Exhibit 10.2

Execution Version

LIQUIDS GATHERING SYSTEM

SUBLETTE COUNTY, WYOMING

PURCHASE AND SALE AGREEMENT

BY AND BETWEEN

PINEDALE CORRIDOR, LP

AS SELLER

AND

ULTRA WYOMING, LLC

AS BUYER

DATED JUNE 28, 2020

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TABLE OF CONTENTS

 

     Page  

ARTICLE I DEFINITIONS

     1  

Section 1.1

 

Definitions

     1  

Section 1.2

 

Certain Interpretive Provisions

     6  

ARTICLE II PURCHASE AND SALE

     7  

Section 2.1

 

Purchase and Sale

     7  

Section 2.2

 

Purchase Price

     7  

ARTICLE III TITLE MATTERS; CONSENTS

     7  

Section 3.1

 

Title

     7  

Section 3.2

 

Consents

     7  

ARTICLE IV SELLER’S REPRESENTATIONS

     8  

Section 4.1

 

Incorporation/Qualification

     8  

Section 4.2

 

Power and Authority

     8  

Section 4.3

 

Authorization and Enforceability

     9  

Section 4.4

 

Liability for Brokers’ Fees

     9  

Section 4.5

 

No Bankruptcy

     9  

Section 4.6

 

Litigation

     9  

Section 4.7

 

Taxes

     9  

Section 4.8

 

Ownership

     10  

Section 4.9

 

Preferential Rights

     10  

Section 4.10

 

Consents

     10  

Section 4.11

 

Good Faith

     10  

Section 4.12

 

Survival

     10  

Section 4.13

 

Disclaimers

     11  

ARTICLE V BUYER’S REPRESENTATIONS

     11  

Section 5.1

 

Incorporation and Qualification

     11  

Section 5.2

 

Power and Authority

     11  

Section 5.3

 

Authorization and Enforceability

     11  

Section 5.4

 

Liability for Brokers’ Fees

     12  

Section 5.5

 

Litigation

     12  

Section 5.6

 

Consents

     12  

Section 5.7

 

Good Faith

     12  

Section 5.8

 

Survival

     12  

ARTICLE VI COVENANTS AND AGREEMENTS

     12  

Section 6.1

 

Conduct of Parties

     12  

Section 6.2

 

Fees and Expenses

     13  

Section 6.3

 

Restructuring Efforts

     13  

Section 6.4

 

Survival

     13  

Section 6.5

 

Termination of Prior Agreements

     14  

 

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ARTICLE VII TAX MATTERS

     14  

Section 7.1

 

Apportionment of Property Tax Liability

     14  

Section 7.2

 

Property Tax Reports and Returns

     14  

Section 7.3

 

Sales Taxes

     14  

Section 7.4

 

Federal Tax Reporting

     14  

Section 7.5

 

Like Kind Exchange

     15  

ARTICLE VIII CONDITIONS PRECEDENT TO CLOSING

     15  

Section 8.1

 

Seller’s Conditions Precedent

     15  

Section 8.2

 

Buyer’s Conditions Precedent

     16  

ARTICLE IX RIGHT OF TERMINATION

     16  

Section 9.1

 

Termination

     16  

ARTICLE X CLOSING

     17  

Section 10.1

 

Date of Closing

     17  

Section 10.2

 

Time and Place of Closing

     17  

Section 10.3

 

Closing Obligations

     17  

ARTICLE XI ASSUMPTION OF OBLIGATIONS AND INDEMNIFICATION

     18  

Section 11.1

 

Buyer’s Assumption of Liabilities and Obligations

     18  

Section 11.2

 

Indemnification

     18  

Section 11.3

 

Survival

     19  

Section 11.4

 

Procedure

     19  

Section 11.5

 

No Insurance; Subrogation

     20  

Section 11.6

 

Reservation as to Non-Parties

     20  

Section 11.7

 

Consequential Damages

     20  

Section 11.8

 

No Derivative Liability

     21  

Section 11.9

 

Attorneys’ Fees

     21  

ARTICLE XII MISCELLANEOUS

     21  

Section 12.1

 

Expenses

     21  

Section 12.2

 

Notices

     21  

Section 12.3

 

Amendments

     22  

Section 12.4

 

Assignment

     22  

Section 12.5

 

Counterparts/PDF and Fax Signatures

     22  

Section 12.6

 

GOVERNING LAW; JURISDICTION, VENUE; JURY WAIVER

     23  

Section 12.7

 

Entire Agreement

     23  

Section 12.8

 

Binding Effect

     23  

Section 12.9

 

No Third-Party Beneficiaries

     23  

Section 12.10

 

Time of the Essence

     23  

Section 12.11

 

No Waiver

     23  

Section 12.12

 

Waiver of Trial by Jury

     23  

Section 12.13

 

Further Assurances

     24  

 

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EXHIBITS

 

Exhibit A       

 

  Exhibit B      Exhibit C      Exhibit D      Exhibit E      Exhibit F     
Exhibit G      Exhibit H      Exhibit I      Exhibit J      Exhibit K     

 

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PURCHASE AND SALE AGREEMENT

This Purchase and Sale Agreement (this “Agreement”), is made as of June 28, 2020
(“Execution Date”), by and between PINEDALE CORRIDOR, LP, a Delaware limited
partnership (“Seller”) whose address is 1100 Walnut Street, Suite 3350, Kansas
City, Missouri 64106 and ULTRA WYOMING, LLC, a Delaware limited liability
company (“Buyer”) whose address is 116 Inverness Drive East, Suite 400,
Englewood, CO 80112. Seller and Buyer may be referred to individually as a
“Party” or collectively as the “Parties.”

RECITALS

Seller owns all right, title and interest in and to the Assets (as defined in
this Agreement) located in the Pinedale Anticline in Sublette County, Wyoming,
as more fully described in this Agreement.

Buyer desires to purchase, and Seller desires to sell and convey, the Assets
pursuant to and in accordance with the terms and conditions of this Agreement.

As a result of the Bankruptcy Case, each Party has determined that the Purchase
Price (as defined in this Agreement) is fair value to be paid by the Buyer for
the Assets.

As a part of the Bankruptcy Case (as defined in this Agreement) the Parties have
determined, for the reasons reflected in the relevant 9019 motion filed in the
Bankruptcy Case relating to the Assets, to enter into this Agreement in
settlement of ongoing disputes and litigation.

AGREEMENT

In consideration of the mutual promises, covenants and warranties contained
herein, and other good and valuable consideration, the receipt and sufficiency
of which are hereby acknowledged, Buyer and Seller agree as follows:

ARTICLE I

DEFINITIONS

Section 1.1 Definitions. The following terms shall have the meanings set forth
below:

Affiliate: With respect to a specified Person, (a) any Subsidiary of that
Person, and (b) any Person that directly, or indirectly through one or more
intermediaries, Controls or is Controlled by or is under common Control with,
the specified Person.

Assets: The Liquids Gathering System and the Personal Property.

Assignment of Jensen Easements to Ultra Resources: The Assignment of Easements
and Transfer of Improvements (LGS) (Jensen Easements) to be executed by Seller
and Ultra Resources and with their signatures acknowledged, in the form attached
to this Agreement as Exhibit A.

 

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Bankruptcy Case: The cases commenced by Buyer under chapter 11 of the Bankruptcy
Code in the Bankruptcy Court, styled In re: Ultra Petroleum Corp., et al.,
jointly administered under Case No. 20-32631, and pending before the Bankruptcy
Court.

Bankruptcy Court: The United States Bankruptcy Court for the Southern District
of Texas.

Bill of Sale: The Bill of Sale executed by Seller and Buyer in the form attached
to this Agreement as Exhibit G.

BLM: The United States Department of the Interior Bureau of Land Management,
Wyoming State Office.

BLM Consent: The consent of BLM to the BLM Easement Assignments to Buyer, in
response to the BLM Request for Consent to Assignment to Ultra Resources.

BLM Easements Assignment to Ultra Resources: The assignment by Seller to Ultra
Resources of all of Seller’s right, title and interest under the BLM Easements
pursuant to (a) the Application for Transportation and Utility Systems and
Facilities on Federal Lands to be executed by Seller and Buyer, in the form
attached to this Agreement as Exhibit D, and (b) the Assignment of Easements and
Transfer of Improvements (LGS) (BLM Easements) to be executed by Seller and
Ultra Resources and with their signatures acknowledged, in the form attached to
this Agreement as Exhibit E.

BLM Easements: The easements, rights of way and agreements listed in Exhibit C,
which shall be assigned to Ultra Resources pursuant to the BLM Easements
Assignment to Ultra Resources.

BLM Request for Consent to Assignment to Ultra Resources: The form of request
for BLM’s consent to the BLM Easements Assignment to Ultra Resources, a copy of
which request is attached to this Agreement as Exhibit B.

Business Day: Any day other than a Saturday, Sunday or any day that is a
national banking holiday in the United States.

Buyer Closing Deliveries: (i) The BLM Easements Assignment to Ultra Resources,
executed by Ultra Resources and with its signature acknowledged; (ii) the BLM
Request for Consent to Assignment to Ultra Resources, executed by Ultra
Resources; (iii) the Assignment of Jensen Easements to Ultra Resources, executed
by Ultra Resources and with its signature acknowledged; (iv) the Release of Nerd
Farm Easement and Transfer of Improvements, executed by Ultra Resources and with
its signature acknowledged; (v) the Bill of Sale, executed by Buyer; (vi) the
Mutual Release and Exculpation, executed by Buyer; (vii) Memorandum of
Termination, executed by Buyer and with its signature acknowledged; and
(viii) evidence of the receipt of Bankruptcy Court approval in connection with
the Bankruptcy Case as referenced in Section 8.2(d).

Buyer Closing Payments: The Purchase Price in Current Funds, and to the extent
payable at Closing, any Taxes that Buyer is required to pay as a result of
Closing under Section 7.3 of this Agreement, any recording fees or costs to
record the Recorded Documents in the Real Estate Records or to file with BLM the
BLM Assignment to Buyer.

 

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Closing Deliveries: The Seller Closing Deliveries and the Buyer Closing
Deliveries.

Code: the Internal Revenue Code of 1986, as amended. All references to the Code,
Treasury Regulations or other governmental pronouncements shall be deemed to
include references to any applicable successor regulations or amending
pronouncements.

Current Funds: Wire transfers of immediately available funds to Seller.

Easement Rights: Collectively, the right, title and interest in the BLM
Easements conveyed to Ultra Resources under the BLM Easements Assignment to
Ultra Resources, the right, title and interest in the Jensen Easements conveyed
to Ultra Resources under the Assignment of Jensen Easements to Ultra Resources,
and the Release of Nerd Farm Easement and Transfer of Improvements (but
exclusive of the Improvements transferred pursuant to the Nerd Farm Easement).

Easements: The BLM Easements, the Jensen Easements and the Release of Nerd Farm
Easement and Transfer of Improvements.

GAAP: means generally accepted accounting principles in effect in the United
States of America from time to time or at a specific time if so specified in
this Agreement.

Improvements: All of the improvements and fixtures used directly in connection
with the Liquids Gathering System, including, without limitation, any and all
surface or subsurface pipelines, surface or subsurface machinery and equipment,
line pipe, pipe connections, fittings, flanges, welds, or other
interconnections, valves, control and monitoring equipment, cathodic or
electrical protection units, by-passes, regulators, drips, treating equipment,
dehydration equipment, separation equipment, processing equipment, condensate
and water storage tanks and other storage facilities, generators, gas
compressors, vapor recovery units, combustors, flares, storage sheds, towers,
gas and electric fixtures, radiators and heaters.

Indebtedness: With respect to a Person, such Person’s (a) liabilities for
borrowed money, (b) liabilities for the deferred purchase price of property
acquired by it (excluding accounts payable arising in the ordinary course of
businesses), (c) obligations that are required to be accounted for as capital
leases on a balance sheet under GAAP (and the amount of such obligations shall
be the capitalized amount thereof determined in accordance with GAAP), and
(d) guaranty obligations with respect to liabilities of another Person of the
type described in the preceding subsections (a)-(c).

Interim Period: The period from and including the Execution Date until the
Closing Date.

Jensen Easements: The following easements: (a) that certain Grant of Pipeline
Easements dated June 24, 2010, recorded in Book 95, Page 423 of the Records of
the Sublette County Clerk’s Office, Sublette County, Wyoming, from Mary Kay
Jensen, as grantor, to Ultra Resources, as grantee, and (b) that certain Grant
of Pipeline Easements dated June 24, 2010, in Book 95, Page 418 of the Records
of the Sublette County Clerk’s Office, Sublette County, Wyoming, from Mary Kay
Jensen, as personal representative of the Estate of John Wayne Jensen,
individually, as grantor, to Ultra Resources, as grantee, as both such easements
were assigned by Ultra Resources to Seller pursuant to the BLM and Jensen
Easements Assignment to Seller.

 

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Land: The land underlying, subject to and covered by the Easement Rights.

Lien: Any mortgage lien, deed of trust lien, vendor’s lien, security interest,
mechanic’s or materialman’s lien, or other lien.

Lien Releases: A release (in forms acceptable to Buyer) of Liens made by Seller
affecting the Assets.

Liquids Gathering System: Generally, the system of pipelines and central
gathering facilities highlighted on the map attached as Exhibit F, together with
the related equipment that is capable of gathering, separating, collecting, and
delivering for sale or transport, condensate and water, together with associated
natural gas, produced from natural gas and oil wells, along with any other
structures, pipelines, gathering lines or other equipment useful in gathering,
collecting or delivering condensate and water, together with associated natural
gas and are located in the Pinedale Anticline Field in Sublette County, Wyoming,
including, specifically, the Easement Rights and the Improvements.

Loan Documents: The Second Amended and Restated Term Credit Agreement dated
December 29, 2017 to which the Seller is a party, the related mortgage, and all
other security documents related thereto.

Material Adverse Effect: Any circumstance, change, or effect that, individually
or in the aggregate, is materially adverse to the ownership, operation, or
financial condition of the Assets, taken as a whole.

Mutual Release and Exculpation: The Form of Mutual Release and Exculpation to be
executed by the appropriate Persons in the form attached to this Agreement as
Exhibit J.

Non-Foreign Affidavit: The Non-Foreign Affidavit (Federal) in the form attached
to this Agreement as Exhibit I, executed by Seller, and equivalent forms, if
any, required by the State of Wyoming.

Outside Closing Date: The earlier of (a) July 30, 2020 and (b) three (3)
Business Days after approval from the Bankruptcy Court to proceed with the
transactions contemplated herein, or such other date as may be mutually agreed
in writing by Buyer and Seller.

Person: Any individual, firm, corporation, partnership, limited liability
company, incorporated or unincorporated association, joint venture, governmental
authority or any other entity of any kind.

Personal Property: (a) The monitoring equipment located in or on the Liquids
Gathering System, (b) the computer hardware located in the centralized
monitoring building for each central gathering facility constituting a portion
of the Liquids Gathering System to which such monitoring equipment connects,
(c) the wires and other connectors for such monitoring equipment between such
computer hardware and such monitoring equipment, (d) all office furniture in
each centralized monitoring building for each central gathering facility,
(e) engineering drawings and plans and specifications in Seller’s possession for
the Liquids Gathering System except to the extent assignment thereof is
prohibited by contract or applicable law, (f) as-built drawings and surveys of
the Liquids Gathering System in Seller’s possession, (g) to the extent
assignable, the other Records and (h) any and all other equipment, personal
property, rights-of-way, permits that were used or held for use in connection
with the Liquids Gathering System.

 

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Records: The following information, to the extent in Seller’s Possession: all
engineering drawings or plans of or covering the Liquids Gathering System or any
component thereof, site assessments and environmental reports regarding or
covering the Liquids Gathering System or any component thereof, manuals relating
to the operation of the Assets, and “as-built” surveys of the pipelines and
drawings of the Liquids Gathering System.

Release of Nerd Farm Easement and Transfer of Improvements: The Release of Nerd
Farm Easement and Transfer of Improvements in the form attached to this
Agreement as Exhibit H.

Representatives: Those Persons including, without limitation, officers,
directors, employees, accountants, attorneys, consultants, independent
contractors, agents, stockholders, members, partners, actual or potential
financing sources, investment advisers, and investment bankers, with a need to
know confidential information in order to evaluate the Transaction.

Seller Closing Deliveries: (i) The BLM Easements Assignment to Ultra Resources,
executed by Seller and with its signature acknowledged; (ii) the BLM Request for
Consent to Assignment to Ultra Resources, executed by Seller; (iii) the
Assignment of Jensen Easements to Ultra Resources, executed by Seller and with
its signature acknowledged; (iv) the Release of Nerd Farm Easement and Transfer
of Improvements, executed by Seller and with its signature acknowledged; (v) the
Bill of Sale, executed by Seller; (vi) the Non-Foreign Affidavit executed by
Seller; (vii) the Lien Releases, executed by Seller and the applicable lien
holder; (viii) the Mutual Release and Exculpation, executed by Seller; and
(ix) the Memorandum of Termination, executed by Seller and with its signature
acknowledged.

Seller’s Knowledge: As of any date, the then current actual knowledge of
Seller’s officers or directors as of such date, and not any implied, imputed or
constructive knowledge of such individuals, and without any independent
investigation or inquiry having been made or any implied duty to investigate,
make any inquiries or review any information. Any use of the qualification of
Seller’s Knowledge shall in no event give rise to any personal liability on the
part of any officers or directors of Seller or its Affiliates on account of any
breach of any representation or warranty made by Seller herein. No broker, agent
or Person other than Seller is authorized to make any representation or warranty
for or on behalf of Seller.

Seller’s Possession: With respect to information, records and materials, only
such information, records and materials as may be in the actual possession or
control of Seller or its Affiliates, and without including any information or
materials in the possession or control of a third Person or any other agent of
Seller or its Affiliates.

Subsidiary: With respect to any Person (the “parent”) at any date, any
corporation, limited liability company, partnership, association or other entity
the accounts of which would be consolidated with those of the parent in the
parent’s consolidated financial statements if such financial statements were
prepared in accordance with generally accepted accounting principles as of such
date, as well as any other corporation, limited liability company, partnership,
association or other entity (a) of which securities or other ownership interests
representing more than fifty percent

 

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(50%) of the equity or more than fifty percent (50%) of the ordinary voting
power or, in the case of a partnership, more than fifty percent (50%) of the
general partnership interests are, as of such date, owned, controlled or held,
or (b) that is, as of such date, otherwise Controlled, by the parent or one or
more subsidiaries of the parent or by the parent and one or more subsidiaries of
the parent

Survival Period: The period beginning on the Closing Date and ending six
(6) months following the Closing Date.

Tax or Taxes: (a) all federal, state, local or foreign income, gross receipts,
license, payroll, employment, excise, severance, stamp, occupation, premium,
windfall profits, environmental, customs, duties, capital stock, franchise,
profits, withholding, social security (or similar), unemployment, disability,
real property, personal property, sales, use, transfer, escheat, registration,
value added, alternative or add-on minimum, estimated or any other taxes,
unclaimed property liabilities, any payments in lieu of taxes or other similar
payments, charges, fees, levies, imposts, customs or duties of any kind
whatsoever, that are imposed by a Taxing Authority, including any interest,
penalty, or addition thereto, whether disputed or not and including any
obligations to indemnify or otherwise assume or succeed to the tax liability of
any other Person or (b) any liability for the payment of any taxes, interest,
penalty, addition to tax or like additional amount resulting from the
application of Treasury Regulation Section 1.1502-6 or comparable federal, state
or local laws.

Tax Return: any return, declaration, report, claim for refund, property
rendition or information return or statement relating to Taxes, including any
schedule or attachment thereto and including any amendment thereof.

Taxing Authority: a governmental entity having jurisdiction over the assessment,
determination, collection, or other imposition of any Tax.

Treasury Regulations: the regulations promulgated by the United States Treasury
Department under the Code.

Ultra Resources: Ultra Resources, Inc., a Delaware corporation.

Section 1.2 Certain Interpretive Provisions. As used in this Agreement: (a) the
word “or” is not exclusive and the word “including” is not limiting,
(b) references to a law include any rule or regulation issued under the law and
any amendment to the law, rule or regulation, (c) whenever the words “include,”
“includes,” or “including” appear, they shall be deemed to be followed by the
words “without limitation,” (d) personal pronouns shall be deemed to include the
other genders and the singular shall include the plural and vice versa, and
(e) the words “herein,” “hereof” and “hereunder” and other words of similar
import refer to this Agreement as a whole and not to any particular Article,
Section or other subdivision. Wherever a period of time is stated in this
Agreement as commencing or ending on specified dates, such period of time shall
be deemed (i) inclusive of such stated commencement and ending dates, and
(ii) to commence at 12:00 A.M. Central Time on such stated commencement date and
to end at 11:59 P.M. Central Time on such stated ending date. Unless the context
otherwise requires, (A) any definition or reference to any agreement, instrument
or other document shall be construed as referring to such agreement, instrument
or other document as from time to time amended, supplemented or

 

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otherwise modified (subject to any restrictions on such amendments, supplements
or modifications set forth herein), (B) subject to restrictions on assignment
set forth herein, any reference herein to any Person shall be construed to
include such Person’s successor and assigns, and (C) any reference to any law
shall include all statutory and regulation provisions consolidating, amending,
replacing or interpreting such law and reference to any law or regulation shall,
unless otherwise specified, refer to such law or regulation as amended, modified
or supplemented from time to time. Section headings herein are included for
convenience of reference only and shall not affect the interpretation of this
Agreement or any other document executed in connection herewith. In the event
that any event hereunder is to occur, or a time period is to expire, on a date
which is not a Business Day, such event shall occur or such time period shall
expire on the next succeeding Business Day.

ARTICLE II

PURCHASE AND SALE

Section 2.1 Purchase and Sale. Seller agrees to sell the Assets to Buyer, and
Buyer agrees to purchase the Assets from Seller, pursuant to, and subject to the
terms and conditions of, this Agreement.

Section 2.2 Purchase Price. The purchase price for the Assets shall be Eighteen
Million U.S. Dollars (U.S. $18,000,000) (the “Purchase Price”). If the
transaction contemplated by this Agreement (“Transaction”) closes, Buyer agrees
to pay to Seller the Purchase Price at Closing in Current Funds.

ARTICLE III

TITLE MATTERS; CONSENTS

Section 3.1 Title. Except for Seller’s Warranties, neither Seller nor any of its
Affiliates makes any representation or warranty, express, implied, statutory or
otherwise, with respect to Seller’s title to any of the Assets, except by,
through and under Seller and its Affiliates, but not otherwise, and Buyer hereby
acknowledges and agrees that Buyer has no claim or remedy against Seller or its
Affiliates, or their respective successors or assigns, for any defect of title
relating to the Assets, including but not limited to any lien, encumbrance,
claim, defect in or object to real property title, and the existence or
non-existence of any leases, easements or rights-of-way, except those claims or
rights against the Assets that arise by, through and under Seller and its
Affiliates, but not otherwise. Seller agrees to assign to Buyer all rights,
claims, and causes of action on title warranties given or made by Seller’s
respective predecessors, and that Buyer is specifically subrogated to all rights
which Seller may have against its predecessors, to the extent that Seller may
legally transfer such rights and grant such subrogation.

Section 3.2 Consents.

(a) Buyer and Seller acknowledge that BLM consent to the assignment of a right
of way or easement from BLM is customarily not requested or obtained until after
the closing of the actual assignment of such right of way or easement. Buyer and
Seller shall use commercially reasonable efforts after Closing to obtain the BLM
Consent, through submission of the BLM Request for Consent to Assignment to
Buyer in the form attached hereto as Exhibit B with such

 

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changes to such form as may be required by changes in applicable law or
regulations after the Execution Date. Buyer shall pay any costs or expenses
assessed by BLM in connection with such BLM Request for Consent to Assignment to
Buyer, and Seller shall not be obligated to incur any out-of-pocket expenses or
obligations to obtain the BLM Consent.

(b) Except for the BLM Consent, if prior to Closing Seller or Buyer discovers a
consent necessary for the valid assignment of the Assets, or a portion thereof,
required by either (a) the contract or agreement granting or creating Seller’s
rights in an Asset component (other than a consent to assignment of the Records
or any part of the Records, which shall not be considered an Additional Required
Consent) or (b) a law applicable to the transfer of an Asset component from
Seller to Buyer hereunder (other than the BLM Request for Consent to Assignment
to Buyer) (each, and except for the BLM Consent, an “Additional Required
Consent”) such Party shall promptly notify the other of the need for such
Additional Required Consent, the Seller and Buyer shall use commercially
reasonable efforts to obtain such Additional Required Consent. Unless and until
any such Additional Required Consent is obtained, to the extent permitted by
applicable law, the Parties will cooperate in good faith to establish an
arrangement reasonably satisfactory to Buyer and Seller under which Buyer would
obtain the claims, rights and benefits associated with the Assets (or portion
thereof) affected by such Additional Required Consents (the “Non-Assignable
Assets”) and under which Seller would enforce for the benefit of Buyer any and
all claims, rights and benefits of Seller associated with the Non-Assignable
Assets against a third party thereto. Nothing in this Section 3.2 shall be
deemed to constitute an agreement by Buyer to exclude from the Assets any of the
Non-Assignable Assets. Seller will convey such Non-Assignable Assets to Buyer
promptly upon receipt of the requisite Additional Required Consents with the
Closing Date for such Non-Assignable Assets being adjusted appropriately, but
subject in all other respects to the terms and conditions of this Agreement.
Buyer shall pay any costs or expenses incurred to obtain any Additional Required
Consent (which for the avoidance of doubt, does not include any consents under
the Loan Documents); provided, however, that in no event shall Buyer be
responsible for any out-of-pocket attorney’s fees incurred by Seller with
respect to any Additional Required Consent.

ARTICLE IV

SELLER’S REPRESENTATIONS

Seller represents and warrants to Buyer as of the Execution Date and as of the
Closing Date the following:

Section 4.1 Incorporation/Qualification. Seller is a Delaware limited
partnership, duly organized, validly existing and in good standing under the
laws of the State of Delaware and is qualified to conduct business in Wyoming.

Section 4.2 Power and Authority. Seller has all requisite power and authority to
own the Assets and to carry on its business as presently conducted and to
execute and deliver this Agreement and perform its respective obligations under
this Agreement. The execution and delivery of this Agreement and consummation of
the Transaction and the fulfillment of and compliance with the terms and
conditions hereof will not violate, or be in conflict with, any material
provision of its governing documents or any material provision of any agreement
or instrument to which it is a party or by which it is bound (other than the
Loan Documents) or, to Seller’s Knowledge, any judgment, decree, order, statute,
rule or regulation applicable to it, subject, however, to approval by the
Bankruptcy Court in connection with the Bankruptcy Case.

 

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Section 4.3 Authorization and Enforceability. The execution, delivery and
performance of this Agreement and the Transaction have been duly and validly
authorized by all requisite partnership action on behalf of Seller. This
Agreement constitutes Seller’s legal, valid and binding obligation, enforceable
in accordance with its terms, subject however, to the effects of bankruptcy,
insolvency, reorganization, moratorium and similar laws for the protection of
creditors, as well as to general principles of equity, regardless whether such
enforceability is considered in a proceeding in equity or at law.

Section 4.4 Liability for Brokers’ Fees. Seller has not incurred any liability,
contingent or otherwise, for brokers’ or finders’ fees relating to the
Transaction for which Buyer shall have any responsibility whatsoever.

Section 4.5 No Bankruptcy. There are no bankruptcy proceedings pending, being
contemplated by or, to Seller’s Knowledge, threatened in writing against Seller.
The Assets contemplated to be transferred, conveyed and sold by Seller pursuant
to the terms set forth in this Agreement and in the assignments contemplated by
this Agreement are being sold for reasonably equivalent value.

Section 4.6 Litigation. To Seller’s Knowledge, as of the date of this Agreement
there are no actions, suits, or proceedings pending against Seller or any of the
Assets in any court or by or before any federal, state, municipal or other
governmental agency that would affect Seller’s ability to consummate the
Transaction or have a Material Adverse Effect. To Seller’s Knowledge, (a) there
are no ongoing governmental investigations or written governmental inquiries
pending or threatened in writing against the Assets that would affect Seller’s
ability to consummate the Transaction, and (b) as of the date of this Agreement,
there are no actions, suits or proceedings threatened in writing against Seller
or any of the Assets that would affect Seller’s ability to consummate the
Transaction. As of the date of this Agreement, Seller is not subject to any
outstanding injunction, judgment, settlement, order, decree, ruling or charge
that would reasonably be expected to have a Material Adverse Effect.

Section 4.7 Taxes.

(a) Seller has (i) duly and timely filed or caused to be filed all Tax Returns
required to be filed by or with respect to Seller or, to Seller’s Knowledge,
with respect to the Assets with the appropriate Taxing Authority, and, to
Seller’s Knowledge, each such Tax Return is complete and correct in all material
respects and (ii) paid all Taxes due or claimed to be due by a Taxing Authority
(whether or not shown as due on a filed Tax Return) and except for any Taxes to
be paid by Buyer or its Affiliates pursuant to the LGS Lease (as defined below)
from or with respect to Seller which, in the case of clauses (i) and (ii) above,
if unpaid would result in the filing of a lien against the Assets for Taxes.

(b) To Seller’s Knowledge, there are not pending any, and Seller has received no
written notice of any currently proposed, material adjustments by any Taxing
Authority in connection with any Tax Returns relating to the Assets which if
unpaid would result in the filing of a lien against the Assets for Taxes and no
waiver or extension of any statute of limitations as to any federal, state,
local or foreign Tax matter relating to the Assets has been given by or
requested from Seller with respect to any Tax year.

 

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(c) To Seller’s Knowledge, there are no liens for Taxes upon any of the Assets
except liens for Taxes not yet due and payable.

(d) Seller does not have any liability for any unpaid Taxes of any other Person
under Treasury Regulation Section 1.1502-6 (or any similar provision of United
States state, local, or foreign Law), as a result of being a member of a
consolidated or combined group (other than a consolidated or combined group with
a common parent with Seller), as a transferee, by contract, or otherwise.

Section 4.8 Ownership. Seller has not transferred, assigned, pledged or conveyed
its rights as “grantee” or “holder” under the BLM Easements or the Jensen
Easements. Seller owns the Improvements and Personal Property free and clear of
all Liens (or, without limiting Seller’s obligation to deliver Lien Releases at
Closing, will own such Assets free and clear of all Liens on the Closing Date
assuming complete termination of the Loan Documents) which secure Indebtedness.

Section 4.9 Preferential Rights. Seller has not granted to any third party a
preferential right to purchase any Asset.

Section 4.10 Consents. Except for (a) the BLM Consent, (b) any Additional
Required Consent that may be discovered after the Execution date, and (c) the
Loan Documents and the LGS Lease, Seller is not a party to any agreement or
proceeding requiring the consent of a third party to transfer or assign the
Assets.

Section 4.11 Good Faith. This Agreement has been proposed, negotiated and
entered into by Seller in good faith and on an arm’s length basis. Buyer has no
control or undue influence over Seller, and this Agreement and the transfer and
sale of the Assets contemplated hereunder have been negotiated and consummated
with procedural and substantive fairness as to all decision making processes and
requirements.

Section 4.12 Survival. Seller’s representations and warranties set forth in this
Article IV (collectively, the “Seller Warranties”) (a) are made as of the
Execution Date, (b) are remade as of the Closing Date, (c) shall not be deemed
to be merged into or waived by the Closing Deliveries, and (d) shall survive
Closing only for the Survival Period. If Buyer first learns of a breach of
Seller’s Warranties prior to Closing, Buyer’s remedies shall be governed solely
and exclusively by Section 8.2. Notwithstanding anything to the contrary in this
Agreement, in the event Buyer elects to proceed to Closing notwithstanding
Buyer’s knowledge of the existence of a breach by Seller with respect to any
Seller Warranties, Buyer shall be deemed to have waived each such breach and any
and all rights and remedies in connection therewith. Seller shall have no
liability or obligation to Buyer with respect to the breach of any
representation or warranty of which Buyer first learns after Closing unless
Buyer delivers written notice to Seller of the alleged breach prior to the end
of the Survival Period, which notice must include the information described in
clauses (i), (ii) and (iii) of Section 11.4(a).

 

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Section 4.13    Disclaimers. SELLER’S EXPRESS REPRESENTATIONS AND WARRANTIES SET
FORTH IN THIS AGREEMENT ARE EXCLUSIVE AND ARE IN LIEU OF ALL OTHER
REPRESENTATIONS AND WARRANTIES, EXPRESS, IMPLIED, STATUTORY OR OTHERWISE. SELLER
EXPRESSLY DISCLAIMS ANY AND ALL SUCH OTHER REPRESENTATIONS AND WARRANTIES.
WITHOUT LIMITATION OF THE FOREGOING AND EXCEPT AS EXPRESSLY SET FORTH HEREIN,
SELLER’S INTEREST IN THE ASSETS TO BE CONVEYED TO ULTRA RESOURCES SHALL BE
CONVEYED PURSUANT HERETO WITHOUT (i) ANY WARRANTY, COVENANT OR REPRESENTATION
WHETHER EXPRESS, IMPLIED, STATUTORY OR OTHERWISE RELATING TO TITLE TO THE ASSETS
(OTHER THAN BY, THROUGH OR UNDER SELLER), THE CONDITION, QUANTITY, QUALITY,
EXISTENCE OF DEFECTS, FITNESS FOR A PARTICULAR PURPOSE, CONFORMITY TO THE MODELS
OR SAMPLES OF MATERIALS OR MERCHANTABILITY OF ANY EQUIPMENT OR PROPERTY OR ITS
FITNESS FOR ANY PURPOSE OR (ii) ANY OTHER EXPRESS, IMPLIED, STATUTORY OR OTHER
WARRANTY OR REPRESENTATION WHATSOEVER. BUYER IS RELYING SOLELY UPON ITS OWN
INSPECTION OF THE ASSETS, AND, SUBJECT TO BUYER’S EXPRESS RIGHTS UNDER THIS
AGREEMENT AND THE OTHER TRANSACTION DOCUMENTS, BUYER AND ULTRA RESOURCES SHALL
ACCEPT ALL OF THE SAME IN THEIR “AS IS”, “WHERE IS” CONDITION, “WITH ALL
FAULTS”.

ARTICLE V

BUYER’S REPRESENTATIONS

Buyer represents and warrants to Seller as of the Execution Date and as of the
Closing Date the following:

Section 5.1 Incorporation and Qualification. Buyer is a Delaware limited
liability company, duly organized, validly existing and in good standing under
the laws of the State of Delaware and on the Closing Date will be qualified to
conduct business in Wyoming.

Section 5.2 Power and Authority. Buyer has all requisite power and authority to
execute and deliver this Agreement and perform its obligations under this
Agreement. The execution and delivery of this Agreement and consummation of the
Transaction and the fulfillment of and compliance with the terms and conditions
hereof will not violate, or be in conflict with, any material provision of its
governing documents or any material provision of any agreement or instrument to
which it is a party or by which it is bound, or, to its knowledge, any judgment,
decree, order, statute, rule or regulation applicable to it, subject, however,
to the approval by the Bankruptcy Court in connection with the Bankruptcy Case.

Section 5.3 Authorization and Enforceability. The execution, delivery and
performance of this Agreement and the Transaction have been duly and validly
authorized by all requisite company action on behalf of Buyer. This Agreement
constitutes Buyer’s legal, valid and binding obligation, enforceable in
accordance with its terms, subject, however, to the effects of bankruptcy,
insolvency, reorganization, moratorium and similar laws for the protection of
creditors, as well as to general principles of equity, regardless whether such
enforceability is considered in a proceeding in equity or at law.

 

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Section 5.4 Liability for Brokers’ Fees. Buyer has not incurred any liability,
contingent or otherwise, for brokers’ or finders’ fees relating to the
Transaction for which Seller shall have any responsibility whatsoever.

Section 5.5 Litigation. To Buyer’s Knowledge, there are no actions, suits, or
proceedings pending against Buyer or any of the Assets in any court or by or
before any federal, state, municipal or other governmental agency that would
affect Buyer’s ability to consummate the Transaction or have a Material Adverse
Effect. To Buyer’s Knowledge, (a) there are no ongoing governmental
investigations or written governmental inquiries pending or threatened in
writing against the Assets that would affect Buyer’s ability to consummate the
Transaction, and (b) there are no actions, suits or proceedings threatened in
writing against Buyer or any of the Assets that would affect Buyer’s ability to
consummate the Transaction. Neither Buyer nor any of its Affiliates are subject
to any outstanding injunction, judgment, settlement, order, decree, ruling or
charge that would reasonably be expected to have a Material Adverse Effect.

Section 5.6 Consents. Except for the Bankruptcy Court approval in connection
with the Bankruptcy Case referenced in Section 8.2(d) below, Buyer is not a
party to any agreement or proceeding requiring the consent of a third party to
complete the Transaction.

Section 5.7 Good Faith. This Agreement has been proposed, negotiated and entered
into by Buyer in good faith and on an arm’s length basis. Seller has no control
or undue influence over Buyer, and this Agreement and the transfer and sale of
Assets contemplated hereunder have been negotiated and consummated with
procedural and substantive fairness as to all decision making processes and
requirements.

Section 5.8 Survival. Buyer’s representations and warranties under this
Agreement (collectively, the “Buyer Warranties”) (a) are made as of the
Execution Date, (b) are remade as of the Closing Date, (c) shall not be deemed
to be merged into or waived by the Closing Deliveries, and (d) shall survive
Closing only for the Survival Period. If Seller first learns of the breach prior
to Closing, Seller’s remedies shall be governed solely and exclusively by
Section 8.1. Notwithstanding anything to the contrary in this Agreement, in the
event Seller elects to proceed to Closing notwithstanding Seller’s knowledge of
the existence of a breach by Buyer with respect to any Buyer Warranties, Seller
shall be deemed to have waived each such breach and any and all rights and
remedies in connection therewith. Buyer shall have no liability or obligation to
Seller with respect to the breach of any representation or warranty of which
Seller first learns after Closing unless Seller delivers written notice to Buyer
of the alleged breach prior to the end of the Survival Period, which notice must
include the information described in clauses (i), (ii) and (iii) of
Section 11.4(a).

ARTICLE VI

COVENANTS AND AGREEMENTS

Section 6.1 Conduct of Parties.

(a) Activities of Parties During Interim Period. Each Party agrees that, during
the Interim Period, without the prior written consent of the other Party, it
shall:

 

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(i) Not sell, transfer, lease, encumber, or create a Lien on, exchange, or
otherwise dispose of any of the Assets (other than the sale of worn-out or
obsolete equipment, spare parts, or minor or insignificant Assets);

(ii) take no action to adversely impact any material federal, state and local
governmental licenses, permits, orders, exemptions, waivers, authorizations,
certificates, consents and applications with respect to the ownership and
operation of the Assets;

(iii) not grant in favor of any Person a preferential purchase right to purchase
any Assets;

(iv) not remove from the Liquids Gathering System any portion of the Liquids
Gathering System except for replacement, substitution or upgrades of the Liquids
Gathering System in the ordinary course of its operations and except such as
would not diminish the operational capability of the Liquids Gathering System as
it existed on the Execution Date; or

(v) not agree, whether in writing or otherwise, or attempt to do any of the
foregoing.

(b) Additional Buyer Obligations During Interim Period. Buyer agrees that,
during the Interim Period, Buyer shall use commercially reasonable efforts to:
(i) secure the financial resources to close the Transaction, and (ii) obtain the
Bankruptcy Court approval in connection with the Bankruptcy Case referenced in
Section 8.2(d) below.

Section 6.2 Fees and Expenses. Except as otherwise provided in this Agreement,
all fees and expenses, including fees and expenses of counsel, financial
advisors, investment and equity advisors, real estate and other brokers and
agents, and accountants, incurred in connection with this Agreement and the
Transactions shall be paid by the Party (or their applicable Affiliate)
incurring such fee or expense. The provisions of this Section 6.2 shall survive
termination of this Agreement and Closing.

Section 6.3 Restructuring Efforts. Seller shall not oppose, impede, or take any
other action to interfere with Buyer’s plan of reorganization, restructuring
efforts, or the Bankruptcy Case, as long as Buyer complies with the terms of
this Agreement.

Section 6.4 Survival. The covenants and agreements of the Parties under
Section 6.1 shall only survive until Closing. If Buyer first learns of a breach
by Seller of any other covenant or agreement in this Article VI prior to
Closing, Buyer’s remedies shall be governed solely and exclusively by
Section 8.2. If Seller first learns of the breach prior to Closing, Seller’s
remedies shall be governed solely and exclusively by Section 8.1. Any liability
or obligation of any Party with respect to the breach of any covenant or
agreement under this Article VI shall lapse and be of no further force or effect
with respect to any matters not described in a written notice delivered to such
Party by the other Party on or prior to the end of the Survival Period, which
notice must include the information described in clauses (i), (ii) and (iii) of
Section 11.4(a).

 

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Section 6.5 Termination of Prior Agreements. The Parties agree that, effective
as of, and conditioned upon, the Closing, all previous agreements and
transaction documents entered into with respect to that certain Purchase and
Sale Agreement by and between Seller and Buyer (f/k/a Ultra Wyoming, Inc.),
dated December 7, 2012, including, for the avoidance of doubt that certain Lease
by and between Ultra Wyoming LGS, LLC and Seller, dated December 20, 2012 (the
“LGS Lease”), are each deemed terminated as of the Closing (such terminated
agreements and documents, the “Terminated Agreements”). Notwithstanding anything
herein to the contrary, assuming Closing occurs on or prior to the Outside
Closing Date, Buyer shall not be responsible for rental payments to Seller under
the LGS Lease from and after June 30, 2020.

ARTICLE VII

TAX MATTERS

Section 7.1 Apportionment of Property Tax Liability. “Property Taxes” means all
ad valorem and property taxes and obligations assessed by a Taxing Authority
against the Assets or based upon the ownership of the Assets, but excluding
income, franchise or similar taxes. All Property Taxes assessed against the
Assets shall be paid by the Buyer. Seller shall be responsible for filing its
2020 Limited Partnership Annual Report with the State of Wyoming and paying any
taxes due thereunder.

Section 7.2 Property Tax Reports and Returns. Buyer agrees to file, or cause to
be filed, all Tax Returns required to be filed that are applicable to the
ownership of the Assets, for all Property Taxes related to the Assets
attributable to the term of the LGS Lease. Buyer also agrees to file all Tax
Returns applicable to ownership of the Assets for all Property Taxes related to
the period of time on and after the Closing Date. The Parties will cooperate
with each other after the Closing Date in connection with audits and other
proceedings with respect to Property Taxes relating to the ownership of the
Assets, and Seller shall not be obligated to incur any out-of-pocket expenses as
a part of such cooperation.

Section 7.3 Sales Taxes. Buyer shall be liable for and shall indemnify Seller
for, any sales and use taxes, conveyance, transfer and recording fees and real
estate transfer stamps or taxes (including any related interest, penalties or
legal costs) that may be imposed on any transfer of the Assets pursuant to this
Agreement. If required by applicable law, Seller shall, in accordance with
applicable law, calculate any sales or similar taxes that are required to be
paid as a result of the transfer of the Assets to Buyer and Buyer shall promptly
pay such taxes. If Seller receives notice that any sales or use taxes are due,
Seller shall promptly forward such notice to Buyer for handling.

Section 7.4 Federal Tax Reporting. Buyer and Seller will comply, to the extent
required pursuant to the procedural requirements of Section 1060 of the Code and
the Treasury Regulations promulgated thereunder, with respect to the allocation
of the Purchase Price among the Assets. Buyer and Seller agree that they will
not take any Tax position inconsistent with allocations made in this Agreement,
if any, provided, however, that (a) Buyer’s cost for the Assets may differ from
the total amount allocated thereunder to reflect Buyer’s capitalized transaction
costs so allocated, and (b) Seller’s amount realized on the sale of the Assets
may differ from the total amount so allocated to reflect Seller’s transaction
costs that reduce the amount realized. The Parties will promptly inform one
another of any challenge by any Taxing Authority to any allocation made pursuant
to this Section 7.4 and agree to consult and keep one another informed with
respect to the status of, and any discussion, proposal or submission with
respect to, such challenge.

 

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Section 7.5 Like Kind Exchange. Seller may desire to have its transfer of one or
more of the Assets to Buyer qualify as a deferred like kind exchange within the
meaning of Section 1031 of the Code and the Treasury Regulations promulgated
thereunder, including for the avoidance of doubt, Proposed Treasury Regulation
Section 1.1031(a)-3(a)(2)(ii)(c). Further, either Seller or Buyer may desire to
effectuate a deferred like kind exchange through the use of an intermediary in
the manner described in Example 4 of Treasury Regulation
Section 1.1031(k)-1(g)(8) or other applicable provisions. Each Party shall
reasonably cooperate with the other Party in effectuating such a deferred like
kind exchange through the use of such an intermediary, including consenting to
an assignment of any or all of the exchanging Party’s rights under this
Agreement to an intermediary. Such other Party, however, shall have no
obligation to locate, contract for or take title to any property that the
exchanging Party may wish to buy or to incur any cost, expense, indebtedness,
liability or other obligation of any kind as a part of such other Party’s
agreement to reasonably cooperate.

ARTICLE VIII

CONDITIONS PRECEDENT TO CLOSING

Section 8.1 Seller’s Conditions Precedent. The obligations of Seller at the
Closing are subject to the satisfaction or waiver at or prior to the Closing of
the following conditions precedent (collectively, the “Seller’s Conditions”):

(a) (i) The representations and warranties of Buyer made in this Agreement will
be true and correct in all material respects as of the Closing Date, as if
remade on the Closing Date (without duplication of any materiality qualifiers
within the representations and warranties themselves); and (ii) Buyer shall have
performed or complied in all material respects with all of the covenants and
agreements required of Buyer or its Affiliates under this Agreement to be
performed at or prior to Closing;

(b) No Additional Required Consent, which has not been obtained, would cause
Closing of the Transaction to be in violation of applicable law;

(c) No order has been entered by any court or governmental agency having
jurisdiction over the Parties or the subject matter of this Agreement that
restrains or prohibits the Transaction and that remains in effect at the time of
Closing;

(d) Buyer shall have delivered at Closing all Buyer Closing Deliveries and have
paid all Buyer Closing Payments unless Buyer’s failure to deliver the Buyer
Closing Deliveries and pay the Buyer Closing Payments results from Buyer’s
termination of this Agreement as a result of its termination rights under
Section 8.2 below as a result of a failure of Buyer’s Conditions; and

(e) The Bankruptcy Court shall have approved in connection with the Bankruptcy
Case the Transaction contemplated by this Agreement.

Notwithstanding anything set forth in this Agreement to the contrary, if any
Seller’s Condition has not been satisfied by the Closing Date, then Seller may,
as Seller’s sole and

 

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exclusive remedy with respect to such Seller’s Condition, either (1) terminate
this Agreement, in which case the Parties shall have no further rights or
obligations hereunder except those which expressly survive termination or
(2) proceed to Closing, in which case such Seller’s Condition shall be deemed to
be waived for all purposes.

Section 8.2 Buyer’s Conditions Precedent. The obligations of Buyer at the
Closing are subject to the satisfaction or waiver at or prior to the Closing of
the following conditions precedent (collectively, the “Buyer’s Conditions”):

(a) (i) The representations and warranties of Seller made in this Agreement will
be true and correct in all material respects as of the Closing Date, as if
remade on the Closing Date (without duplication of any “materiality” qualifiers
in the representations and warranties themselves); and (ii) Seller shall have
performed or complied in all material respects with all of the covenants and
agreements required of Seller under this Agreement to be performed at or prior
to Closing;

(b) No Additional Required Consent, which has not been obtained, would cause
Closing of the Transaction to be in violation of applicable law which would
result in (1) criminal liability to Buyer or Seller or (ii) a material civil
fine or penalty to Buyer or Seller;

(c) No order has been entered by any court or governmental agency having
jurisdiction over the Parties or the subject matter of this Agreement that
restrains or prohibits the Transaction and that remains in effect at the time of
Closing;

(d) The Bankruptcy Court shall have approved in connection with the Bankruptcy
Case the Transaction contemplated by this Agreement; and

(e) Seller shall have delivered at Closing all Seller Closing Deliveries unless
Seller’s failure to deliver the Seller Closing Deliveries results from Seller’s
termination of this Agreement as a result of its termination rights under
Section 8.1 above as a result of a failure of Seller’s Conditions.

Notwithstanding anything set forth in this Agreement to the contrary, if any
Buyer’s Condition has not been satisfied by the Closing Date, then Buyer may, as
Buyer’s sole and exclusive remedy with respect to such Buyer’s Condition, either
(1) terminate this Agreement, in which case the Parties shall have no further
rights or obligations hereunder except those which expressly survive
termination, or (2) proceed to Closing, in which case such Buyer’s Condition
shall be deemed to be waived for all purposes.

ARTICLE IX

RIGHT OF TERMINATION

Section 9.1 Termination. This Agreement may be terminated in accordance with the
following provisions:

(a) by mutual written consent of Seller and Buyer, in which case this Agreement
shall terminate and the Parties shall have no further rights or obligations
hereunder except those which expressly survive termination;

 

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(b) as otherwise expressly provided in this Agreement including Article VIII
hereof; or

(c) by either Party, if the Closing has not occurred by the Outside Closing
Date.

Upon termination of this Agreement, the Parties shall remain subject to the
terms of the LGS Lease and may pursue any rights and remedies available to each
Party under the LGS Lease.

ARTICLE X

CLOSING

Section 10.1 Date of Closing. The “Closing” will be held on June 30, 2020, or
such date as Buyer and Seller mutually agree in writing, but in any event on or
before the Outside Closing Date (the “Closing Date”).

Section 10.2 Time and Place of Closing. The Closing shall be held at such time
and place as Buyer and Seller may agree in writing and shall be effective as of
12:01 a.m. central time on the Closing Date.

Section 10.3 Closing Obligations. At Closing, the following events shall occur,
each being a condition precedent to the others and each being deemed to have
occurred simultaneously with the others:

(a) Seller shall execute and deliver, or cause to be executed and delivered, to
Buyer the Seller Closing Deliveries;

(b) Buyer shall deliver the Purchase Price to the account at a bank designated
by Seller, for the benefit of Seller or Seller’s lender, in Current Funds, and
Buyer shall pay the Taxes required to be paid by Buyer in connection with the
Closing under Section 7.3 of this Agreement and Buyer shall pay the other Buyer
Closing Payments as required hereby,

(c) Buyer shall execute and deliver, or cause to be executed and delivered, to
Seller the Buyer Closing Deliveries and pay the Buyer Closing Payments;

(d) Seller shall deliver to Buyer copies of all Additional Required Consents
obtained prior to Closing pursuant to Section 3.2 of this Agreement;

(e) Seller and Buyer shall cause the following documents (collectively, the
“Recorded Documents”) to be recorded in the applicable real estate records of
Sublette County, Wyoming (the “Real Estate Records”), in the following order:
(i) the BLM Easement Assignment to Ultra Resources, (ii) the Assignment of
Jensen Easements to Ultra Resources, (iii) the Release of Nerd Farm Easement and
Transfer of Improvements; (iv) the Lien Releases, and (v) a memorandum of
termination of the LGS Lease (the “Memorandum of Termination”) and Buyer shall
pay all fees and costs for such recording; and

(f) Seller, as agent for Buyer for this limited purpose, shall deliver to BLM
and provide to Buyer (i) the BLM Easement Assignment to Ultra Resources which is
not a Recorded

 

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Document and (ii) the BLM Request for Consent to Assignment to Ultra Resources,
and Buyer shall pay all fees and costs for such filing.

ARTICLE XI

ASSUMPTION OF OBLIGATIONS AND INDEMNIFICATION

Section 11.1 Buyer’s Assumption of Liabilities and Obligations. Without limiting
Buyer’s rights to indemnity under this Article XI, from and after Closing, Buyer
assumes and hereby agrees to fulfill, perform, pay and discharge (or cause to be
fulfilled, performed, paid and discharged) all obligations and liabilities,
known or unknown, with respect to the Assets regardless of whether such
obligations or liabilities arose prior to, on or after Closing (all of said
obligations and liabilities, the “Assumed Obligations”).

Section 11.2 Indemnification. For the purposes of this Article XI, “Loss” or
“Losses” means any actual losses, costs, expenses (including court costs,
reasonable fees and expenses of attorneys, technical experts and expert
witnesses and the cost of investigation), liabilities, damages, demands, suits,
claims, and sanctions of every kind and character (including civil fines)
arising from, related directly or indirectly or reasonably incident to matters
indemnified against, excluding however any special, consequential, punitive or
exemplary damages, loss of profits, any Loss incurred as a result of the
indemnified party indemnifying a third party, or diminution in value of the
Assets unless caused directly and exclusively by Seller or an Affiliate of
Seller. After the Closing, the Parties shall indemnify each other as follows:

(a) Seller’s Indemnification of Buyer. Seller assumes all risk, liability,
obligation and Losses in connection with, and shall indemnify, save and hold
harmless Buyer, its officers, directors, employees and agents, from and against
all Losses which arise from or in connection with (i) any matter for which
Seller has agreed to indemnify Buyer under this Agreement, and (ii) any breach
of representations, warranties, covenants, or agreements by Seller under this
Agreement which are not waived or deemed waived under Section 12.1, 4.12 or 8.2
of this Agreement or this Article XI of this Agreement. The Seller’s obligations
under this Section 11.2(a) are limited as provided in Section 11.3.

(b) Buyer’s Indemnification of Seller. Buyer assumes all risk, liability,
obligation and Losses in connection with, and Buyer shall indemnify, release
save and hold harmless Seller, its officers, directors, employees and agents,
from and against all Losses which arise from or in connection with (i) any
matter for which Buyer has agreed to indemnify Seller under this Agreement,
(ii) any breach of representations, warranties, covenants, or agreements by
Buyer under this Agreement which are not waived or deemed waived under
Section 12.1, Section 5.8 and Section 8.1 of this Agreement or this Article XI
of this Agreement, and (iii) the Assumed Obligations. The Buyer’s obligations
under this Section 11.2(b) are limited as provided in Section 11.3.

(c) Sole and Exclusive Remedy. THE INDEMNITIES CONTAINED IN THIS ARTICLE XI
SHALL BE THE SOLE AND EXCLUSIVE REMEDIES OF THE PARTIES HERETO, THEIR
AFFILIATES, SUCCESSORS AND ASSIGNS WITH RESPECT TO ANY AND ALL CLAIMS ARISING
OUT OF OR RELATING TO THIS

 

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AGREEMENT, THE TRANSACTIONS CONTEMPLATED HEREBY, ANY PROVISION HEREOF OR THE
BREACH OR PERFORMANCE THEREOF.

(d) Express Negligence. BUYER UNDERSTANDS AND AGREES THAT BUYER’S INDEMNITY
OBLIGATIONS UNDER THIS ARTICLE XI INCLUDE AND COVER INDEMNIFICATION FOR CERTAIN
CLAIMS ARISING FROM ITS INDEMNITEE’S NEGLIGENCE, AS AND TO THE EXTENT PROVIDED
HEREIN. SELLER UNDERSTANDS AND AGREES THAT SELLER’S INDEMNITY OBLIGATIONS UNDER
THIS ARTICLE XI INCLUDE AND COVER INDEMNIFICATION FOR CERTAIN CLAIMS ARISING
FROM ITS INDEMNITEE’S NEGLIGENCE, AS AND TO THE EXTENT PROVIDED HEREIN.

Section 11.3 Survival.

(a) The indemnity and other obligations of Seller contained in Section 11.2(a)
of this Agreement shall survive Closing only for the Survival Period.

(b) The indemnity and other obligations of Buyer contained in Section 11.2(b) of
this Agreement shall survive Closing until the statute of limitations for such
matters expires (except for those indemnities and obligations with respect to
the representations and warranties in Section 5.5 and Section 5.6 which will
survive Closing only for the Survival Period).

(c) All liability or obligation of any Party with respect to any indemnity or
other obligation contained in Section 11.1 or Section 11.2(a), or (b) of this
Agreement shall lapse and be of no further force or effect with respect to any
matters not described in reasonable detail in a Claim Notice delivered to such
Party by the other Party on or prior to the end of the applicable period
described in Section 11.3(a) or (b).

(d) The provisions of, Section 11.2(c) and (d), 11.3, 11.4, 11.5, 11.6, 11.7,
11.8 and 11.9 shall survive termination of this Agreement and Closing without
limitation.

Section 11.4 Procedure. The indemnifications contained in this Article XI shall
be implemented as follows:

(a) Claim Notice. The Party seeking indemnification under the terms of this
Agreement (“Indemnified Party”) shall submit a written “Claim Notice” to the
other Party (“Indemnifying Party”) which, to be effective, must state: (i) the
amount of each payment claimed by an Indemnified Party to be owing, (ii) the
basis for such claim, with supporting documentation, and (iii) a list
identifying to the extent reasonably possible each separate item of Loss for
which payment is so claimed. The amount claimed shall be paid by the
Indemnifying Party to the extent required herein within 30 days after receipt of
the Claim Notice, or after the amount of such payment has been finally
established, whichever last occurs; provided, however, that any objection to the
Claim Notice by the Indemnifying Party must be provided to the Indemnified Party
within 15 days of receipt of the Claim Notice, or the Indemnifying Party waives
its right to protest the Claim. Any undisputed portion of the Claim must be paid
within 30 days of receipt of the Claim Notice.

 

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(b) Information. Within 60 days after the Indemnified Party receives notice of a
claim or legal action by a third party that may result in a Loss for which
indemnification may be sought under this Agreement (a “Claim”), the Indemnified
Party shall give written notice of such Claim to the Indemnifying Party. If the
Indemnifying Party or its counsel so requests, the Indemnified Party shall
furnish the Indemnifying Party with copies of all pleadings and other
information with respect to such Claim. At the election of the Indemnifying
Party made within 60 days after receipt of such notice, the Indemnified Party
shall permit the Indemnifying Party to assume control of such Claim (to the
extent only that such Claim, legal action or other matter relates to a Loss for
which the Indemnifying Party is liable), including the determination of all
appropriate actions, the negotiation of settlements on behalf of the Indemnified
Party, and the conduct of litigation through attorneys of the Indemnifying
Party’s choice. No settlement of a Claim can result in any liability or cost to
the Indemnified Party for which it is entitled to be indemnified hereunder
without its consent. If the Indemnifying Party elects to assume control, (i) any
expense incurred by the Indemnifying Party thereafter for investigation or
defense of the matter shall be borne by the Indemnifying Party, and (ii) the
Indemnified Party shall give all reasonable information and assistance, other
than pecuniary, that the Indemnifying Party shall deem necessary to the proper
defense of such Claim, legal action, or other matter. In the absence of such an
election to assume control by the Indemnifying Party, the Indemnified Party will
use commercially reasonable efforts to defend, at the Indemnifying Party’s
expense, any claim, legal action or other matter to which such other Party’s
indemnification under this Article XI applies until the Indemnifying Party
assumes such defense, and, if the Indemnifying Party fails to assume such
defense within the time period provided above, settle the same in the
Indemnified Party’s reasonable discretion at the Indemnifying Party’s expense.
If such a Claim requires immediate action, the Parties agree to cooperate in
good faith to take appropriate action so as not to jeopardize defense of such
Claim or either Party’s position with respect to such Claim.

Section 11.5 No Insurance; Subrogation. The indemnifications provided in this
Agreement shall not be construed as a form of insurance. Buyer and Seller hereby
waive for themselves, their successors or assigns including, without limitation,
any insurers, any rights to subrogation for Losses for which each of them is
respectively liable or against which each respectively indemnifies the other,
and, if required by applicable policies, Buyer and Seller shall obtain waiver of
such subrogation from their respective insurers.

Section 11.6 Reservation as to Non-Parties. Nothing herein is intended to limit
or otherwise waive any recourse Buyer or Seller may have against any Person not
a Party to this Agreement for any obligations or liabilities that may be
incurred with respect to the Assets.

Section 11.7 Consequential Damages. Notwithstanding anything set forth in this
Agreement, Buyer and Seller, on behalf of themselves and their respective
Affiliates, expressly waive any and all rights to consequential, special,
incidental, punitive, or exemplary damages and loss of profits resulting from a
breach of this Agreement, including under or with respect to any
indemnifications required hereby, and agree that the indemnifications set forth
herein shall not include or cover any consequential, special, incidental,
punitive, or exemplary damages or loss of profits (except to the extent
constituting direct damages). Nothing in this Section 11.7 shall constitute a
waiver by any Party to a claim under this Article XI with respect to diminution
in value to the extent diminution in value is expressly included in the
definition of the “Losses” covered by the Section of this Article under which
the claim is made.

 

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Section 11.8 No Derivative Liability. Notwithstanding anything set forth in this
Agreement, the Closing Deliveries or otherwise, no direct or indirect (through
tiered ownership or otherwise) advisor, trustee, director, officer, employee,
beneficiary, shareholder, participant, partner, member, owner, investor, lender,
representative or agent of a Party or its applicable Affiliates shall have any
personal liability, directly or indirectly, under or in connection with this
Agreement or any Closing Deliveries or any amendment or amendments to any of the
foregoing made at any time or times, heretofore or hereafter, and the other
Party and its successors and assigns and, without limitation, all other persons
and entities, shall look solely to the assets of such Party (or, if expressly
applicable, the assets of such Party’s Affiliate) for the payment of any claim
or for any performance, and each other Party, on behalf of itself and its
successors and assigns, hereby waive any and all such personal liability.

Section 11.9 Attorneys’ Fees. If it shall be necessary for any Party to this
Agreement to employ an attorney to enforce its rights pursuant to this
Agreement, the non-prevailing Party shall reimburse the prevailing Party for its
reasonable attorneys’ fees and the reasonable attorneys’ fees of the prevailing
Party’s applicable Affiliates, if any, in such proceeding.

ARTICLE XII

MISCELLANEOUS

Section 12.1 Expenses. Except as otherwise specifically provided, all fees,
costs and expenses incurred by Buyer or Seller in negotiating this Agreement or
in consummating the Transaction shall be paid by the Party incurring the same,
including without limitation, engineering, land, title, legal and accounting
fees, costs and expenses. This Section 12.1 shall survive termination of this
Agreement and Closing.

Section 12.2 Notices. All notices and communications required or permitted under
this Agreement (a “Notice”) shall be in writing and addressed as set forth
below. Any Notice shall be deemed to have been duly made and the receiving Party
charged with notice (a) if personally delivered, or sent by registered or
certified mail, or nationally recognized overnight courier, when received;
(b) if sent by electronic transmission (with read receipt requested); and (c) if
the addressee rejects or otherwise refuses to accept the Notice, or if the
Notice cannot be delivered because of a change in address for which no Notice
was given, then upon the rejection, refusal, or inability to deliver the Notice;
provided, however, that if a Notice is sent by electronic transmission, the
party sending the Notice also must send, on the same date, a confirmation copy
of the Notice (including the acknowledgement/transmission report described
above) by one of the other methods set forth in this Section. All Notices shall
be addressed as follows:

If to Seller.

Pinedale Corridor, LP

1100 Walnut Street, Suite 3350

Kansas City, MO 64106

Attn: Rebecca M. Sandring

Email: BSandring@corenergy.reit

With a copy to:

 

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Husch Blackwell LLP

4801 Main Street, Ste. 1000

Kansas City, MO 64112

Attn: Steven F. Carman

Email: steve.carman@huschblackwell.com

If to Buyer:

Ultra Wyoming, LLC

116 Inverness Drive East, Suite 400, Englewood, CO 80112

Attention: David W. Honeyfield, Senior Vice President and Chief Financial
Officer

Email: dhoneyfield@ultrapetroleum.com

With a copy to:

Ultra Wyoming, LLC

116 Inverness Drive East, Suite 400, Englewood, CO 80112

Attention: Legal Department

Email: kkerr@ultrapetroleum.com

Kirkland & Ellis LLP

609 Main Street

Houston TX 77002

Attention: Christopher Heasley

Email: Christopher.Heasley@kirkland.com

Any Party may, by written notice so delivered to the other Party, change the
address or individual to which delivery shall thereafter be made.

Section 12.3 Amendments. This Agreement may not be amended nor any rights
hereunder waived except by an instrument in writing signed by the Party to be
charged with such amendment or waiver and delivered by such Party to the Party
claiming the benefit of such amendment or waiver.

Section 12.4 Assignment. Neither Party may assign all or any portion of its
rights or delegate all or any portion of its duties hereunder without the prior
written consent of the other Party. Any assignment or delegation made in
violation of this Section 12.4 shall be null and void. In the event a Party
consents in writing to the other Party’s assignment or delegation of its rights
or duties hereunder, the assigning or delegating Party shall not be released
from any of its liabilities or obligations hereunder, and no such assignment or
delegation shall increase the burden on the non-assigning or non-delegating
Party, and the non-assigning or non-delegating Party may continue to look to the
assigning or delegating Party for all purposes under this Agreement.

Section 12.5 Counterparts/PDF and Fax Signatures. This Agreement may be executed
by Buyer and Seller in any number of counterparts, each of which shall be deemed
an original instrument, but all of which together shall constitute but one and
the same instrument.    PDF and facsimile signatures shall be considered
binding. The Parties agree to exchange originally executed counterparts of this
Agreement within three (3) Business Days of the request of a Party hereto.

 

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Section 12.6 GOVERNING LAW; JURISDICTION, VENUE; JURY WAIVER. THIS AGREEMENT AND
THE OTHER TRANSACTION AGREEMENTS AND ANY DISPUTE RESOLUTION CONDUCTED PURSUANT
HERETO AND THERETO SHALL BE CONSTRUED IN ACCORDANCE WITH, AND GOVERNED BY, THE
LAWS OF THE STATE OF TEXAS EXCEPT AS MAY OTHERWISE BE REQUIRED FOR REAL PROPERTY
ISSUES UNDER THE CONFLICT OF LAWS PRINCIPLES OF WYOMING. THE PARTIES IRREVOCABLY
AGREE THAT ANY LEGAL ACTION, SUIT OR PROCEEDING ARISING OUT OF OR RELATING TO
THIS AGREEMENT SHALL BE BROUGHT IN THE COURTS OF THE STATE OF TEXAS OR OF THE
UNITED STATES OF AMERICA LOCATED IN HOUSTON, HARRIS COUNTY, TEXAS. BY THE
EXECUTION AND DELIVERY OF THIS AGREEMENT, THE PARTIES IRREVOCABLY SUBMIT TO THE
EXCLUSIVE JURISDICTION OF ANY SUCH COURT IN ANY SUCH ACTION, SUIT OR PROCEEDING.
EACH PARTY HERETO WAIVES, TO THE FULLEST EXTENT PERMITTED BY APPLICABLE LAW, ANY
RIGHT IT MAY HAVE TO A TRIAL BY JURY IN RESPECT OF ANY ACTION, SUIT OR
PROCEEDING ARISING OUT OF OR RELATING TO THIS AGREEMENT.

Section 12.7 Entire Agreement. This Agreement constitutes the entire
understanding between the Parties with respect to the subject matter hereof,
superseding all negotiations, prior discussions and prior agreements and
understandings relating to such subject matter.

Section 12.8 Binding Effect. This Agreement shall be binding upon, and shall
inure to the benefit of the Parties hereto and their respective successors and
assigns.

Section 12.9 No Third-Party Beneficiaries. This Agreement is intended to benefit
only the Parties hereto and their respective permitted successors and assigns.
This Section 12.9 shall survive termination of this Agreement and Closing.

Section 12.10 Time of the Essence. It is expressly agreed by the Parties hereto
that time is of the essence with respect to this Agreement and the obligations
and duties of the Parties hereunder.

Section 12.11 No Waiver. Except as and to the extent expressly provided herein,
(a) the failure of any Party hereto to enforce at any time any of the provisions
of this Agreement shall in no way be construed as a waiver of any of such
provisions, or the right of any party thereafter to enforce each and every such
provision, and (b) no waiver of any breach of this Agreement shall be held to be
a waiver of any other or subsequent breach.

Section 12.12 Waiver of Trial by Jury. NEITHER SELLER NOR BUYER SHALL HAVE THE
RIGHT TO SEEK A TRIAL BY JURY OF ANY ISSUE TRIABLE OF RIGHT BY JURY, AND EACH
WAIVES TO THE EXTENT PERMITTED BY APPLICABLE LAW ANY RIGHT TO TRIAL BY JURY
FULLY TO THE EXTENT THAT ANY SUCH RIGHT SHALL NOW OR HEREAFTER EXIST WITH REGARD
TO THE TERMS OF THIS AGREEMENT OR ANY CLOSING DELIVERY, THE TRANSACTION
CONTEMPLATED HEREBY, OR ANY CLAIM, COUNTERCLAIM OR OTHER ACTION ARISING IN
CONNECTION THEREWITH. THIS WAIVER OF RIGHT TO TRIAL BY JURY IS GIVEN KNOWINGLY
AND VOLUNTARILY BY EACH PARTY, AND IS INTENDED TO ENCOMPASS

 

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INDIVIDUALLY EACH INSTANCE AND EACH ISSUE AS TO WHICH THE RIGHT TO A TRIAL BY
JURY WOULD OTHERWISE ACCRUE. ANY PARTY IS HEREBY AUTHORIZED TO FILE A COPY OF
THIS SECTION IN ANY PROCEEDING AS CONCLUSIVE EVIDENCE OF THIS WAIVER BY EACH
PARTY HERETO. This Section 12.12 shall survive termination of this Agreement and
Closing.

Section 12.13 Further Assurances. In furtherance of the provisions of this
Agreement, Buyer agrees to take and cause its Affiliates to take, and Seller
agrees to take and cause its Affiliates to take, such commercially reasonable
further actions and to execute, deliver and file such further reasonable
documents and instruments as may be reasonably necessary to consummate the
transactions contemplated by this Agreement (including, but not limited to, any
documentation required to be filed with the BLM or other governmental authority
to effectuate a transfer of the BLM Easements or other easements contemplated
herein), but only if such actions and documents are consistent with the terms of
this Agreement and do not expand or otherwise vary from the obligations and
liabilities of such Persons under this Agreement and the Closing Deliveries.
Unless otherwise provided in this Agreement, any and all such documents and
instruments shall be prepared by, or at the direction of, the requesting Party,
at the requesting Party’s sole cost and expense, and shall be in form and
substance reasonably acceptable to the other Party. This Section 12.13 shall
survive Closing.

Section 12.14 Waiver of Right of Rescission. Seller and Buyer acknowledge that,
following Closing, the payment of money, as limited by the terms of this
Agreement, shall be adequate compensation for breach of any representation,
warranty, covenant or agreement contained herein or for any other claim arising
in connection with or with respect to the transactions contemplated by this
Agreement. As the payment of money shall be adequate compensation, following the
Closing, Buyer and Seller waive any right to rescind this Agreement or any of
the transactions contemplated hereby.

[Remainder of Page Intentionally Blank

Signature Pages Follow]

 

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Executed as of the Execution Date.

Buyer:

 

ULTRA WYOMING, LLC,

a Delaware limited liability company

By:

 

/s/ Kason D. Kerr

Name:

 

Kason D. Kerr

Title:

  Vice President, General Counsel and Corporate Secretary

Signature Page to Liquids Gathering System

Sublette County, Wyoming Purchase and Sale Agreement

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Seller:

 

By:

 

PINEDALE CORRIDOR, LP,

a Delaware limited partnership

By:

 

PINEDALE GP, INC.,

a Delaware corporation, its sole general partner

By:

 

/s/ David J. Schulte

Name:

 

David J. Schulte

Title:

 

President

Signature Page to Liquids Gathering System

Sublette County, Wyoming Purchase and Sale Agreement