EXHIBIT 10.1

Purchase and Sale Agreement

Among

Mid-Con Energy Properties, LLC
As Buyer

And

Scout Energy Group IV, LP,

Scout Energy Partners IV-A, LP,

Scout Energy Group I, LP,

Scout Energy Partners I-A, LP,
As Sellers

February 15, 2019

 

 

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Table of Contents

Page No.

Article I Definitions and Usage

1

 

 

Section 1.01

Definitions.1

 

 

Section 1.02

Usage.5

 

Article II Assets

6

 

 

Section 2.01

Agreement to Sell and Purchase.6

 

 

Section 2.02

Assets.6

 

 

Section 2.03

Excluded Assets.8

 

Article III Purchase Price

11

 

 

Section 3.01

Purchase Price.11

 

 

Section 3.02

Deposit.11

 

 

Section 3.03

Effective Time12

 

Article IV Title Matters

12

 

 

Section 4.01

Examination Period.12

 

 

Section 4.02

Defensible Title and Permitted Encumbrances.12

 

 

Section 4.03

Title Defect.16

 

 

Section 4.04

Notice of Title Defects.17

 

 

Section 4.05

Remedies for Title Defects.18

 

 

Section 4.06

Special Warranty of Title.20

 

 

Section 4.07

Preferential Rights To Purchase.20

 

 

Section 4.08

Consents to Assignment.21

 

 

Section 4.09

Title Benefits; Remedies.21

 

Article V Environmental Matters

22

 

 

Section 5.01

Environmental Review.22

 

 

Section 5.02

Environmental Definitions.23

 

 

Section 5.03

Notice of Environmental Defects.24

 

 

Section 5.04

Remedies for Environmental Defects.25

 

 

Section 5.05

No Warranty Regarding Environmental Matters.26

 

 

Section 5.06

Physical Condition of the Assets26

 

 

Section 5.07

NORM27

 

Article VI Representations and Warranties of Seller

27

 

 

Section 6.01

Seller’s Existence27

 

 

Section 6.02

Legal Power28

 

 

Section 6.03

Execution28

 

 

Section 6.04

Brokers28

 

 

Section 6.05

Bankruptcy28

 

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Section 6.06

Proceedings28

 

 

Section 6.07

Royalties.28

 

 

Section 6.08

Taxes.29

 

 

Section 6.09

Contracts.29

 

 

Section 6.10

Governmental Authorizations.29

 

 

Section 6.11

No Violations of Laws.29

 

 

Section 6.12

No Prepayments.29

 

Article VII Representations and Warranties of Buyer

30

 

 

Section 7.01

Buyer’s Existence.30

 

 

Section 7.02

Legal Power.30

 

 

Section 7.03

Execution.30

 

 

Section 7.04

Brokers.30

 

 

Section 7.05

Bankruptcy.31

 

 

Section 7.06

Proceedings.31

 

 

Section 7.07

Qualifications.31

 

 

Section 7.08

Investment.31

 

 

Section 7.09

Funds.31

 

 

Section 7.10

Independent Investigation.31

 

Article VIII Tax-Deferred Exchange

32

 

 

Section 8.01

Election.32

 

 

Section 8.02

Qualified Intermediary.32

 

 

Section 8.03

Additional Costs.32

 

 

Section 8.04

Indemnification.32

 

Article IX Seller’s Conditions to Close

32

 

 

Section 9.01

Representations.32

 

 

Section 9.02

Performance.32

 

 

Section 9.03

Pending Matters.32

 

 

Section 9.04

Closing of Scout-As-Seller PSA.33

 

Article X Buyer’s Conditions to Close

33

 

 

Section 10.01

Representations.33

 

 

Section 10.02

Performance.33

 

 

Section 10.03

Pending Matters.33

 

 

Section 10.04

Closing of Scout-As-Seller PSA.33

 

Article XI Purchase Price Allocation and Tax Matters

33

 

 

Section 11.01

Purchase Price Allocation.33

 

 

Section 11.02

Transfer Taxes.34

 

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Article XII The Closing

34

 

 

Section 12.01

Time and Place of the Closing.34

 

 

Section 12.02

Adjustments to Purchase Price at the Closing.34

 

 

Section 12.03

Closing Statement.36

 

 

Section 12.04

Actions of Seller at the Closing.36

 

 

Section 12.05

Actions of Buyer at the Closing.38

 

Article XIII Termination

39

 

 

Section 13.01

Right of Termination.39

 

 

Section 13.02

Remedies and Effect of Termination.40

 

 

Section 13.03

Termination Damages.40

 

 

Section 13.04

Return of Documents and Confidentiality.41

 

 

Section 13.05

Damages.41

 

Article XIV Post-Closing Obligations

41

 

 

Section 14.01

Gas Imbalances.41

 

 

Section 14.02

Final Accounting Statement.42

 

 

Section 14.03

Records.43

 

 

Section 14.04

Further Cooperation.43

 

 

Section 14.05

Solicitation of Employees.43

 

Article XV Operation of the Assets

43

 

 

Section 15.01

Operations.43

 

 

Section 15.02

Limitations on the Operational Obligations and Liabilities of Seller.44

 

 

Section 15.03

Operation of the Assets after the Closing.45

 

 

Section 15.04

Change in Circumstances; Casualty Loss.45

 

Article XVI Obligations and Indemnification

46

 

 

Section 16.01

Retained Obligations.46

 

 

Section 16.02

Assumed Obligations.46

 

 

Section 16.03

Buyer’s Indemnification.47

 

 

Section 16.04

Seller’s Indemnification.47

 

 

Section 16.05

Limitations on Seller’s Indemnification Obligations.47

 

 

Section 16.06

Exclusive Remedy.48

 

 

Section 16.07

Notices and Defense of Indemnified Matters.48

 

Section 16.08    Sellers' Liability Several, Not Joint …………………………………...49

Article XVII Limitations on Representations and Warranties

50

 

 

Section 17.01

Disclaimers of Representations and Warranties.50

 

 

Section 17.02

Sale “As Is” “Where Is”.50

 

 

Section 17.03

DISCLAIMER REGARDING THE ASSETS.51

 

 

Section 17.04

DISCLAIMER REGARDING INFORMATION.51

 

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Article XVIII Dispute Resolution

51

 

 

Section 18.01

Scope; Appointment of Independent Expert.51

 

 

Section 18.02

Additional Procedures.52

 

 

Section 18.03

Waiver.53

 

 

Section 18.04

Binding Nature.53

 

 

Section 18.05

Confidentiality.53

 

Article XIX Miscellaneous

53

 

 

Section 19.01

Names.53

 

 

Section 19.02

Expenses.53

 

 

Section 19.03

Filings, Notices and Certain Governmental Approvals.54

 

 

Section 19.04

Document Retention.54

 

 

Section 19.05

Entire Agreement.54

 

 

Section 19.06

Waiver.54

 

 

Section 19.07

Construction.54

 

 

Section 19.08

No Third Party Beneficiaries.55

 

 

Section 19.09

Assignment.55

 

 

Section 19.10

Governing Law.55

 

 

Section 19.11

Jurisdiction.55

 

 

Section 19.12

Notices.55

 

 

Section 19.13

Severability.56

 

 

Section 19.14

Survival.56

 

 

Section 19.15

Time of the Essence.56

 

 

Section 19.16

Counterpart Execution.56

 

 

Section 19.17

Knowledge.56

 

 

Section 19.18

Press Releases.57

 

 

Section 19.19

Exclusivity; Waiver of Rescission.57

 

 

Section 19.20

Waiver of Trade Practices Act.57

 

 

 

 

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Exhibits and Schedules

Exhibit A Subject Interests (Listing of Leases)

Exhibit A-1Easements

Exhibit BWells and Interests

Exhibit B-1Allocated Values

Exhibit CForm of Escrow Agreement

Exhibit D Form of Assignment and Bill of Sale

Exhibit EForm of Title Indemnity Agreement

Exhibit FForm of Environmental Indemnity Agreement

 

Schedule 2.02(e)Field Offices

Schedule 2.03(p)Suspense Amounts

Schedule 6.09Material Contracts

Schedule 6.10Governmental Authorizations

Schedule 6.11No Violations of Laws

Schedule 6.13Mechanical Integrity

Schedule 6.14Preferential Purchase Rights

Schedule 14.01Gas Imbalances

Schedule 14.05Subject Employees

 

 

 

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PURCHASE AND SALE AGREEMENT

This Purchase and Sale Agreement (this “Agreement”) is made and entered into
this 15th day of February, 2019, by and among Mid-Con Energy Properties, LLC, a
Delaware limited liability company (“Buyer”), and SCOUT ENERGY GROUP IV, LP, a
Texas limited partnership, SCOUT ENERGY PARTNERS IV-A, LP, a Delaware limited
partnership, SCOUT ENERGY GROUP I, LP, a Texas limited partnership, and SCOUT
ENERGY PARTNERS I-A, LP, a Delaware limited partnership (each a “Seller” and
collectively, “Sellers”).  Buyer and Sellers are collectively referred to as the
“Parties” and individually as a “Party.”

W I T N E S S E T H:

WHEREAS, Sellers are willing to sell to Buyer, and Buyer is willing to purchase
from Sellers, the Assets (as defined in Section 2.02), all upon the terms and
conditions set forth in this Agreement.

NOW, THEREFORE, in consideration of the mutual benefits derived and to be
derived from this Agreement by each Party, Sellers and Buyer agree as follows:

Article I
Definitions and Usage

Section 1.01Definitions.

  For purposes of this Agreement, the following terms and their variations have
the meanings specified or referred to in this Section 1.01:

“Accounting Statement” — as defined in Section 14.02(a).

“Advisor” — as defined in Section 2.03(f).

“Affiliate” — as defined in Section 2.03(g).

“Agreed Imbalance” — as defined in Section 14.01.

“Agreement” — as defined in the first paragraph of this Agreement.

“Allocated Value” — as defined in Section 4.04(c)(ii).

“Asset” or “Assets” — as defined in Section 2.02.

“Assignment” — as defined in Section 4.06.

“Assumed Environmental Obligations” — as defined in Section 5.02(a).

“Assumed Obligations” — as defined in Section 16.02.

“Business Day” — as defined in Section 3.02.

“Buyer” — as defined in the first paragraph of this Agreement.

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“Buyer Indemnitees” — as defined in Section 16.04.

“Buyer’s Environmental Consultant” — as defined in Section 5.01(a).

“Buyer’s Environmental Review” — as defined in Section 5.01(a).

“Claim” — as defined in Section 16.07(b).

“Claim Notice” — as defined in Section 16.07(b).

“Closing” — as defined in Section 12.01.

“Closing Date” — as defined in Section 12.01.

“Closing Statement” — as defined in Section 12.03.

“Code” — as defined in Section 8.01.

“Confidentiality Agreement” — as defined in Section 4.01.

“Contracts” — as defined in Section 2.02(h).

“Control” — as defined in Section 2.03(g).

“Cure Period” — as defined in Section 4.05(a)(iii).

“Defensible Title” — as defined in Section 4.02(a).

“Deposit” — as defined in Section 3.02(a).

“Dispute” or “Disputes” — as defined in Section 18.01.

“Documents” — as defined in Section 19.04.

“DTPA” — as defined in Section 19.20(a).

“Easements” — as defined in Section 2.02(d).

“Effective Time” — as defined in Section 3.03.

“Election Notice” — as defined in Section 18.01.

“Environmental Defect” — as defined in Section 5.02(b).

“Environmental Defect Notice” — as defined in Section 5.03.

“Environmental Defect Value” — as defined in Section 5.02(c).

“Environmental Indemnity Agreement” — as defined in Section 5.04(a)(ii).

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“Environmental Information” — as defined in Section 5.01(b).

“Environmental Laws” — as defined in Section 5.02(d).

“Escrow Agent” — as defined in Section 3.02.

“Escrow Agreement” — as defined in Section 3.02.

“Examination Period” — as defined in Section 4.01.

“Excluded Assets” — as defined in Section 2.03.

“Final Statement” — as defined in Section 14.02(b).

“Final Settlement Date” — as defined in Section 14.02(a).

“Gas Imbalances” — as defined in Section 14.01.

“Governmental Authority” — as defined in Section 4.02(b)(v).

“Governmental Authorizations” — as defined in Section 6.10.

“Hazardous Substances” — as defined in Section 5.02(e).

“Hydrocarbons” — as defined in Section 2.02(e).

“Indemnified Environmental Defect” — as defined in Section 5.02(f).

“Indemnified Party” — as defined in Section 16.07(a).

“Indemnified Title Defect” — as defined in Section 4.05(a)(ii).

“Indemnifying Party” — as defined in Section 16.07(a).

“Independent Expert” — as defined in Section 18.01.

“Knowledge” — as defined in Section 19.17.

“Law” — as defined in Section 1.02(a)(v).

“Leases” — as defined in Section 2.02(a).

“Loss” or “Losses” — as defined in Section 16.03.

“Material Adverse Effect” means any change, inaccuracy, circumstance, effect,
event, result, occurrence, condition or fact (whether or not (i) foreseeable or
known as of the date of this Agreement or (ii) covered by insurance) that has
had, or would reasonably be expected to have, a material adverse effect on the
ownership, operation or value of the Assets, taken as a whole.

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“Material Contract” means any Contract (other than any joint operating agreement
included within the Contracts) that would reasonably be expected to result in
aggregate payments with respect to the Assets of more than $100,000 during any
twelve (12) month period following the Closing (based solely on the terms
thereof and without regard to any expected increase in volumes or revenues) and
which requires more than ninety (90) days’ notice by Sellers, or Buyer after
Closing, in order to terminate the Contract.

“Mid-Con-As-Seller PSA” — as defined in Section 9.04.

“Net Revenue Interest” or “NRI” — as defined in Section 4.02(a)(i).

“NORM” — as defined in Section 5.07.

“Notice of Disagreement” — as defined in Section 14.02(a).

“Parties” — as defined in the first paragraph of this Agreement.

“Permitted Encumbrances” — as defined in Section 4.02(b).

“Person” — as defined in Section 2.03(g).

“Personal Property” — as defined in Section 2.02(e).

“PPRs” — as defined in Section 4.07(a).

“Purchase Price” — as defined in Section 3.01.

“Purchase Price Adjustments” — as defined in Section 12.02(c).

“Records” — as defined in Section 2.02(j).

“Required Consents” — as defined in Section 4.08.

“Retained Obligations” — as defined in Section 16.01.

“Rules” — as defined in Section 18.01.

“Seller” — as defined in the first paragraph of this Agreement.

“Sellers Indemnitees” — as defined in Section 15.02(b).

“Sellers Ownership Period” — as defined in Section 6.07.

“Subject Interest” or “Subject Interests” — as defined in Section 2.02(a).

“Subject Property” — as defined in Section 5.02(a).

“Suspense Amounts” has the meaning set forth in Section 2.03(p).

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“Tangible Property” — as defined in Section 17.03.

“Taxes” — as defined in Section 2.03(b).

“Third Party” — as defined in Section 4.02(b)(ix).

“Title Benefit” — as defined in Section 4.09(a).

“Title Defect” — as defined in Section 4.03.

“Title Defect Notice” — as defined in Section 4.04.

“Title Defect Value” — as defined in Section 4.04(c).

“Transfer Taxes” — as defined in Section 11.02.

“Unadjusted Purchase Price” — as defined in Section 3.01.

“Working Interest” or “WI” — as defined in Section 4.02(a)(ii).

Section 1.02Usage.

(a)In this Agreement, unless a clear contrary intention appears:

(i)the singular number includes the plural number and vice versa;

(ii)reference to any Person includes that Person’s successors and assigns but,
if applicable, only if those successors and assigns are not prohibited by this
Agreement, and reference to a Person in a particular capacity excludes that
Person in any other capacity or individually;

(iii)reference to any gender includes each other gender;

(iv)reference to any agreement, document or instrument means that agreement,
document or instrument as amended or modified and in effect from time to time in
accordance with its terms;

(v)reference to any law, rule, regulation, order or decree of any Governmental
Authority (“Law”) means that Law as amended, modified, codified, replaced or
reenacted, in whole or in part, and in effect from time to time, including rules
and regulations promulgated under it, and reference to any section or other
provision of any Law means that provision of that Law from time to time in
effect and constituting the amendment, modification, codification, replacement
or reenactment of that section or other provision;

(vi)“hereunder,” “hereof,” “hereto,” and words of similar import shall be deemed
references to this Agreement as a whole and not to any particular Article,
Section or other provision of this Agreement;

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(vii)“including” (and with correlative meaning “include”) means including
without limiting the generality of any description preceding that term;

(viii)“or” is used in the inclusive sense of “and/or”;

(ix)with respect to the determination of any period of time, “from” means “from
and including” and “to” means “to but excluding”;

(x)references to documents, instruments or agreements shall be deemed to refer
as well to all addenda, exhibits, schedules or amendments to them;

(xi)references to any Exhibit or Schedule means an Exhibit or Schedule attached
to this Agreement, all of which are incorporated into and made a part of this
Agreement; and

(xii)references to any Article or Section means an Article or Section of this
Agreement.

(b)Unless otherwise specified, all accounting terms used in this Agreement shall
be interpreted, and all accounting determinations under this Agreement shall be
made, in accordance with United States generally accepted accounting principles.

(c)This Agreement was negotiated by the Parties with the benefit of legal
representation, and any rule of construction or interpretation otherwise
requiring this Agreement to be construed or interpreted against any Party shall
not apply to any construction or interpretation of this Agreement.

Article II
Assets

Section 2.01Agreement to Sell and Purchase.

  Subject to and in accordance with the terms and conditions of this Agreement,
Buyer agrees to purchase the Assets from Sellers, and Sellers agree to sell the
Assets to Buyer.

Section 2.02Assets.

  Subject to Section 2.03, the term “Assets” (or in the singular “Asset”) means
all of Sellers’ right, title and interest in and to:

(a)the oil, gas and/or mineral leases described in Exhibit A attached hereto
(collectively, the “Leases”), and all oil, gas and/or mineral leasehold
interests, overriding royalty interests, operating rights, record title and
other similar interests in the Leases or in the lands covered by the Leases
along with all surface fee interests and estates in the lands specifically
described on Exhibit A or in the Leases (collectively, the “Subject Interests”
or, singularly, a “Subject Interest”);

(b)All fee mineral, royalty, overriding royalty and other similar non-leasehold
oil, gas and other mineral interests and estates, in the lands covered by the
Leases, described on Exhibit A;

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(c)except to the extent as may be limited by the Subject Interests or used or
held in connection with the Excluded Assets, all rights, privileges, benefits
and powers conferred upon Sellers as holders of the Subject Interests, with
respect to (i) all rights of use and occupation of the surface of and the
subsurface depths under the Subject Interests, and (ii) all rights with respect
to any pooled, communitized or unitized acreage by virtue of any Subject
Interest being a part thereof, including all Hydrocarbon production after the
Effective Time attributable to the Subject Interests or any such pool or unit
allocated to any such Subject Interest;

(d)to the extent assignable or transferable by Sellers, all easements,
rights-of-way, surface leases, servitudes, permits, licenses, franchises and
other estates or similar rights and privileges directly related to and used
solely in connection with the Subject Interests, including those described or
referred to in Exhibit A-1 (the “Easements”);

(e)to the extent assignable or transferable by Sellers and not used or held in
connection with the Excluded Assets, all personal property, equipment, fixtures,
inventory and improvements located on and used directly in connection with the
Subject Interests or the Easements or with the production, treatment, sale, or
disposal of oil, gas or other hydrocarbons produced from or attributable to the
Subject Interests (collectively, “Hydrocarbons”), byproducts or waste produced
from or attributable to the foregoing, including all wellhead equipment, pumps,
pumping units, flowlines, gathering systems, piping, tanks, buildings, treatment
facilities, disposal facilities, compression facilities, and other materials,
supplies, equipment, facilities and machinery, and to the extent used primarily
in the operation of the Subject Interests all vessels, software, computers and
associated peripherals and all radio, telephone and other communication
equipment, and to the extent Buyer elects by March 2, 2019 to increase the
Purchase Price by the Kelly Blue Book value thereof, all vehicles and licensed
trailers (collectively, “Personal Property”), and the fixtures, equipment and
other contents of the field offices listed on Schedule 2.02(e);

(f)all radio equipment, SCADA and measurement technology, and other production
related mobility devices (such as SCADA controllers), well communication
devices, and any other information technology systems and licenses associated
with the foregoing, in each case only to the extent such assets and licenses are
(i) used or held for use solely in connection with the operation of the Assets,
(ii) assignable (with consent, if applicable, but without the payment of any fee
unless Buyer agrees in writing to pay such fee; provided Sellers shall use
commercially reasonable efforts to cause the transfer of all such rights and
interests to Buyer), and (iii) located on the Assets;

(g)all wells which are located on the lands covered by the Subject Interests or
on lands with which the Subject Interests may have been pooled, communitized or
unitized (whether producing, shut in or abandoned), including the wells
described in Exhibit B;

(h)to the extent assignable or transferable by Sellers and not used or held in
connection with the Excluded Assets, all contracts, warranties, agreements and
other arrangements, and all express and implied rights that directly relate to
the Subject Interests, the Leases or the Easements, including communitization,
unitization or pooling

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agreements, production sales contracts, farmout agreements, subleases, joint
venture or partnership agreements, operating agreements, service agreements,
exploration agreements, transportation or gathering agreements, agreements for
the sale and purchase of Hydrocarbons, processing agreements, surface use
agreements and other similar contracts, agreements and other arrangements (the
“Contracts”), provided that “Contracts” shall not include the instruments
constituting the Leases;

(i)the real property, if any, plant and related equipment owned by Sellers’
Affiliate, Fairfax Midstream Company, LLC (“Fairfax”), located at 2399 CR 5825,
Fairfax, Oklahoma 74637 and any pipelines or rights of way related to such
plant; and

(j)to the extent assignable or transferable by Sellers and not used or held in
connection with the Excluded Assets, all books, records, files, muniments of
title, reports and similar documents and materials, including lease records,
well records, and division order records, well files, well logs, title records
(including abstracts of title, title opinions and memoranda, and title curative
documents directly related to the Assets), geological and geophysical data and
information, contracts and contract files, correspondence, in each case, that
directly relate to the foregoing interests in the possession of, and maintained
by, Sellers (collectively, the “Records”), provided, however, that Sellers may
retain copies of all geological and geophysical data and information and may
retain the copies of such Records as Sellers have reasonably determined may be
required for existing litigation, tax, accounting and auditing purposes.

Section 2.03Excluded Assets.

  Notwithstanding the foregoing, the Assets shall not include, and there is
excepted, reserved and excluded from the sale contemplated by this Agreement
(collectively, the “Excluded Assets”):

(a)all trade credits and all accounts, accounts receivable, checks, funds,
promissory notes, instruments and general intangibles (as those terms are
defined in the Oklahoma Uniform Commercial Code) attributable to the Assets with
respect to any period of time prior to the Effective Time; provided, however,
that if any Third Party makes a claim that would be an Assumed Obligation
regarding time periods prior to the Effective Time, all then uncollected trade
credits and all accounts, accounts receivable, checks, funds, promissory notes,
instruments and general intangibles receivable from such Third Party that would
otherwise be Excluded Assets pursuant to this Section 2.03(a) shall become
Assets;

(b)all claims of Sellers for, and rights of Sellers to, refunds of or loss
carryovers with respect to (i) any Taxes with respect to the Assets for any
taxable year or period, or portion thereof, that ends at or before the Effective
Time, (ii) any Taxes with respect to the Excluded Assets, or (iii) those other
refunds, and rights to them, for amounts paid in connection with the Assets and
attributable to the period prior to the Effective Time, including refunds of
amounts paid under any Hydrocarbon gathering or transportation agreement; and
for purposes of this Agreement, the term “Taxes” means any and all taxes,
including any interest, penalties or other additions to tax that may become
payable in respect of any tax, imposed by any Governmental Authority, which
taxes shall include, without limiting the generality of the foregoing, all
income taxes, profits taxes, margin

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taxes, alternative minimum taxes, estimated taxes, payroll taxes, employee
withholding taxes, unemployment insurance taxes, social security taxes, welfare
taxes, disability taxes, severance taxes, license charges, sales taxes, use
taxes, ad valorem taxes, value added taxes, excise taxes, franchise taxes, gross
receipts taxes, real or personal property taxes, stamp taxes, production taxes,
environmental taxes, transfer taxes, workers’ compensation taxes, windfall
taxes, net worth taxes, and other taxes, fees, duties, levies, customs, tariffs,
imposts, assessments, obligations and charges of the same or of a similar nature
to any of the foregoing;

(c)all proceeds, income, royalties or revenues (and any security or other
deposits made) attributable to (i) the Assets for any period prior to the
Effective Time or (ii) any other Excluded Assets;

(d)all Hydrocarbons produced from or attributable to the Subject Interests with
respect to all periods prior to the Effective Time, together with all proceeds
from the sale of those Hydrocarbons;

(e)all of Sellers’ proprietary or licensed computer software, technology,
patents, trade secrets, copyrights, names, trademarks, logos and other
intellectual property;

(f)all documents and instruments of Sellers (other than title opinions) (i) that
may be protected by an attorney-client, work product or other privilege; (ii)
prepared by or for counsel of Sellers; or (iii) received from any financial,
commercial or legal advisor of Sellers (each, an “Advisor”);

(g)all (i) agreements and correspondence between Sellers or any of Sellers’
Affiliates and any Advisor relating to the transactions contemplated in this
Agreement; (ii) lists of prospective purchasers for those transactions compiled
by Sellers or any of Sellers’ Affiliates or any Advisor; (iii) bids submitted by
other prospective purchasers of the Assets; (iv) analyses by Sellers or any of
Sellers’ Affiliates or any Advisor of any bids submitted by any prospective
purchaser; (v) correspondence between Sellers or any of Sellers’ Affiliates or
any Advisor, or any of their respective representatives, and any prospective
purchaser other than Buyer; and (vi) correspondence between Sellers or any of
Sellers’ Affiliates or any Advisor or any of their respective representatives
with respect to any of the bids, the prospective purchasers, the engagement or
activities of any Advisor, or the transactions contemplated in this Agreement;
and for purposes of this Agreement, the term “Affiliate” means, with respect to
any Person, any other Person controlling, controlled by or under common control
with that Person, where the term “control” (and correlative terms) means the
power, whether by contract, equity ownership or otherwise, to direct the
policies or management of a Person; and the term “Person” means an individual,
corporation, partnership, limited liability company, association, trust,
unincorporated organization or other entity;

(h)all data and other information that may not be disclosed or assigned to Buyer
as a result of confidentiality or similar arrangements under agreements with
Persons not Affiliates of Sellers, even if such data or other information is
inadvertently disclosed or

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provided to Buyer (in which case Buyer shall promptly return such data or
information to Sellers);

(i)all audit rights arising under any of the Contracts or otherwise with respect
to any period prior to the Effective Time or to any of the Excluded Assets;
provided, however, that if any Third Party makes a claim that would be an
Assumed Obligation regarding time periods prior to the Effective Time, all then
uncollected audit rights receivable from such Third Party that would otherwise
be Excluded Assets pursuant to this Section 2.03(i) shall become Assets;

(j)all corporate, partnership and limited liability company financial and income
tax books, accounts, records and documents of Sellers or any of Sellers’
Affiliates;

(k)all claims and causes of action of Sellers (i) arising from acts, omissions
or events related to, or damage to or destruction of, the Assets, occurring
prior to the Effective Time; (ii) arising under or with respect to any of the
Contracts that are attributable to periods of time prior to the Effective Time
(including claims for adjustments or refunds); or (iii) with respect to any of
the Excluded Assets; provided, however, that if any Third Party makes a claim
that would be an Assumed Obligation regarding time periods prior to the
Effective Time, all then uncollected claims and causes of action against such
Third Party that would otherwise be Excluded Assets pursuant to this Section
2.03(k) shall become Assets;

(l)all rights and interests of Sellers (i) under any policy or agreement of
insurance or indemnity; (ii) under any bond; or (iii) to any insurance or
condemnation proceeds or awards arising, in each case, from acts, omissions or
events related to, or damage to or destruction of, the Assets occurring prior to
the Effective Time;

(m)all amounts due or payable to any Sellers as adjustments to insurance
premiums related to the Assets with respect to any period prior to the Effective
Time;

(n)all amounts resulting from derivative contracts or similar agreements used to
manage oil, natural gas, products or other commodity prices whether deemed a
hedge, non-hedge or ineffective hedge transaction;

(o)all proceeds, income, revenues or other benefits (including any benefit
attributable to any future laws or regulations with respect to “royalty relief”
or other similar measures) not otherwise enumerated above, as well as any
security or other deposits made, attributable to (i) the Assets for any period
prior to the Effective Time; or (ii) the Excluded Assets;

(p)all funds held in suspense accounts related to the Assets (the aggregate
amount held in such accounts, the “Suspense Amounts”), which funds as of January
1, 2019 are set forth and itemized on Schedule 2.03(p) attached hereto;

(q)all oil, gas or other mineral reserve reports, and all environmental site
assessments, reports and related data and information;

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(r)all rights or benefits under or in connection with any State or Federal
candidate conservation agreements or similar agreements;

(s)all books, records and files that relate to the Excluded Assets;

(t)Sellers’ area-wide bonds, permits and licenses or other permits, licenses or
authorizations used in the conduct of Sellers’ business generally;

(u)all rights of Sellers in assets, contracts or rights not described in Section
2.02;

(v)all rights of Sellers under this Agreement or under any instruments executed
and delivered in connection with the Closing;

(w)all items which would have constituted “Assets” as defined in Section 2.02
but for their being used or held in connection with the Excluded Assets;

(x)one compressor located at the Fairfax plant described in Section 2.02(i)
which Sellers intend to sell to a third party prior to Closing; and

(y)all vehicles and licensed trailers for which Buyer does not elect to increase
the Purchase Price by the Kelly Blue Book value thereof.

Article III
Purchase Price

Section 3.01Purchase Price.

  The total consideration for the purchase, sale and conveyance of the Assets to
Buyer is Buyer’s payment to Sellers of the sum of Twenty-Seven Million Five
Hundred Thousand Dollars ($27,500,000) (the “Unadjusted Purchase Price”), as
adjusted in accordance with the provisions of this Agreement (the “Purchase
Price”).

Section 3.02Deposit.

(a)Not later than 3:00 p.m. Central Time on the next Business Day following the
execution and delivery of this Agreement by Buyer and Sellers, Buyer shall
deposit with BOKF, NA DBA Bank of Texas (the “Escrow Agent”) in an interest
bearing escrow account, pursuant to the terms of an Escrow Agreement
substantially in the form attached hereto as Exhibit C (the “Escrow Agreement”)
a performance guaranty deposit in an amount equal to five percent (5%) of the
Unadjusted Purchase Price (together with all accrued interest thereon, if any,
the “Deposit”).  Sellers, on the one hand, and Buyer, on the other hand, shall
each be responsible for one-half of all fees and expenses associated with the
Escrow Agreement.  If the Deposit is not deposited by Buyer with the Escrow
Agent on or before the time set forth above, then this Agreement shall be null
and void and no Party shall have any further rights or obligations under this
Agreement.  For the purpose of this Agreement, the term “Business Day” means any
calendar day excluding Saturdays, Sundays and other days on which national banks
are closed for business in Tulsa, Oklahoma.

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(b)If the Closing occurs, the Parties shall cause the Deposit to be delivered by
the Escrow Agent to Sellers and the Deposit shall be applied as part of the
payment of the Purchase Price, with the amount payable by Buyer at the Closing
being reduced by the amount of the Deposit in accordance with Section 12.03.

(c)If the Agreement is terminated without the Closing having occurred, the
Deposit shall be delivered as provided in Article XIII.

Section 3.03Effective Time

.  If the transactions contemplated by this Agreement are consummated in
accordance with the terms and provisions of this Agreement, the ownership of the
Assets shall be transferred from Sellers to Buyer on the Closing Date, effective
as of 11:59 p.m. local time where the Assets are located on the Closing Date
(the “Effective Time”).

Article IV
Title Matters

Section 4.01Examination Period.

  The Examination Period shall run from the date of this Agreement until March
18, 2019 at 4:00 pm, Central Time (the “Examination Period”).  During the
Examination Period, Sellers shall permit Buyer and/or its authorized
representatives to examine, during normal business hours, in the offices of
Sellers, all abstracts of title, title opinions, title files, ownership maps,
lease files, contract files, assignments, division orders and royalty accounting
records pertaining to the Assets insofar as same may now be in existence and in
the possession of Sellers or Sellers’ Affiliates, subject to such restrictions
on disclosure as may exist under confidentiality agreements or other agreements
binding on Sellers or such data.  Such examination shall be upon reasonable
notice and shall not unreasonably disrupt the personnel and operations of
Sellers or otherwise impede the efforts of Sellers to comply with Sellers’ other
obligations under this Agreement.  Any such examination by Buyer shall be at
Buyer’s sole cost and expense.  All information made available to Buyer, whether
disclosed pursuant to this Agreement or otherwise, shall be maintained
confidential by Buyer as provided in the Non-Disclosure Agreement dated August
14, 2018, between Sellers’ affiliated operating company and Buyer (the
“Confidentiality Agreement”), the terms of which are incorporated into this
Agreement by this reference and made a part of this Agreement.  Buyer shall take
whatever reasonable steps as may be necessary to ensure that Buyer’s Affiliates,
employees, consultants, representatives and agents comply with the provisions of
the Confidentiality Agreement, and shall be responsible for any disclosure or
other breach of such provisions by any such Persons.  Buyer shall not contact
any of the customers or suppliers of Sellers or Sellers’ working interest
co-owners or operators, in connection with the transactions contemplated by this
Agreement, whether in person or by telephone, mail or other means of
communication, without the specific prior written consent of Sellers, which
consent may be withheld at Sellers’ sole discretion.  The confidentiality and
other obligations in this Section 4.01 shall survive termination of this
Agreement.

Section 4.02Defensible Title and Permitted Encumbrances.

(a)For purposes of this Agreement, the term “Defensible Title” means, with
respect to a given Asset, such ownership by Sellers in that Asset that, subject
to and except for Permitted Encumbrances:

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(i)with respect to each well, unit, well location or Lease shown on Exhibit B,
entitles Sellers to receive not less than the percentage or decimal interest set
forth in Exhibit B as Sellers’ “Net Revenue Interest” or “NRI” of all
Hydrocarbons produced, saved or marketed from (A) the applicable well or unit as
set forth in Exhibit B as to the currently producing interval in that well or
unit, and (B) the interval or zone identified in Exhibit B with respect to any
non-producing well, unit, well location, Lease or area set forth in Exhibit B
except, in each case (1) to the extent caused after the date hereof by
continuous development and partial termination provisions contained in the
Leases, (2) to the extent resulting from changes in proration units after the
date hereof in compliance with Section 15.01, (3) to the extent resulting from
changes or adjustments that result from the establishment of units, changes in
existing units or the participating areas therein after the date hereof in
compliance with Section 15.01, (4) to the extent resulting from the entry into
pooling, communitization or unitization agreements after the date hereof in
compliance with Section 15.01, or (5) as specifically set forth in Exhibit B;

(ii)with respect to each well, unit, well location or Lease shown in Exhibit B,
obligates Sellers to bear not greater than the percentage or decimal interest
set forth in Exhibit B as Sellers’ “Working Interest” or “WI” of the costs and
expenses relating to the maintenance, development and operation of (A) the
applicable well or unit set forth in Exhibit B as to the currently producing
interval in that well or unit, and (B) the interval or zone identified in
Exhibit B with respect to any non-producing well, unit, well location or Lease
set forth in Exhibit B except, in each case (1) to the extent any increase in
Working Interest is accompanied by a proportionate increase in the applicable
Net Revenue Interest, (2) to the extent resulting from changes in proration
units after the date hereof in compliance with Section 15.01, (3) to the extent
resulting from changes or adjustments that result from the establishment of
units, changes in existing units or the participating areas therein after the
date hereof in compliance with Section 15.01, (4) to the extent resulting from
the entry into pooling, communitization or unitization agreements after the date
hereof in compliance with Section 15.01, or (5) as specifically set forth in
Exhibit B; and

(iii)is free and clear of all liens, encumbrances, security interests and
pledges.

(b)The term “Permitted Encumbrances” means any of the following matters to the
extent the same are valid and subsisting and affect the Assets:

(i)the terms and provisions of the Leases and Contracts;

(ii)any (A) undetermined or inchoate liens or charges constituting or securing
the payment of expenses that were incurred incidental to the maintenance,
development, production or operation of the Assets or for the purpose of
developing, producing or processing Hydrocarbons from or in them, and (B)
materialman’s, mechanics’, repairman’s, employees’, contractors’ and operators’

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liens or other similar liens, privileges or charges for liquidated amounts
arising in the ordinary course of business, in each case for amounts not yet
delinquent or that are being contested in good faith;

(iii)any liens for Taxes and assessments not yet delinquent or that are being
contested in good faith;

(iv)any liens or security interests created by law or reserved in oil, gas and
other mineral leases for royalty, bonus or rental, or created to secure
compliance with the terms of such agreements;

(v)any obligations or duties affecting the Assets to any federal, state, county,
municipal or local government authority, including any legislative body,
administrative agency, court, judicial or regulatory agency or instrumentality
(“Governmental Authority”), with respect to any franchise, grant, license or
permit and all applicable Law or any Governmental Authority;

(vi)any (A) easements, rights-of-way, servitudes, permits, surface leases and
other rights in respect of surface operations, pipelines, grazing, hunting,
lodging, canals, ditches, reservoirs or the like, and (B) easements for streets,
alleys, highways, pipelines, telephone lines, power lines, railways and other
similar rights-of-way on, over or in respect of property owned or leased by
Sellers or over which Sellers owns rights-of-way, easements, permits or
licenses, to the extent that they do not materially interfere with the
operations currently conducted on the Assets;

(vii)all royalties, overriding royalties, net profits interests, carried
interests, production payments, reversionary interests and other burdens on or
deductions from the proceeds of Hydrocarbon production created or in existence
as of the Effective Time, provided that such matters are properly recorded and
do not operate to reduce the Net Revenue Interests of Sellers below those set
forth in Exhibit B or increase the Working Interests of Sellers above those set
forth in Exhibit B without a corresponding increase in the Net Revenue
Interests;

(viii)subject to Section 4.07, preferential rights to purchase or similar
agreements with respect to which (A) waivers or consents are obtained from the
appropriate parties for the transaction contemplated by this Agreement, or
(B) required notices have been given for the transaction contemplated by this
Agreement to the holders of such rights and the appropriate period for asserting
such rights has expired without an exercise of such rights;

(ix)required Third Party consents to assignment or similar agreements with
respect to which (A) waivers or consents are obtained from the appropriate
parties for the transaction contemplated by this Agreement; (B) required notices
have been given for the transaction contemplated by this Agreement to the
holders of those rights and the appropriate period for asserting such rights has
expired without an exercise of such rights; or (C) there is no provision
expressly stating that an assignment in violation thereof (1) is void or
voidable, (2) triggers the payment

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of specified liquidated damages, or (3) causes a termination of the Lease or
other Asset to be assigned; and for purposes of this Agreement, the term “Third
Party” means any Person or entity, governmental or otherwise, other than
Sellers, Buyer, and their respective Affiliates and includes other working
interest owners, royalty owners, lease operators, landowners, service
contractors and governmental agencies;

(x)all rights to consent by, required notices to, filings with, or other actions
by Governmental Authorities in connection with the sale or conveyance of oil,
gas or other mineral leases or interests in them that are customarily obtained
or made subsequent to such sale or conveyance;

(xi)the presence or lack of production sales contracts; division orders;
contracts for sale, purchase, exchange, refining or processing of Hydrocarbons;
unitization and pooling designations, declarations, orders and agreements;
operating agreements; agreements of development; area of mutual interest
agreements; gas balancing or deferred production agreements; processing
agreements; plant or compression agreements; pipeline, gathering and
transportation agreements; injection, repressuring and recycling agreements;
carbon dioxide purchase or sale agreements; salt water or other disposal
agreements; seismic or geophysical permits or agreements; and any and all other
agreements that have terms that are ordinary and customary to the oil, gas,
sulphur and other mineral exploration, development, processing or extraction
business or in the business of processing of gas and gas condensate or liquids
production for the extraction of products from them; provided that such matters
individually or in the aggregate, (A) do not operate to (1) reduce the Net
Revenue Interests of Sellers, (2) increase the proportionate share of costs and
expenses of leasehold operations attributable to or to be borne by the Working
Interests of Sellers, or (3) otherwise interfere materially with the operation,
value or use of the Assets; or (B) operate to increase the proportionate share
of costs and expenses of leasehold operations attributable to or to be borne by
the Working Interest of Sellers, so long as there is a proportionate increase in
Sellers’ Net Revenue Interests;

(xii)farmout or farmin agreements, to the extent that such matters individually
or in the aggregate, (A) do not operate to (1) reduce the Net Revenue Interests
of Sellers, (2) increase the proportionate share of costs and expenses of
leasehold operations attributable to or to be borne by the Working Interests of
Sellers, or (3) otherwise interfere materially with the operation, value or use
of the Assets; or (B) operate to increase the proportionate share of costs and
expenses of leasehold operations attributable to or to be borne by the Working
Interest of Sellers, so long as there is a proportionate increase in Sellers’
Net Revenue Interests;

(xiii)liens and security interests that will be released at Closing as provided
in Section 12.04(g);

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(xiv)rights reserved to or vested in any Governmental Authority to control or
regulate any of the Assets and the applicable Law;

(xv)all defects and irregularities affecting the Assets that, individually or in
the aggregate, (A) do not operate to (1) reduce the Net Revenue Interests of
Sellers, (2) increase the proportionate share of costs and expenses of leasehold
operations attributable to or to be borne by the Working Interests of Sellers,
or (3) otherwise interfere materially with the operation, value or use of the
Assets; or (B) operate to increase the proportionate share of costs and expenses
of leasehold operations attributable to or to be borne by the Working Interest
of Sellers, so long as there is a proportionate increase in Sellers’ Net Revenue
Interests;

(xvi)Gas Imbalances associated with the Assets; and

(xvii)all Title Defects expressly waived by Buyer in writing or that have been
deemed to have been waived or not otherwise to be Title Defects under Section
4.04 or Section 4.05(d) or any other provision of this Agreement.

Section 4.03Title Defect.

  The term “Title Defect,” as used in this Agreement, means any encumbrance,
encroachment, irregularity, defect in or objection to Sellers’ ownership of any
Asset (excluding Permitted Encumbrances) that causes Sellers not to have
Defensible Title to that Asset.  Notwithstanding any other provision in this
Agreement to the contrary, the following matters shall not constitute, and shall
not be asserted as a Title Defect or a breach of Sellers’ special warranty of
title in the Assignment:  (a) defects or irregularities arising out of a lack of
evidence of, or other defects with respect to, authorization, execution,
delivery or acknowledgment of documents, or a variation in name, unless Buyer
provides affirmative evidence that such matter results in another Person’s
superior claim of title to the relevant Asset or a gap in the chain of title;
(b) defects or irregularities that have been cured or remedied by the passage of
time, including applicable statutes of limitation and statutes for prescription
or preemption; (c) defects or irregularities in the chain of title consisting of
the failure to recite marital status in documents or omissions of heirship
proceedings; (d) defects or irregularities in title which for a period of five
(5) years or more have not delayed or prevented Sellers (or Sellers’
predecessor, if owned by Sellers less than five (5) years) from receiving
Sellers’ Net Revenue Interest share of the proceeds of production and have not
caused Sellers to bear a share of expenses or costs greater than Sellers’
Working Interest share from any Lease, unit or well; (e) defects or
irregularities resulting from or related to probate proceedings or the lack of
probate proceedings if the defects or irregularities have been outstanding for
five (5) years or more; (f) conventional rights of reassignment normally
actuated by an intent to abandon or release a Lease or well and requiring notice
to the holders of such rights; (f) lack of a survey, unless a survey is required
by Law; (g) any failure of the records of any Person to reflect sufficient
production or operations to maintain a Lease in force and effect absent
reasonable evidence that such failure has caused such Lease to terminate or
would result in a termination of such Lease pending only action by the lessor
under such Lease; (h) matters based solely on assertions that Sellers’ (or the
applicable operator’s) files lack information (including title opinions); or (i)
failure of the records of any Governmental Authority (including the United
States Bureau of Land Management) to reflect Sellers as the owner of an interest
in a Lease, provided that the instruments evidencing an assignment of such
interest from the party reflected as the owner of an interest in the Lease in
such Governmental Authority records directly to Sellers is recorded in the real
property records of the applicable county

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(or indirectly to a predecessor in interest of Sellers in the real property
records of the applicable county); (k) unreleased instruments executed prior to
the year 2008 (including prior oil, gas and/or mineral leases and mortgages)
absent reasonable evidence that such instruments continue in force and effect
and constitute a superior claim of title to an Asset; (l) calls on oil and/or
gas production under existing Contracts, provided that the holder of such right
must pay an indexed-based price for any production purchased by virtue of such
call on production; or (m) any defect or irregularity as would normally be
waived by Persons engaged in the oil and gas business when purchasing producing
properties a chain of title for such interest resulting in ownership by Sellers
is recorded in the real property records of the applicable county.

Section 4.04Notice of Title Defects.

(a)If Buyer discovers any alleged Title Defect affecting any Asset, Buyer shall
notify Sellers of the alleged Title Defect as promptly as possible, but no later
than the expiration of the Examination Period.  To be effective, this notice (a
“Title Defect Notice”) must (i) be in writing; (ii) be received by Sellers prior
to the expiration of the Examination Period; (iii) describe the Title Defect in
sufficient, specific detail (including any alleged variance in the Net Revenue
Interest or Working Interest); (iv) include copies of documents necessary for
Sellers to verify the existence of the alleged Title Defect, (v) identify the
specific Asset or Assets affected by the Title Defect; and (vi) include the
Title Defect Value as determined by Buyer.  Except as set forth in Section 4.06,
any matters that otherwise may have constituted Title Defects, but that are not
so described in a timely Title Defect Notice complying and delivered in
accordance with this Section 4.04, shall be deemed to have been waived by Buyer
for all purposes and shall constitute Permitted Encumbrances.

(b)After receipt of an effective Title Defect Notice, Sellers shall have the
option, but not the obligation, to attempt to cure the Title Defect at any time
prior to the Closing.

(c)The value attributable to each Title Defect (the “Title Defect Value”) that
is asserted by Buyer in a Title Defect Notice shall be determined in good faith
based upon the criteria set forth below:

(i)If the Title Defect is a lien on any Asset, the Title Defect Value is the
amount necessary to be paid to remove the lien from the affected Asset.

(ii)If the Title Defect asserted is that the Net Revenue Interest attributable
to any well, unit, well location or Lease is less than that stated in Exhibit B
or the Working Interest attributable to any well, unit or well location is
greater than that stated in Exhibit B, then the Title Defect Value shall take
into account the relative change in the interest from Exhibit B and the
appropriate Allocated Value of such Asset.  For purposes of this Agreement, the
term “Allocated Value” means, with respect to any Asset, the amount allocated to
that Asset under Section 11.01.

(iii)If the Title Defect represents an obligation, encumbrance, burden or charge
on the affected Asset (including any increase in Working Interest for which

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there is not a proportionate increase in Net Revenue Interest) for which the
economic detriment to Buyer is unliquidated, the amount of the Title Defect
Value shall be determined by taking into account the Allocated Value of the
affected Asset, the portion of the Asset affected by the Title Defect, the legal
effect of the Title Defect, the potential discounted economic effect of the
Title Defect over the life of the affected Asset and the Title Defect Value
placed upon the Title Defect by Buyer and Sellers; provided that if such Title
Defect is reasonably susceptible of being cured, the Title Defect Value shall
not be greater than the lesser of (A) the reasonable cost and expense of curing
such Title Defect or (B) the share of such curative work cost and expense which
is allocated to the Asset affected by such Title Defect.

(iv)If a Title Defect is not in effect or does not adversely affect an Asset
throughout the entire productive life of such Asset, the consequences of that
fact shall be taken into account in determining the Title Defect Value.

(v)The Title Defect Value of a Title Defect shall be determined without
duplication of any costs or losses included in another Title Defect Value. For
example, if a lien which constitutes a Title Defect affects more than one Asset
or the curative work with respect to one Title Defect results (or is reasonably
expected to result) in the curing of any other Title Defect affecting the same
or another Asset, the amount necessary to discharge such lien or the cost and
expense of such curative work shall be noted in respect to each applicable Asset
affected by the Title Defect as also applying to other Assets, and the amount
shall be included only once in adjustments to the Purchase Price pursuant to
Section 4.05.

(vi)Notwithstanding anything in this Agreement to the contrary, in no event
shall a Title Defect Value exceed the Allocated Value of the wells, units, well
locations or other Assets affected by it.

(vii)To give Sellers an opportunity to commence reviewing possible Title
Defects, Buyer shall use reasonable efforts to give Sellers, on or before
5:00 p.m. Central Time each Friday prior to the expiration of the Examination
Period, notice of all Title Defects discovered by Buyer during the preceding
week, which notice may be preliminary in nature and supplemented prior to the
expiration of the Examination Period.

Section 4.05Remedies for Title Defects.

(a)Subject to the continuing right of Sellers to dispute the existence of an
asserted Title Defect and/or the asserted Title Defect Value and subject to the
rights of the Parties under Section 13.01(g), if any Title Defect timely
asserted by Buyer in accordance with Section 4.04 is not waived in writing by
Buyer or cured on or before Closing, Sellers shall, at Sellers’ sole option,
elect to:

(i)subject to Section 4.05(d), reduce the Purchase Price by the Title Defect
Value for the Title Defect as determined in accordance with Section 4.04(c)

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or Article XII (which shall cause such asserted Title Defect to become an
Assumed Obligation under Section 16.02);

(ii)indemnify Buyer against all claims resulting from the Title Defect (an
“Indemnified Title Defect”) under an indemnity agreement in the form attached
hereto as Exhibit E; or

(iii)retain the entirety of the Asset that is subject to the Title Defect,
together with all associated Assets, in which event the Purchase Price shall be
reduced by an amount equal to the Allocated Value of the Asset and all
associated Assets (which shall be deemed Excluded Assets, except as otherwise
provided below in this Section 4.05(a)(iii)).  Following Closing, Sellers will
have one hundred eighty (180) calendar days to cure any such Title Defect (the
“Cure Period”).  Sellers are not obligated to cure any Title Defect during the
Cure Period, but if a Title Defect is cured before the expiration of the Cure
Period, then Sellers shall promptly convey the affected Asset and all associated
Assets to Buyer effective as of the Effective Time, and Buyer shall
contemporaneously with the receipt of such conveyance, pay Sellers the Allocated
Value of the affected Asset and all associated Assets, subject to Purchase Price
Adjustments as set forth herein, and upon such conveyance and payment such Asset
and associated Assets shall no longer be deemed Excluded Assets.  If Sellers are
unable to cure any such Title Defect before expiration of the Cure Period, then
Sellers shall retain the affected retained Asset and all associated Assets,
which will permanently be deemed Excluded Assets and Buyer will have no further
obligation to purchase such retained Asset and associated Assets.

(b)If any Title Defect is in the nature of an unobtained consent to assignment
or other restriction on assignability, the provisions of Section 4.08 shall
apply.

(c)If at or before the Closing Buyer and Sellers have not agreed on the validity
of any asserted Title Defect or the Title Defect Value attributable to the Title
Defect and Sellers have not elected to indemnify Buyer with respect to the Title
Defect under Section 4.05(a)(ii) or to retain the Assets associated with the
Title Defect under Section 4.05(a)(iii), Buyer or Sellers shall have the right
to elect to have the Dispute regarding the validity of the Title Defect or the
Title Defect Value determined by an Independent Expert in accordance with
Article XIII.  In that event, the Purchase Price paid at Closing shall not be
reduced by virtue of the disputed Title Defect or Title Defect Value, but upon
the final resolution of the Dispute, the Title Defect Value, if any, found to be
attributable to the Title Defect shall, subject to Section 4.05(d), be refunded
by Sellers to Buyer within five (5) Business Days of such resolution.

(d)Notwithstanding anything to the contrary in this Agreement, but subject to
Section 4.05(c), (i) if the value of a particular individual Title Defect (or
individual Title Benefit, except for an Asset on which there is a Title Defect
exceeding $50,000) does not exceed $50,000, then it shall be deemed to be a
Permitted Encumbrance and no adjustment to the Purchase Price shall be made or
other remedies provided by Sellers for the Title Defect (or Title Benefit),
(ii) if the aggregate adjustment to the Purchase Price determined

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in accordance with this Agreement for Title Defects (after taking into account
clause (i))) does not exceed two percent (2%) of the Unadjusted Purchase Price
prior to any other adjustments, then they shall be deemed to be Permitted
Encumbrances and no adjustment of the Purchase Price shall be made or other
remedies provided by Sellers on account of Title Defects, and (iii) if the
aggregate adjustment to the Purchase Price determined in accordance with this
Agreement for Title Defects (after taking into account clause (i))) does exceed
two percent (2%) of the Unadjusted Purchase Price prior to any other
adjustments, then the Purchase Price shall be adjusted only by the amount of the
excess and no other adjustment of the Purchase Price shall be made or other
remedies provided by Sellers on account of Title Defects

Section 4.06Special Warranty of Title.

  The documents to be executed and delivered by Sellers to Buyer transferring
title to the Assets as required hereby, including the Assignment and Bill of
Sale in the form attached hereto as Exhibit D (the “Assignment”), shall provide
for a special warranty of title warranting title by, through and under Sellers,
but not otherwise, subject to the Permitted Encumbrances and the terms of this
Agreement.  Buyer’s remedy for breach of Sellers’ special warranty of title in
the Assignment shall be limited to an amount not exceeding the Allocated Value
of the affected Asset, and any claims for such breach must be asserted within
twelve (12) months from the Closing Date.  Any such claims not asserted within
such twelve (12) month period shall be deemed to be Assumed Obligations.

Section 4.07Preferential Rights To Purchase.

(a)Sellers shall use reasonable efforts, but without any obligation to incur any
additional cost or expense beyond postage or other reasonable transmittal
expense, to comply with all preferential right to purchase provisions relative
to any Asset (“PPRs”) prior to the Closing.  Prior to the Closing, Sellers shall
notify Buyer of the existence of any known PPRs and if any PPRs are exercised or
if the requisite period has elapsed without said rights having been exercised.

(b)If, as of the Closing Date, a Third Party holder of a PPR has timely and
properly notified Sellers that it elects to exercise its PPR with respect to the
Assets to which its PPR applies (determined by and in accordance with the
agreement in which the PPR arises), then the Assets covered by that PPR will be
sold to such holder of the PPR subject to the terms and conditions of this
Agreement, and will not be sold to the Party originally executing this Agreement
as “Buyer” (subject to the remaining provisions in this Article), and the
Unadjusted Purchase Price will be reduced by the Allocated Value of such
Assets.  Buyer shall remain obligated to purchase the remainder of the Assets
not affected by an exercised PPR.  Upon the consummation of the sale of any
Assets to the holder of such PPR, any such Assets shall be deemed for all
purposes to constitute “Excluded Assets.”

(c)After the Closing, if for any reason the purchase and sale of the Assets
covered by a PPR exercised prior to Closing under (b) above is not or cannot be
consummated with the holder of the PPR that exercised its PPR, Sellers may so
notify Buyer and within ten (10) Business Days after Buyer’s receipt of such
notice, Sellers shall sell, assign and convey to Buyer and Buyer shall purchase
and accept from Sellers such Assets pursuant to the terms of this Agreement and
for the Allocated Value of such Assets

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(except the Closing Date with respect to such Assets will be the date of
assignment of such Assets from Sellers to Buyer).

(d)Any interest in the Assets covered by any unexercised PPRs (whether due to
the PPR notice period or otherwise) shall be conveyed to Buyer at the Closing
subject to any PPRs, and Buyer shall assume all duties, obligations and
liabilities arising from the PPR.  Without limiting the foregoing, if any Third
Party elects to purchase all or a part of an interest in any Asset subject to a
PPR after the Closing Date, Buyer shall be obligated to convey that interest to
that Third Party and shall be entitled to the consideration for the sale of that
interest.

Section 4.08Consents to Assignment.

  Sellers shall use reasonable efforts to obtain all necessary consents from
Third Parties to assign the Assets prior to the Closing (other than approvals of
any relevant Governmental Authority that are customarily obtained after the
Closing), and Buyer shall assist Sellers with those efforts; provided, however,
Sellers shall not be obligated to pay any consideration to (or incur any cost or
expense for the benefit of) the holder of the consent in order to obtain a
waiver or consent.  To the extent any such consents are not obtained prior to
Closing and an express provision of the document providing for the consent would
render the assignment of some or all of the Assets void or voidable, give rise
to a claim for specified liquidated damages or cause the termination of the
Lease or other Asset to be assigned as a result of the failure to obtain that
consent (collectively, “Required Consents”), then at Closing Sellers shall
retain the affected Asset and all associated Assets and the Unadjusted Purchase
Price shall be reduced by the Allocated Value of the affected Asset and all
associated Assets.  If a Required Consent that was not obtained prior to Closing
is obtained on or before six (6) months after the Closing Date, Sellers shall
promptly convey the affected Asset and all associated Assets to Buyer effective
as of the Effective Time, and Buyer shall contemporaneously with the receipt of
such conveyance, pay Sellers the Allocated Value of the affected Asset and all
associated Assets, subject to Purchase Price Adjustments as set forth
herein.  In all other cases, such unobtained consents shall not constitute Title
Defects.

Section 4.09Title Benefits; Remedies.

(a)If any Party discovers any Title Benefit during the Examination Period
affecting the Assets, it shall promptly notify the other Parties at or before
the expiration of the Examination Period.  Subject to Section 4.05(d), Sellers
shall be entitled to an upward adjustment to the Purchase Price pursuant to
Section 12.02(a)(iii) with respect to the Title Benefit, in an amount mutually
agreed upon by the Parties.  For purposes of this Agreement, the term “Title
Benefit” means the Sellers’ interest in any Asset that is greater than or in
addition to that set forth in Exhibit B, including a Net Revenue Interest that
is greater than that set forth in Exhibit B or Sellers’ Working Interest in any
Asset that is less than the Working Interest set forth in Exhibit B (without a
corresponding decrease in the Net Revenue Interest).

(b)If, with respect to a Title Benefit, Buyer and Sellers have not agreed on the
amount of the upward Purchase Price Adjustment or have not otherwise agreed on
such amount at or prior to the Closing, Sellers or Buyer shall have the right to
elect to have the Dispute regarding the Purchase Price Adjustment determined by
an Independent Expert in accordance with Article XVIII.  In that event, Buyer
shall pay the undisputed portion of

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the Purchase Price with respect to the Asset affected by the Title Benefit at
the Closing and, subject to Section 4.05(d), upon determination of the amount of
the adjustment, shall pay to Sellers any unpaid portion within five (5) Business
Days of such determination.

Article V
Environmental Matters

Section 5.01Environmental Review.

(a)Buyer shall have the right to conduct or cause a consultant reasonably
acceptable to Sellers (“Buyer’s Environmental Consultant”) to conduct an
environmental review of the Assets prior to the expiration of the Examination
Period (“Buyer’s Environmental Review”).  The cost and expense of Buyer’s
Environmental Review, if any, shall be borne solely by Buyer. Subject to the
following sentence, the scope of work comprising Buyer’s Environmental Review
shall be limited to a Phase I review that does not exceed the basic assessment
requirements set forth under the current American Society for Testing and
Material Standard Practice for Phase I environmental property assessments
(Designation E1527-05) and otherwise as may be agreed by Buyer and Sellers prior
to commencement.  Buyer’s Environmental Review shall not include any intrusive
test or procedure without the prior written consent of Sellers, which consent
shall not be unreasonably withheld, condition or delayed.  Buyer shall, and
shall cause Buyer’s Environmental Consultant to, (i) consult with Sellers before
conducting any work comprising Buyer’s Environmental Review, (ii) perform all
such work in a safe and workmanlike manner and so as to not unreasonably
interfere with the operation of the Assets and (iii) comply with all applicable
Law.  Buyer shall be solely responsible for obtaining any consents from a Third
Party that are required to perform any work comprising Buyer’s Environmental
Review, and Buyer shall consult with Sellers prior to requesting each such
consent.  Sellers shall have the right to have a representative or
representatives accompany Buyer and Buyer’s Environmental Consultant at all
times during Buyer’s Environmental Review.  With respect to any samples taken in
connection with Buyer’s Environmental Review, Buyer shall take split samples,
providing one of each such sample, properly labeled and identified, to Sellers
without charge.  Buyer releases, and shall defend, indemnify and hold harmless,
Sellers Indemnitees from and against all claims, losses, damages, costs,
expenses, causes of action and judgments of any kind or character (INCLUDING
THOSE RESULTING FROM A SELLERS INDEMNITEE’S SOLE, JOINT, COMPARATIVE OR
CONCURRENT NEGLIGENCE OR STRICT LIABILITY, BUT SPECIFICALLY EXCLUDING THOSE
RESULTING FROM A SELLERS INDEMNITEE’S GROSS NEGLIGENCE OR WILLFUL MISCONDUCT)
arising out of or relating to Buyer’s Environmental Review. The indemnity and
other obligations set forth in the immediately preceding sentence shall survive
the Closing or termination of this Agreement.

(b)Until Closing and unless otherwise required by applicable Law, Buyer shall,
and shall cause Buyer’s Environmental Consultant to, treat confidentially any
matters revealed by Buyer’s Environmental Review and any reports or data
generated from such review (the “Environmental Information”), and Buyer shall
not, and shall cause Buyer’s Environmental Consultant to not, disclose any
Environmental Information to any

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Governmental Authority or other Third Party without the prior written consent of
Sellers.  Buyer may use the Environmental Information only in connection with
the transactions contemplated by this Agreement.  If Buyer, Buyer’s
Environmental Consultant or any Third Party to which Buyer has provided any
Environmental Information become legally compelled to disclose any of the
Environmental Information, Buyer shall provide Sellers with prompt notice
sufficiently prior to any such disclosure so as to allow Sellers to file any
protective order or seek any other remedy, as Sellers deem appropriate under the
circumstances.  Buyer shall provide to Sellers copies of any Environmental
Information generated by Buyer or Buyer’s Environmental Consultant promptly
after Buyer’s receipt thereof.  If this Agreement is terminated prior to the
Closing, Buyer shall promptly deliver the Environmental Information to Sellers,
which Environmental Information shall become the sole property of Sellers
without charge. The confidentiality and other obligations set forth in this
paragraph shall survive the termination of this Agreement.

Section 5.02Environmental Definitions.

(a)Assumed Environmental Obligations.  For purposes of this Agreement, the term
“Assumed Environmental Obligations” means, with respect to the ownership of the
Assets, the operation of the Assets or the condition of the Assets and any
surface or subsurface depths used in connection with the Assets, including any
pooled, communitized or unitized acreage by virtue of the Assets being a part of
the pooled, communitized or unitized area (collectively, the “Subject
Property”), all liabilities, losses, claims, obligations, costs or expenses
arising from or relating to the following: (i) any violation or alleged
violation of, or non-compliance with applicable Environmental Laws prior to, on,
or after the Effective Time, including the cost of correcting such violations or
noncompliance and any fines or penalties arising out of such violations or
noncompliance; (ii) the release, discharge or disposal of Hazardous Substances
prior to, on, or after the Effective Time, at, on, in, under, from or migrating
to or from the Subject Property, including claims for property damage, loss,
injury, damage to natural resources, bodily injury or wrongful death, and any
investigation, remediation or monitoring with respect to said Hazardous
Substances; (iii) any Environmental Defects that are not Indemnified
Environmental Defects; or (iv) those matters that would otherwise be
Environmental Defects but for the provisions of Section 5.04(c).

(b)Environmental Defects.  For purposes of this Agreement, the term
“Environmental Defect” means, with respect to any given Asset, an individual
environmental condition identified with specificity in Buyer’s Environmental
Review that constitutes a material violation of Environmental Laws in effect as
of the date of this Agreement in the jurisdiction in which the affected Asset is
located, excluding, however any environmental conditions deemed not to be
Environmental Defects by application of Section 5.04(c).

(c)Environmental Defect Value.  For purposes of this Agreement, the term
“Environmental Defect Value” means, with respect to any Environmental Defect,
the value, as of the Closing Date, of the estimated costs and expenses to
correct the Environmental Defect in the most cost-effective manner reasonably
available, such that the Environmental Defect is brought into compliance
consistent with Environmental Laws,

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taking into account that interim non-permanent remedies (such as mechanisms to
contain or stabilize hazardous materials, including monitoring site conditions,
natural attenuation, risk-based corrective action, institutional controls or
other appropriate restrictions on the use of property, caps, dikes,
encapsulation, leachate collection systems, etc.) may be included in the most
cost-effective manner reasonably available. The Environmental Defect Value of an
Environmental Defect shall be determined without duplication of any costs or
losses included in another Environmental Defect Value. For example, if a matter
which constitutes an Environmental Defect affects more than one Asset or the
curative work with respect to one Environmental Defect results (or is reasonably
expected to result) in the curing of any other Environmental Defect affecting
the same or another Asset, the amount of such curative work shall be noted in
respect to each applicable Asset affected by the Environmental Defect as also
applying to other Assets, and the Environmental Defect Value shall be included
only once in adjustments to the Purchase Price pursuant to Section 5.04.

(d)Environmental Laws.  For purposes of this Agreement, the term “Environmental
Laws” means all Laws pertaining to health (as relates to exposure to Hazardous
Substances) or the environment, including the Clean Air Act, as amended, the
Comprehensive Environmental Response, Compensation and Liability Act, as
amended, the Federal Water Pollution Control Act, as amended, the Resources
Conservation and Recovery Act, as amended, the Safe Drinking Water Act, as
amended, the Toxic Substances Control Act, as amended, the Superfund Amendment
and Reauthorization Act of 1986, as amended, the Hazardous Materials
Transportation Act, as amended, and comparable state and local laws.

(e)Hazardous Substances.  For purposes of this Agreement, the term “Hazardous
Substances” means (i) any petrochemical or petroleum products, oil or coal ash,
radioactive materials, radon gas, asbestos in any form that is or could become
friable, urea formaldehyde foam insulation and transformers or other equipment
that contain dielectric fluid which may contain levels of polychlorinated
biphenyls, (ii) any chemicals, materials, or substances defined as or included
in the definition of “hazardous substances,” “hazardous wastes,” “restricted
hazardous materials,” “extremely hazardous substances,” “toxic substances,”
“contaminants” or “pollutants” or words of similar meaning and regulatory effect
or (iii) any other chemical, material or substance, exposure to which is
prohibited, limited or regulated by any applicable Environmental Law.

(f)Indemnified Environmental Defects.  For purposes of this Agreement, the term
“Indemnified Environmental Defect” means an Environmental Defect as to which
Sellers have elected to indemnify Buyer in accordance with Section 5.04(a)(ii).

Section 5.03Notice of Environmental Defects.

  If Buyer discovers any Environmental Defect affecting any Asset, Buyer shall
notify Sellers of the alleged Environmental Defect as promptly as possible, but
no later than the expiration of the Examination Period.  To be effective, this
notice (an “Environmental Defect Notice”) must (i) be in writing; (ii) be
received by Sellers prior to the expiration of the Examination Period; (iii)
describe the Environmental Defect in sufficient, specific detail, including (A)
the written conclusion of Buyer’s Environmental Consultant that an Environmental
Defect exists, which conclusion shall be reasonably substantiated by the factual

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data gathered in Buyer’s Environmental Review; and (B) a separate specific
citation of the provisions of Environmental Laws alleged to be violated and the
related facts that substantiate such violation; (iv) identify the specific Asset
or Assets affected by the Environmental Defect, including a site plan showing
the location of all sampling events, boring logs and other field notes
describing the sampling methods utilized and the field conditions observed,
chain-of-custody documentation and laboratory reports; (v) identify the
procedures recommended to correct the Environmental Defect, together with any
related recommendations from Buyer’s Environmental Consultant; and (vi) state
Buyer’s estimate of the Environmental Defect Value, including the basis for such
estimate, for which Buyer would agree to adjust the Purchase Price to accept
such Environmental Defect if Sellers elected Section 5.04(a)(i) as the remedy
for it.  Any matters that may otherwise have constituted Environmental Defects,
but that are not so described in a timely Environmental Defect Notice complying
with this Section 5.03, together with any environmental matter that does not
constitute an Environmental Defect, shall be deemed to have been waived by Buyer
for all purposes and constitute an Assumed Obligation.  After receipt of an
effective Environmental Defect Notice, Sellers shall have the option, but not
the obligation, to attempt to cure the Environmental Defect at any time prior to
the Closing.

Section 5.04Remedies for Environmental Defects.

(a)Subject to the continuing right of Sellers to dispute the existence of an
asserted Environmental Defect and/or the asserted Environmental Defect Value and
subject to the rights of the Parties under Section 13.01(g), if any
Environmental Defect timely asserted by Buyer in accordance with Section 5.03 is
not waived in writing by Buyer or cured on or before Closing, Sellers shall, at
Sellers’ sole option, elect to:

(i)subject to Section 5.04(c), reduce the Purchase Price by the Environmental
Defect Value for the Environmental Defect as determined in accordance with
Section 5.02(c) or Article XVIII (which shall cause such alleged Environmental
Defect to become an Assumed Obligation under Section 16.02);

(ii)indemnify Buyer against all claims resulting from the Environmental Defect
under an indemnity agreement in the form attached hereto as Exhibit F; or

(iii)retain the entirety of the Asset that is subject to such Environmental
Defect, together with all associated Assets, in which event the Purchase Price
shall be reduced by an amount equal to the Allocated Value of the Asset and all
associated Assets (which shall be deemed Excluded Assets, except as otherwise
provided below in this Section 5.04(a)(iii)).  Following Closing, Sellers will
have the Cure Period to cure any such Environmental Defect.  Sellers are not
obligated to cure any Environmental Defect during the Cure Period, but if an
Environmental Defect is cured before the expiration of the Cure Period, then
Sellers shall promptly convey the affected retained Asset and all associated
Assets to Buyer effective as of the Effective Time, and Buyer shall
contemporaneously with the receipt of such conveyance, pay Sellers the Allocated
Value of the affected Asset and all associated Assets, subject to Purchase Price
Adjustments as set forth herein, and upon such conveyance and payment such Asset
and associated Assets shall no longer be

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deemed Excluded Assets.  If Sellers are unable to cure any such Environmental
Defect before expiration of the Cure Period, then Sellers shall retain the
affected retained Asset and all associated Assets, which will permanently be
deemed Excluded Assets and Buyer will have no further obligation to purchase
such retained Asset and associated Assets.

(b)If at or before the Closing Buyer and Sellers have not agreed on the validity
of any asserted Environmental Defect or the Environmental Defect Value
attributable to the Environmental Defect and Sellers have not elected to
indemnify the Buyer with respect to the Environmental Defect under Section
5.04(a)(ii) or to retain the Assets associated with the Environmental Defect
under Section 5.04(a)(iii), Buyer or Sellers shall have the right to elect to
have the Dispute regarding the validity of the Environmental Defect or the
Environmental Defect Value determined by an Independent Expert in accordance
with Article XVIII.  In that event, the Purchase Price paid at Closing shall not
be reduced by virtue of the disputed Environmental Defect or Environmental
Defect Value, but on the final resolution of the Dispute the Environmental
Defect Value, if any, found to be attributable to the Environmental Defect
shall, subject to Section 5.04(c), be refunded by Sellers to Buyer within five
(5) Business Days of such resolution.

(c)Notwithstanding anything to the contrary in this Agreement (i) if the
Environmental Defect Value for a particular individual Environmental Defect does
not exceed $50,000, then no adjustment to the Purchase Price shall be made for
the Environmental Defect, (ii) if the aggregate adjustment to the Purchase Price
determined in accordance with this Agreement for Environmental Defects
(exceeding $50,000) does not exceed two percent (2%) of the Unadjusted Purchase
Price prior to any other adjustments, then no adjustment of the Purchase Price
shall be made on account of Environmental Defects and , and (iii) if the
aggregate adjustment to the Purchase Price determined in accordance with this
Agreement for Environmental Defects (exceeding $50,000) does exceed two percent
(2%) of the Unadjusted Purchase Price prior to any other adjustments, then the
Purchase Price shall be adjusted only by the amount of the excess.

Section 5.05No Warranty Regarding Environmental Matters.

  SELLERS WILL CONVEY THE ASSETS TO BUYER WITHOUT ANY WARRANTY OF ANY KIND WITH
RESPECT TO ENVIRONMENTAL MATTERS OR ENVIRONMENTAL DEFECTS, EXPRESS, STATUTORY OR
IMPLIED, NOT EVEN FOR RETURN OF THE PURCHASE PRICE.  BUYER’S SOLE REMEDY FOR
ENVIRONMENTAL DEFECTS OR OTHER ENVIRONMENTAL MATTERS IS THE ENVIRONMENTAL DEFECT
PROCEDURE UNDER THIS Article V.

Section 5.06Physical Condition of the Assets

.  Buyer acknowledges that the Assets have been used by Sellers for oil and gas
drilling and production operations and related field operations, and that
physical changes in the Assets (or adjacent lands) may have occurred as a result
of those uses.  In this regard, the Assets may also contain unplugged or
improperly plugged wells, wellbores or buried pipelines or other equipment,
whether or not of a similar nature, the locations of which may not now be known
by Sellers or be readily apparent by a physical inspection of the
property.  Buyer understands that Sellers do not have the requisite information
with which to determine the exact condition of the Assets or the effect that any
such use has had on the physical

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condition of the Assets, and Sellers do not make any representation or warranty
with respect to those matters and, subject to Buyer’s remedies available for
Environmental Defects under this Article V, Buyer expressly assumes all
liability for those matters (INCLUDING THOSE RESULTING FROM A SELLERS
INDEMNITEE’S SOLE, JOINT, COMPARATIVE OR CONCURRENT NEGLIGENCE OR STRICT
LIABILITY).

Section 5.07NORM

.  Buyer acknowledges that some oilfield production equipment comprising the
Assets may contain asbestos and/or naturally occurring radioactive material
(“NORM”).  In this regard, Buyer specifically acknowledges that NORM may affix
or attach itself to the inside of wellbores, materials and equipment as scale or
in other forms, and that wells, materials and equipment comprising the Assets or
located on a Lease may contain NORM and that NORM containing materials may have
been disposed of on a Lease.  Buyer expressly understands that special
procedures may be required for the removal and disposal of asbestos and NORM
from the Assets if and where they may be found, and subject to Buyer’s remedies
available for Environmental Defects under this Article V, Buyer assumes Sellers’
liability for or in connection with the assessment, remediation, removal,
transportation or disposal of any such materials present on the Assets at or
after the Effective Time in accordance with all requirements of any Governmental
Authority (INCLUDING THOSE RESULTING FROM A SELLERS INDEMNITEE’S SOLE, JOINT,
COMPARATIVE OR CONCURRENT NEGLIGENCE OR STRICT LIABILITY).

Article VI
Representations and Warranties of Sellers

Inclusion of a matter on a Schedule to a representation or warranty which
addresses matters possibly having a Material Adverse Effect shall not be deemed
an indication that such matter does, or may, have a Material Adverse Effect.
Likewise, the inclusion of a matter on a Schedule in relation to a
representation or warranty shall not be deemed an indication that such matter
necessarily would, or may, breach such representation or warranty absent its
inclusion on such Schedule. Matters may be disclosed on a Schedule or Exhibit to
this Agreement for purposes of information only. Nothing in the Schedules of
Sellers is intended to broaden the scope or effect of any representation or
warranty contained in the Agreement.  Nothing in the Schedules constitutes an
admission of any liability or obligation to any third person, or an admission to
any third person against the interest of Sellers.  Descriptions of or references
to particular contracts, agreements, notices and other documents herein are
qualified in their entirety by reference to such documents. Certain sections of
the Agreement may be qualified by the matters set forth in the related Schedule,
and the disclosure of any fact or item in any of the Schedules shall, should the
existence of such fact or item be relevant to any other of the Schedules or
sections in the Agreement, be deemed to be disclosed with respect to that other
section or Schedule. In disclosing information pursuant to the Schedules,
Sellers do not waive any attorney-client privilege associated with such
information or any protection afforded by the work-product doctrine. Subject to
the foregoing, the disclaimers and waivers contained herein and the other terms
and conditions of this Agreement, each Seller severally represents and warrants
to Buyer as follows as to the Assets sold or to be sold by such Seller under
this Agreement:

Section 6.01Seller’s Existence

.   Seller is a limited partnership duly formed, validly existing and in good
standing under the laws of the State of Delaware or the State of Texas as shown

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in the opening paragraph of this Agreement, and has full legal power, right and
authority to carry on its business as such is now being conducted and as
contemplated to be conducted.

Section 6.02Legal Power

.  Seller has the legal power and right to enter into and perform this Agreement
and the transactions it contemplates for Seller.  The consummation of the
transactions contemplated by this Agreement will not violate, or be in conflict
with:

(a)any provision of Seller’s governing documents;

(b)any material agreement or instrument to which Seller is a party or by which
Seller or the Assets are bound; or

(c)any judgment, order, ruling or decree applicable to Seller as a party in
interest or any Law applicable to Seller’s interest in any of the Assets, except
(i) as would not, individually or in the aggregate, have a Material Adverse
Effect, or (ii) as to rights to consent by, required notices to, filings with,
approval or authorizations of, or other actions by any Governmental Authorities
where the same are not required prior to the assignment of the related Asset or
they are customarily obtained subsequent to the sale or conveyance thereof.

Section 6.03Execution

.  The execution, delivery and performance of this Agreement and the
transactions it contemplates for Seller are duly and validly authorized by the
requisite action, as applicable, on the part of Seller.  This Agreement has been
duly executed and delivered by Seller (and all documents this Agreement requires
be executed and delivered by Seller at Closing will be duly executed and
delivered by Seller) and this Agreement constitutes, and at the Closing those
other documents will constitute, the valid and binding obligations of Seller,
enforceable against Seller in accordance with their terms except as such
enforceability may be limited by applicable bankruptcy or other similar laws
affecting the rights and remedies of creditors generally as well as to general
principles of equity (regardless of whether such enforceability is considered in
a proceeding in equity or at law).

Section 6.04Brokers

.  No broker or finder is entitled to any brokerage or finder’s fee, or to any
commission, based in any way on agreements, arrangements or understandings made
by or on behalf of Seller or any Affiliate of Seller for which Buyer has or will
have any liabilities or obligations (contingent or otherwise).

Section 6.05Bankruptcy

.  There are no bankruptcy, reorganization, or similar arrangement proceedings
pending, being contemplated by or, to Seller’s Knowledge, threatened against
Seller.

Section 6.06Proceedings

.  There is no suit, action, claim, investigation or inquiry by any Person or by
any administrative agency or Governmental Authority and no legal, administrative
or arbitration proceeding pending or, to Seller’s Knowledge, threatened against
Seller or any Affiliate of Seller or the Assets, or any of them, that has
materially affected or will materially affect Seller’s ability to consummate the
transactions contemplated by this Agreement.

Section 6.07Royalties.

  To Seller’s Knowledge, during the Seller Ownership Period all rentals,
royalties and other payments due under the Subject Interests have been paid in
all material

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respects, except those amounts included in the Suspense Amounts and where
failure to so pay would not have a Material Adverse Effect.  The term “Seller
Ownership Period” means, with respect to each Asset, the period beginning on the
date Seller acquired ownership of the Asset and ending at the Effective Time.

Section 6.08Taxes.

  To Seller’s Knowledge, during the Seller Ownership Period, all ad valorem,
property, production, severance, excise and similar taxes and assessments based
on or measured by the ownership of the Assets or the production of Hydrocarbons
or the receipt of proceeds of production that have become due and payable have
been paid in all material respects prior to becoming delinquent, unless
contested in good faith.

Section 6.09Contracts.

  Except for defaults and other matters as would not, individually or in the
aggregate, have a Material Adverse Effect, and to Seller’s Knowledge, (a) all of
Seller’s Material Contracts (i) are in full force and effect, and (ii) Seller is
not in default with respect to any of Seller’s material obligations under any of
them, and (b) all agreements for the sale of Hydrcarbons produced from the
Assets that meet the definition of Material Contracts are listed on Schedule
6.09.

Section 6.10Governmental Authorizations.

  Except as set forth on Schedule 6.10, except for failures to obtain or
maintain as would not, individually or in the aggregate,  have a Material
Adverse Effect and to Seller’s Knowledge, Seller has obtained and is maintaining
all material federal, state and local governmental licenses, permits,
franchises, orders, exemptions, variances, waivers, authorizations,
certificates, consents, rights, privileges and applications for any of them (the
“Governmental Authorizations”) that are presently necessary or required by
Seller for Seller’s ownership and operation of the Assets as currently owned and
operated by Seller (excluding matters arising under Environmental Laws or
relating to Taxes, which are addressed exclusively under Article V and Section
6.08, respectively).

Section 6.11No Violations of Laws.

  To Seller’s Knowledge and except as set forth on Schedule 6.11 or Schedule
6.13, Seller has not violated any applicable Law (excluding Environmental Laws
and Laws relating to Taxes, which are addressed exclusively under Article V and
Section 6.08, respectively) with respect to the ownership and operation of the
Assets, except where such violations would not, individually or in the
aggregate, have a Material Adverse Effect.

Section 6.12No Prepayments.

  There have been no advance, take or pay or other prepayments received by
Seller with respect to Seller’s interest in the Assets that would obligate

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Buyer to deliver Hydrocarbon production from the Assets after the Effective Time
without receiving full payment.

Section 6.13Mechanical Integrity.

  To Seller’s Knowledge and except as set forth on Schedule 6.13, the wells set
forth on Schedule 6.13 have maintained mechanical integrity and are capable of
passing any mechanical integrity tests mandated by Law.

Section 6.14Preferential Purchase Rights.

  Except as set forth on Schedule 6.14, to Seller’s Knowledge, none of the PPRs
are triggered by, or would require notice to be delivered as a result of, the
execution and delivery or consummation of this Agreement.

Article VII
Representations and Warranties of Buyer

Buyer represents and warrants to Sellers that:

Section 7.01Buyer’s Existence.

  Buyer is a limited liability company duly formed, validly existing and in good
standing under the laws of the State of Delaware, and is qualified to conduct
business and in good standing in the State in which the Assets are
located.  Buyer has full legal power, right and authority to carry on its
business as such is now being conducted and as contemplated to be conducted.

Section 7.02Legal Power.

  Buyer has the legal power and right to enter into and perform this Agreement
and the transactions it contemplates for Buyer. The consummation of the
transactions contemplated by this Agreement will not violate, or be in conflict
with:

(i)any provision of Buyer’s limited partnership agreement or other governing
documents;

(ii)any material agreement or instrument to which Buyer is a party or by which
Buyer is bound; or

(iii)any judgment, order, ruling or decree applicable to Buyer as a party in
interest or any Law applicable to Buyer.

Section 7.03Execution.

  The execution, delivery and performance of this Agreement and the transactions
it contemplates for Buyer are duly and validly authorized by all requisite
action on the part of Buyer. This Agreement has been duly executed and delivered
by Buyer (and all documents this Agreement requires be executed and delivered by
Buyer at Closing will be duly executed and delivered by Buyer) and this
Agreement constitutes, and at the Closing those other documents will constitute,
the legal, valid and binding obligation of Buyer enforceable against Buyer in
accordance with their terms, except as such enforceability may be limited by
applicable bankruptcy or other similar laws affecting the rights and remedies of
creditors generally as well as to general principles of equity (regardless of
whether such enforceability is considered in a proceeding in equity or at law).

Section 7.04Brokers.

  No broker or finder is entitled to any brokerage or finder’s fee, or to any
commission, based in any way on agreements, arrangements or understandings made
by or

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on behalf of Buyer or any Affiliate of Buyer for which Sellers have or will have
any liabilities or obligations (contingent or otherwise).

Section 7.05Bankruptcy.

  There are no bankruptcy, reorganization or arrangement proceedings pending,
being contemplated by or, to Buyer’s knowledge, threatened against Buyer or any
Affiliate of Buyer.

Section 7.06Proceedings.

  There is no suit, action, claim, investigation or inquiry by any Person or by
any administrative agency or Governmental Authority and no legal, administrative
or arbitration proceeding pending or, to Buyer’s knowledge, threatened against
Buyer or any Affiliate of Buyer that has materially affected or will materially
affect Buyer’s ability to consummate the transactions contemplated by this
Agreement.

Section 7.07Qualifications.

  Buyer is now, and after the Closing shall continue to be, qualified with all
applicable Governmental Authorities to own and operate the Assets and has, and
shall maintain, all necessary bonds to own and operate the Assets.

Section 7.08Investment.

  Buyer is an “accredited investor,” as that term is defined in Regulation D of
the Securities Act of 1933, as amended, and will acquire the Assets for its own
account and not with a view to a sale or distribution in violation of the
Securities Act of 1933, as amended, and the rules and regulations under that
statute, any applicable state blue sky laws or any other applicable securities
laws.  Buyer understands and acknowledges that if any of the Assets were held to
be securities, they would be restricted securities and could not be transferred
without registration under applicable state and federal securities laws or the
availability of an exemption from such registration.

Section 7.09Funds.

  Buyer has arranged to have available by the Closing Date sufficient funds to
enable Buyer to pay in full the Purchase Price as provided in this Agreement and
otherwise to perform its obligations under this Agreement.

Section 7.10Independent Investigation.

  Buyer is an experienced and knowledgeable investor in the oil, gas and mineral
resources industry that has previously expended substantial amounts in the
acquisition and development of oil, gas and mineral properties. Before entering
into this Agreement, Buyer was advised by and has relied solely on its own
legal, tax and other professional counsel concerning this Agreement, the Assets
and their value. Buyer is knowledgeable of the usual and customary practices of
producers such as Sellers, including reliance on the advice of experts (e.g.,
reservoir and facility engineers, attorneys, tax advisors, accountants,
valuation specialists and environmental consultants), and it has had (or will
have before Closing) access to the Assets, the officers and employees of
Sellers, and the books, records and files of Sellers relating to the Assets, and
in making the decision to enter into this Agreement Buyer has relied, and in
making the decision to consummate the transactions contemplated by this
Agreement Buyer will rely, solely on the basis of its own independent due
diligence investigation of the Assets, upon the express

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representations and warranties in Article VI and upon the covenants of Sellers
in this Agreement, and not on any other representations, warranties or covenants
of Sellers or any other Person or entity.

Article VIII
Tax-Deferred Exchange

Section 8.01Election.

  At or before the Closing, Sellers may elect, by notice to Buyer, to effect a
tax-deferred exchange, pursuant to section 1031 of the Internal Revenue Code of
1986, as amended (the “Code”), of those Assets it owns and is transferring for
other qualifying properties in accordance with this Article VIII; provided,
however, that notwithstanding anything to the contrary in this Article VIII,
under no circumstances shall the consummation of the transactions contemplated
by this Agreement be delayed, directly or indirectly, as a result of any such
tax-deferred exchange.

Section 8.02Qualified Intermediary.

  If Sellers make a tax-deferred exchange election under this Article VIII,
Sellers may elect, by notice to Buyer delivered on or before the Closing Date,
to have all or a portion of the Purchase Price paid to a qualified intermediary.

Section 8.03Additional Costs.

  If Sellers make a tax-deferred exchange election under this Article VIII,
Buyer shall not be required to incur any additional cost, liability or
obligation.

Section 8.04Indemnification.

  If Sellers make a tax-deferred exchange election, it shall release, indemnify,
defend and hold harmless Buyer from any responsibility or liability related to
such election.

Article IX
Sellers’ Conditions to Close

The obligations of Sellers to consummate the transaction provided for in this
Agreement (at Closing or any delayed closing) are subject, at the option of
Sellers, to the fulfillment on or prior to the Closing Date of each of the
following conditions:

Section 9.01Representations.

  The representations and warranties of Buyer contained in this Agreement shall
be true and correct in all material respects as of the date of this Agreement
and on the Closing Date as though made on and as of those dates.

Section 9.02Performance.

  Buyer shall have performed all material obligations, covenants and agreements
contained in this Agreement to be performed or complied with by it at or prior
to the Closing.

Section 9.03Pending Matters.

  No suit, action or other proceeding shall be pending or threatened against any
Party that seeks to restrain, enjoin or otherwise prohibit the consummation of
the transactions contemplated by this Agreement; provided, however, the Closing
shall proceed notwithstanding any suits, actions or other proceedings seeking to
restrain, enjoin or otherwise prohibit consummation of the transactions
contemplated hereby brought by holders of PPRs seeking to enforce such rights
with respect to the Assets.  The Assets subject to such suits, actions or other
proceedings brought by holders of PPRs shall be excluded from the initial
Closing and treated, for purposes of this Agreement only, as though the PPR(s)
had been exercised prior to Closing pursuant

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to Section 4.07(b) and Section 4.07(c) pending the completion of such suits,
actions or other proceedings.

Section 9.04Closing of Mid-Con-As-Seller PSA.

  The closing of the transaction contemplated that certain Purchase and Sale
Agreement dated the same date as this Agreement among Scout Energy Group IV, LP,
as “Buyer”, and Buyer, as “Seller” (the “Mid-Con-As-Seller PSA”), shall occur
contemporaneously with the closing of the transaction contemplated by this
Agreement (or, in the case of a delayed closing, prior to such delayed closing).

Article X
Buyer’s Conditions to Close

The obligations of Buyer to consummate the transaction provided for in this
Agreement (at Closing or any delayed closing) are subject, at the option of
Buyer, to the fulfillment on or prior to the Closing Date of each of the
following conditions:

Section 10.01Representations.

  The representations and warranties of Sellers contained in this Agreement
shall be true and correct in all material respects as of the date of this
Agreement and on the Closing Date as though made on and as of those dates.

Section 10.02Performance.

  Sellers shall have performed all material obligations, covenants and
agreements contained in this Agreement to be performed or complied with by
Sellers at or prior to the Closing.

Section 10.03Pending Matters.

  No suit, action or other proceeding shall be pending or threatened against any
Party that seeks to restrain, enjoin, or otherwise prohibit the consummation of
the transactions contemplated by this Agreement; provided, however, the Closing
shall proceed notwithstanding any suits, actions or other proceedings seeking to
restrain, enjoin or otherwise prohibit consummation of the transactions
contemplated hereby brought by holders of PPRs seeking to enforce such rights
with respect to the Assets.  The Assets subject to such suits, actions or other
proceedings brought by holders of PPRs shall be excluded from the initial
Closing and treated, for purposes of this Agreement only, as though the PPR(s)
had been exercised prior to Closing pursuant to Section 4.07(b) and Section
4.07(c) pending the completion of such suits, actions or other proceedings.

Section 10.04Closing of Mid-Con-As-Seller PSA.

  The closing of the transaction contemplated the Mid-Con-As-Seller PSA shall
occur contemporaneously with the closing of the transaction contemplated by this
Agreement (or, in the case of a delayed closing, prior to such delayed closing).

Article XI
Purchase Price Allocation and Tax Matters

Section 11.01Purchase Price Allocation.

  The Unadjusted Purchase Price has been allocated among the Assets by Buyer as
set forth in Exhibit B-1.  Buyer represents that the Allocated Values constitute
reasonable and good faith allocations of the Unadjusted Purchase Price among the

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Assets.  Sellers and Buyer agree that the Allocated Values shall be used to
compute any adjustments to the Unadjusted Purchase Price pursuant to this
Agreement.

Section 11.02Transfer Taxes.

  Buyer shall be responsible for the timely payment of, and shall indemnify,
defend and hold harmless Sellers Indemnitees from and against, all Transfer
Taxes, if any, arising out of or in connection with the transactions
contemplated by this Agreement, including any and all legal costs associated
with them.  Buyer shall prepare and file when due all necessary documentation
and Tax Returns with respect to any such Transfer Taxes; provided, however, that
Sellers shall cooperate with Buyer and take any action reasonably requested by
Buyer which does not cause Sellers to incur any cost or inconvenience to
minimize any such Transfer Taxes.  For purposes of this Agreement, the term
“Transfer Taxes” means any and all transfer Taxes (excluding Taxes measured in
whole or in part by net income), including sales, use, excise, stock,
conveyance, gross receipts, registration, business and occupation, securities
transactions, real estate, stamp, documentary, notarial, filing, recording,
permit, license, authorization and similar Taxes, fees, duties, levies, customs,
tariffs, imposts, assessments, obligations and charges.

Article XII
The Closing

Section 12.01Time and Place of the Closing.

  If the conditions referred to in Article IX and Article X of this Agreement
have been satisfied or waived in writing, and subject to any extensions pursuant
to Section 13.01(g) or by written agreement of the Parties or as the Parties
otherwise may agree in writing, the transactions contemplated by this Agreement
(the “Closing”) shall take place at the offices of Sellers, whose address is
4901 LBJ Freeway, Suite 300, Dallas, Texas 75244, or at such other place
reasonably designated by Sellers, on March 28, 2019 at 9:00am Central Time (the
“Closing Date”); provided, however, that for any delayed closings under Section
12.06, the Closing and Closing Date will be on the actual date on which the
delayed closing occurs, but the Effective Time of any delayed closing shall be
the same as for the Assets transferred at the original Closing.

Section 12.02Adjustments to Purchase Price at the Closing.

(a)At the Closing, the Purchase Price shall be increased by the following
amounts:

(i)an amount equal to all prepaid ad valorem, property and similar Taxes and
assessments based upon or measured by the ownership of the Assets, and any
prepaid costs, including rentals and insurance premiums, insofar as such prepaid
taxes and costs relate to periods of time after the Effective Time;

(ii)an amount equal to all operating and capital costs and expenses (including
without limitation rentals, royalties, drilling costs, capital expenditures,
lease operating expenses, expenses incurred under applicable operating
agreements and overhead charges allowable under applicable accounting procedures
(COPAS), and including any charges incurred by Sellers as non-operator, or in
the absence of an operating agreement, those customarily billed under such
agreements) to the extent paid to a Third Party by Sellers (but not Sellers’ own
overhead related to

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operated or non-operated Assets, which shall not be reimbursable hereunder) that
are attributable to the Assets and attributable to the period of time from and
after the Effective Time;

(iii)all increases to the Purchase Price for Title Benefits provided in Section
4.09;

(iv)the value of all merchantable Hydrocarbons produced prior to the Effective
Time but in storage above the sales connection or upstream of the applicable
sales meter as of the Effective Time;

(v)all proceeds actually paid to Buyer from sales of Hydrocarbons that are
produced and saved prior to the Effective Time and any other revenues paid to
Buyer that arise out of the ownership or operation of the Assets prior to the
Effective Time;

(vi)an amount equal to all Taxes (other than income taxes, ad valorem, property
and similar taxes) that are incurred and paid by Sellers in connection with the
ownership or operation of the Assets from and after the Effective Time; and

(vii)any other amounts provided for in this Agreement or agreed by Buyer and
Sellers (including any amounts that Buyer expressly approves in writing (or is
deemed to have approved) in accordance with Section 15.01).

(b)At the Closing, the Purchase Price shall be decreased by the following
amounts:

(i)an amount equal to all unpaid ad valorem, property and similar Taxes and
assessments based upon or measured by the ownership of the Assets insofar as
such unpaid Taxes relate to periods of time prior to the Effective Time, which
amount shall, to the extent not actually assessed, be computed based on such
Taxes and assessments for the preceding taxable year (such amount to be prorated
for the period of Sellers’ ownership prior to the Effective Time);

(ii)all proceeds actually collected by Sellers, or which at the time of Closing
can be reasonably estimated, from sales of Hydrocarbons that are produced and
saved from and after the Effective Time and any other revenues paid to Sellers
that arise out of the ownership or operation of the Assets after the Effective
Time;

(iii)an amount equal to all operating and capital costs and expenses (including
without limitation rentals, royalties, drilling costs, capital expenditures,
lease operating expenses, expenses incurred under applicable operating
agreements and overhead charges allowable under applicable accounting procedures
(COPAS), and including any charges incurred by Sellers as non-operator, or in
the absence of an operating agreement, those customarily billed under such
agreements) to the extent paid by Buyer that are attributable to the Assets and
attributable to the period of time prior to the Effective Time;

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(iv)the Allocated Value of any Subject Interest covered by an exercised PPR
pursuant to Section 4.07(b);

(v)all reductions in the Purchase Price for Title Defects provided in Article IV
and for Environmental Defects provided in Article V;

(vi)an amount equal to the Suspense Amounts relative to the Assets for which
Buyer has assumed responsibility under Section 16.02; and

(vii)any other amount provided for in this Agreement or agreed by Buyer and
Sellers.

(c)The adjustments described in Section 12.02(a) and (b) above are referred to
as the “Purchase Price Adjustments.”  To the extent that the amount of any
Purchase Price Adjustment is not determinable with certainty by Sellers prior to
the Closing, the amount of such Purchase Price Adjustment shall be determined by
Sellers based upon Sellers’ estimate.

Section 12.03Closing Statement.

  Not later than the fifth (5th) Business Day prior to the Closing Date, Sellers
shall prepare and deliver to Buyer a statement (the “Closing Statement”) of
(a) the estimated Purchase Price Adjustments, and (b) a credit for the Deposit
as described in Section 3.02(b).  At the Closing, Buyer shall pay the Purchase
Price as so estimated to Sellers in immediately available federal funds, as
adjusted by the Purchase Price Adjustments and the credit for the Deposit
reflected on the Closing Statement.

Section 12.04Actions of Sellers at the Closing.

  At the Closing (or any delayed closing, as applicable), Sellers shall:

(a)execute, acknowledge and deliver to Buyer the Assignment, in sufficient
counterparts for filing in each appropriate county, and such other instruments
(in form and substance agreed by Buyer and Sellers) as may be reasonably
necessary to convey the Assets to Buyer, including appropriate state and federal
assignments of record title and operating rights;

(b)execute and deliver to Buyer letters in lieu of transfer or division orders
directing all purchasers of Hydrocarbon production from the Subject Interests to
make payment of proceeds attributable to such production to Buyer from and after
the Effective Time;

(c)execute and deliver to Buyer the Closing Statement;

(d)subject to the provisions of Section 14.03 regarding the Records, deliver to
Buyer possession of the Assets;

(e)deliver to Buyer a certificate under Section 1445(b)(2) of the Code executed
by Sellers, providing that each Seller is not a foreign Person;

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(f)execute and deliver to Buyer appropriate change of operator forms on those
Assets operated by Sellers or Sellers’ Affiliates;

(g)deliver to Buyer recorded or recordable releases of all mortgage liens,
security interests and financing statements granted by Sellers or any Affiliate
of Sellers that encumber the Assets, including that mortgage recorded in Osage
County, Oklahoma benefitting BOKF NA as Administrative Agent for the Secured
Parties named therein;

(h)cause Fairfax to deliver to Buyer appropriate deeds (to the extent Fairfax
owns real property), assignments of right of way and other assignments and bills
of sale in form and substance reasonably satisfactory to Buyer conveying the
Assets described in Section 2.02(i) to Buyer;

(i)cause Sellers’ Affiliate, Scout Energy Partners IV-B, LP, a Delaware limited
partnership (“SEP IV-B”), to execute and deliver a reconveyance to Scout Energy
Group IV, LP of any interest previously assigned to or otherwise obtained by SEP
IV-B in the Subject Interests or in any way relating to the Assets;

(j)cause Sellers’ Affiliate, Scout Energy Partners I-B, LP, a Delaware limited
partnership (“SEP I-B”), to execute and deliver a reconveyance to Scout Energy
Group I, LP of any interest previously assigned to or otherwise obtained by SEP
I-B in the Subject Interests or in any way relating to the Assets;

(k)deliver to Buyer written agreements or amendments executed by the appropriate
parties, in form and substance reasonably satisfactory to Buyer, that amend and
restate, or replace, 1) that certain letter agreement dated November 1, 2018
among Riviera Upstream, LLC, f/k/a Linn Energy Holdings, LLC and Rivera
Operating, LLC, f/k/a Linn Operating, LLC (collectively, “Riviera”), and Scout
Energy Group IV, LP (“SEP IV”), and 2) that certain letter agreement dated
November 1, 2018 among Riviera, SEP IV and Coffeeville Resources (collectively,
the “Osage Payment Letters”); such amendments or agreements shall add Buyer as a
party, along with the other parties named in this paragraph, and shall provide
that any revenue from the Assets that purchasers of production refuse to pay
directly to Buyer due to pending approval from the Bureau of Indian Affairs
(“BIA”) or the like shall be paid to another party for the benefit of Buyer, and
that such funds shall then in turn be paid to Buyer; provided, however, that if,
despite Sellers’ reasonable efforts, Seller is unable to obtain the joinder of
third parties in such agreements, this deliverable may be fulfilled by a written
agreement from Sellers, in form and substance reasonably satisfactory to Buyer,
to promptly forward to Buyer all revenue Sellers receive from the Assets due to
a delay in BIA approval of the transfer of such Assets to Buyer;

(l)deliver to Buyer written agreements from Sellers and any other appropriate
parties, in form and substance reasonably satisfactory to Buyer, to give Buyer
similar benefits as those set forth above in Section 12.04(k) for any other
Assets that are subject to BIA approval, but are not expressly covered by the
Osage Payment Letters, including any Asset that is then covered by the Osage
Payment Letters but later becomes no longer covered by the Osage Payment
Letters, in each case until such time as the BIA has approved the transfer of
such Assets to Buyer; provided, however, that if, despite Sellers’

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reasonable efforts, Seller is unable to obtain the joinder of third parties in
such agreements, this deliverable may be fulfilled by a written agreement from
Sellers, in form and substance reasonably satisfactory to Buyer, to promptly
forward to Buyer all revenue Sellers receive from the Assets due to a delay in
BIA approval of the transfer of such Assets to Buyer;

(m)deliver to Buyer consents (to the extent that consents to assignment are
required and may not be unreasonably withheld) and assignments of the leases of
the field offices described in Schedule 2.02(e), in form and substance
reasonably satisfactory to Buyer;

(n)deliver to Buyer a Closing Certificate dated as of the Closing Date, executed
by Sellers or by an executive officer of Sellers or of Sellers’ general partner,
as applicable, certifying that all of the conditions set forth in Section 10.01
and Section 10.02 have been satisfied;

(o)execute and deliver to the Escrow Agent a joint instruction letter of the
Parties, requesting that the Deposit be delivered to Sellers; and

(p)execute, acknowledge and deliver any other agreements provided for in this
Agreement or necessary or desirable to effectuate the transactions contemplated
by this Agreement as may be reasonably requested by Buyer.

Section 12.05Actions of Buyer at the Closing.

  At the Closing (or any delayed closing, as applicable), Buyer shall:

(a)deliver to Sellers the Purchase Price in immediately available federal funds
(with the adjustments and credits provided in Section 12.03) by wire transfer to
accounts designated by notice to Buyer from Sellers on or before the second
Business Day before the Closing;

(b)execute and deliver to Sellers the Closing Statement;

(c)deliver to Sellers written evidence of Buyer’s compliance with the
qualification and bonding requirements of Section 7.07;

(d)deliver to Sellers a Closing Certificate dated as of the Closing Date,
executed by an executive officer of Buyer, certifying that all of the conditions
set forth in Section 9.01 and Section 9.02 have been satisfied;

(e)execute and deliver to the Escrow Agent a joint instruction letter of the
Parties, requesting that the Deposit be delivered to Sellers;

(f)subject to the provisions of Section 14.03 regarding the Records, take
possession of the Assets; and

(g)execute, acknowledge and deliver the Assignment and any other agreements
provided for in this Agreement or necessary or desirable to effectuate the
transactions contemplated by this Agreement.

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Section 12.06Delayed Closings.

  If any Assets are required to be conveyed to Buyer after Closing under Section
4.05(a)(iii) or Section 5.04(a)(iii), then (a) such Assets shall be deemed to no
longer be Excluded Assets and shall be Assets for all purposes under this
Agreement, (b) such Assets shall be conveyed on the date that is ten (10)
Business Days after the applicable Title Defect or Environmental Defect is cured
by Sellers, (c) Sellers shall convey such Assets to Buyer at a delayed closing
in accordance with this Article XII, subject to the terms and conditions of this
Agreement and (d) simultaneously with such conveyance, Buyer shall pay to
Sellers the Allocated Values, as adjusted by any Title Defect Value or
Environmental Defect Value, for such Assets subject to adjustment pursuant to
Section 12.02, solely to the extent not duplicative of any adjustments already
made to the Purchase Price (unless the subject Title Defect Value or
Environmental Defect Value is equal to or greater than the Allocated Value of
any such retained Asset, in which event, Sellers may elect in their sole
discretion, to permanently retain such Asset).

Article XIII
Termination

Section 13.01Right of Termination.

  This Agreement may be terminated at any time at or prior to the Closing:

(a)by written consent of Buyer and Sellers;

(b)by Sellers on the Closing Date if the conditions set forth in Section 9.01,
Section 9.02 and Section 9.03 have not been satisfied in all material respects
or waived by Sellers;

(c)by Buyer on the Closing Date if the conditions set forth in Section 10.01,
Section 10.02 and Section 10.03 have not been satisfied in all material respects
or waived by Buyer;

(d)by Sellers, by notice to Buyer on or after May 1, 2019, if the Closing shall
not have occurred;

(e)by Buyer, by notice to Sellers on or after May 1, 2019, if the Closing shall
not have occurred;

(f)by Buyer or Sellers if any Governmental Authority shall have issued an order,
judgment or decree or taken any other action challenging, delaying, restraining,
enjoining, prohibiting or invalidating the consummation of any of the
transactions contemplated by this Agreement;

(g)by Buyer or Sellers if (i) the aggregate amount of the Purchase Price
Adjustments agreed by the Parties or otherwise finally determined pursuant to
this Agreement with respect to Title Defect Values attributable to all uncured
Title Defects (net of the aggregate amount of the Purchase Price Adjustments for
all Title Benefits and for all exercised PPR’s) determined in accordance with
Article IV, plus (ii) the aggregate amount of the Purchase Price Adjustments
agreed to by the Parties or otherwise finally determined pursuant to this
Agreement with respect to Environmental Defect Values attributable to all
uncured Environmental Defects determined in accordance with Article

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V, exceeds fifteen percent (15%) of the Unadjusted Purchase Price; provided,
however, that if a Dispute regarding the existence or value of any of the
foregoing is subject to resolution in accordance with Article XVIII, and if
Sellers and Buyer agree to postpone the Closing Date in order to seek such
resolution before Closing, then no Party may terminate this Agreement pursuant
to this Section 13.01(g), until each such Dispute is resolved; or

(h)by Buyer or Sellers on the Closing Date if the conditions set forth in
Section 9.04 and Section 10.04 have not been satisfied in all material respects
or waived by Buyer and Sellers;

provided, however, that no Party shall have the right to terminate this
Agreement pursuant to clause (b), (c), (d), (e) or (h) above if that Party is at
the time in material breach of any provision of this Agreement or the
Mid-Con-As-Seller PSA.

Section 13.02Remedies and Effect of Termination.

  If the Closing does not occur as a result of any Party exercising its right to
terminate pursuant to Section 13.01, then except as provided in this Section
13.02 and in Section 4.01, Section 5.01, Section 13.03, Section 13.04, Section
13.05 and Section 18.05, this Agreement shall be null and void and no Party
shall have any further rights or obligations under this Agreement, except that a
Party shall continue to be liable for any breach of this Agreement or any
liability that has accrued prior to the date of termination or results from any
event occurring prior to termination.  Notwithstanding anything to the contrary
contained in this Agreement other than Buyer’s right pursuant to Section
13.02(b)(i) if elected, upon any termination of this Agreement pursuant to this
Article XIII, Sellers shall be free immediately to enjoy all rights of ownership
of the Assets and to sell, transfer, encumber or otherwise dispose of the Assets
to any person without any restriction under this Agreement or claim by Buyer
hereunder.  Termination of this Agreement shall not affect the Parties’ rights
or obligations under the Confidentiality Agreement.

(a)If Sellers have the right to terminate this Agreement pursuant to Section
13.01(b) and Sellers are ready, willing and able to perform its obligations
under Section 13.01(c), and Buyer nevertheless elects not to close the
transactions contemplated by this Agreement, then Sellers shall be entitled to
terminate this Agreement.

(b)If Buyer has the right to terminate this Agreement pursuant to Section
13.01(c) and Buyer is ready, willing and able to perform its obligations under
Section 12.05, and Sellers nevertheless elects not to close the transactions
contemplated by this Agreement, then Buyer shall be entitled to (i) seek the
specific performance of Sellers hereunder, or (ii) terminate this Agreement.

Section 13.03Termination Damages.

(a)If this Agreement is terminated by Sellers as provided in Section 13.01(b)
based upon Buyer wrongfully failing to tender performance at Closing or
otherwise breaching this Agreement (but expressly excluding the conditions set
forth in Section 9.03 or Section 9.04), then Buyer shall cause the Deposit to be
delivered to Sellers within three (3) Business Days following such termination
as liquidated damages on account of such termination, which remedy upon such a
termination by Sellers shall be the sole and

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exclusive remedy available to Sellers.  Buyer and Sellers acknowledge and agree
that (i) Sellers’ actual damages upon such a termination would be difficult to
ascertain with any certainty, (ii) that the Deposit is a reasonable estimate of
such actual damages, and (iii) such liquidated damages do not constitute a
penalty.

(b)If this Agreement is terminated as provided in Sections Section 13.01(a),
(c), (d), (e), (f) or (g), or as provided in Section 13.01(b) based on one of
the conditions set forth in Section 9.03 or Section 9.04 not being fulfilled,
then within five (5) Business Days after termination Sellers shall cause the
Deposit to be delivered to Buyer.

(c)If this Agreement is terminated as provided in Section 13.01(h) and: (A) the
sellers under the Mid-Con-As-Seller PSA are entitled to receive the deposit
under the Mid-Con-As-Seller PSA pursuant to Section 13.03(a) thereof, then
within five (5) Business Days after termination Sellers shall cause the Deposit
to be delivered to Buyer, (B) the buyer under the Mid-Con-As-Seller PSA is
entitled to receive the deposit under the Mid-Con-As-Seller PSA pursuant to
Section 13.03(b) thereof based on a termination or failure to close of the
Mid-Con-As-Seller PSA pursuant to Section 13.01(c), then then within five (5)
Business Days after termination Buyer shall cause the Deposit to be delivered to
Sellers, or (C) the buyer under the Mid-Con-As-Seller PSA is entitled to receive
the deposit under the Mid-Con-As-Seller PSA pursuant to Section 13.03(b) thereof
based on a termination or failure to close of the Mid-Con-As-Seller PSA pursuant
to Section 13.01(a), (d), (e), (f) or (g), then then within five (5) Business
Days after termination Sellers shall cause the Deposit to be delivered to Buyer.

Section 13.04Return of Documents and Confidentiality.

  Upon any termination of this Agreement, Buyer shall within ten (10) Business
Days following such termination return to Sellers all title, engineering and
other data, reports, maps and other information furnished by Sellers or any
Affiliates or Advisors of Sellers to Buyer or prepared by or on behalf of Buyer
in connection with its due diligence investigation of the Assets, together with
all copies of the foregoing, and an officer of Buyer shall certify same to
Sellers in writing.

Section 13.05Damages.

  Notwithstanding anything to the contrary in this Agreement, in no event shall
any Party be entitled to receive any punitive, indirect or consequential damages
unless they are a part of a Third Party claim for which a Party is entitled to
indemnification under this Agreement, REGARDLESS OF WHETHER CAUSED OR
CONTRIBUTED TO BY THE SOLE, JOINT, COMPARATIVE OR CONCURRENT NEGLIGENCE OR
STRICT LIABILITY OF THE OTHER PARTY.

Article XIV
Post-Closing Obligations

Section 14.01Gas Imbalances.

  The Gas Imbalances attributable to the Subject Interests as of January 1,
2019, of which Sellers have Knowledge are set forth on Schedule 14.01 (the
“Agreed Imbalance”).  For purposes of this Agreement, “Gas Imbalances” means
over-production or under-production subject to an imbalance or make-up
obligation with respect to gas produced from or allocated to the Subject
Interests, regardless of whether such over-production or under-production,
imbalance or make-up obligation arises at the wellhead, pipeline, gathering
system, transportation or

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other location and regardless of whether the same arises under contract or by
operation of Law.  Buyer and Sellers shall jointly verify the actual net gas
imbalances as of the Effective Time in the Accounting Statement and any Agreed
Imbalance shall be accounted for between the Parties in the Accounting
Statement, and the Purchase Price shall be adjusted therefor at the price per
MMBtu of $1.50.  This adjustment shall become final upon the Final Settlement
Date, and no Party afterwards shall make claim upon the other Parties concerning
the Gas Imbalances.  BUYER ASSUMES ALL RIGHTS AND LIABILITIES RELATING TO GAS
IMBALANCES DISCOVERED AFTER THE FINAL STATEMENT INCLUDING ANY REVENUE ADJUSTMENT
CAUSED BY SUCH SUBSEQUENTLY DISCOVERED GAS IMBALANCES AND AGREES TO DEFEND AND
INDEMNIFY SELLERS INDEMNITEES FROM AND AGAINST ANY CLAIM, BY ANYONE, ARISING OUT
OF SUCH GAS IMBALANCES REGARDLESS OF A SELLERS INDEMNITEE’S NEGLIGENCE OR FAULT
(INCLUDING STRICT LIABILITY).

Section 14.02Final Accounting Statement.

(a)On or before the ninetieth (90th) day after the Closing Date, Sellers shall
prepare and deliver to Buyer a revised Closing Statement setting forth a
detailed calculation of the actual Purchase Price Adjustments (the “Accounting
Statement”).  The Accounting Statement shall include any adjustment or payment
which was not finally determined as of the Closing Date, including any Gas
Imbalances, and the allocation of revenues and expenses as determined in
accordance with Section 12.02.  Sellers shall provide Buyer such data and
information as Buyer reasonably may request supporting the amounts reflected on
the Accounting Statement to permit Buyer to agree to the Accounting
Statement.  The Accounting Statement shall become final and binding on the
Parties on the thirtieth (30th) day following receipt by Buyer (the “Final
Settlement Date”) unless Buyer gives written notice of its disagreement (a
“Notice of Disagreement”) to Sellers prior to that date, and upon such Notice of
Disagreement, the Accounting Statement will be final and binding with respect to
all matters other than those specified in the Notice of Disagreement.  Any
Notice of Disagreement shall specify in detail the dollar amount, nature and
basis of any disagreement so asserted.  If a Notice of Disagreement is received
by Sellers in a timely manner, then the Parties shall resolve the Dispute
evidenced by the Notice of Disagreement in accordance with Article XVIII.

(b)If the amount of the Purchase Price as set forth on the Final Statement
exceeds the amount of the estimated Purchase Price paid at the Closing, then
Buyer shall pay to Sellers the amount by which the Purchase Price as set forth
on the Final Statement exceeds the amount of the estimated Purchase Price paid
at the Closing on or before the third (3rd) Business Day after the Final
Settlement Date (or within the third (3rd) Business Day of resolution of the
Final Statement by an Independent Expert, if applicable).  If the amount of the
Purchase Price as set forth on the Final Statement is less than the amount of
the estimated Purchase Price paid at the Closing, then Sellers shall refund to
Buyer the amount by which the Purchase Price as set forth on the Final Statement
is less than the amount of the estimated Purchase Price paid at the Closing on
or before the third (3rd) Business Day after the Final Settlement Date (or
within the third (3rd) Business Day of resolution of the Final Statement by an
Independent Expert, if applicable).  For purposes of this Agreement, the term
“Final Statement” means (i) the final Accounting Statement as

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finalized pursuant to Section 14.02(a), or (ii) upon resolution of any Dispute
regarding a Notice of Disagreement, the final Accounting Statement reflecting
those resolutions.

(c)The Parties agree that any and all payments pursuant to this Agreement shall,
to the maximum extent permitted by applicable Law, be treated for all Tax
purposes as an adjustment to the Purchase Price.

Section 14.03Records.

  Sellers shall make the Records available to be picked up by Buyer at the
offices of Sellers as shown in Section 19.12 during normal business hours within
fifteen (15) Business Days after the Closing to the extent the Records are in
the possession of Sellers and are not subject to contractual restrictions on
transferability.  Sellers shall have the right to retain copies of any of the
Records and the rights granted under Section 19.04.

Section 14.04Further Cooperation.

  After the Closing Date, Sellers and Buyer, at the request of the other and
without additional consideration, shall execute and deliver, or shall cause to
be executed and delivered, from time to time such further instruments of
conveyance and transfer and shall take such other action as the other reasonably
may request to convey and deliver the Assets to Buyer and to accomplish the
orderly transfer of the Assets to Buyer in the manner contemplated by this
Agreement.  After the Closing, the Parties will cooperate to have all proceeds
received attributable to the Assets be paid to the proper Party under this
Agreement and to have all expenditures to be made with respect to the Assets be
made by the proper Party under this Agreement.  To the extent a Party receives
funds after the Closing Date, other than funds described in and allocated
pursuant to Section 12.02(a) or (b), to which another Party is entitled, the
receiving Party will promptly, but in any event no later than ten (10) days
after receipt, transfer such funds to the Party so entitled.  To the extent a
Party receives any invoice or statement after the Closing Date that is the
responsibility of another Party, the receiving Party will promptly, but in any
event no later than ten (10) days after receipt, send the invoice or statement
to the appropriate Party.

Section 14.05Solicitation of Employees.

  Notwithstanding anything in the Confidentiality Agreement to the contrary
(including Section 13 and Section 15 of the Confidentiality Agreement), Buyer
shall be permitted, from and after the date of this Agreement, to solicit for
employment and/or hire any employees listed on Schedule 14.05, subject to
providing Sellers advance notice before contacting any such employee.

Article XV
Operation of the Assets

Section 15.01Operations.

  From and after the date of this Agreement until the Closing, except as
expressly contemplated by this Agreement, as expressly consented to in writing
by Buyer (which consent will be conclusively presumed to have been given as of
5:00 p.m. Central Time on the third (3rd) Business Day following notice to Buyer
requesting the consent unless Buyer has notified Sellers in writing that it does
not consent), or in situations in which emergency action is taken in the face of
risk to life, property or the environment, Sellers shall:

(a)operate and maintain the Subject Interests operated by Sellers or an
Affiliate of Sellers in the usual, regular and ordinary manner consistent with
past practice;

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(b)except to the extent necessary to maintain a Lease, not enter into a material
Contract, or materially amend or change the terms of any such Contract that
would involve individual commitments of more than $50,000, net to the Working
Interest of Sellers;

(c)Except to the extent necessary or advisable to maintain a Lease or avoid
forfeiture or penalties, not enter into agreements to drill new wells or to
rework, plug back, deepen, plug or abandon any well located on the Leases, nor
commence any drilling, reworking or completing or other operations on the Leases
which requires estimated expenditures exceeding $50,000, net to the Working
Interest of Sellers, for each operation (except for emergency operations)
without obtaining the prior written consent of Buyer (which consent shall not be
unreasonably withheld, delayed or conditioned); provided that the terms of this
paragraph (c) shall not apply to any expenditures of Sellers which will not be
charged to Buyer;

(d)unless required by Law or a Governmental Authority, not plug or abandon any
well located on the Subject Interests that is identified on Exhibit B as
producing;

(e)not transfer, sell, mortgage, farmout, hypothecate, pledge or otherwise
dispose of any material portion of the Subject Interests other than the sale
and/or disposal of Hydrocarbons in the ordinary course of business;

(f)not release, terminate or materially amend any Lease, Easement, or
communitization, unitization or pooling agreement;

(g)not voluntarily relinquish its position as Operator to anyone other than
Buyer with respect to any of the operated Assets; and

(h)to the extent Sellers have Knowledge thereof, provide Buyer with written
notice of (i) any claims, demands, suits or actions made against Sellers which
materially affect the Assets; or (ii) any proposal from a Third Party to engage
in any material transaction (e.g., a farmout) with respect to the Assets.

Section 15.02Limitations on the Operational Obligations and Liabilities of
Sellers.

(a)Buyer acknowledges that Sellers own undivided interests in some or all of the
Assets, and Buyer agrees that, as long as Sellers have voted Sellers’ interests
in a manner that complies with the provisions of this Article XV, the acts or
omissions of the other working interest owners shall not constitute a violation
of the provisions of this Article XV, nor shall any action required by a vote of
working interest owners constitute such a violation.  To the extent that Sellers
or an Affiliate of Sellers are not the operator of an Asset, the obligations of
Sellers in this Article XV shall be construed to require that Sellers use
reasonable efforts (without being obligated to incur any material expense or
institute any cause of action) to cause the operator of that Asset to take such
actions or render such performance within the constraints of the applicable
operating agreements and other applicable agreements.

(b)Notwithstanding anything to the contrary in this Article XV, Sellers shall
have no liability to Buyer for, and Buyer agrees to release, defend, indemnify
and hold

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harmless Sellers and Sellers’ shareholders, partners, members, managers,
Affiliates, co-lessees, co-venturers and their respective officers, directors,
managers, employees, agents, partners, representatives, members, shareholders,
Affiliates, subsidiaries, successors, heirs and assigns (collectively, “Sellers
Indemnitees”) from, the incorrect payment of delay rentals, royalties, shut-in
royalties or similar payments or for any failure to pay any such payments
through mistake or oversight (INCLUDING THOSE RESULTING FROM ANY OF THE SELLERS
INDEMNITEES’ SOLE, JOINT, COMPARATIVE OR CONCURRENT NEGLIGENCE OR STRICT
LIABILITY) to the extent that such payments relate to periods after the
Effective Time.  In no event shall Buyer’s remedy for Sellers’ breach of
Sellers’ obligations under this Article XV exceed the Allocated Value of the
Subject Interest affected by such breach.

Section 15.03Operation of the Assets after the Closing.

  It is expressly understood and agreed that Sellers shall not be obligated to
continue operating any of the operated Assets following the Closing, and Buyer
assumes full responsibility for operating (or causing the operation of) all such
Assets following the Closing.  Sellers do not warrant or guarantee that Buyer
will become the operator of the operated Assets or any portion of the Assets, as
such matter will be controlled by the applicable joint operating
agreement(s).  Without implying any obligation on Sellers’ part to continue
operating any operated Assets after the Closing, if Sellers elect to continue to
operate any such Assets following the Closing at the request of Buyer or any
Third Party working interest owner, due to constraints of applicable joint
operating agreement(s), failure of a successor operator to take over operations
or other reasonable cause, the continued operation by Sellers shall be for the
account of Buyer, at the sole risk, cost and expense of Buyer.  Buyer releases
and agrees to indemnify, defend and hold harmless Sellers Indemnitees, as a part
of the Assumed Obligations, from and against all claims, losses, damages, costs,
expenses, causes of action and judgments of any kind or character (INCLUDING
THOSE RESULTING FROM ANY OF THE SELLERS INDEMNITEES’ SOLE, JOINT, COMPARATIVE OR
CONCURRENT NEGLIGENCE OR STRICT LIABILITY) with respect to (a) continued
operations by Sellers, (b) Buyer’s assumption of operations from Sellers, and
(c) compliance with the terms of any applicable joint operating agreement
related to the election of a successor operator.

Section 15.04Change in Circumstances; Casualty Loss.

(a)Buyer shall assume all risk of loss with respect to, and any change in the
condition of, the Assets from the Effective Time until the Closing, including
with respect to the depletion of Hydrocarbons, the watering-out of any well, the
collapse of casing, sand infiltration of wells and damage to and depreciation of
property, including normal wear and tear.

(b)If after the Effective Time and prior to the Closing any part of the Assets
shall be damaged or destroyed by fire or other casualty or if any part of the
Assets shall be taken in condemnation or under the right of eminent domain or if
proceedings for such purposes shall be pending or threatened, this Agreement
shall remain in full force and effect notwithstanding any such destruction,
taking or proceeding, or the threat of any such destruction, taking or
proceeding, and the Parties shall proceed with the transactions contemplated by
this Agreement notwithstanding such destruction or taking without reduction of
the Purchase Price, but subject to Section 15.04(c).  Sellers shall maintain or

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cause to be maintained Sellers’ existing insurance coverage with respect to the
Assets from the date of this Agreement until Closing.

(c)Notwithstanding Section 15.04(a), in the event of any loss described in
Section 15.04(b), at the Closing, Sellers shall pay to Buyer all sums paid to
Sellers by Third Parties by reason of the destruction or taking of such Assets
(up to the Allocated Value), including any sums paid pursuant to any policy or
agreement of insurance or indemnity, and shall assign, transfer and set over
unto Buyer all of the rights, title and interest of Sellers in and to any
claims, causes of action, unpaid proceeds or other payments from Third Parties,
including any policy or agreement of insurance or indemnity, arising out of such
destruction or taking (with assignment, transfer and set over unto Buyer with
respect to payments based on property value limited to the Allocated Value of
the affected Asset).

Article XVI
Obligations and Indemnification

Section 16.01Retained Obligations.

  Provided that the Closing occurs and subject to Section 16.05, each Seller
shall severally as to the Assets sold or to be sold by such Seller under this
Agreement retain (but only to the extent Buyer has provided Sellers with a
timely Claim Notice in accordance with Section 16.07 and not otherwise, and only
to the extent the same do not constitute Permitted Encumbrances, Indemnified
Title Defects, Assumed Environmental Obligations or Indemnified Environmental
Defects) all Losses related to (a) the payment or improper payment of royalties
or operating expenses by Sellers accruing under the Leases or related to the
Assets prior to the Effective Time (other than an amount equal to the Suspense
Amounts); (b) claims of Third Parties for personal injury, death or property
damage to the extent such personal injury, death or property damage occurs prior
to the Effective Time as a result of the operation of the Assets by Sellers or
an Affiliate of Sellers; and (c) the mispayment or non-payment by Sellers of ad
valorem, property, severance, production and similar Taxes attributable to the
Assets prior to the Effective Time (collectively, the “Retained Obligations”).

Section 16.02Assumed Obligations.

  Provided that the Closing occurs, Buyer hereby assumes all duties, obligations
and liabilities of every kind and character with respect to the Assets or the
ownership or operation of the Assets (other than the Retained Obligations),
whether attributable to periods before or after the Effective Time, REGARDLESS
OF WHETHER CAUSED OR CONTRIBUTED TO BY THE SOLE, JOINT, COMPARATIVE OR
CONCURRENT NEGLIGENCE, STRICT LIABILITY OR OTHER LEGAL FAULT OF ANY OF THE
SELLERS INDEMNITEES, including those arising out of (a) the terms of the
Easements, Contracts, Leases, Personal Property or Subject Interests comprising
part of the Assets; (b) Gas Imbalances; (c) payment of funds held in suspense
for the benefit of Third Parties (it being agreed that, notwithstanding anything
in this Agreement to the contrary, Buyer shall be solely responsible for the
distribution of all suspended funds to Third Parties relating to the Assets to
the extent there is a Purchase Price adjustment related to the interest of such
Third Party(ies) interest pursuant to Section 12.02(b)(vi)); (d) the condition
of the Assets, regardless of whether such condition arose before or after the
Effective Time; (e) obligations to properly plug and abandon or re-plug or
re-abandon or remove or bury wells, flowlines, gathering lines or other
facilities, equipment or other personal property or fixtures comprising part of
the Assets; (f) the Assumed Environmental Obligations; (g) alleged Title Defects
that are deemed to constitute Assumed Obligations under Article IV; (h) the

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Losses for which Buyer would be entitled to indemnification under Section 16.04
to the extent (I) Buyer does not provide Sellers with a Claim Notice complying
with Section 16.07 on or before the date required by Section 16.05, or (II) such
Losses are in excess of any limitations of Sellers’ liability under Section
16.05; and (i) any other duty, obligation, event, condition or liability assumed
by Buyer under the terms of this Agreement; and (j) any Retained Obligation as
to which Sellers do not have, or no longer has, an obligation to indemnify Buyer
in accordance with the terms of this Agreement (collectively, the “Assumed
Obligations”).

Section 16.03Buyer’s Indemnification.

  PROVIDED THAT THE CLOSING OCCURS, BUYER SHALL RELEASE, DEFEND, INDEMNIFY AND
HOLD HARMLESS SELLERS INDEMNITEES FROM AND AGAINST ANY AND ALL CLAIMS, DAMAGES,
LIABILITIES, LOSSES, CAUSES OF ACTION, COSTS AND EXPENSES (INCLUDING THOSE
INVOLVING THEORIES OF NEGLIGENCE OR STRICT LIABILITY OR PRE-EXISTING DEFECTS AND
INCLUDING COURT COSTS AND ATTORNEYS’ FEES) (COLLECTIVELY, THE “LOSSES” OR IN THE
SINGULAR, A “LOSS”) AS A RESULT OF, ARISING OUT OF, OR RELATED TO (a) THE
ASSUMED OBLIGATIONS, (b) ANY BREACH OF BUYER’S REPRESENTATIONS OR WARRANTIES IN
THIS AGREEMENT; OR (c) ANY BREACH OF ANY COVENANT OR AGREEMENT OF BUYER IN THIS
AGREEMENT, IN EACH CASE, REGARDLESS OF WHETHER CAUSED OR CONTRIBUTED TO BY THE
SOLE, JOINT, COMPARATIVE OR CONCURRENT NEGLIGENCE, STRICT LIABILITY OR OTHER
LEGAL FAULT OF ANY OF THE SELLERS INDEMNITEES.

Section 16.04Sellers’ Indemnification.

  PROVIDED THAT THE CLOSING OCCURS, EACH SELLER SHALL SEVERALLY, as to the
ASSETS SOLD OR TO BE SOLD BY such Seller UNDER THIS AGREEMENT, RELEASE, DEFEND,
INDEMNIFY AND HOLD HARMLESS BUYER AND BUYER’S OFFICERS, DIRECTORS, EMPLOYEES,
AGENTS, REPRESENTATIVES, MEMBERS, SHAREHOLDERS, AFFILIATES AND SUBSIDIARIES
(COLLECTIVELY, THE “BUYER INDEMNITEES”) FROM AND AGAINST ANY AND ALL LOSSES AS A
RESULT OF, ARISING OUT OF, OR RELATED TO (a) THE RETAINED OBLIGATIONS, (b) ANY
BREACH OF SELLERS’ REPRESENTATIONS OR WARRANTIES IN THIS AGREEMENT; OR (c) ANY
BREACH OF ANY COVENANT OR AGREEMENT OF SELLERS IN THIS AGREEMENT, IN EACH CASE,
REGARDLESS OF WHETHER CAUSED OR CONTRIBUTED TO BY THE SOLE, JOINT, COMPARATIVE
OR CONCURRENT NEGLIGENCE OR STRICT LIABILITY OF ANY OF THE BUYER INDEMNITEES

Section 16.05Limitations on Sellers’ Indemnification Obligations.

  Notwithstanding anything to the contrary contained in this Agreement, (a)
Sellers’ obligations under Section 16.04 shall apply only if and to the extent
Buyer provides Sellers with a Claim Notice complying with Section 16.07 (i) as
to Losses covered by Section 16.04(a) on or before the day occurring twelve (12)
months after the Closing and (ii) as to Losses covered by Section 16.04(b) on or
before the day occurring six (6) months after the Closing, (b) as to Losses
covered by Section 16.04(b), Buyer shall bear sole responsibility for the
aggregate Losses associated with all such claims up to a threshold percentage of
one and one-third percent (1.33%) of the Unadjusted Purchase Price, it being
intended by the Parties that Sellers be obligated only to the extent of those
Losses that exceed one and one-third percent (1.33%) of the Unadjusted Purchase
Price, and (b) Sellers’ aggregate liability under Section 16.04 is limited to an
amount equal to twenty percent (20%) of the Unadjusted Purchase Price

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and Sellers’ liability pursuant to Section 16.04 shall terminate on the day
occurring eighteen (18) months after Closing.  For the avoidance of doubt,
Sellers shall not be liable under Section 16.04 for any Losses to the extent
there has been a downward adjustment to the Purchase Price for such Losses under
Section 12.02(b).

Section 16.06Exclusive Remedy.

  EFFECTIVE UPON CLOSING AND EXCEPT FOR (a) BUYER’S RIGHTS WITH RESPECT TO ANY
INDEMNIFIED TITLE MATTER AND/OR INDEMNIFIED ENVIRONMENTAL MATTER, AND (b)
BUYER’S RIGHTS WITH RESPECT TO THE SPECIAL WARRANTY OF TITLE IN THE ASSIGNMENT,
INDEMNIFICATION UNDER Section 16.03 AND Section 16.04, AS APPLICABLE, SHALL BE
EACH PARTY’S SOLE AND EXCLUSIVE REMEDY WITH RESPECT TO ANY LOSSES OR CLAIM OF
LOSSES ARISING OUT OF OR RELATED TO THIS AGREEMENT OR THE DOCUMENTS EXECUTED AS
PART OF THE TRANSACTION CONTEMPLATED BY THIS AGREEMENT, AND SELLERS’ LIABILITY
SHALL BE SUBJECT TO THE PROCEDURES AND LIMITATIONS ON TIMING AND AMOUNT PROVIDED
IN Section 16.05 AND IN Section 16.07.

Section 16.07Notices and Defense of Indemnified Matters.

(a)For purposes of this Section 16.07, the term “Indemnifying Party” when used
in connection with particular Losses shall mean the party or parties having an
obligation under this Article XVI to another party or parties with respect to
such Losses pursuant to this Agreement, and the term “Indemnified Party” when
used in connection with particular Losses shall mean the party or parties having
the right to be indemnified or otherwise protected with respect to such Losses
by another party or parties pursuant to this Agreement.

(b)To make a claim under any of Section 16.03 or Section 16.04, an Indemnified
Party must notify the Indemnifying Party of its claim under this Section 16.07,
including the specific details of and specific basis under this Agreement for
its claim (the “Claim Notice”).  In the event that the claim is based upon a
claim by a Third Party against the Indemnified Party (a “Claim”), the
Indemnified Party shall provide its Claim Notice promptly after the Indemnified
Party has actual knowledge of the Claim and shall enclose a copy of all papers
(if any) served with respect to the Claim; provided, however, that the failure
of any Indemnified Party to give timely notice of a Claim as provided in this
Section 16.07 shall relieve the Indemnifying Party of its obligations under
Section 16.03 or Section 16.04 (as applicable) only to the extent that failure
results in insufficient time being available to permit the Indemnifying Party to
defend effectively against the Claim or otherwise materially prejudices the
Indemnifying Party’s ability to defend against the Claim.

(c)In the case of a claim based upon a Claim, the Indemnifying Party, on or
before the thirtieth (30th) day after its receipt of the Claim Notice, shall
notify the Indemnified Party whether it admits or denies its liability to defend
the Indemnified Party against the Claim at the sole cost and expense of the
Indemnifying Party.  The Indemnified Party is authorized, prior to and before
the expiration of this 30-day period, to file any motion, answer or other
pleading that it shall deem necessary or appropriate to protect its

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interests or those of the Indemnifying Party and that is not prejudicial to the
Indemnifying Party.

(d)If the Indemnifying Party admits its liability to defend the Claim, it shall
have the right and obligation to diligently defend, at its sole cost and
expense, the Claim.  The Indemnifying Party shall have full control of such
defense and proceedings, including any compromise or settlement of the
Claim.  If requested by the Indemnifying Party, the Indemnified Party agrees to
cooperate in contesting any Claim which the Indemnifying Party elects to
contest.  The Indemnified Party may participate in, but not control, any defense
or settlement of any Claim controlled by the Indemnifying Party pursuant to this
Section 16.07.  Without the written consent of the Indemnified Party, an
Indemnifying Party shall not (i) settle any Claim or consent to the entry of any
judgment with respect to any Claim which does not include an unconditional
written release of the Indemnified Party from all liability in respect of such
Claim or (ii) settle any Claim or consent to the entry of any judgment with
respect any Claim in any manner that may materially and adversely affect the
Indemnified Party.

(e)If the Indemnifying Party does not admit its liability to defend the Claim or
admits its liability but fails diligently to prosecute or settle the Claim, then
the Indemnified Party shall have the right to defend against the Claim at the
sole cost and expense of the Indemnifying Party, with counsel of the Indemnified
Party’s choosing, subject to the right of the Indemnifying Party to admit its
liability to defend the Claim and assume the defense of the Claim at any time
prior to its settlement or final determination.  If the Indemnifying Party has
not yet admitted its liability for a Claim defense, the Indemnified Party shall
notify the Indemnifying Party of any proposed settlement and the Indemnifying
Party shall have the option, on or before the tenth (10th) day following receipt
of that notice (i) to admit in writing its liability for the Claim defense, and
(ii) if liability is so admitted, to reject, in its reasonable judgment, the
proposed settlement.

(f)In the case of a claim not based upon a Claim, the Indemnifying Party shall
have ninety (90) days from its receipt of the Claim Notice (i) to cure the
Losses complained of, (ii) to admit its liability for those Losses, or (iii) to
dispute the claim for those Losses.  If the Indemnifying Party does not notify
the Indemnified Party within this 90-day period that it has cured the Losses or
that it disputes the claim for those Losses, the amount of those Losses shall
conclusively be deemed a liability of the Indemnifying Party.

Section 16.08Sellers’ Liability Several, Not Joint.  NOTWITHSTANDING ANYTHING TO
THE CONTRARY ELSEWHERE IN THIS AGREEMENT OR THE DOCUMENTS DELIVERED AT CLOSING,
EACH SELLER SHALL BE LIABLE ONLY TO THE EXTENT THAT A LIABILITY OR CLAIM
ENFORCEABLE PURSUANT TO

{1919007;4}- 49 -

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THIS AGREEMENT RELATES TO THE ASSETS (OR PERCENTAGE THEREOF) SOLD OR TO BE SOLD
BY SUCH SELLER UNDER THIS AGREEMENT.

.

Article XVII
Limitations on Representations and Warranties

Section 17.01Disclaimers of Representations and Warranties.

  The express representations and warranties of each Seller contained in this
Agreement are exclusive and are in lieu of all other representations and
warranties, express, implied or statutory.

Section 17.02Sale “As Is” “Where Is”.

  BUYER REPRESENTS THAT IT HAS INSPECTED, OR WILL HAVE THE OPPORTUNITY TO
INSPECT, THE ASSETS AND IF CLOSING OCCURS, WILL ACCEPT THE PHYSICAL AND
ENVIRONMENTAL CONDITION OF SAME ON AN “AS IS-WHERE IS” BASIS, AND BUYER FOREVER
RELEASES SELLERS INDEMNITEES FROM ANY LIABILITY WITH RESPECT TO THE PHYSICAL AND
ENVIRONMENTAL CONDITION OF THE ASSETS AT THE CLOSING, REGARDLESS OF WHETHER
CAUSED BY OR ATTRIBUTABLE TO A SELLERS INDEMNITEE’S SOLE, JOINT, COMPARATIVE OR
CONCURRENT NEGLIGENCE, FAULT, OR STRICT LIABILITY, AND REGARDLESS OF WHETHER
ARISING DURING THE PERIOD OF, OR FROM, OR IN CONNECTION WITH SELLERS’ OWNERSHIP
OF THE ASSETS OR USE OF THE PROPERTY DESCRIBED IN THE LEASES BEFORE OR AT THE
CLOSING.  WITHOUT LIMITING THE FOREGOING, BUYER WAIVES ANY RIGHT TO RECOVER FROM
SELLERS INDEMNITEES AND FOREVER RELEASES AND DISCHARGES SELLERS INDEMNITEES AND
AGREES TO RELEASE, INDEMNIFY, DEFEND AND HOLD SELLERS INDEMNITEES HARMLESS FROM
AND AGAINST ANY AND ALL DAMAGES, CLAIMS, LOSSES, LIABILITIES, PENALTIES, FINES,
LIENS, JUDGMENTS, COSTS AND EXPENSES WHATSOEVER, INCLUDING ATTORNEYS’ FEES AND
COSTS, WHETHER DIRECT OR INDIRECT, KNOWN OR UNKNOWN, FORESEEN OR UNFORESEEN,
THAT MAY ARISE ON ACCOUNT OF OR IN ANY WAY BE CONNECTED WITH THE PHYSICAL AND
ENVIRONMENTAL CONDITION OF THE ASSETS AT THE CLOSING OR ANY LAW OR REGULATION
APPLICABLE TO THE ASSETS, INCLUDING THE COMPREHENSIVE ENVIRONMENTAL RESPONSE,
COMPENSATION AND LIABILITY ACT OF 1980, AS AMENDED (42 U.S.C. § 9601 et seq.),
THE RESOURCE CONSERVATION AND RECOVERY ACT OF 1976 (42 U.S.C. § 6901 et seq.),
THE CLEAN WATER ACT (33 U.S.C. §§ 466 et seq.), THE SAFE DRINKING WATER ACT (14
U.S.C. §§ 1401-1450), THE HAZARDOUS MATERIALS TRANSPORTATION ACT (49 U.S.C. §
7401 et seq.), AS AMENDED, THE CLEAN AIR ACT AMENDMENTS OF 1990, AND ANY OTHER
APPLICABLE FEDERAL, STATE OR LOCAL LAW, REGARDLESS OF WHETHER ARISING DURING THE
PERIOD OF, OR FROM, OR IN CONNECTION WITH, SELLERS’ OWNERSHIP OF THE ASSETS OR
USE OF THE PROPERTY DESCRIBED IN THE LEASES AT OR PRIOR TO THE CLOSING, AND
REGARDLESS OF WHETHER ATTRIBUTABLE TO THE STRICT LIABILITY OF A SELLERS
INDEMNITEE OR TO THE SOLE, JOINT, COMPARATIVE OR CONCURRENT NEGLIGENCE OF A
SELLERS INDEMNITEE, EVEN IF CAUSED BY THE GROSS NEGLIGENCE OR WILLFUL MISCONDUCT
OF A SELLERS INDEMNITEE PRIOR TO CLOSING.  NOTWITHSTANDING THE FOREGOING, BUYER
AND SELLERS AGREE THAT THE PROVISIONS OF THIS

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Section 17.02 ARE ALSO SUBJECT TO AND LIMITED BY THE EXPRESS OBLIGATIONS OF
SELLERS CONTAINED IN THIS AGREEMENT TO THE EXTENT THAT ANY OF THE FOREGOING
RELATE TO INDEMNIFIED ENVIRONMENTAL DEFECTS.

Section 17.03DISCLAIMER REGARDING THE ASSETS.

  BUYER ACKNOWLEDGES THAT SELLERS HAVE NOT MADE, AND SELLERS HEREBY EXPRESSLY
DISCLAIM AND NEGATE, ANY COVENANT, REPRESENTATION OR WARRANTY, EXPRESS OR
IMPLIED, RELATING TO THE CONDITION OF ANY BUILDINGS, FACILITIES, WELLS,
EQUIPMENT, INVENTORY, MACHINERY, FIXTURES AND PERSONAL/MOVABLE PROPERTY
CONSTITUTING PART OF THE ASSETS (COLLECTIVELY, THE “TANGIBLE PROPERTY”),
INCLUDING (a) ANY IMPLIED OR EXPRESS WARRANTY OF MERCHANTABILITY, (b) ANY
IMPLIED OR EXPRESS WARRANTY OF FITNESS FOR A PARTICULAR PURPOSE, (c) ANY IMPLIED
OR EXPRESS WARRANTY OF CONFORMITY TO MODELS OR SAMPLES OF MATERIALS, (d) ANY
RIGHTS OF BUYER UNDER APPROPRIATE STATUTES TO CLAIM DIMINUTION OF CONSIDERATION
OR RETURN OF THE PURCHASE PRICE, (e) ANY IMPLIED OR EXPRESS WARRANTY OF FREEDOM
FROM PATENT OR TRADEMARK INFRINGEMENT, (f) ANY IMPLIED OR EXPRESS WARRANTY OF
FREEDOM FROM HIDDEN DEFECTS OR OTHER DEFECTS, WHETHER KNOWN OR UNKNOWN, AND (g)
ANY AND ALL IMPLIED WARRANTIES EXISTING UNDER APPLICABLE LAW IN EFFECT NOW OR IN
THE FUTURE, IT BEING THE EXPRESS INTENTION OF SELLERS AND BUYER THAT THE
TANGIBLE PROPERTY SHALL BE CONVEYED TO BUYER AS IS AND IN THEIR PRESENT
CONDITION AND STATE OF REPAIR.  BUYER REPRESENTS TO SELLERS THAT BUYER HAS MADE
OR CAUSED TO BE MADE SUCH INSPECTIONS WITH RESPECT TO THE TANGIBLE PROPERTY AS
BUYER DEEMS APPROPRIATE AND BUYER WILL ACCEPT THE TANGIBLE PROPERTY AS IS, WHERE
IS, IN THEIR PRESENT CONDITION AND STATE OF REPAIR.

Section 17.04DISCLAIMER REGARDING INFORMATION.

  SELLERS HEREBY EXPRESSLY NEGATES AND DISCLAIMS, AND BUYER HEREBY WAIVES, AND
ACKNOWLEDGES THAT SELLERS HAVE NOT MADE, ANY REPRESENTATION OR WARRANTY, EXPRESS
OR IMPLIED, RELATING TO (a) THE ACCURACY, COMPLETENESS OR MATERIALITY OF ANY
INFORMATION, DATA OR OTHER MATERIALS (WRITTEN, ELECTRONIC OR ORAL) NOW, IN THE
PAST OR IN THE FUTURE FURNISHED TO BUYER BY OR ON BEHALF OF SELLERS OR
(b) PRODUCTION RATES, RECOMPLETION OPPORTUNITIES, DECLINE RATES, GEOLOGICAL OR
GEOPHYSICAL DATA OR INTERPRETATIONS, THE QUALITY, QUANTITY, RECOVERABILITY OR
COST OF RECOVERY OF ANY HYDROCARBON RESERVES, ANY PRODUCT PRICING ASSUMPTIONS,
OR THE ABILITY TO SELL OR MARKET ANY HYDROCARBONS AFTER CLOSING.

Article XVIII
Dispute Resolution

Section 18.01Scope; Appointment of Independent Expert.

  All disputes among the Parties regarding Title Defects, Title Defect Values,
Environmental Defects, Environmental Defect Values, Title Benefits or
calculation of the Final Statement or revisions thereto (“Disputes”) shall be

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exclusively and finally resolved pursuant to this Article XVIII.  If the Parties
are unable to reach resolution as to any such outstanding Dispute within five
(5) days following delivery of a written notice from either Buyer or Sellers to
the other Party that Buyer or Sellers, as applicable, intends to submit such
Dispute to the Independent Expert for resolution pursuant to this Article XVIII,
then any Party may, by written notice to the other Parties (an “Election
Notice”), elect to submit such Dispute to a single arbitrator (the “Independent
Expert”), who shall be selected by mutual agreement of Buyer and Sellers within
fifteen (15) days after the delivery of such Election Notice in accordance with
following:

(a)in the case of any Dispute regarding Title Defects, Title Defect Values or
Title Benefits, the Independent Expert shall be a title attorney with at least
twenty (20) years’ experience in oil and gas titles involving properties in the
regional area in which the Assets with respect to which such Title Defects or
Title Benefits are alleged or with respect to which such Title Defect Values in
dispute are located and who is licensed to practice law in the state in which
such Assets are located;

(b)in the case of any Dispute regarding Environmental Defects or Environmental
Defect Values, the Independent Expert shall be an environmental consultant with
at least twenty (20) years’ experience involving properties in the regional area
in which the Assets with respect to which such Environmental Defects are alleged
or with respect to which such Environmental Defect Values in dispute are
located;

(c)in the case of any Dispute regarding the calculation of the Final Statement
or revisions thereto, the Independent Expert shall be a senior partner of an
independent accounting firm mutually acceptable to Buyer and Sellers; and

(d)in the case of any Dispute, the Independent Expert shall not have had a
substantial relationship with any Party or any Affiliate of any Party during the
two (2) years prior to such selection;

provided that, in any case, in the absence of such agreement within fifteen (15)
days of the delivery of the Election Notice, the Independent Expert shall be
selected as would a single arbitrator in accordance with the Commercial
Arbitration Rules of the American Arbitration Association (the “Rules”)
notwithstanding the selection method and criteria set forth in clauses (a)-(d)
above.

Section 18.02Additional Procedures.

  All proceedings under this Article XVIII shall be held in Dallas County,
Texas, or such other location as may be agreed upon by the Parties, and shall be
conducted in accordance with the Rules, to the extent such Rules do not conflict
with the terms of this Article XVIII.  The Independent Expert’s final
determination shall be made within twenty-one (21) days after submission of the
matters in dispute to the Independent Expert, and the Independent Expert shall
agree to comply with this schedule before accepting appointment.  In making its
determination, the Independent Expert shall be bound by terms of this Agreement,
to the extent applicable, and, subject to the foregoing, may consider such other
matters as in the opinion of the Independent Expert are necessary to make a
proper determination.  Additionally, the Independent Expert may consult with and
engage disinterested advisors for advice, including without limitation petroleum
engineers.  The Independent Expert, however, may not determine that (a) a Title
Defect Value of a Title Defect is greater than the Title Defect Value claimed by
Buyer in its applicable Title

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Defect Notice, (b) an Environmental Defect Value is greater than the
Environmental Defect Value claimed by Buyer in its applicable Environmental
Defect Notice, or (c) the value of a Title Benefit is greater than the amount
claimed by Sellers.  The Independent Expert shall act as an expert for the
limited purpose of determining the specific disputed Title Defects, Title Defect
Values, Title Benefits, Environmental Defects or Environmental Defect Values, or
calculation of the Final Statement or revisions thereto submitted by any Party
and may not award damages, interest or penalties to any Party with respect to
any matter.  Sellers and Buyer shall each bear their own legal fees and other
costs.  Sellers and Buyer shall each bear one-half of the costs and expenses of
the Independent Expert, including those which relate to any disinterested
advisor utilized by the Independent Expert.

Section 18.03Waiver.

  Notwithstanding anything to the contrary in this Agreement, at any time Buyer
may waive, by written notice to Sellers referencing this Section 18.03, any
Title Defect, Title Defect Value, Environmental Defect or Environmental Defect
Value previously asserted by Buyer.

Section 18.04Binding Nature.

  The decision and award of the Independent Expert with respect to any
arbitration under this Article XVIII shall be binding upon the Parties and final
and nonappealable to the maximum extent permitted by law, and judgment thereon
may be entered in a court of competent jurisdiction and enforced by any Party as
a final judgment of such court.

Section 18.05Confidentiality.

  Except to the extent necessary to enforce a decision and award of the
Independent Expert, to enforce other rights of the Parties hereunder, or as
required by applicable law or the rules of any stock exchange on which the
securities of any Party or any of their Affiliates are listed or are in the
process of being listed, the Independent Expert and Parties, and their counsel,
consultants and other representatives, shall maintain as confidential the fact
any proceedings are ongoing, or have been completed, under this Article XVIII,
any decision and award of the Independent Expert and all documents prepared and
submitted by any Party, or its counsel, consultants and other agents and
representatives, in connection with any proceedings under this Article XVIII.
The confidentiality obligations in this Section 18.05 shall survive termination
of this Agreement.

Article XIX
Miscellaneous

Section 19.01Names.

  As soon as reasonably possible after the Closing, but in no event later than
the forty-fifth (45th) day after the Closing, Buyer shall at Buyer’s expense
remove the name of Sellers and Sellers’ Affiliates, or any variations on them,
from all of the operated Assets and make the requisite filings with, and provide
the requisite notices to, the appropriate federal, state or local agencies to
place the title or other indicia of ownership, including operation of the
operated Assets, in a name other than the name of Sellers or any of Sellers’
Affiliates, or any variations of them.

Section 19.02Expenses.

  Except as otherwise provided in this Agreement, each Party shall be solely
responsible for all expenses, including due diligence expenses, incurred by it
in

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connection with this transaction, and no Party shall be entitled to any
reimbursement for such expenses from the other Party.

Section 19.03Filings, Notices and Certain Governmental Approvals.

Promptly after Closing, Buyer shall at Buyer’s expense (a) record the Assignment
of the Assets, all state/federal assignments and any lien releases related to
the Assets executed or delivered at the Closing in all applicable real property
records and/or, if applicable, all state or federal agencies; (b) send notices
to vendors supplying goods and services for the Assets of the assignment of the
Assets to Buyer and, if applicable, the designation of Buyer as the operator of
the operated Assets; (c) actively pursue the unconditional approval of all
applicable Governmental Authorities of the assignment of the Assets to Buyer and
the designation of Buyer as the operator of the operated Assets; and
(d) actively pursue all other consents and approvals that may be required in
connection with the assignment of the Assets to Buyer and the assumption of the
liabilities assumed by Buyer under this Agreement, that have not been obtained
prior to Closing.  Buyer shall at Buyer’s expense promptly provide Sellers with
copies of all filings, approvals and consents required pursuant to this Section
19.03.  Buyer shall take any and all action required by any Governmental
Authority to obtain unconditional approval, including the posting of any and all
bonds or other security that may be required in excess of its existing lease,
pipeline or area-wide bond.

Section 19.04Document Retention.

  As used in this Section 19.04, the term “Documents” means all files,
documents, books, Records and other data delivered to Buyer by Sellers pursuant
to the provisions of this Agreement (other than those that Sellers retained
either the original or a copy of), including financial accounting and Tax
records; land, title and division of interest files; contracts; engineering and
well files; and books and records related to the operation of the Assets prior
to the Closing Date.  Buyer shall retain and preserve the Documents for a period
of no less than seven (7) years following the Closing Date (or for such longer
period as may be required by Law), and shall allow Sellers or Sellers’
representatives to inspect the Documents at reasonable times and upon reasonable
notice during regular business hours during such time period.  Sellers shall
have the right during such period to make copies of the Documents at Sellers’
expense.

Section 19.05Entire Agreement.

  This Agreement, the Confidentiality Agreement and the documents to be executed
under this Agreement constitute the entire agreement between the Parties
pertaining to the subject matter of this Agreement and supersede all prior
agreements, understandings, negotiations and discussions, whether oral or
written, of the Parties pertaining to the subject matter of this Agreement, the
Confidentiality Agreement and the documents to be entered into under this
Agreement.  Any supplement, amendment, alteration, modification or waiver of
this Agreement shall be binding only if executed in writing by the Parties and
specifically referencing this Agreement.

Section 19.06Waiver.

  No waiver of any of the provisions of this Agreement shall be deemed or shall
constitute a waiver of any other of its provisions (whether or not similar), nor
shall such waiver constitute a continuing waiver unless otherwise expressly
provided.

Section 19.07Construction.

  The captions in this Agreement are for convenience only and shall not be
considered a part of or affect the construction or interpretation of any
provision of this Agreement.  The Parties acknowledge that they have
participated jointly in the negotiation and

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drafting of this Agreement and as such the Parties agree that if an ambiguity or
question of intent or interpretation arises under this Agreement, this Agreement
shall not be construed more strictly against one Party than another on the
grounds of authorship.

Section 19.08No Third Party Beneficiaries.

  Except as provided in Section 16.03, Section 16.04 and any other provisions in
this Agreement relating to Buyer’s obligations to Sellers Indemnitees or
Sellers’ obligations to Buyer Indemnitees, nothing in this Agreement shall
provide any benefit to any Third Party or entitle any Third Party to any claim,
cause of action, remedy or right of any kind, it being the intent of the Parties
that this Agreement shall otherwise not be construed as a Third Party
beneficiary contract.

Section 19.09Assignment.

  Except as otherwise provided in Article VIII, a Party may assign or delegate
any of its rights or duties under this Agreement only with the prior written
consent of the other Party, and any assignment made without such consent shall
be void.  Except as otherwise provided in this Agreement, this Agreement shall
be binding upon and inure to the benefit of the Parties and their respective
permitted successors, assigns and legal representatives.

Section 19.10Governing Law.

  THIS AGREEMENT AND THE LEGAL RELATIONS AMONG THE PARTIES SHALL BE GOVERNED AND
CONSTRUED IN ACCORDANCE WITH THE LAW OF THE STATE OF OKLAHOMA, EXCLUDING ANY
CONFLICT OF LAWS RULE OR PRINCIPLE THAT MIGHT REFER CONSTRUCTION OF SUCH
PROVISIONS TO THE LAWS OF ANOTHER JURISDICTION.

Section 19.11Jurisdiction.

  THE PARTIES CONSENT TO THE EXERCISE OF JURISDICTION IN PERSONAM BY THE COURTS
OF THE STATE OF TEXAS FOR ANY ACTION ARISING OUT OF THIS AGREEMENT OR THE OTHER
DOCUMENTS EXECUTED PURSUANT TO OR IN CONNECTION WITH THIS AGREEMENT.  ALL
ACTIONS OR PROCEEDINGS WITH RESPECT TO, ARISING DIRECTLY OR INDIRECTLY IN
CONNECTION WITH, OUT OF, RELATED TO, OR FROM THIS AGREEMENT OR THE OTHER
DOCUMENTS EXECUTED PURSUANT TO OR IN CONNECTION WITH THIS AGREEMENT SHALL BE
LITIGATED (IF AT ALL) ONLY IN THE DISTRICT COURTS OF TEXAS IN DALLAS COUNTY OR
(IF IT HAS JURISDICTION) THE UNITED STATES DISTRICT COURT FOR THE NORTHERN
DISTRICT OF TEXAS LOCATED IN DALLAS COUNTY, TEXAS.  EACH PARTY 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 19.12Notices.

  Any notice, communication, request, instruction or other document required or
permitted under this Agreement shall be given in writing and delivered in person
or by courier, email or facsimile to the addresses of Sellers and Buyer set
forth below. Any such notice shall be effective only upon receipt.

Buyer:

Mid-Con Energy Properties, LLC

 

2431 E. 61st, Suite 850

 

Tulsa, Oklahoma 74136

 

Attention:  Chad McLawhorn III

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Email:  CMcLawhorn@midcon-energy.com

 

 

Sellers:

SCOUT ENERGY GROUP IV, LP

 

4901 LBJ Freeway, Suite 300

 

Dallas, Texas 75244

 

Attention:  Jon Piot

 

Email:  jpiot@scoutep.com

 

 

Any Party may, by written notice so delivered to the other Party, change its
address for notice purposes under this Agreement.  Unless a notice or election
is expressly specific to an individual Seller, a notice by or to a Seller or an
election by a Seller shall be deemed to relate to all Sellers to the extent each
Seller sold or agreed to sell under this Agreement an interest in the Assets
affected by such notice or election.

Section 19.13Severability.

  If any term or other provision of this Agreement is invalid, illegal or
incapable of being enforced by any rule of law or public policy, all other
conditions and provisions of this Agreement shall nevertheless remain in full
force and effect and the Parties shall negotiate in good faith to modify this
Agreement so as to effect their original intent as closely as possible in an
acceptable manner to the end that the transactions contemplated by this
Agreement are fulfilled to the extent possible.

Section 19.14Survival.

  The representations and warranties of Sellers set forth in Section 6.06
through Section 6.12 and the covenants and agreements of Sellers and Buyer to be
performed prior to or at the Closing shall terminate upon the Closing and be of
no further force or effect.  The representations and warranties of Sellers set
forth in Section 6.01 through Section 6.05 shall survive the Closing for a
period of one (1) year.  All other representations, warranties, covenants and
agreements shall survive the Closing indefinitely; provided that nothing herein
shall extend the six (6) month period after Closing during which Buyer may send
a Claim Notice claiming indemnification in accordance with Section
16.05(a)(ii).  The obligations and covenants of Buyer under this Agreement that
survive the Closing shall be deemed covenants running with the land.

Section 19.15Time of the Essence.

  Time shall be of the essence with respect to all time periods and notice
periods set forth in this Agreement.  If the date specified in this Agreement
for giving any notice or taking any action is not a Business Day (or if the
period during which any notice is required to be given or any action taken
expires on a date which is not a Business Day), then the date for giving such
notice or taking such action (and the expiration of such period during which
notice is required to be given or action taken) shall be the next day which is a
Business Day.

Section 19.16Counterpart Execution.

  This Agreement may be executed in any number of counterparts (including by
facsimile or email transmission), and each such counterpart shall be effective
as to each Party that executes the same whether or not all of the Parties
execute the same counterpart.  If counterparts of this Agreement are executed,
the signature pages from various counterparts may be combined into one composite
instrument for all purposes.  All counterparts together shall constitute only
one Agreement, but each counterpart shall be considered an original.

Section 19.17Knowledge.

  Whenever a statement in this Agreement is qualified by a phrase such as to
Sellers’ “Knowledge,” the Parties intend that the only information to be
attributed

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to Sellers is information actually known by a current officer or field
superintendent of Sellers who devotes attention to such matters during the
course of his or her employment.

Section 19.18Press Releases.

Neither Sellers nor Buyer, nor any Affiliate thereof, shall make any press
release regarding the existence of this Agreement, the contents hereof, or the
transactions contemplated hereby without (a) in the case of announcements by
Sellers or Sellers’ Affiliates, the prior written consent of Buyer, which
consent shall not be unreasonably withheld or delayed, or (b) in the case of
announcements by Buyer or its Affiliates, the prior written consent of Sellers,
which consent shall not be unreasonably withheld or delayed; provided, however,
the foregoing shall not restrict disclosures by Buyer or Sellers (i) to the
extent that such disclosures are required by applicable securities or other Law
or the applicable rules of any stock exchange having jurisdiction over the
disclosing Party or its Affiliates, or (ii) to Governmental Authorities and
Third Parties holding preferential rights to purchase, rights of consent or
other rights that may be applicable to the transactions contemplated by this
Agreement, as reasonably necessary to provide notices, seek waivers, amendments
or terminations of such rights, or seek such consents.  Sellers and Buyer shall
each be liable for the compliance of their respective Affiliates with the terms
of this Section 19.18.  Requests by Sellers to omit the identity of Sellers in
any announcement by Buyer and requests by Buyer to omit the identity of Buyer in
any announcement by Sellers shall be considered reasonable for purposes of this
Section 19.18, unless disclosure of such Party’s identity is required by
applicable Law.

Section 19.19Exclusivity; Waiver of Rescission.

(a)Buyer agrees that after Closing, in relation to any breach, default, or
nonperformance of any representation, warranty, covenant, or agreement made or
entered into by Sellers pursuant to this Agreement or any certificate,
instrument, or document delivered pursuant hereto or with respect to the
Retained Obligations, the relief and remedy available to Buyer in respect of
said liability, breach, default, or nonperformance shall be limited to the
extent properly claimable hereunder and subject to the terms and provisions of
Article XVI.

(b)Buyer and Sellers acknowledge that, following the 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 Sellers waive any right
to rescind this Agreement or any of the transactions contemplated hereby.

Section 19.20Waiver of Trade Practices Act.

(a)It is the intention of the parties that Buyer’s rights and remedies with
respect to this transaction and with respect to all acts or practices of
Sellers, past, present or future, in connection with this transaction shall be
governed by legal principles other than the Oklahoma Consumer Protection Act
(the “OCP”). As such, Buyer hereby waives the applicability of the OCP to this
transaction and any and all duties, rights or remedies that might be imposed by
the OCP, whether such duties, rights and remedies are applied directly

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by the OCP itself or indirectly in connection with other statutes. Buyer
acknowledges, represents and warrants that it is purchasing the goods and/or
services covered by this Agreement for commercial or business use; that it has
assets of $25,000,000 or more according to its most recent financial statement
prepared in accordance with GAAP; that it has knowledge and experience in
financial and business matters that enable it to evaluate the merits and risks
of a transaction such as this; and that it is not in a significantly disparate
bargaining position with Sellers.

(b)Buyer expressly recognizes that the price for which Sellers have agreed to
perform Sellers’ obligations under this Agreement has been predicated upon the
inapplicability of the OCP and this waiver of the OCP. Buyer further recognizes
that Sellers, in determining to proceed with the entering into this Agreement,
has expressly relied on this waiver and the inapplicability of the OCP.

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IN WITNESS WHEREOF, Sellers and Buyer have executed and delivered this Agreement
as of the date first set forth above.

BUYER:

Mid-Con Energy Properties, LLC

By:  Mid-Con Energy Partners, LP,

Its Sole Member

 

By:  Mid-Con Energy GP, LLC,

Its General Partner

 

By: /s/Charles L. McLawhorn, III
Charles L. McLawhorn III, Vice President,

General Counsel and Corporate Secretary

 

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Purchase and Sale Agreement
59

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IN WITNESS WHEREOF, Sellers and Buyer have executed and delivered this Agreement
as of the date first set forth above.

SELLERS:

SCOUT ENERGY GROUP IV, LP

By Scout Energy Group IV GP LLC

Its General Partner

By:/s/Jon C. Piot
Jon C. Piot, Managing Director

SCOUT ENERGY PARTNERS IV-A, LP

By Scout Energy Group IV, LP

Its General Partner

 

By Scout Energy Group IV GP LLC

Its General Partner

By:/s/Jon C. Piot
Jon C. Piot, Managing Director

SCOUT ENERGY GROUP I, LP

By Scout Energy Group I GP LLC

Its General Partner

By:/s/Jon C. Piot
Jon C. Piot, Managing Director

SCOUT ENERGY PARTNERS I-A, LP

By Scout Energy Group I, LP

Its General Partner

 

By Scout Energy Group I GP LLC

Its General Partner

By:/s/Jon C. Piot
Jon C. Piot, Managing Director

 

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