,
on
January 1,
2007.
means or
"Environm..ental Laws" emissionsl discharges, releases industrial, toxic or hazardous

surface water,
use,
or
any
and
all
Laws
relating
to
the
environment ambient
or
to
or
threatened
or
or
releases
wastes
of into
pollutants, contaminants,
the environment
to
chemicals,
substances
or
including
manufacture,
air,
ground
industrial,
Rate"
water, toxic
land,
hazardous
otherwise
relating
or
or
the of
processing,
distribution, chemicals,
treatment,
storage,
or
disposal,
transport,
handling
pollutants, contaminants,
and the laws the of
substances
wastes.
"Fixed maximum the State

rate
means,
for
any
to
of interest
permitted
day, the lesser of be charged pursuant
the
rate
of
11%
per
annum
to this
Conveyance
under
of Alaska. "Hazardous
means Materials" contaminants, pollutants,
any
or
substances
or
regulated
as
under toxic
any
or
Environmental
hazardous
Law,
whether
or
as
chemicals,
industrial,
substances
wastes,
or
otherwise.
gas and all other minerals, casinghead gas, (and including without limitation the term "Hydrocarbons" includes all extracted
"Hydrocarbons_" means
the
oil,
whether minerals
or
not
similar
and substances
to
any
of
foregoing As used herein, organic kind, whether

'lnternal
condensate,
sulphur,
and
lignite).
of any
or
inorganic
Code" time with and
means
Revenue time
to
the
successor
United
statute
States
or
Internal statutes,
Revenue
Code with
of all
1986,
rules
as
amended
from
any
together
and
regulations promulgated
"Law"
means
respect
thereto.
decree, statute, law, regulation, ordinance, rule, treaty, judgment, order, United of the franchise, license, agreement or other governmental restriction permit, conc'--'-ession, of any foreign country or any department, or or any state political subdivision thereof or States includes to a Law any amendment thereof. Any reference other political subdivision or
any
province
or
modification
Law.
to
such
Law,
and
all
regulations, rulings,
and
other
Laws
promulgated
under
such
"Marketing
"Month"
Terms
an.d.Conditions"
the
has the 7:00
meaning assigned (local time,

and 7:00
a.m.
to
such
term
in Section of each
3.1.
means
period
of each
between calendar
arm.
at the
on
location the first
Subject
the
next
Interest) on succeeding
"Net
the
first
day
month.
month
day of
calendar Revenue
the Hydrocarbons (and the proceeds of land, fee mineral to a particular lease, tract thereof) produced and saved from or attributable or net profits interest interest, royalty interest, overriding royalty interest, production payment,
Interest"
means
a
percentage
share
of
Iltlllllllltllilllll[ll
3 of 92
2007.054467-0
other
interest and
in
Hydrocarbons,
burdens
on
aRer
deduction
of
royalties, overriding
(a)
each
royalties, production
each Well
payments
similar
production,
with
"N "
means,
respect
to
each
Subject
Interest:
to
with other
Subject
located
Interest.
Well
on
located
such
and (b) with respect such Subject Interest Net Revenue actual Subjecl Interest, WI Owner's
on
respect to Subject
Interest
in such
Subject
"_ORRI"has
"_ORRI
the
meaning assigned
the
to
such
term
in Section
2.I.
Hydrocarbons"means
oil,
gas and other
minerals
attributable
to
the ORRI.
".ORRI Per.centa.e" means
.06177%.
means
"Permitted
of
Enc umbrance.s."
each of the following,
to
the extent
existing
on
the date
delivery (a)
of this
the
Conveyance:
contracts,
being applicable to
Exhibit
A hereto. liens
are
agreements, certain of the Subject
burdens, encumbrances
Interests in the
and
other of such
matters
set
forth
as on
descriptions
Subject
Interests
due
in good faith by appropriate action being contested of which WI Owner has reserved diligently conducted and for the payment
or
(b)
for taxes,
assessments
or
other
governmentalcharges
or
levies
which funds.
are
not
which
promptly
adequate
initiated
and
(c)
or
liens
or
of contractors, other
or
materialmen
are
like which
liens
are
subcontractors, arising by law
carriers,
or
warehousemen, in the
mechanics,
of business action has reserved
laborers for
sums
contract
ordinary
which
not
due
initiated funds.
and
diligently conducted
being contested in good faith and for the payment of which
by appropriate
WI Owner
promptly
adequate
(d)
reservations,
of
covenants,
restrictions,
minor
easements,
servitudes,
minor which
or
minor
rights,
reassignment prior to rights WI occupation, use and enjoyment by in the normal course the Subject Interests
materially
ORRI.
encumbrances, abandonment
Owner
exceptions, permits, conditions, conventional irregularities in title or

not
do
materially
of their
interfere
with interests value
the in
Royalty
as
Owner
respective
of business of
impair
the value
thereof
for the purpose
presently conducted or to or impair the such business,
be conducted, of the
(e) arrangements development

.
similar or under joint operating agreements operators of of the expense proportionate share with respect to WI Owner's owned leasehold or fee interests and operation of oil, gas and mineral
liens of that such liens
secure sums
contractual
exploration, jointly with

and for
the
others,
in
to
the extent faith
which
are
not
due
or
which
are
being contested
good
by
appropriate action
Wt Owner
promplly initiated
adequate
funds.
and
diligently
conducted
payment
of which
has reserved
IttllittllH/illllllll
4 of 92
2007-O54467.0
(f)
Affiliates under and subordinate "Person" limited
executor
liens the
to
obligations owing by to secure security interests that such liens and security Credit Agreements, provided this Conveyance.
and
an
Wt
Owner
are
and
its
interests
subject
means
individual, association,
corporation, general partnership,

joint
stock
or
limited
partnership,
estate
or
liability
thereof
company,
court
or
company, agency
governmental unit
means
any
thereof; trust or or authority thereof, or

trustee
any
other
legally recognizable entity.

"Reimbursa.ble
of
or Royally Owner ownership, enforcement,
Expenses"
its
or
all costs which of

are
and
Affiliates
termination
or
the
expenses paid or incurred by related to: (a) the negotiation, or any ORPU, this Conveyance,
contest, release Person
or
or
on
behalf
or
acquisition,
waivers adverse
manner
amendments
claim
or
hereto
or
thereto,
(b)
any
litigation,
instituted
by any made or demand proceeding defense or the enforcement ORRI Hydrocarbons, this Conveyance, the OR.R], any whatsoever of their rights exercise and its Affiliates' of Royalty Owner's hereof or thereof, or the defense all recording and Expenses are (i) the Reimbursable lneluded among or thereunder, hereunder of counsel, engineers, accountants and fees and expenses filing fees, (ii) all actual and reasonable and (iii) all costsof and its Affiliates, for Royalty Owner and advisors experts other consultants, hereunder. of its remedies in Royalty
Owner
discharge affecting
of any in any
exercising
means
any
"'Release"
the done
disposition
in material
or
release with
of all
Hazardous
Materials,
other
than W1
dispositions
Owner
and releases has

no
compliance
applicable Laws
similar
or
and for which
otherwise
material
means
remedial all
obligations.
taxes or taxes
"Specified Taxes.'" measured by production and

"Subiect
severance
severance
of ORRI
all
Hydrocarbons
the value
assessed thereof.
against
or
after Time
Hydrocarbons in and under and that pooled or unitized, allocated Time from (or, to the extent the Effective to the Subject Interests. attributable to) the Subject Lands that are Hvdr.gc.arbons" means
"_Subiect
Interests"
means:
may be after the
produced
Effective
(a)
Exhibit
A
All of the attached hereto;

Without
or on
leasehold
and
interests
and
other
property
interests
described
in
(b)
whatever of Wi that leases and
net
limitation whether
of the in and
kind Owner be
character,
the date
(of foregoing, all other right, title and legal or equitable and whether vested or contingent)
interest
to
hereof
any
cover
the
oil,
gas
and other
minerals
in
in and gas
under
or
may
to
produced from
the
same
Subject
such
or
Lands
(including
interests
oil,
or
mineral
the extent
profits
and in such
interests
in such and
lands
lands, overriding royalties, production payments such leases, and fee mineral interests, fee royalty
interests interest
other
interests gas
in such other
oil,
gas and other minerals may be
oil,
minerals) even though WI Owner's incorrectly described in, or omitted
from, Exhibit
A; and
[ Illllill ll[llll I lll ll

5 of 92
2007-054467-O
to, rights, titles and interests of W1 Owner unitization, pooling, or mineral valid oil, gas or from, all presently existing and and to the properties covered and in orders or communitization agreements, declarations under orders, rules, regulations, all units formed and the units created thereby (including voluntary acts of any federal, state, or other authority having jurisdiction, or other official
(c)
All
in and
or
otherwise
derived
unitization agreements, under created units"

described in subsections
means
and so-called "working interest designations or declarations, to the properties operating agreements or otherwise) relating
(a)or (b)
the lands in Exhibit
A.
above
in this definition.
or
"Subject Lands_"
other instruments
described
referred
to in Exhibit
or
in the leases
and
described
located on the Subject Lands (whether fully drilled all wells now means "Wells'" and (unless production drilled on the Subject Lands, and completed or not) or hereafter A) any other wells of the descriptions on Exhibit by the terms is expressly excluded therefrom with the Subject or unitized eommunitized hereafter located on lands or leases pooled, or now
Interests. "WI
Percentage"
means,
in Working-interest such
"Wl
Percentage" orwords
Subject Lands, all of the W] Owner's WI, to "Working Interest," Subject Lands, generally by reference of similar import.
with respect
to the
various
"Wo...rkinjInterest"
and gas
means,
with
respect
or
to
any
Subject Lands,
to
the
interest
owned mineral
owner
in oil fee
leaseholds interests,
or
other that
Hydrocarbon
interests
interests
pertainirg
other share
such
Subject by
Lands and the
(including
or
leasehold
operating rights
determines
cost-bearing
of costs
interests,
borne
ownership
interest.
interests)
the
percentage
of such
to articles, in this Conveyance All references Construction.. articles, sections, subsections and other subdivisions refer to corresponding sections, subsections Titles appearing unless expressly provided otherwise. of this Conveyance and other subdivisions for convenience only and shall not constitute are subdivisions at the beginning of any of such in such contained and shall be disregarded in construing the language part of such subdivisions "hereof", "hereunder" "'this instrument", "herein", "this Conveyance", The words subdivisions. and not to any particular whole a as this Conveyance import refer to and words of similar otherwise requires: "including" and unless expressly so limited. Unless the context subdivision in "of" is not exclusive; words "including without limitation"; mean variations
Section
1.2
Rules
of
its
grammatical
singular
the
form
shall
be construed references
to
include
herein
to
the
plural
and
vice
or
versa;
words
include
or amended supplemented; and time to be from it may in and assigns. All references successors such Person's include to any Person herein references this Conveyance to and schedules refer to exhibits this Conveyance to exhibits and schedules are hereby incorporated exhibits and schedules unless expressly provided otherwise, and all such has been drafted This Conveyance for all purposes. a part hereof and made herein by reference
all other
or
genders;
instrumenl
agreement
as
any time
instrument
agreement
in any refer
gender
such
to
lIMIII11111111m
6 of 92
2007.O54467-0
with
the
joint participation
nor
of
WI
Owner
and
Royalty
Owner
and with
shall the fair
be
construed
neither hereof.
against
in favor
of either
such
party but rather ARTICLE GRANTING
in accordance
meaning
II
PROVISIONS
and
Section
2.1
sufficiency
SELL,
of which
Granting' Clause. For a good are hereby acknowledged, WI

ASSIGN, CONVEY,
valuable
does and
Owner
consideration, the receipt and hereby GRANT, BARGAIN,

to
TRANSFER,
WARRANT
DELIVER
Royalty
Owner
an
"ORRI") equal to (collectively, carved out of each Subject Interest overriding royalty interest of all Hydrocarbons in, under and by) the ORRI Percentage of the WI Percentage (and measured covered by each such Subject Interest. produced from or allocable to the Subject Lands
the TO forever. and
to
HAVE
AND and
TO
HOLD
This
Conveyance
is made warranties
all covenants Section 2.2
and assigns, ORRI unto Royalty Owner, its successors in of Royalty Owner and subrogation with full substitution given or made. by others heretofore the
Non-Cost-Bearinglnterest.
shall
or
ORRI
limitation
acquiring, property taxes), (b) and recompleting, reworking, producing, operating, maintaining, developing, exploring, payments, and remediating the Subject Interests, (c) all royalties, overriding royalties, production for separating, gathering, and (d) all costs similar charges burdening the Subject Interests, ORRI Hydrocarbons or of compressing, treating, dehydrating, processing or marketing
ad valorem all
costs
Hydrocarbons
be
flee
and
clear
of
Except (a) all
for
taxes
Specified Taxes,
ef any kind associated
the ORRJ
and
the
(including
with
without
and
expenses
transporting
meet to pipeline or liydroearbons to the point of sale in a condition taxes (excluding only Specified specifications and qualifications. All of the foregoing transporter royalties, production payments, and similar and expenses, royalties, overriding Taxes), costs become the same dates delinquent shall be paid by W1 Owner promptly, on or before the charges being diligently pursued and for (unless being disputed in good faith by appropriate proceedings will promptly (and in WI Owner have been established). In addition, which adequate reserves
OR_RI
any
event
within
30
days
which
after have
receiving
been and
any
notice
or
statement
for
the
same)
pay
all
Reimbursable
Owner pay
amount
on
Expenses
for any
hereunder,
that of is
Reimbursable which have

to
Expenses,
nonetheless
WI Owner shall bear but not
be
paid by
Owner
pursuant
interest
and are unpaid that WI Owner is for any other amounts been paid by or on behalf of Royalty Owner. Each is instead paid by or to this Conveyance which incurred
at the
and
will
reimburse
Royalty obligated to
behalf
Royalty
Fixed
Rate
on
each
day
from
and
including
the date
of such Section
payment until
2.3
including
the date
repaid by
or
WI Owner. The the ORRI shall thereof

not
or
Measurement:
Lost _Hydrocarbons that

are
Used. in the
to
apply
to
any
production applicable point of sale or compression or transportation of Subject Hydrocarbons prior Well for the production of Subject which are used by WI Owner or the operator of any Subject thereof prior to the applicable point of Hydrocarbons or for the compression or transportation of operations which lost or used in the course are the same sale, in each case only to the extent WI Owner hereby manner. prudently and in a good and workmanlike are being conducted from each Subject Well is that production to Royalty Owner and covenants warrants represents,
oil,
gas
or
other
minerals
unavoidably
lost
in the
lt|lllllltlllllilillll
7of 92
2007-054467-0
and
will
continue from
or
to
be
measured
at
point prior
to
any
point
oil
or
where other
gas,
oil
or
other from
Hydrocarbons
any other well
such
wells
Subject Well is commingled that are not Subject Wells. ProportionateReduction. Owner to Royalty Owner
be determined from be
not
with
gas,
Hydrocarbons
Section
2.4
No WI
It is understood
out
on
and
agreed that, although

the ORRI
the and
ORRI
is
conveyed by
other minerals Lands
of the
Subject Interests,
or
the ORR1 gas and various such
Hydrocarbons
shall shall
based
to
100%
of the full
produced
and
Subject
(or, adjusted
the
extent
pooled
of the oil, WI Percentage unitized, allocated to) the failure of title

to
for any
reason,
including partial
full WI Percentage.
Section and Acquisitions. This Conveyance and the ORRI Extensions and other in (i) all renewals, extensions interests and its Affiliates' WI Owner's in the is included which determinable interest) lease (or other of each 2.5
Renewals,
shall
similar
apply
to
arrangements
Interests,
Subject
obtained
whether interest all been interest
whether
or
such
are are
renewals,
extensions
or
arrangements
or new
have
heretofore
been
by
or
WI Owner
not
the
same
hereafter obtained by or for WI Owner in Exhibit A, and (ii) any described

WI Owner
or
thereof and any Affiliate lease or other property
acquired hereafter Obligations (as defined

fully satisfied.
that and
covers
by
the
its Affiliates
in the Slate
in the Credit
For the is
purposes
interest within
Agreements) under each of the preceding sentence,

(or
one
of Alaska until such time as of the Credit Agreements have

a
new
lease
or
other
or or
same
any
interest,
such
or
which
or
prior
lease
acquired properly interest,
part thereof) covered by a prior year after the expiration, termination,

as
a
lease
property properly
release of lease
shall
be treated
renewal
or
extension
of such
prior
property
interest.
ARTICLE
Ill
MARKETING
Section 3.1
OF
ORIEl
Nature
HYDROCARBONS
of
AND
DISTRIBUTION
OF
PROCEEDS-
shall have the obligation to WI Owner Marketing Arrangements. the ORRI Hydrocarbons on behalf of and prudently market, or cause to be prudently marketed, with reputable purchasers who are of Royally Owner in arm's-length transactions for the account relating to ineluding those arrangements such marketing arrangement, not Affiliates, with each
processing, sales, treating, transportation, compression that (a) are conditions (the "Marketing Terms and Conditions") (b) are at least in the general field or area, reasonably obtainable
and any into
to
be
made
upon and
as
terms
and
the
as
best favorable
most
favorable
or
W1 Owner
to
Affiliate
account
of WI
or
Owner
obtains
to
for
WI
Owner's
share
in the
of
Hydrocarbons
field
or
attributable
the
Subject
Interests and
attributable
give due regard agreed by Royalty Owner from time market prices plus or minus a basis become will or subject to are
any other to the best
general area, (c) take of Royalty Owner, (d) unless otherwise interests on spotto time, provide for floating prices generally based differential; provided, however, that no ORRI Hydrocarbons ORRI for whereby (i) payment sales arrangement any
properties
same
and
Hydrocarbons Hydrocarbons
excess
similar
prudently
the month in which the ORR1 of gas in of 30 days, and in the case delivered (i.e., in the case of oit, in excess are wire transfer or of 60 days), or (ii) payments may be made other than by checks, drafts, and Owner shall W1 of money. duly for the immediate payment communications by which ORRI it under any arrangements perform all obligations performable by
is
or can
be deferred
for
substantial
period
after
8of
92
2007-O54467"O
Hydrocarbons are sold the performance under to any third parties, all
other
or
to enforce measures otherwise marketed, and shall take all appropriate As of the other parties thereto. each such arrangement of the obligations acts
of WI it
Owner
in
marketing
that
the
ORRI
Hydrocarbons
herewith
and
and
all sales
or on
marketing agreements
executed
Royalty Owner and the ORRI; does not have any vested in WI Owner, and Royalty Owner ORRI Hydrocarbons is at all times to join in any for Royalty Owner it shall not be necessary such right or obligation. Accordingly, to existing production sales or amendments sales or marketing agreements or any production any acts of WI to the contrary, any provision hereof marketing agreements. Notwithstanding or sales marketing Hydrocarbons or in entering production in marketing the ORRI Owner be void as the provisions of this Conveyance shall which are not in compliance with
agreements
to the
by WI Owner being understood
in accordance the
shall
be
to
binding
market
right
obligation
the
ORRI
Hydrocarbons.
3.2
to contrary, Until notified by Royalty Owner Fund__s. and shall, on or account of) ORRI Hydrocarbons shall receive all payments for (Or on WI Owner distribute any such payments day of each calendar month, the last business on before noon by to Royalty Owner month, net only of Specified Taxes, received during the previous calendar (or locations) as check) to such accounts wire transfer (or, if consented to by Royalty Owner, by received by W1 Owner for direct from time to time in writing. Any moneys Owner
Section
Distribution
of
the
Royalty
on
or
account for
may of ORRI the

on
Hydrocarbons shall
right
at all
constitute
trust
funds
in WI
Owner's
hands.
Royalty
Owner
shall have
payment
from
(or
account
of)
any other parties obligated payment for (or its right to receive
WI Owner, to times, upon written notice sent to from the purchasers thereof or all ORPd Hydrocarbons diree1Iy Royalty Owner exercises In the event to make payment therefor.
on
begin receiving
account
of) ORRI Hydrocarbons directly,

such any
W1 Owner time any
shall
immediately
instructions
to cause
cause
to
be
prepared
Royalty
and
executed
division
orders,
transfer
orders,
reason,
or
in lieu
thereof,
to
as
Owner
(or
third
party)
payments
Owner
be
made does
Royalty
by
to
cannot
(or
wire
WI Owner
and shall
constitute in
directly to Royalty Owner; not) receive such payments directly, funds in WI Owner's hands, trust
or
may require from that, for in the event the

to same
to time
shall be collected
Royalty
from
Owner time
to
by
transfer
check
to
such other
account
direct
time
writing (or by such
form
immediately paid over as Royalty Owner may or location reasonably specified by of transfer
be
Royalty Owner).
Section
true, the On the
not
3.3
Production
and the
Records; Statements and Payments.

and other
to
WI Owner from
or
and
correct
recorcisof
or
the oil, gas,
Hydrocarbons produced
the ORRL Owner Interests Such made
shall keep full, to attributable
Subject
or
Interests, the of such direct last
portion attributable
day
of each
Royalty
statement
Owner
its authorized
representativesand copies
Month,
the sale
to
records may be inspected by times. thereof at all reasonable

send
to
before
business
the
WI
shall
Royalty
Owner does
setting forth (i)
production from proceeds from

to
Subject
for the
extent
preceding Month, (ii)

Royalty
pursuant
the
to
portion
receive
production attributable
payment of
and
the ORRI,
(iii) to the of ORR/Hydrocarbons

Owner may
Owner
Section
3.2
above, the gross allocable thereto,

form
as
proceeds attributable
(iv)
may such Owner
the sale data

as
of ORRI
Hydrocarbons and
Specified
request,
Taxes
Royalty
Royalty reasonably request.

other
reasonably
in such
9 of
92
0 2007-054467
ARTICLE
IV COVENANTS of
AND REPRESENTATION.S,...WARRANTIES WI Owner follows: Section 4.1

to
hereby represents,
warrants
and covenants
for the benefit
Royalty
Owner
as
Qperatio_n_.s.The
extent
being (and,
the
Subject
interests
after
the and
therewith are and properties unitized Subject Interests could adversely affect the ownership or operation of the the same of ownership been) tenure date hereof, have during WI Owner's
in
a
maintained,
orders other of all
operated
prudent industry standards Hydrocarbon

Interests. and
conformity with all applicable laws, rules, regulations and and in conformity with all oil, gas or duly constituted authorities having jurisdiction and agreements forming a part of the leases, deeds and other contracts
and in WI Owner has all
developed
good
and
workmanlike
manner,
in
accordance
with
Subject
to own
governmental permits.
WI
licenses shall
and
permits
received
operate the Subject Interests,

such licenses
as or
and WI Owner Owner the Decisions
has not with effect
in respect of any Subject Interests will

be
would WI
made Interests.
Subject legally
the
the as As to any portions of the Subject Interests Shall take all such action and exercise all such rights and remedies as are WI Owner operator, and operate such portions of the operator to so develop, maintain available to it to cause
to
by
Owner
prudent operator. without considering
develop, regard to
of the
or appropriate necessary notice of any violations the operate and maintain
the conduct
as
a
of
operations
on
OKR]
which
burden
the
WI
Owner
is not
Subject
Interests. 4.2
Section the Permitted
Title; Permitted
Encumbrances. of all
to
W1 Owner
has
good
and defensible is made for and
title
to
Subject Interests,
of
to
free and
Such the the
clear
liens, security interests,

as
and
encumbrances made
except
for
Encumbrances.
purpose intended
to
limiting
restrict
cause
qualification representations and

description
of the shall
Permitted
nor
Encumbrances Owner is it intended

to
the sole is not herein

or
warranties the of
of WI ORRI
herein,
Subject Interests, rights

all and
that reference
to be
any
Permitted
Encumbrance
this
subordinate
such Permitted
hereunder Owner ORRI
unto
Encumbrance
made binds itself
otherwise
to,
or
encumbered and FOREVER WARRANT

successors
Conveyance by, such
or any Permitted
Royalty
Owner WI
subject
to
Encumbrance.
hereby
the
DEFEND
every
and
assigns, against
of the
Person
singular title to the lawfully claiming or
Royalty Owner,
same or
its
to claim
any part
thereof.
Without
to
limitation that the
Royalty
Owner
generality of the foregoing, WI ownership of Wl Owner of the Subject

WI
Owner Interests
represents
does
to
and
will:
warrants
and
(a)
clear of liens
entitle
Owner
a
and
Royalty
or
Owner
collectively
revenue
receive,
that is
free
and of the
to
or
percentage net to, each Subject Hydrocarbons produced from, or allocated such Subject Interest, and greater than the NRI Percentage for
and encumbrances, decimal
interest
share
Interest
equal
(b)
the costs
cause
WI with
Owner
to
be
obligated
Well
that
to
bear
no
decimal
than
or
associated
such
Subject
is
greater
share of percentage for the WI Percentage
$111tlJlllmlllUilllll
10 of 92
20O7-054467-O
such
Subject Interest,
A) without
a
which
share
of costs increase
to
is not
subject
revenue
to
increase interest.
that
(except
as
set
forth in
Exhibit
WI
corresponding
and
warrants
are
in net
Owner is
further
which Owner in and
W1 Owner
A. This
represents and Royalty

to
Royalty
to
Owner
such
shares
of
production
which WI
Owner
not
entitled
not
receive,
to
and and
shares
of expenses
as
obligated
bear,
are
and wilt with
be
subject
substitution
change except
in Exhibit
to
Conveyance
Interests.
is made
full
all covenants,
representations
and
and warranties
by
others
expressly set forth subrogation of Royally Owner heretofore given or made with
respect
to the
Subject
4.3
Section mineral
fees, deeds, and other leases, otherwise or cover the same Subject Interests, to the extent them to so maintain WI Owner agrees full force and effect, and
extent
a
Leases, Deeds servitudes, contracts,
Contracts;
Performance
Oblig.tions. The oil, forming a part agreements relate to the Subject Interests,
of in full force and effect do
or
gas or of the
are
in the
to
so.
prudent operator,
Section4.4
without
giving
effect
to
the
ORRI
this
Conveyance,
would
and
present (a) The Subject Lands, and WI Owner's Compliance withLaws.. with all applicable material in all respects proposed operations thereon, are in compliance Laws; (b) WI Owner has taken all steps reasonably necessary the on has occurred Materials of Hazardous that no Release
on
Laws, including all Environmental and has determined to determine Subject Lands or as a result of
makes best action the and intends
to
operations
none
the
Subject Lands,
will
not
and in any
the
use
which
WI
Owner
make of any
of the
Subject Lands
of such
state
or
result
such
and
Release;
none
of WI Owner's is the
knowledge,
operations
local
of W1 Owner,
of the
(c) to the Subject
Lands,
subject
to
federal,
investigation
evaluating
into
at
whether the
respond to a Release of any Hazardous or disposal (including storage or improper storage

is needed
Materials
any remedial or to environment
disposal
offsite
locations)
Hazardous
Person has
Materials;
filed
(d)
neither
WI Owner
nor,
to
the
best
responsible
Hazardous
any
Subject Lands,
Environmental under any arty notice the or the environment, into for the Release removed on, were Materials that are now located have Materials Hazardous that
or
knowledge of Law indicating improper storage

from,
been
or are
WI Owner, WI that
of any any other is
Owner
or disposal, of any to in any way related or are
any
Released,
improperly
stored or otherwise
Lands
disposed
has
of upon
any
for
Hazardous in violation
or respecl to the Subject WI Owner, Royalty Owner or the which will subject anything or permit anything to be done Laws, assuming in remedial obligations under any Environmental Subject Lands to any material facts, conditions of all relevant authorities to the applicable governmental disclosure each case
any material into the Release Materials. WI Owner of any
Owner nor any Subject Lands; and (e) neither WI Subject with operations on any in connection contingent liability or disposal, of any the improper storage or the environment, will
not
cause or or
of its Affiliates
permit
Laws
the
Subject
Lands
or
WI
Owner Lands
to
be do
Environmental
Laws
other
with
and
circumstances,
Owner in
if any,
pertaining to
of any
the
Subject Lands,
and the
WI best
Owner
will
promptly notify
of W]
threatened
Lands by any nature material affecting WI Owner Laws. with any Environmental in connection private party or governmental authority Materials are disposed of that no Hazardous to deterinine will take all steps reasonably necessary WI Laws. of any Environmental in violation otherwise Released on or to "the Subject Lands or the to on or Subject Materials of any Hazardous the Release
Royalty
writing investigation or
existing,
a
pending
or,
to
inquiry of
knowIedge Subject any
Owner,
Owner
will
not
cause
or
permit
Lands
in violation
of any Environmental
Law
and
covenants
and
agrees
to
remove
or
remediate
1o!
g2
2007-054467-0
any Hazardous would violate Section
which Materials any Environmental 4.5 Imbalances.
has Laws.
been
Released
on
the
Subject
Lands
in
amounts
which
of production that an owner means As used herein, "undertake" Definitions. (a) Well than the share from such Subject Well takes a lesser share of oil or gas produced a Subject without determined of its ownership interest, is entitled to take by virtue which such owner or similar any or arrangement regard to any rights under any production balancing agreement and that an means "overtake.'" law with respect to production balancing under common
from
rights
owner
of
production
Well than
from
Subject
which without
Well such
takes
owner
Subject
interest,
the
share
from such greater share of oil or gas produced of its ownership virtue take by to is entitled
production balancing respect to production or any rights similar arrangement or agreement taken is "underproduction" and not of production the amount undertakes, balancing. If an owner share of production taken is "overproductio_n_". overtakes, the extra if an owner
again
determined
regard
to
any under
rights
under
common
law
any with
therebyovertakes
reasonable
undertake be
or Without C0nsent. WI Owner will not undertake No Undertakes (b) of WI Owner if an Affiliate of Royalty Owner)behalf for Subject Weleither itself or on in its or overtake undertake otherwise elect to WI Owner or
overtake
from
undertakes.
occurs
business
judgment
Owner the maximum without
exercised in violation
extent
for
by
WI
determined
Permitted
(to Encumbrances)
No
If any benefit of itself and Royalty Owner. of this subsection (b), the ORKI Hydrocarbons shall under applicable Law and any applicable allowed
may the
regard
thereto. will
not
any Balancing__From Other Properties. WI Owner third or more one which under to be subject to any production balancing arrangement Interest as a result such Subject Interest a portion of the production attributable to overtake Persons may than actions or inactions) with respect to properties other overtakes (or other or of undertakes all which of this subsection (c), a production unit in For the purposes such Subject Interest. to be a single Subject Interest, be considered parties have uniform interests shall
allow
(c)
Subject
Section
other covenants
or
4.6
to note
Royalty. Rie, ht
Royalty
Owner's of its
to
Join with
in Sales.
Whenever the
(after taking
into
account
all loan
Affiliates
WI
under
interest
Credit
WI
agreement
Owner) (in this opportunity to sell any part WI Owner to this Conveyance, subject lnteres__ t") in any properties and interests the option to sell to have, Owner Royalty Owner has, and shall cause Royalty to be sold (in this section called and interests the properties ORRI that burdens
purchase agreement
Owner
retained
or any other Agreements to take, the has, and intends called a "S.old Retained section
shall that
a
insure
that
"Sold
portion of the Royalty")
as
to WI Owner available and at a price which is as favorable as that part of such transaction such option, that such Sold Royalty is a cost free interest). In exercising (taking into consideration sale on to the (for further Sold Royalty to WI Owner Royalty Owner may elect to resell the to WI Owner the purchaser. Any such resale to purchaser) or to sell the Sold Royalty directly Owner's special warranty of title representation or warranty other than Royalty shall be without of any such 30 days' notice at least Owner Royalty. WI Owner shall give Royalty to the Related of any sale of which such a notice was in the terms sale (or of any material modification a
potential
previously given). Royalty
Owner
has
no
obligation
,,
to
participate
in
or
consent
to
any
such
itlIMlll llllllltl ll
t2 of 92
2007.054467-0
transaction
participate
Owner
costs
sell to otherwise in any such transaction,

or
all
or
any
part
of any
ORRI,
then Retained
regardless
Interest the
purchaser in
shall of sale
such and of WI
sale
to
the Sold
of any purchase and the Sold Royalty, WI Owner
does if Royalty Owner made by the allocations price but and the and
Royalty
net
divide
between
any
themselves
taxes
aggregate
purchase price
taxes, Owner
received
shall
by both,
be A/C
of
transaction
and where:
net
obligations
Owner
Owner
(other than income Royalty Owner), with WI
which
separate
receiving
Royalty
receiving B/C,
"A'"
to present value attributable then Owner using any engineering information reasonably derived by Royalty recent independent (including the then most to Royalty Owner available loan their under Affiliates Owner's engineering report furnished to Royalty agreement or note purchase agreement),
equals
the
the
Sold
Retained
Interest,
as
"B"
equals
the
net
present
Owner
value
attributable
any
to
the
Sold
Royalty,
then
as
reasonably
available
or
derived
by Royalty
Owner
to
using
Royalty
fiarnished
various "C"
(including the
Royalty
and
then
to engineering recent most independent engineering report
information
loan
Owner's
into
Affiliates
account
under that the
their Sold
agreement
is and
not
note to
purchase agreement), taking

costs
Royalty
Interest,
subject
expenses of A
burdening plus
B.
the Sold
Retained
equals
the
sum
ARTICLE
AS S,,1GNMENTS AND
Section 5.1
TRA, NSFERS
Assignment
shall
or
and any
Trnngfer
way
by
or
.Royalty
restrict
nothing
convey, estates,
herein
contained
powers or in whole until
in
limit
assign, mortgage
remedies,
Conveyance),
dispose of the ORRI and privileges appurtenant or in part. No change of ownership

otherwise
is furnished Owner with may
Royalty Owner the right of Royalty Owner (including its rights, titles,
Owo__er.
to
and may, to, sell, interests, this upon such
however, WI Owner, Person Each change.
rights of Royalty Owner of the documents share. Upon receipt by WI Owner of copies to its percentage attributable other disposition of the ORRI, WI or assignment, mortgage evidencing a sale, conveyance, Royalty Owner in place of the transferring deal with the transferee thereafter shall Owner to be be deemed shall thereafter the Royalty Owner to herein Royalty Owner and references shall Owner Royalty Owner, provided that the transferring Royalty to such transferee references that are reimbursement and and benefit from, all rights to indemnification to have, continue comprising Royalty
exercise the
WI Owner
incident of the ORRI shall be binding evidencing copies of the documents
the
ORRI
under
provided
herein.
SectionS.2
Assignment
or
assignment, mortgage therein, by WI Owner

transfer and
assume or
other be the
shall
other all
disposition obligations, covenants
Any sale, conveyance, by W/ Owner. interest thereof or disposition of the Subject Interests, or any part effecting such in the instrument subject to this Conveyance, and expressly recognize other disposition recipient must or transferee
and
Transfer
and
agreements
of W1 Owner
hereunder.
12
Inilllllllllllllll ILIIIIIlIIII ItM

13 of 92
2OO7-054467-O
Section
5.3
Covenants herein
Running
With
the inure
Subject
to to
Interests. be
covenants
All
covenants
and with
and the
agreements
of W1 Owner
Subject
successors
Interests.
shall contained hereof shall All of the provisions
be deemed
the benefit
of
running Royalty Owner
its
and assigns. ARTICLE

VI
MISCELLANEOUS
Section 6.1
to
PROVISIONS
Owner agrees
to to
Further
Assurances.
is within
WI
execute
to
and
cause
deliver third
to
Royalty
to Royalty Owner, all such to more fully vest in and assure or appropriate such further acts and things as may be necessary herein and privileges remedies, powers all of the rights, titles, interests, to Royalty Owner and recording delivering granted or intended so to be including, without limitation, executing, execute
Owner,
and,
and
the
extent it
to
WI Owner's
deliver
power other and
do so, additional
any instrumems
parties
do
to
and
all
further
conveyances
to effect
the
provisions
of Section
2.5.
Section of
a
6.2 hereunder
No Waiver.
or
The
failure be
of
Royally
of
Owner
to insist
covenant
of any
obligation
not
a
hereunder,
irrespective
Royalty
Owner's
upon of the
strict
performance
which
default or to or of any breach compliance in the future. No consent or waiver, express or implied, to or of any waiver or a consent shall constitute in the performance of any obligation hereunder No other obligation hereunder. or any in the performance of the same or default other breach of any rights granted Owner a waiver by Royalty provision of this Conveyance shall be deemed and the rights of Law governing overriding royalty interests under applicable to Royalty Owner
the
owners
such
failure
continues,
shall
waiver
length of time for strict right to demand
thereof. Section
6_3
Applicable
shall,
without and enforced
Law.
This
to
Conveyance
and
the
rights
of laws,
and be
parties
hereunder
regard
principles
with
of conflicts the laws in this be
obligations of governed by
the and
interpreted,
construed 6.4
in accordance
of the State
of Alaska.
be to is intended Conveyance for or unenforceable to invalid, illegal severable. If any term or provision hereof is determined shall not affect the validity, such invalidity, illegality or unenforceability whatsoever, any reason this Conveyance. legality and enforceability of the remainder of Section
Severability.
Every
provision
Section under this
6.5
Notices. shall
All be in
notices
and
other
unless
or
communications
otherwise for
delivered
Monthly (except personally, by facsimile transmission which a mail, postage prepaid, or by delivery service for sent by email) by registered or certified on delivered be deemed and shall below shown receipt is obtained, at the respective addresses address or any other post office address party may specify his proper the date of receipt. Either in the States of the United by giving notice to the other party, limits the continental within date of such change of the effective manner provided in this section, at least 15 days prior to and Royalty Owner are as follows: of WI Owner address. The addresses
may
Conveyance
writing and,
required or permitted specifically provided, shall be

Statements which be
13
tllUllltlll lll $1111

14 o! 92
2007.0544S7-0
Wl
Owner: Ocean
CA
R.oyalty Owner: Boulevard,

90802 Suite t240 Two Greenwich
111 West
Plaza,
I st Floor
Long Beach,
with Rutan
a
Greenwich,
with
a
CT 06830
copy
to:
copy
to:
& Tucker,
LLP 14th Floor

333 Suite West 2100 IL 60606 Seth L. E. Jacobson Vance Wacker Drive
& Flora
LLP
611 Anton
Boulevard,
Costa Mesa, CA 92626 Attention: Gregg Amber
Chicago,
Attention:
Byron
III
Section ROYALTY PART WITH: OF THE
6.6 OWNEP,
NO
LIABILITY
INDEMNITEE EXPENSES COSTS,
ROYALTY EVER SHALL LIABILITIES OR

OF
OWNER;
BE
INDEMNITY.
FOR IN CONNECTION
NO ANY
RESPONSIBLE
INCURRED
(A) OWNING,
OPERATING, DEVELOPING, EXPLORING, OF RECOMPLETING OR REWORKING MAINTAINING, ANY OBLIGATIONS LANDS, OR SUBJECT INTERESTS THE SUBJECT PARTNERSHIPS TAX ANY TO RESPECT WITH OWNER WI OF PHYSICAL THE INTERESTS, SUBJECT THE BURDENING SUBJECT THE OR INTERESTS SUBJECT OF THE CONDITION OF TRANSPORTING OR TREATING THE HANDLING, OR LANDS, LANDS SUBJECT THE FROM PRODUCED HYDROCARBONS LIABILITIES OR LOSSES EXPENSES, ANY COSTS,
TIlE
(INCLUDING
OR LAW ENVIRONMENTAL AN OF VIOLATION TO RELATED THE OF TO OR REMEDIATION TO DAMAGE RELATED OTHERWISE OF ROYALTY OUT ARISE SAME THE WHETHER ENVIRONMENT, OR OUT OF IN PROPERTY OF AN INTEREST OWNERSHIP OWNER'S OR OF THIRD OWNER OR ROYALTY OF WI OWNER ACTIONS THE PARTIES
OR.
ARISE THE ALL
OTHERWISE),
FAILURE
TO BY THE WI
OR
(B)
DEFENSIBLE OF CLEAR
DEFECTS
OWNER
TO
HAVE
GOOD FREE AND LOSSES
AND AND TITLE OR
TITLE
SUBJECT
INTERESTS
BURDENS,
INDEMNITEE SUFFERED LIABILITIES OWNER ROYALTY SUCH THAT CLAIM ANY OF AS A RESULT ANY PAY OVER TO ANY PERSON OR MUST DELIVER INDEMNITEE PROCEEDS ANY OR HYDROCARBONS ORRI THE OF PART OR RECEIVED PREVIOUSLY TIME ANY AT THEREOF OWNER ROYALTY SUCH BY BE RECEIVED TO THEREAFTER
(INCLUDING
LIENS ENCUMBRANCES, EXPENSES, ANY COSTS, OWNER ROYALTY BY ANY
INDEMNITEE),
14
tlilllll/lllllll llll liillllll

15 of 92
2007-054467"0
AND
WI
OWNER
AGREES
HARMLESS INDEMNITEE INCURRED LIABILITIES AND ANY OF WITH CONNECTION

THE
AND INDEMNIFY AND AGAINST FROM TO BY THE
HOLD
ALL OR
EACIt
ROYALTY
OWNER
LOSSES
ANY ROYALTY FOREGOING

OR OR OR THE
COSTS, OWNER
EXPENSES,
INDEMNITEE CONNECTION
AND OR IN TAX ANY
(I)
IN
(II)
IN
WITH
ORRI,
TIME
THIS THE OR ANY ALL
CONVEYANCE,
ENFORCEMENT
WITH IN THE
(INCLUDING
ANY
FOREGOING
TRANSACTIONS THEREOF DEFENSE CONTEMPLATED

WITH ANY
EVENTS
AT THE OF
HEREOF)
ASSOCIATED
(llI)
OF
CONNECTION
BURDENING ALSO OWNER

WHICH AS USED ROYALTY OF THEIR COVER ARE
SUBJECT
INTERESTS.
AND
REASONABLE INCLUDING INDEMNITEE,

IN INCIDENT INCURRED SECTION THIS 6.6, ROYALTY AND OWNER
COSTS
SUCH EXPENSES
PARTNERSHIP SHALL INDEMNITY

OF ANY ROYALTY
FEES AND EXPENSES, LEGAL REASONABLE AGAINST. INDEMNIFIED MATTERS TO THE MEANS INDEMNITEES" OWNER "ROYALTY OWNER'S
RESPECTIVE
AGENTS,
THEMSELVES THE
BENEFICIARIES,
AND THEIR
ALL AND ASSIGNS, SUCCESSORS DIRECTORS, OFFICERS, AND ALL OF THE AFFILIATES, OF EMPLOYEES AND ATTORNEYS TRUSTEES,
AFFILIATES.
SHALL APPLY
FOREGOING OF
INDEMNITY
WHETHER
OWNER LIABILITY OF ANY RESULT OF
OR NOT
ARISING
OUT
OR
THE
SOLE, JOINT
OF
OR
CONCURRENT
ANY
NEGLIGENCE,
INDEMNITEE IMPOSED
ANY
FAULT
AND UPON OF
THE
LIABILITY STRICT SItALL APPLY, WITHOUT

ROYALTY OWNER
ROYALTY
TO AS
A
ANY STRICT
LIMITATION, INDEMNITEE
NOT BY
ANY
THEORY THAT
OR ANY OTHER LIABILITY SHALL INDEMNITY FOREGOING INCURRED OR LIABILITIES LOSSES PROXIMATELY EXTENT TO THE
DOCTRINE APPLY ANY BY
LAW,
TO
PROVIDED
ROYALTY
THE
COSTS, EXPENSES, INDEMNITEE OWNER

OR THE THIS
CAUSED
SURVIVE
MISCONDUCT WILLFUL INDEMNITY FOREGOING CONVEYANCE.

Section
6.7
OF
SUCH
ROYALTY
SHALL
NEGLIGENCE INDEMNITEE. OWNER OF TERMINATION ANY

GROSS
Conveyance is being executed in several counterparts, hereof only recordation, in certain counterparts all of which are identical, except that, to facilitate in contains A which specific descriptions of the Subject Interests located that portion of Exhibit shall be included, and all is to be recorded the counterpart the recording jurisdiction in which together All of such counterparts only. other portions of Exhibit A shall be included by reference instrument. Complete copies of this Conveyance, containing and the same one shall constitute
Counterparts. This the entire Exhibit
A,
have
been
retained THIS
by
WI Owner
and
Royalty
Owner. the date Time.

set
IN WITNESS in the
WHEREOF,
acknowledgment
below,
to
on IS EXECUTED CONVEYANCE for all purposes as of the Effective be effective
forth
[Remainder of page
intentionally
left blank]
IIIHIILIIlUlIbllll]I lllllll I
15
16ot 92
2007-054487-0
W1 OWNER:
PACIFIC
LLC
ENERGY
known
ALASKA
as
OPERATING
Alaska
(formerly Operating LLC)
Forest
Darren President
Katie
1/111 1 ii 1/11t
7of 92
2007-054467-0
ACKNOWLEDGEMENT
STATE
OFCOLORADO
o,YOO,
o, Public Pacific Delaware
,,,,t
for
in and
,4, ,00,, oro said County liability

to
m,,
,o
,o,,1o,
known
>
Darren
as to
me
6o'o,
Katic,
to
me
and
State,
LLC
personally appeared
known
or
the Presidem the basis
of
a
Energy
limited
Alaska
Operating
(formerly
Forest
Alaska
Operating LLC),
on
satisfactory acknowledged
signature
on
evidence
to
me
personally company whose name be the person the same that he executed
the person,
or
proved
to
of and his
is subscribed in his behalf authorized
the within
instrument,
and
that
capacity,
the person
by
the instrument
entity
upon
of which
acted, executed
the instrument. WITNESS my hand and official seal.
NOTARY
PUBLIC
Aq
'
Printed
Name
S.
wO
My
commission
expires:
v
o- 2----
-:0>
5-)I-3<3oo
Deborah
Stale
S. Pottenger Notary Public

of Colorado
My Commission J:xpires: May 11, 2008
IllllllLIllllTIIIIIlllllll
18 of 92
2007-054467-0
ROYALTY
OWNER:
SPCP
Group
IT/Alaska
LLC
By:_._
Name:
Richard Petritli
Title:
Author=zeO ignatoo/
2007 .O54467-0
ACKNOWLEDGEMENT STATE COVNTV OF or On
tc'v'[" Lt')O)tC
August ::t 2007,
before
Notary
the whose
same
Public
S,,lo ,,t,,-a
name
personally
m and for said County and of SPCP Group llI Alaska LLC, a Delaware known td me or proved to me on the basis of satisfactory is subscribed of which
to the
"q'(- )/-. undersigned, R c,--'# '-e'&I [i State, personally appeared

me,
the
,a
,
..
limited evidence
me
liabiiitycompany,
be the person that he executed
to
within and that
instrument,
in his authorized behalf
capacity,
the person
my
by
his
acknowledged to signature on the instrument

a.d the instrument. seal.
the
the person,
or
entity
upon
acted, executed
and official
WITNESS
hand
tinted commission
Yale State
Name
My
expires:
Lansky
NOTARY PUBLIC
of Connecticut
MyCommission
Expires 8/3/2011
IFIIJiltlfllJltlill I$1111111Ii11
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2007-054467-0
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10000014993

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Exhibit B Christianson Affidavit Page 1 of 11

Exhibit B Christianson Affidavit Page 2 of 11

Exhibit B Christianson Affidavit Page 3 of 11

Exhibit B Christianson Affidavit Page 4 of 11

Exhibit B Christianson Affidavit Page 5 of 11

Exhibit B Christianson Affidavit Page 6 of 11

Exhibit B Christianson Affidavit Page 7 of 11

Exhibit B Christianson Affidavit Page 8 of 11

Exhibit B Christianson Affidavit Page 9 of 11

Exhibit B Christianson Affidavit Page 10 of 11

Exhibit B Christianson Affidavit Page 11 of 11

Operating LLC Energy Alaska Operating

Grantee: Lands: AFTER PERSON:

Skadden, Arps, Slate, Meagher

& Flom 2100

Exhibit C Christianson Affidavit Page 1 of 92

When Skadden, 333 $uile

to: please return Arp, Slate) Meagher & Flora

Chicago, IL 60606 Seth E. Jaeobson Attention:

OVERRIDING OVERFdDING ALASKA

amended, this ""), by PACIFIC ENERGY

company, .limited Delaware

(formerly known as (herein called "W__!I liability company,

Section schedule have the

defined (unless otherwise assigned meanings respective referred

in any such exhibit them in this section

directly, or indirectly (through control by, or is under common

managing general partner

Point and Second

and (iii) that

I!I IRItltlIIIlIItl !11111]!!111t

Exhibit C Christianson Affidavit Page 2 of 92

time Point and

the WI Owner, among from time to time lenders

Pacific borrower, party thereto, Silver sole bookrunner

administrative and J. Aron

agent, sole lead arranger, documentation agent.

treatment, storage, toxic or hazardous

including relating to the manufacture, disposal, transport, or handling of pollutants, contaminants,

"Fixed maximum the State

day, the lesser of be charged pursuant

and the laws

similar and substances

Code" time with and

has the 7:00

meaning assigned (local time,

location the first

Exhibit C Christianson Affidavit Page 3 of 92

royalties, overriding royalties, production

the oil, gas and other

being applicable Exhibit A hereto.

governmental charges or levies which are by appropriate action promptly initiated

funds. laborers for

of contractors, other like liens

which initiated fundS.

arising by law being contested

warehousemen, in the ordinary

for the payment

exceptions, permits, conditions, in title or conventional irregularities

Subject Interests in the materially impair the value

liens with and

joint operating agreements Owner's proportionate share of the

expense owned fee interests