Exhibit 10.8

PURCHASE AND SALE AGREEMENT
AMONG
MID-CON ENERGY PROPERTIES, LLC
(“BUYER”)
AND
WALTER EXPLORATION COMPANY, JWMW LTD., and WILDCAT PROPERTIES L.P.,
(“SELLERS”)
EXECUTED AS OF
JULY 28, 2016

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TABLE OF CONTENTS
1.
DEFINITIONS    7

2.
PURCHASE AND SALE    13

2.1
Assets    13

2.2
Retained Assets    15

2.3
Third Party Owners    16

2.4
Participation of Third Party Owners    17

3.
PURCHASE PRICE AND ALLOCATION    18

3.1
Base Purchase Price    18

3.2
Performance Deposit and Payment    18

3.3
Adjustments to the Base Purchase Price    19

3.4
Allocation of Base Purchase Price    21

4.
ACCESS TO ASSETS AND DATA; DISCLAIMERS; GOVERNMENTAL REVIEWS    21

4.1
Access    22

4.2
Confidentiality Obligations    22

4.3
Disclaimer    23

4.4
Governmental Reviews    24

5.
SELLERS’ REPRESENTATIONS    25

5.1
Existence    25

5.2
Authority    25

5.3
Compliance    25

5.4
Payment of Royalties    25

5.5
Taxes    25

5.6
Material Contracts    25

5.7
Permits    26

5.8
Litigation and Claims    26

5.9
Sale Contracts    26

5.10
Notices    26

5.11
Take-or-Pay    26

5.12
Timely Payment    26

5.13
Imbalances    26

5.14
Outstanding Obligations    26

5.15
Brokers    27

5.16
Bankruptcy    27

5.17
Consents    27

5.18
Preferential Purchase Rights    27

5.19
Mortgages and Other Instruments    27

6.
BUYER’S REPRESENTATIONS    27

6.1
Information    27

6.2
Knowledge and Experience    28

6.3
No Warranty    28

6.4
Existence    29

6.5
Authority    29

6.6
Liability for Broker’s Fees    29

6.7
Bankruptcy    29

6.8
Qualification to Assume Operatorship    29

6.9
Consents    30

6.10
Litigation    30

7.
TITLE    30

7.1
Title Defects    30

7.2
Additional Interests    32

7.3
Notices    32

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7.4
Adjustments to Base Purchase Price    32

7.5
Deductible for Title, Environmental, or Casualty Defects    34

7.6
Termination Threshold for Defects    35

8.
ENVIRONMENTAL AND ENVIRONMENTAL INDEMNITY    35

8.1
Acceptance of Environmental Condition    35

8.2
Remedy for Environmental Defects    36

8.3
Acceptance of Environmental Condition    37

8.4
NORM    38

8.5
Environmental Indemnities    38

9.
THIRD-PARTY CONSENTS AND PREFERENTIAL PURCHASE RIGHTS    39

9.1
Third Party Notices    39

9.2
Third-Party Exercise    39

9.3
Third-Party Failure to Purchase    39

9.4
Consents    40

10.
CONDITIONS TO CLOSING; Settlement Statement; CLOSING    40

10.1
Sellers’ Conditions to Closing    40

10.2
Buyer’s Conditions to Closing    41

10.3
Closing Settlement Statement    42

10.4
Closing Date and Place    42

10.5
Closing Activities    42

11.
POST-CLOSING OBLIGATIONS    44

11.1
Recordation and Filing of Documents    44

11.2
Records    44

11.3
Final Settlement Statement    44

11.4
Cooperation with Sellers’ Retained Assets    45

11.5
Suspense Accounts    45

11.6
Further Assurances    46

12.
TAXES    46

12.1
Property Taxes    46

12.2
Production Taxes    46

12.3
Other Taxes    47

13.
OWNERSHIP OF ASSETS    47

13.1
Distribution of Production    47

13.2
Proration of Income and Expenses    47

13.3
Notice to Remitters of Proceeds    48

13.4
Notice to Third Party Users of Key Facilities    48

13.5
Production Imbalances    48

13.6
Pipeline and Other Non-Wellhead Imbalances    48

14.
INTERIM OPERATIONS    49

14.1
Standard of Care    49

14.2
Liability of Operator    49

14.3
Removal of Signs    49

14.4
Third-Party Notifications    50

14.5
Seller Credit Obligations    50

14.6
Notification of Breaches    50

15.
ASSUMPTION OF LIABILITY AND GENERAL INDEMNIFICATION    50

15.1
Buyer’s Assumption of Obligations    50

15.2
Definitions    51

15.3
Buyer’s General Indemnity    52

15.4
Sellers’ General Indemnity    52

15.5
Limitation on Indemnification    54

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15.6
Further Limitation on Indemnification    54

15.7
Indemnification Procedures    54

15.8
Exclusive Remedy.    55

16.
CASUALTY LOSS    56

17.
NOTICES    56

18.
TERMINATION    57

18.1
Termination    57

18.2
Liabilities Upon Termination; Deposit Amount    58

19.
JOINDER OF ZEBRA INVESTMENTS, INC. Zebra Investments, Inc. (herein “Zebra”), a
Texas corporation, joins in this Agreement for the following limited
purposes:    58

19.1
Pace 1-68 Well    58

19.2
Sisters Lease    59

19.3
Undeveloped Leases covering Tract 1 through Tract 5    59

19.4
Mineral Interest in leased premises of Joe Young Lease    59

19.5
Representations    60

19.6
Form of Conveyance    60

19.7
Breach of Covenant.    60

20.
MISCELLANEOUS    60

20.1
Entire Agreement    60

20.2
Survival    60

20.3
Arbitration    60

20.4
Memorandum of Understanding    61

20.5
Choice of Law    61

20.6
Assignment    61

20.7
No Admissions    61

20.8
Waivers and Amendments    62

20.9
Counterparts    62

20.10
Third-Party Beneficiaries    62

20.11
Specific Performance    62

20.12
Public Communications    62

20.13
Headings    63

20.14
Expenses    63

20.15
No Recourse    63

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List of Exhibits:

Exhibit “A-1” - Schedule of Producing Leases
Exhibit “A-2” - Schedule of Undeveloped Leases
Exhibit “B” - Schedule of Wells
Exhibit “C-1” - Allocation Values for Wells
Exhibit “C-2” - Allocation Values for Undeveloped Leases
Exhibit “D” - Conveyance
Exhibit “E” - Certificate of Non-Foreign Status
Exhibit “F-1” - Third Party Owner Election to Participate
Exhibit “F-2” - Third Party Owner Election Not to Participate
Exhibit “G” - Interests of Sellers and Third Party Participants

List of Schedules:
Schedule 2.1(d) - Key Facilities
Schedule 2.1(f)A - Easements and Surface Agreements
Schedule 2.1(f)B - Key Facilities Related Easements and Surface Agreements
Schedule 2.2(g) - Retained Equipment and Personal Property    
Schedule 5.3 - Compliance
Schedule 5.6 - Material Contracts
Schedule 5.7 - Permits
Schedule 5.8 - Litigation
Schedule 5.10 - Notices
Schedule 5.14 - Outstanding Obligations/AFEs
Schedule 5.17 - Third Party Consents
Schedule 5.18 - Preferential Purchase Rights
Schedule 11.5 - Suspense Accounts
Schedule 13.5 - Production Imbalances

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PURCHASE AND SALE AGREEMENT
This Purchase and Sale Agreement (“Agreement”) is made and entered into as of
July 28, 2016 (“Execution Date”) by and between MID-CON ENERGY PROPERTIES, LLC,
a Delaware Limited Liability Company, whose address is 2431 E. 61st Street,
Suite 850, Tulsa, Oklahoma 74136 (“Buyer”), and WALTER EXPLORATION COMPANY, JWMW
LTD., and WILDCAT PROPERTIES L.P., whose address is 6116 N. Central Expressway,
Suite 313, Dallas, Texas 75206 (collectively “Sellers”). Buyer and Sellers may
sometimes be referred to in this Agreement individually as a “Party” or
collectively as the “Parties”.
WHEREAS, Buyer desires to purchase the Assets (as defined below) from Sellers,
and Sellers desire to sell the Assets to Buyer on the terms and conditions set
forth below.
NOW, THEREFORE, in consideration of the mutual promises contained herein and
other good and valuable consideration, the receipt and sufficiency of which are
hereby acknowledged, Buyer and Sellers agree as follows:

ARTICLE 1

.

.
DEFINITIONS

“Additional Interest” has the meaning set forth in Section 7.2.
“Agreement” has the meaning set forth in the Preamble.
“Allocated Values” has the meaning set forth in Section 3.4.
“Asset” or “Assets” has the meaning set forth in Article 2.
“Asset Group” has the meaning set forth in Section 7.4.
“Assumed Imbalance” or “Assumed Imbalances” has the meaning set forth in Section
13.5.
“Assumed Obligations” has the meaning set forth in Section 15.1.1.
“Base Purchase Price” has the meaning set forth in Section 3.1.

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“Business Day” means any day, other than Saturday or Sunday, on which commercial
banks are open for commercial business with the public in Tulsa, Oklahoma.
“Buyer” has the meaning set forth in the Preamble.
“Buyer Group” has the meaning set forth in Section 15.2.
“Casualty Defect” has the meaning set forth in Article 16.
“Claim Notice” has the meaning set forth in Section 15.7.2.
“Claims” means any and all claims, rights, demands, causes of action,
liabilities (including civil fines), damages, losses, fines, penalties,
sanctions of every kind and character including reasonable fees and expenses of
attorneys, technical experts and expert witnesses, judgments or proceedings of
any kind or character whatsoever, whether arising or founded in law, equity,
statute, contract, tort, strict liability or voluntary settlement and all
reasonable expenses, costs and fees (including reasonable attorneys’ fees) in
connection therewith.
“Cleanup” has the meaning set forth in Section 8.1(d).
“Closing” has the meaning set forth in Section 10.4.
“Closing Date” has the meaning set forth in Section 10.4.
“Closing Settlement Statement” has the meaning set forth in Section 10.3.
“Consents” has the meaning set forth in Section 9.1.
“Contracts” means all contract rights directly relating to the Assets,
including, but not limited to, any operating agreements, joint venture
agreements, unit agreements, orders and decisions of state, tribal and federal
regulatory authorities establishing units, unit operating agreements, farm-in
and/or farmout agreements, pooling or unitization or communitization agreements,
processing agreements, transportation agreements, gathering and processing
agreements, enhanced recovery and injection agreements, balancing agreements,
options, drilling agreements, exploration agreements, area of mutual interest
agreements, oil and/or gas production sales or marketing agreements, and
assignments of operating rights, working interests, subleases and rights above
or below certain footage depths or geological formations, to the extent the same
are directly related to the Assets; provided, however, the term “Contract” shall
not include any master service contract or any other contract or agreement which
precludes assignment for which Sellers, using their reasonable efforts, cannot
secure a waiver or consent to assignment prior to Closing by the other party(s)
to such contract or agreement.
“Conveyances” means the one or more conveyances, assignments, deeds, and bills
of sale, in form and substance mutually agreed to by Buyer and Sellers,
conveying the Sale Interests to Buyer in accordance with the terms of this
Agreement, to be executed and delivered in accordance with the provisions of
Section 10.5.2.
“Current Tax Period” has the meaning set forth in Section 12.1.
“Deductible Amount” has the meaning set forth in Section 7.5.
“Deposit” has the meaning set forth in Section 3.2.
“Due Diligence Period” has the meaning set forth in Section 7.1.
“Easements” means rights-of-way, easements, permits, licenses, approvals,
servitudes and franchises specifically acquired for, or used in connection with,
operations for the exploration and production of oil, gas or other minerals on
or from the Interests or otherwise in connection with the Wells, Equipment, any
gathering system(s) (whether used for the gathering of Hydrocarbons or
non-Hydrocarbon substances produced in association therewith, including produced
water and saltwater) or Surface Agreements, including, without limitation, the
rights to permits and licenses of any nature owned, held or operated in
connection with said operations.
“Effective Time” means 7:00 a.m. local time where the Assets are located on June
1, 2016.

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“Election Agreements” has the meaning set forth in Section 2.4(a).
“Environmental Adjustment” has the meaning set forth in Section 8.2(a).
“Environmental Defect” has the meaning set forth in Section 8.1.
“Environmental Laws” means any and all present and future laws, statutes,
regulations, rules, orders, ordinances, codes, plans, requirements, criteria,
standards, decrees, judgments, injunctions, notices, demand letters, permits,
licenses or determinations issued, or promulgated by any Governmental Authority
now or hereafter in effect, and in each as amended or supplemented from time to
time, and any applicable administrative or judicial interpretation thereof,
pertaining to (a) use, storage, emission, discharge, clean-up, release, or
threatened release of pollutants, contaminants, NORM, chemicals, or industrial,
toxic or hazardous substances (collectively, “Pollutants”) on or into the
environment or otherwise relating to the manufacture, processing, distribution,
use, treatment, storage, disposal, transportation or handling of Pollutants, (b)
health, (c) the environment, or (d) wildlife or natural resources applicable to
the Assets and in effect in or for the jurisdiction in which the Assets are
located, including, without limitation, the Clean Air Act (Air Pollution Control
Act), the Clean Water Act (CWA), the Federal Water Pollution Act, the Rivers and
Harbors Act, the Safe Drinking Water Act, the National Environmental Policy Act
of 1969 (NEPA), the Endangered Species Act (ESA), the Fish and Wildlife
Conservation Act of 1980, the Fish and Wildlife Coordination Act (FWCA), the Oil
Pollution Act, the Comprehensive Environmental Response, Compensation and
Liability Act (CERCLA), the Superfund Amendments and Reauthorization Act of 1986
(SARA), the Resources Conservation and Recovery Act (RCRA), the Toxic Substance
Control Act, the Occupational, Safety and Health Act (OSHA), the Emergency
Planning and Community Right-To-Know Act (EPCRA), the Hazardous Materials
Transportation Act, the Hazardous and Solid Waste Amendments of 1984 (HSWA), and
any and all other applicable present and future federal, state and local laws,
statutes, regulations, rules, orders, ordinances, codes, plans, requirements,
criteria, standards, decrees, judgments, injunctions, notices, demand letters,
permits, licenses or determinations whose purpose is to regulate Pollutants or
to conserve or protect health, the environment, wildlife or natural resources as
any of the foregoing are now existing or may hereafter be amended or
interpreted.
“Environmental Notice” has the meaning set forth in Section 8.1.
“Equipment” has the meaning set forth in Section 2.1(c).
“Excluded Third Party Owner Interests” has the meaning set forth in Section
2.4(c).
“Excluded Records” has the meaning set forth in Section 2.1(h).
“Excluded Assets” shall have the meaning set forth in Section 9.4.
“Exclusion Adjustment” shall have the meaning set forth in Section 9.4.
“Execution Date” has the meaning set forth in the Preamble.
“Final Settlement Statement” has the meaning set forth in Section 11.3.
“Final Suspense Account Statement” has the meaning set forth in Section 11.5.
“Governmental Authority” or “Governmental Authorities” means any court or
tribunal (including an arbitrator or arbitral panel) in any jurisdiction
(domestic or foreign) or any federal, tribal, state, county, municipal or other
governmental or quasi-governmental body, agency, authority, department, board,
commission, bureau, official or other authority or instrumentality.
“Hydrocarbons” has the meaning set forth in Section 2.1(e).
“Interests” has the meaning set forth in Section 2.1.
“Indemnified Party” has the meaning set forth in Section 15.7.1.
“Indemnifying Party” has the meaning set forth in Section 15.7.1.
“Key Facility” or “Key Facilities” has the meaning set forth in Section 2.1(d).
“Leases” has the meaning set forth in Section 2.1(a).

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“Loss” has the meaning set forth in Section 8.1(e).
“Material Contracts” means (a) all area of mutual interests agreements (other
than customary area of mutual interest provisions in operating agreements),
partnership (other than tax partnerships), joint venture and/or exploration or
development program agreements relating to Wells and Leases or otherwise
included in the Assets, (b) all of the oil and/or gas production sales,
marketing and processing agreements relating to the Wells and Leases, other than
such agreements which are terminable by Sellers without penalty on 90 or fewer
days’ notice, and (c) certain agreements with third parties related to the Key
Facilities.
“Non-Participating Third Party Owners” has the meaning set forth in Section
2.4(c).
“NORM” means naturally occurring radioactive material.
“Notice Period” has the meaning set forth in Section 15.7.3.
“Open Defect” has the meaning set forth in Section 7.4(c).
“Out-of-Pocket Costs” has the meaning set forth in Section 7.1(d).
“Party” or “Parties” has the meaning set forth in the Preamble.
“Party Affiliate” has the meaning set forth in Section 20.15.
“Participating Third Party Owners” has the meaning set forth in Section 2.4(c).
“Permits” has the meaning set forth in Section 2.1(g).
“Permitted Encumbrances” means (i) any third party consents to assignment and
similar agreements with respect to which waivers or consents are obtained prior
to Closing or which are typically obtained after Closing (including any
applicable approval(s) from Governmental Authorities); (ii) easements, rights of
way, servitudes, licenses and permits on, over, across or in respect of any of
the Assets which do not materially interfere with the use, operation or
development of the Assets; (iii) rights reserved to or vested in any
Governmental Authority to control or regulate any of the Assets in any manner,
and all obligations and duties under all applicable laws, rules and orders of
any such Governmental Authority or under any franchise, grant, license or permit
issued by any such Governmental Authority; (iv) materialmen’s, mechanics’,
repairmen’s, employees’, contractors’, operators’, tax and other similar liens
or charges arising in the ordinary course of business incidental to the
construction, maintenance or operation of any of the Assets which have not yet
become due and payable or payment is being withheld as provided by law or are
being contested in good faith in the ordinary course of business by appropriate
action; (v) any other liens, charges, encumbrances, contracts, agreements,
instruments, obligations, defects or irregularities of any kind whatsoever
affecting the Assets that do not operate to reduce the net revenue interest
below that set forth on the applicable Exhibit(s) hereto for such Interest or
increase the working interest above that set forth on the applicable Exhibit(s)
hereto without a proportionate increase in the corresponding net revenue
interest; (vi) defects and irregularities arising out of the lack of a survey;
(vii) defects or irregularities arising out of the lack of recorded powers of
attorney from any Person to execute and deliver documents on their behalf;
(viii) defects arising out of a lack of evidence of corporate authorization;
(ix) defects in the chain of title consisting of failure to recite marital
status or the omission of succession of heirship or estate proceedings; (x)
defects or irregularities arising out of improper or incomplete acknowledgement,
witness, or attestation; (xi) defects or irregularities of title as to which the
relevant statute(s) of limitations or prescription would bar any attack or claim
against Sellers’ title (or, after the Closing, Buyer’s title); (xii) any of the
matters disclosed on any Exhibit or any Schedule to this Agreement; (xiii)
defects based on lack of information in Seller’s files; (xiv) defects or
irregularities arising out of prior oil and gas leases which by their terms and
on their face, expired more than ten (10) years prior to the Effective Time, and
which have not been released of record; (xv) defects or irregularities arising
out of liens, mortgages or deeds of trust which, by their terms and on their
face, expired and terminated more than ten (10) years prior to the Effective
Time but which remain unreleased of record; (xvi) defects and irregularities
cured by possession under applicable statutes of limitation or statutes relating
to prescription; (xvii) all approvals or rights to consent by, required notices
to, filings with or other actions by Governmental Authorities in connection with
the sale or conveyance of oil and gas leases or interests therein if they are
customarily obtained subsequent to the sale or conveyance; (xviii) Preferential
Purchase Rights which are subject to Article 9; (xix) nonexistent contracts,
outside of the operator’s rights under the terms of any applicable operating
agreement(s), for the purchase of production from third-party shippers or the
gathering, transportation, treatment, injection or disposal of such third-party
shippers proportionate share of production on any gathering system(s) (including
the Key Facilities); (xx) conventional rights of reassignment triggered by
Sellers’ (or, after the Closing, Buyer’s) express indication of its intention to
release or abandon its interest prior to expiration of the primary term or other
termination of such interest; (xxi) any maintenance of uniform interest
provision in an operating agreement if waived by the party or parties having the
right to enforce such provision or if the violation of such provision would

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not give rise to the unwinding of the sale of the affected Asset; and (xxii)
such other defects or irregularities of title as Buyer may have waived in
writing or by which Buyer shall be deemed to have waived pursuant to the
provisions of Section 6.3 and Section 7.3.
“Person” means any individual, partnership, joint venture, corporation, trust,
limited liability company, unincorporated organization, government or department
or agency thereof, or any other entity.
“Pipeline Imbalances” has the meaning set forth in Section 13.6.
“Pollutants” has the meaning set forth in the definition of Environmental Laws.
“Preferential Purchase Right” has the meaning set forth in Section 9.1.
“Property Taxes” has the meaning set forth in Section 12.1.
“Records” has the meaning set forth in Section 2.1(h).
“Represented Imbalance” has the meaning set forth in Section 13.5.
“Retained Assets” has the meaning set forth in Section 2.2.
“Sale Interests” has the meaning set forth in Section 2.4(f).
“Sellers” has the meaning set forth in the Preamble.
“Seller Credit Obligations” has the meaning set forth in Section 14.5.
“Seller Group” has the meaning set forth in Section 15.2.
“Seismic License” has the meaning set forth in Section 2.1(h).
“Surface Agreements” means any contracts, rights, permits, permissions or
licenses to use of the surface estate as related to the Assets, including any
surface leases, surface use rights or agreements or any similar surface rights,
agreements or licenses relating to the Assets.
“Suspense Accounts” has the meaning set forth in Section 11.5.
“Third Party Owners” has the meaning set forth in Section 2.3.
“Third Party Notice Date” has the meaning set forth in Section 2.4(c).
“Termination Threshold” has the meaning set forth in Section 7.6.
“Title Defect” has the meaning set forth in Section 7.1.
“Undeveloped Leases” mean and refer to those oil, gas and mineral leases
separately identified in Exhibit A-2, which are oil and gas leases or oil, gas
and mineral leases which are currently within their respective primary terms,
under which no exploration activity as yet has occurred.
“WEC” means and refers to Walter Exploration Company.
“Wells” has the meaning set forth in Section 2.1(b).
“Zebra” means and refers to Zebra Investments, Inc.

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ARTICLE 2

.

.
PURCHASE AND SALE

1.
Assets. Subject to the terms and conditions of this Agreement, Sellers agree to
sell to Buyer and Buyer agrees to buy from Sellers, effective as of the
Effective Time for the consideration recited and subject to the terms and
conditions set forth in this Agreement, all of Sellers’ right, title and
interest in the following (each individually referred to as an “Asset” and all
collectively referred to as the “Assets”):

(a)
Interests - All of those certain oil and gas leases and oil, gas and mineral
leases described on the attached Exhibit “A-1” (describing those leases on which
are located Wells, or that are pooled or communitized with Wells) and Exhibit
“A-2” (describing the Undeveloped Leases) (collectively the “Leases”), and the
mineral interest described on Exhibit “A-1,” together with all other rights,
titles and interests of Sellers insofar as the same pertain to the right to
explore for, develop, and/or produce oil and/or gas, in the Leases and the lands
for which the Leases are now in force and effect, and the lands and leases
pooled, unitized or communitized therewith, including all working interests,
royalty interests, overriding royalty interests, net profits interests,
production payments, forced pooled interests, and interests pertaining to the
right to explore for, develop, and/or produce oil and/or gas acquired under
contracts or otherwise in the lands covered by the Leases, to which the Leases
are currently in force and effect, and any other lands or interests pooled,
unitized or communitized therewith; provided, however, that all of the foregoing
are subject to the limitations described in Exhibit “A-1” and Exhibit “A-2” (the
Leases and the lands currently covered thereby and other interests therein are
collectively referred to in this Agreement as the “Interests”).

(b)
Wells - All of the oil and gas wells, salt water disposal wells, injection
wells, monitoring wells and any other wells and wellbores located on or
attributable to the Interests or on lands pooled, unitized or communitized with
any portion thereof, or on lands located within any governmental drilling and/or
spacing unit (if applicable) which includes any portion thereof, or on portions
thereof associated with proved undeveloped reserves whether producing, plugged
or unplugged, shut-in, or permanently or temporarily abandoned, including, but
not limited to, the wells identified on the attached Exhibit “B” (the “Wells”).

(c)
Equipment

- All personal property, fixtures and improvements and facilities which are
located on the Interests and are used in connection with the operations of the
Assets or the production of Hydrocarbons therefrom, including equipment,
pipelines, pipeline laterals, well pads, tank batteries, well heads, treating
equipment, compressors, power lines, casing, tubing, pumps, motors, gauges,
meters, valves, heaters, treaters, and separators appurtenant to the Interests,
Wells, or any Key Facility and used in connection with the ownership or
operation of the Interests, Wells, or any Key Facility or the production,
gathering, transportation, storage, treatment, sale or disposal of Hydrocarbons,
including, but not limited to, facilities, plants, treating and processing
systems, casing, pipelines and flow lines (collectively, the “Equipment”).
Equipment does not cover oil field equipment currently stored on the Leases
which is not in use in connection with the ownership and operation of Interests,
Wells, or any Key Facilities described in Schedule 2.2(g), which Sellers may
remove within ninety (90) days following closing.
(d)
Key Facilities

- Those certain facilities which are utilized to service all or a portion of the
Assets, which facilities are more fully identified and described on Schedule
2.1(d) hereto (collectively, the “Key Facilities”), including all related (i)
surface locations, Easements, Surface Agreements, access agreements, and rights
of ingress and egress, and (ii) all related facilities, equipment, inventory,
fixtures and structures used in the operation of the Key Facilities, including,
but not limited to, all injection and/or disposal wells, compressors,
separators, dehydration units, risers, skids, processing plants, pipelines, flow
lines, meters, gauges, tanks, fittings, valves, and flares.
(e)
Production

- All of the oil, natural gas, condensate, casinghead gas, products or other
minerals, attributable or allocable to the Interests or Wells (i) from and after
the Effective Time or (ii) which are in storage above the pipeline connection as
of the Effective Time and for which Sellers receive an upward adjustment to the
Base Purchase Price, or (iii) with regard to any over-produced or under-produced
volumes of Sellers attributable to the Assumed Imbalances and Pipeline
Imbalances (“Hydrocarbons”).
(f)
Easements and Surface Agreements

- All Easements and Surface Agreements, including those identified and described
on the attached Schedule 2.1(f)A, as well as those Easements and Surface
Agreements related to the Key Facilities as more particularly identified on the
attached Schedule 2.1(f)B.

--------------------------------------------------------------------------------

(g)
Contract Rights and Permits

- All Contracts and all environmental and other governmental (whether federal,
tribal, state or local) permits, permissions, licenses, orders, authorizations,
franchises and related instruments or rights to the extent the aforementioned
can be assigned and to the extent relating to the ownership, operation or use of
the Interests, Wells, Equipment, Key Facilities, Hydrocarbons, Easements and
Surface Agreements (“Permits”).
(h)
Files and Records

- All of the files, records and data directly relating to the items and
interests described in Section 2.1(a) through Section 2.1(g) above including,
without limitation, land and lease files, well files, title records including
abstracts of title, title opinions, title insurance reports/policies, property
ownership reports, division order and right-of-way files, contracts, production
records, all logs including electric logs, core data, pressure data and decline
curves and graphical production curves, operational records, technical records,
production and processing records, and contract files, and all related materials
in the possession of Sellers, less and except the following (the “Excluded
Records”) (i) the general corporate files and records of Sellers insofar as they
relate to Sellers’ business generally and are not required for the future
ownership or operation of the Assets, (ii) all legal files and records (other
than legal files and records included in, or are part of, the above-referenced
files and records), (iii) Sellers’ federal or state income, franchise or margin
tax files and records, (iv) employee files, (v) reserve evaluation information
or economic projections (other than reserve evaluation or economic projection
materials and files previously made available to Buyer), (vi) records relating
to the sale of the Assets, including competing bids, (vii) proprietary data,
information and data under contractual restrictions on assignment or disclosure,
(viii) privileged information, (ix) intellectual property, (x) seismic,
geophysical, geological or other similar information or data, or (xi) any files
or records regarding interpretation of geological and/or geophysical data, and
engineering analysis, or (xii), any other files or records to the extent
constituting Retained Assets. All of the above files, records and data, save and
except the Excluded Records, are collectively referred to herein as the
“Records”.
(i)
A license in respect of the seismic survey data owned by Seller, only to the
extent covering any of the lands to which the Leases are currently in force and
effect, together with a “halo” or extension of 1/4th of a mile beyond the
boundaries of such lands (all to the extent existing), which shall be a
non-exclusive license to hold and use the data, indefinite in term, with such
license, as to data relating to a particular property, transferable to the
successors in title to the interests acquired under this Agreement in the
particular property, and otherwise containing mutually agreed terms (the
“Seismic License”);

1.
Retained Assets

•
- Notwithstanding anything to the contrary in Section 2.1(a) through Section
2.1(h) or elsewhere herein, the Assets do not include the following
(collectively, the “Retained Assets”):

(a)
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, or any part or
portion thereof, occurring or accrued prior to the Effective Time;

(b)
All claims of Sellers for refunds or loss carry forwards with respect to (i)
production, severance or any other taxes attributable to the Assets for any
period prior to the Effective Time, (ii) income or franchise taxes or (iii) any
taxes attributable to the Retained Assets;

(c)
All hydro-carbon production from or attributable to the Assets with respect to
all periods prior to the Effective Time, and all proceeds, income, revenues,
claims, refunds or other benefits (including any benefit attributable to any
current or future laws or regulations in respect of “royalty relief” or other
similar measures) not otherwise enumerated above, prior to the Effective Time as
well as any security or other deposits made, attributable to (i) the Assets for
any period prior to the Effective Time, or (ii) any Retained Assets;

(d)
All documents and instruments of Sellers relating to the Assets that may be
protected by an attorney-client or attorney-work product privilege;

(e)
All audit rights arising under any of the Contracts or otherwise with respect to
any period prior to the Effective Time or to any Retained Assets;

(f)
The Excluded Records; and

(g)
Those items more particularly identified and described on Schedule 2.2(g)hereto.

2.
Third Party Owners

(a)
KAREN M. WALTER, JOHN V. WALTER, Individually and as Trustee of the trusts
created under the last will and testament of ANGES MARIE WALTER, Deceased, CRAIG
WALTER, KIMBERLY WALTER, J. BLAKE WALTER, Trustee of THE J. BLAKE WALTER TRUST,
J. BRIAN WALTER, Trustee of THE J. BRIAN WALTER TRUST, J. CRAIG WALTER, Trustee
of the J. CRAIG WALTER

--------------------------------------------------------------------------------

TRUST, and KENT FOURET are third parties, all of whom are identified in Exhibit
“G” as owning interests in the Assets (the “Third Party Owners”).
(b)
This Agreement contemplates, and the Purchase Price set forth in Section 3 below
is based upon, all of the Third Party Owners electing to have all of their
ownership interests in the Assets conveyed to Buyer under this Agreement;
provided, however, and notwithstanding the foregoing, the overriding royalty
interest of one-half of one percent (0.5%) to which Kent Fouret is entitles to
the Undeveloped Leases covering Tracts 1 through Tract 5 in Exhibit “A-2” are
not covered by this Agreement. Kent Fouret has no overriding royalty interest in
the Undeveloped Leases covering Tract 6 in Exhibit “A-2”.

3.
Participation of Third Party Owners

(a)
The Third Party Owners shall utilize Exhibit “F-1” to elect to participate in
the sale under this Agreement, or, alternatively, the Third Party Owners shall
utilize Exhibit “F-2” to elect not to participate in the sale under this
Agreement. The elections to be made by the Third Party Owners are herein called
the “Election Agreements”.

(b)
Promptly after the execution of this Agreement WEC shall deliver a copy of this
Agreement to each Third Party Owner informing such persons of the opportunity to
elect to sell all of their respective interests in the Assets to Buyer under
this Agreement, and providing such persons with the appropriate Election
Agreements to allow such persons to make their respective elections.

(c)
Not later than 5:00 p.m. CDT on Monday, August 1, 2016 (the “Third Party Notice
Date”), WEC shall deliver to Buyer a copy of the Election Agreements having been
executed by the Third Party Owners. The Third Party Owners electing to
participate in the sale are herein referred to as the “Participating Third Party
Owners”. The Third Party Owners who elect not to participate in the sale are
herein referred to as the “Non-Participating Third Party Owners”. The interests
of the Non-Participating Third Party Owners shall be deemed excluded from this
Agreement (“Excluded Third Party Owner Interests”). Any Third Party Owner who
fails to timely execute and deliver an Election Agreement on or before the Third
Party Notice Date shall be deemed to be a Non-Participating Third Party Owner.
In addition to delivering to Buyer copies of the Election Agreements on or
before the Third Party Notice Date, WEC shall also deliver to Buyer in writing a
summary report of the Participating Third Party Owners, the Non-Participating
Third Party Owners and the Excluded Third Party Owner Interests, if any,
certifying to Buyer the Net Revenue Interest that comprise the Excluded Third
Party Owner Interests.

(d)
If not all Third Party Owners elect to participate in the sale, then Buyer, by
written notice to Sellers, delivered not later than 5:00 p.m. CDT on Friday,
August 5, 2016, may elect to terminate its obligation to purchase the Assets
under this Agreement. If Buyer does not elect to terminate its purchase under
this Agreement, then the Excluded Third Party Owner Interests shall cause a
direct and full reduction in the Purchase Price by the Purchase Price
attributable to the Excluded Third Party Owners Interest as though the Excluded
Third Party Owner Interests are Title Defects and a Title Defect Property, as
set forth under the applicable provisions below; but, however, Sellers shall
have no right to cure such deemed Title Defects. The deemed Title Defect Amount
caused by the Excluded Third Party Owner Interests shall not be subject or
applicable to the Aggregate Defect Deductible.

(e)
Per the terms of Section 10.5 below, the originally executed copies of the
Election Agreements shall be delivered to Buyer at Closing.

(f)
All of right, title and interest of Sellers and the Participating Third Party
Owners in the Assets, less and except the Retained Assets, and less and except
the Excluded Third Party Owner Interests, shall be herein referred to as the
“Sale Interests.”

(g)
Buyer is directed to rely upon the representation and covenants set forth in the
Election Agreements, including the directive to deliver to WEC all payments to
be made by Buyer under this Agreement.

(h)
Buyer is directed to rely upon the Participating Third Party Owners designation
of WEC as their respective agent and attorney in fact to act for them as to all
matters under this Agreement, as expressed in the Election Agreements.

(i)
Buyer’s duty to close with Sellers is a condition to Buyer’s duty to close under
the Election Agreement of any Participating Third Party Owner. Any Participating
Third Party Owner’s duty to close under its Election Agreement is a conditioned
upon Sellers’ duty to close under this Agreement.

(j)
In the event Kent Fouret executes and Election Agreement, and becomes a
Participating Third Party Owner under this Agreement, such Election Agreement
shall be deemed to cover only his interests in the Leases described in Exhibit
A-1, and shall be deemed not to cover the overriding royalty interest to which
he is entitled in the Undeveloped Leases covering Tract 1 through Tract 5 in
Exhibit “A-2”.

--------------------------------------------------------------------------------

ARTICLE 3

.

.
PURCHASE PRICE AND ALLOCATION

1.
Base Purchase Price

- Buyer agrees to pay, for the Sale Interests, the total sum of Nineteen Million
Three Hundred Thousand Dollars ($19,300,000.00) (“Base Purchase Price”) to be
paid by direct bank deposit or wire transfer in same day funds at Closing,
payable to WEC, for and on behalf of the Sellers and the Participating Third
Party Owners, subject only to the price adjustments set forth in this Agreement.
2.
Performance Deposit and Payment

- As evidence of good faith, Buyer has deposited or is depositing with WEC, at
the time of the execution of this Agreement, a performance deposit equal to five
percent (5%) of the Base Purchase Price ($965,000.00) (the “Deposit”), which
Deposit shall be non-interest bearing and non-refundable except as provided
herein. In the event Closing occurs, the Deposit shall be applied to the Base
Purchase Price to be paid at Closing, subject to the other adjustments thereto
as set forth in this Agreement. If Closing does not occur and the Agreement is
terminated, then the Deposit shall be retained by Sellers or paid to Buyer, as
provided in Article 18 below.
3.
Adjustments to the Base Purchase Price

- The Base Purchase Price shall be adjusted as follows:
(a)
Adjustments for Out-of-Pocket Costs. The Purchase Price is to be inclusive of
the actual out-of-pocket costs incurred by Sellers in the acquisition of such
leases (e.g. bonus fees paid to the mineral owners, landman fees, and attorney
fees) for the Undeveloped Leases (the “Out-of-Pocket Costs”). Exhibit C-2
contains a schedule of out the Out-of-Pocket Costs incurred (invoices received)
by Sellers as of July 20, 2016. The leasing activity of Sellers for Tract 1
through Tract 5 referenced in Exhibit “A-1” has been concluded by Sellers, and
Seller’s confirm that the Out-of-Pockets Costs incurred are included in Exhibit
“C-2.” On the other hand, the leasing activity of Sellers for Tract 6 referenced
in Exhibit “A-2” is ongoing, and Out-of-Pocket Costs have been incurred after
the effective date of Exhibit “C-2,” and will hereafter be incurred by Sellers.
The Out-of-Pocket Costs incurred after the effective date of Exhibit “C-2” are
to be to an upward adjustment to the Base Purchase Price. Upon request Sellers
shall advise Buyer of any additional Out-of-Pocket Costs not reflected in
Exhibit “C-2.” The Out-of-Pocket Costs are subject to Buyer’s review. In the
event such costs are overstated, or understated, by Sellers, the Base Purchase
Price shall be increased, or decreased, as the case may be, by any
understatement or overstatement, which adjustments shall be made in the Closing
Settlement Statement or the Final Settlement Statement, as the case may be.

(b)
Upward Adjustments - In addition to Section 3.3(a) above, the Base Purchase
Price shall be adjusted upward for the following, without duplication:

(i)
all production expenses, operating expenses, operated and non-operated overhead
charges and capital expenditures paid or incurred by Sellers in connection with
the ownership and operation of the Assets, including, but not limited to, lease
option or extension payments, attributable to the periods from and after the
Effective Time (including, without limitation, royalties and taxes attributable
to Hydrocarbons produced and saved from and after the Effective Time, and
pre-paid charges) (the fixed overhead charges currently charged to the joint on
the Wells by WEC as operator shall continue to be so charged by WEC to the joint
account for the adjustment period; in this respect WEC shall be entitled to
receive the fixed overhead charges for the adjustment period, proportionally
reduced for any period less than a full calendar month);

(ii)
all proceeds attributable to the sale of Hydrocarbons from the Assets received
by Buyer, and all other income and benefits received by Buyer, attributable to
production, ownership and operation of the Assets prior to the Effective Time
(net of royalties, overriding royalties and other burdens attributable to the
Sale Interests’ share of production not otherwise accounted for hereunder);

(iii)
all positive adjustments, if any, regarding Additional Interests, as provided in
Section 7.2;

(iv)
to the extent the Assumed Imbalances reflect an underbalanced (or under-produced
or under-received balance) position of the Sellers as of the Effective Time, all
adjustments regarding such underbalanced Assumed Imbalances in accordance with
the provisions of Section 13.5;

(v)
all adjustments for oil in storage above the pipeline connection, as provided in
Section 13.1;

(vi)
adjustments for over-delivered Pipeline Imbalances (volumes owed to Sellers) as
provided in Section 13.6;

--------------------------------------------------------------------------------

(vii)
all royalty overpayment amounts and/or future deductions as royalty offsets
associated with the Assets as of the Effective Time;

(viii)
all fees charged to third parties but for which payment has not been collected
by Sellers for services provided on or related to any Key Facility from and
after the Effective Time; and

(ix)
any other upward adjustments to the Base Purchase Price specified in this
Agreement.

(c)
Downward Adjustments - In addition to Section 3.3(a) above, the Base Purchase
Price shall be adjusted downward for the following, without duplication:

(i)
except as otherwise provided in this Agreement, all production expenses,
operating expenses, operated and non-operated overhead charges and other costs
under applicable operating agreements (or other contracts, pooling orders, or
other similar agreements) and other expenses, costs and charges paid or incurred
by Buyer in connection with the Assets attributable to periods prior to the
Effective Time, including, without limitation, taxes, capital expenses and other
costs;

(ii)
except as otherwise provided in this Agreement, all proceeds attributable to the
sale of Hydrocarbons and all other income and benefits received by Sellers and
attributable to the production, operation or ownership of the Assets on or after
the Effective Time (net of royalties, overriding royalties (other than
overriding royalties that are conveyed as part of the Assets) and other burdens
on Buyer’s share of production not otherwise accounted for hereunder);

(iii)
all adjustments regarding Title Defects, in accordance with the provisions of
Article 7;

(iv)
all adjustments regarding Environmental Defects, in accordance with the
provisions of Article 8;

(v)
all adjustments regarding exercised Preferential Purchase Rights, as
contemplated in Article 9;

(vi)
all adjustments regarding Casualty Defects, in accordance with the provisions of
Article 16;

(vii)
to the extent the Assumed Imbalances reflect an overbalanced (or over-produced
or over-received balance) position of Seller as of the Effective Time regarding
the Assets, all adjustments regarding such overbalanced Assumed Imbalances, in
accordance with the provisions of Sections 13.5;

(viii)
adjustments for under-delivered Pipeline Imbalances (volumes owed by Sellers),
as provided in Section 13.6;

(ix)
an amount equal to the amounts held in the Suspense Accounts as of the Closing,
as contemplated in Section 11.5;

(x)
all fees charged to third parties and for which payment has been collected by
Sellers for service provided on or related to any Key Facility from and after
the Effective Time; and

(xi)
any other downward adjustments to the Base Purchase Price as specifically
provided for under the terms of this Agreement.

4.
Allocation of Base Purchase Price

- Sellers and Buyer agree that the Base Purchase Price shall be allocated among
the Assets as set forth on the attached Exhibit “C-1 - Wells” and Exhibit “C-2 -
Undeveloped Leases” (the “Allocated Values”) for the purpose of (i) providing
notices, or obtaining waivers, of any Preferential Purchase Rights affecting any
Asset(s), (ii) determining the value of a Title Defect and (iii) handling those
instances for which the Base Purchase Price is to be adjusted.

--------------------------------------------------------------------------------

ARTICLE 4

.

.
ACCESS TO ASSETS AND DATA; DISCLAIMERS; GOVERNMENTAL REVIEWS

1.
Access

- Pursuant and subject to the terms and provisions of that certain Memorandum of
Understanding entered into by and between Buyer and Sellers dated June 27, 2016
(the “Memorandum”), Sellers shall provide Buyer and Buyer’s authorized
representatives, at any reasonable time(s) before the Closing, (i) reasonable
physical access, at Buyer’s sole risk, cost and expense, to the Assets that are
operated by Sellers to allow Buyer to conduct on-site environmental site
assessments of the Assets in the presence of Sellers’ representatives (which
assessments shall not include sampling, boring, drilling or other invasive
investigation activities, or any “Phase II” environmental assessment, without
Sellers’ prior written consent), to the extent Sellers have the right to grant
such access for such purpose; and (ii) access to the Records and other Assets,
to the extent such data and records are in Sellers’ or their representatives’
possession and relate to the Assets, insofar as Sellers may do so without
(i) violating any legal constraint or confidentiality obligation to a third
person (provided that Sellers shall use all commercially reasonable efforts to
obtain any necessary waivers of such obligations to allow disclosure of any
Records, and Sellers shall advise Buyer of the type of Records held back pending
such requested waivers) or (ii) waiving any attorney/client privilege; provided,
however, Sellers shall not provide access to any Excluded Records, and Sellers
shall have no obligation to provide Buyer access to any interpretive or
predictive data or information which Sellers consider confidential or
proprietary or which Sellers believe in good faith it cannot provide Buyer
because of third-party restrictions.
In connection with any on-site inspections, Buyer agrees to not unreasonably
interfere with the normal operation of the Assets and further agrees that under
no circumstances shall it perform any invasive tests of any nature on the Assets
without the prior express written consent of Seller. In connection with granting
such access, and except to the extent that such claims are caused by the gross
negligence of Sellers, Buyer waives and releases all claims against Seller Group
(as defined in Section 15.2) for injury to, or death of persons, or damage to
property INCURRED, HOWSOEVER CAUSED, in connection with the performance of this
diligence and Buyer SHALL indemnify, defend and hold harmless Seller Group from
and against all such claims.
2.
Confidentiality Obligations

(a)
Prior to the Closing, and thereafter, if Closing does not occur, Buyer shall
maintain as confidential all information made available to it under Section 4.1
which is not otherwise currently in Buyer’s possession or control and which is
not otherwise generally available to the public, and shall cause its officers,
employees, representatives, consultants and advisors to maintain all such
information confidential.

(b)
For a period of one (1) year from and after the Closing and except as otherwise
required by any requirements of law, Sellers shall maintain all information
relating to and with respect to the Assets confidential and otherwise to comply
in all respects with, and to cause its officers, employees, representatives,
consultants and advisors to maintain all information relating to the Assets
confidential; provided, however, that the information subject to such
confidentiality restrictions shall not include information that is or becomes
generally available to the public other than as a result of disclosure by
Sellers or by any member of Seller Group.

3.
Disclaimer

- Buyer specifically understands and acknowledges the following:
1.
Title - Subject to the other provisions contained in this Agreement, title to
the Sale Interests shall be transferred and conveyed from Sellers and the
Participating Third Party Owners to Buyer at Closing with a “by, through and
under” warranty of title through the Effective Time, and shall otherwise be
conveyed in accordance with the terms of this Agreement and the Conveyances.

2.
Disclaimer of Warranty - EXCEPT AS EXPRESSLY PROVIDED FOR OTHERWISE IN THIS
AGREEMENT, OR IN THE CONVEYANCES, SELLERS AND THE PARTICIPATING THIRD PARTY
OWNERS EXPRESSLY DISCLAIM AND NEGATE ANY REPRESENTATION, COVENANT OR WARRANTY,
EXPRESS OR IMPLIED, AT COMMON LAW, BY STATUTE OR OTHERWISE, RELATING TO THE
TITLE OR CONDITION OF THE ASSETS AND ANY PERSONAL PROPERTY, EQUIPMENT, FIXTURES
AND ITEMS OF MOVABLE PROPERTY COMPRISING ANY PART OF THE ASSETS, INCLUDING (i)
ANY IMPLIED OR EXPRESS WARRANTY OF FITNESS FOR ANY PARTICULAR PURPOSE OR
WARRANTY OF MERCHANTABILITY; (ii) ANY IMPLIED OR EXPRESS WARRANTY OF CONFORMITY
TO MODELS OR SAMPLES OF MATERIALS; (iii) ANY RIGHTS OF BUYER UNDER APPLICABLE
STATUTES TO CLAIM DIMINUTION OF CONSIDERATION OR RETURN OF THE PURCHASE

--------------------------------------------------------------------------------

PRICE; (iv) ANY CLAIM BY BUYER FOR DAMAGES BECAUSE OF DEFECTS OR OTHER VICES,
WHETHER KNOWN OR UNKNOWN, FORESEEN OR UNFORESEEN, LATENT OR PATENT; (v) ANY
IMPLIED OR EXPRESS WARRANTY OF FREEDOM FROM PATENT OR TRADEMARK INFRINGEMENT OR
INFRINGEMENT OF ANY OTHER INTELLECTUAL PROPERTY RIGHT; (vi) ANY IMPLIED OR
EXPRESS WARRANTY REGARDING ENVIRONMENTAL LAWS, THE RELEASE OF MATERIALS INTO THE
ENVIRONMENT INCLUDING, WITHOUT LIMITATION, NATURALLY OCCURRING RADIOACTIVE
MATERIAL OR ASBESTOS, OR PROTECTION OF THE ENVIRONMENT OR HEALTH; OR (vii) ANY
IMPLIED OR EXPRESS WARRANTY REGARDING TITLE TO ANY OF THE ASSETS. UPON CLOSING,
IT IS THE EXPRESS INTENTION OF BUYER, SELLERS AND THE PARTICIPATING THIRD PARTY
OWNERS THAT, EXCEPT AS EXPRESSLY PROVIDED FOR OTHERWISE IN THIS AGREEMENT, OR IN
THE CONVEYANCES, THE PERSONAL PROPERTY, EQUIPMENT, FIXTURES AND ITEMS AND THE
CONDITION OF THE ASSETS ARE BEING CONVEYED TO BUYER “AS IS, WHERE IS,” WITH ALL
FAULTS, AND IN THEIR PRESENT CONDITION AND STATE OF REPAIR AND BUYER WAIVES ANY
CLAIM(S) FOR BREACH OF WARRANTY UNDER THE CONVEYANCES, WHICH WERE NOT ASSERTED
BY BUYER IN ACCORDANCE WITH THE TERMS AND CONDITIONS OF THIS AGREEMENT. AS ONE
OF ITS CONDITIONS TO CLOSING, BUYER ACKNOWLEDGES, AGREES AND REPRESENTS TO
SELLERS AND THE PARTICIPATING THIRD PARTY OWNERS THAT AS OF CLOSING BUYER WILL
HAVE BEEN GIVEN THE OPPORTUNITY TO MAKE OR CAUSE TO BE MADE SUCH INSPECTIONS AS
BUYER DEEMS APPROPRIATE. FURTHERMORE, SELLERS AND THE PARTICIPATING THIRD PARTY
OWNERS EXPRESSLY DISCLAIM AND NEGATE ANY REPRESENTATION OR WARRANTY, EXPRESS OR
IMPLIED, AND IN NO WAY GUARANTEE ANY RATES, FEES OR PRICING RECEIVED AND/OR
BARGAINED FOR BY SELLERS WITH ANY THIRD-PARTY RELATED TO THE KEY FACILITIES.
3.
Additional Disclaimer - EXCEPT AS OTHERWISE EXPRESSLY PROVIDED FOR IN THIS
AGREEMENT OR IN THE CONVEYANCES, SELLERS AND THE PARTICIPATING THIRD PARTY
OWNERS HEREBY EXPRESSLY NEGATE AND DISCLAIM, AND BUYER HEREBY WAIVES AND
ACKNOWLEDGES THAT SELLERS AND PARTICIPATING THIRD PARTY OWNERS HAVE NOT MADE AND
BUYER HAS NOT RELIED UPON, ANY WARRANTY, REPRESENTATION OR COVENANT, EXPRESS OR
IMPLIED, AS TO THE ACCURACY OR COMPLETENESS OR MATERIALITY OF ANY FILES,
RECORDS, DATA, INFORMATION, OR MATERIALS (WHETHER WRITTEN, ORAL OR OTHERWISE)
HERETOFORE OR HEREAFTER FURNISHED TO BUYER IN CONNECTION WITH THE ASSETS, OR AS
TO THE QUALITY OR QUANTITY OF HYDROCARBON RESERVES (IF ANY) ATTRIBUTABLE TO THE
ASSETS OR THE ABILITY OF THE ASSETS TO PRODUCE HYDROCARBONS. ANY AND ALL SUCH
FILES, RECORDS, DATA, INFORMATION, AND OTHER MATERIALS FURNISHED TO BUYER,
WHETHER MADE AVAILABLE PURSUANT TO THIS ARTICLE 4 OR OTHERWISE, ARE PROVIDED TO
BUYER AS A CONVENIENCE AND ACCOMMODATION, AND ANY RELIANCE UPON OR USE OF THE
SAME SHALL BE AT BUYER’S SOLE RISK.

4.
Governmental Reviews

•
- Sellers and Buyer shall each in a timely manner make (or cause its applicable
affiliate to make) (i) all required filings, including filings required under
the Hart-Scott-Rodino Act, and prepare applications to and conduct negotiations
with, each Governmental Authority as to which such filings, applications or
negotiations are necessary or appropriate in the consummation of the transaction
contemplated hereby, and (ii) provide such information as the other may
reasonably request in order to make such filings, prepare such applications and
conduct such negotiations. Each Party shall cooperate with and use all
reasonable efforts to assist the other with respect to such filings,
applications and negotiations. Buyer shall bear the cost of all filing or
application fees payable to any Governmental Authority with respect to the
transaction contemplated by this Agreement, regardless of whether Buyer, Seller,
or any affiliate of any of them is required to make the payment.

•

--------------------------------------------------------------------------------

ARTICLE 5

.

.
SELLERS’ REPRESENTATIONS

Each Seller, as to itself, represent the following to Buyer as of the Execution
Date:
1.
Existence

- Seller is an entity duly organized and validly existing and in good standing
under the laws of its state of formation, and is duly qualified to carry on its
business and to own and operate oil and gas properties in each jurisdiction in
which the Assets owned by it are located.
2.
Authority

- Seller has all requisite power and authority to carry on its business as
presently conducted, to enter into this Agreement and to perform its obligations
under this Agreement. Furthermore, as of the Execution Date, Seller has obtained
all necessary board of directors and/or such other internal approvals as are
required under its own corporate governance requirements to close this
transaction. This Agreement constitutes the legal, valid and binding obligation
of Seller and is enforceable against Seller in accordance with its terms,
subject to (i) applicable bankruptcy, insolvency, reorganization, moratorium and
other similar laws of general application with respect to creditors, (ii)
general principles of equity, and (iii) the power of a court to deny enforcement
of remedies generally based upon public policy.
3.
Compliance

- To Seller’s knowledge and except as set forth on Schedule 5.4, all of the
Assets, as owned and operated by Seller, are in material compliance with all
applicable laws, rules, regulations, ordinances and orders of all Governmental
Authorities having jurisdiction.
4.
Payment of Royalties

- To Seller’s knowledge, all royalties and in-lieu royalties with respect to the
Assets which accrued or are attributable to the period prior to the Effective
Time have been properly and fully paid, or are included within the Suspense
Accounts being conveyed to Buyer pursuant to Section 11.5.
5.
Taxes

- To Seller’s knowledge, all ad valorem, property, production, severance and
similar taxes with respect to the Assets that are due based upon or measured by
the ownership of any Assets, the production or removal of Hydrocarbons therefrom
or the receipt of proceeds therefrom have been properly and timely paid.
6.
Material Contracts

- Except as set forth on Schedule 5.6, as of the Execution Date, (a) each
Material Contract is in full force and effect, (b) Seller has not received
written notice of its breach or default under any Material Contract, and (c) to
Seller’s knowledge, no other party to any such Material Contract is in breach
thereof or in default thereunder.
7.
Permits

- To Seller’s knowledge and except as set forth on Schedule 5.7, as of the
Execution Date, (a) Seller has not received written notice of a default under
any Permit, and (b) each Permit is in full force and effect.
8.
Litigation and Claims

- Except as set forth on Schedule 5.8, no suit, action, demand, proceeding,
lawsuit or other litigation is pending or, to Seller’s knowledge, threatened
with respect to Seller that could reasonably be expected to materially and
adversely affect the ownership, operation or value of the Assets.
9.
Sale Contracts

- Except for (a) contracts governing Seller’s sale of Hydrocarbons in the
ordinary course, (b) the disposition in the ordinary course of equipment no
longer suitable for oil and gas field operations or (c) this Agreement, there
are no material contracts or options outstanding for the sale, exchange or
transfer of Seller’s interest in the Assets or any portion thereof.
10.
Notices

- Except as set forth on Schedule 5.10, to Seller’s knowledge, (a) operation of
the Assets is not the subject of any pending material regulatory compliance or
enforcement actions, and (b) Seller has not received written notice with respect
to operation of the Assets, which (i) has not heretofore been complied with, in
all material respects, regarding

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any material violation of applicable laws, rules or regulations of any
Governmental Authority with jurisdiction therein, or (ii) that remains uncured,
and that would, individually or in the aggregate, have a material adverse effect
on the Assets (taken as a whole).
11.
Take-or-Pay

- To Seller’s knowledge, Seller is not obligated, under a take-or-pay or similar
arrangement, to allow its share of the Hydrocarbons to be sold, without
receiving full payments at the time of delivery in an amount that corresponds to
its net revenue interest in the Hydrocarbons attributable to any Lease or Well
described in Exhibits “A” or “B” (other than with regard to certain obligations
relative to Assumed Imbalances or Pipeline Imbalances, as contemplated under
Sections 13.5 and 13.6, respectively).
12.
Timely Payment

- To Seller’s knowledge, Seller has paid its share of all costs payable by it
under the Leases and the Material Contracts as of the Effective Time, except
those included in the Suspense Accounts or being contested in good faith.
13.
Imbalances

- To Seller’s knowledge, and except as set forth on Schedule 13.5, there are no
gas or other Hydrocarbon production imbalances existing as of the Effective Time
with respect to any of the Wells.
14.
Outstanding Obligations

- Except as otherwise described in Schedule 5.14, to Seller’s knowledge, as of
the Execution Date, there are no outstanding authorizations or other written
commitments or proposals to conduct operations on the Assets for expenditures in
excess of Twenty-Five Thousand and No/100 U.S. Dollars ($25,000.00), net to the
interests of all Sellers .
15.
Brokers

- Seller has incurred no liability, contingent or otherwise, for broker’s or
finder’s fees in respect of this Agreement or the transaction contemplated
hereby for which Buyer shall have any responsibility whatsoever.
16.
Bankruptcy

- There are no bankruptcy, reorganization or arrangement proceedings pending,
being contemplated by, or, to the knowledge of Seller, threatened against any of
the Sellers.
17.
Consents

- Except as set forth on Schedule 5.17 and other than Preferential Purchase
Rights, to the knowledge of Seller, and with the exception of those waivers,
consents to assign, approvals or other similar rights customarily obtained from
Governmental Authorities after Closing, there are no waivers, consents to
assign, approvals or similar rights required in connection with the conveyance
of the Assets from Seller to Buyer under the terms of this Agreement.
18.
Preferential Purchase Rights

- Except as set forth on Schedule 5.18, to the knowledge of Seller, there are no
Preferential Purchase Rights to which the Assets are subject, which would be
triggered by this Agreement, and to which a notice would be required under the
terms thereof due to the Parties entering into this Agreement.
19.
Mortgages and Other Instruments - There is no lien or security interest in or on
any Asset securing indebtedness for borrowed money that has been created by,
through or under Seller or any of its affiliates that burden any of the Assets.

5.20
Seismic Data - Seller is a joint owner of the Seismic Data and has the right to
grant the License, together with the other Sellers, without consent of any third
parties.

ARTICLE 6

.

.
BUYER’S REPRESENTATIONS

Buyer represents the following to Sellers as of the Execution Date:
1.
Information

- Buyer represents that it is a sophisticated purchaser, knowledgeable in the
evaluation of oil and gas properties of the nature being acquired by Buyer
hereunder and has performed due diligence on the Assets and performed all
necessary tasks involved in evaluating the Assets, to the Buyer’s complete
satisfaction. EXCEPT AS OTHERWISE SET FORTH IN THIS AGREEMENT, BUYER REPRESENTS
AND WARRANTS THAT

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IT HAS FULLY INSPECTED THE ASSETS AND UPON CLOSING, BUYER WILL ACCEPT THE SALE
INTERESTS AT CLOSING IN THEIR PRESENT CONDITION, “AS IS AND WHERE IS AND WITH
ALL FAULTS.” BUYER ACKNOWLEDGES AND AGREES THAT, EXCEPT AS OTHERWISE SET FORTH
IN THIS AGREEMENT AND IN THE CONVEYANCES, SELLERS AND THE PARTICIPATING THIRD
PARTY OWNERS HAVE MADE NO REPRESENTATIONS OR WARRANTIES OF ANY KIND, EXPRESS OR
IMPLIED, WRITTEN, ORAL, OR OTHERWISE, AS TO THE ACCURACY OR COMPLETENESS OF THE
BACKGROUND MATERIALS OR ANY OTHER INFORMATION RELATING TO THE ASSETS FURNISHED
BY OR ON BEHALF OF SELLER OR ON BEHALF OF THE PARTICIPATING THIRD PARTY OWNERS
OR TO BE FURNISHED TO BUYER OR ITS REPRESENTATIVES, INCLUDING, WITHOUT
LIMITATION, SELLERS’ INTERNAL APPRAISALS AND/OR INTERPRETIVE DATA. Buyer
acknowledges and affirms that it has relied and will rely solely upon Sellers’
representations, warranties or covenants expressed in this Agreement and on its
own independent analysis, evaluation and investigation of, and judgment with
respect to, the business, economic, legal, tax or other consequences of this
transaction, including its own estimate and appraisal of the extent and value of
the oil, natural gas, natural gas liquids, and other reserves associated with
the Assets.
2.
Knowledge and Experience

- Buyer (i) is engaged in the business of exploring for and/or producing oil and
gas or other valuable minerals as an ongoing business and (ii) is purchasing the
Sale Interests for its own account for investment purposes and not with the
intent to resell the Sale Interests in violation of any federal or state
securities laws. Buyer is an experienced and knowledgeable investor in oil and
gas properties, is knowledgeable with respect to the tax ramifications
associated therewith and herewith, and has the financial and business expertise
to fully evaluate the merits and risks of the transactions covered by this
Agreement and has relied solely upon the basis of its own independent
investigation of the Assets for all purposes (including the geologic and
geophysical characteristics of the Assets, the estimated Hydrocarbon reserves
recoverable therefrom, and the price and expense assumptions applicable
thereto). In acquiring the Sale Interests, Buyer is acting in the conduct of its
own business and not under any specific contractual commitment to any third
party, or any specific nominee agreement with any third party, to transfer to,
or to hold title on behalf of, such third party, with respect to all or any part
of the Sale Interests. Buyer acknowledges that it has had the opportunity to
seek the advice of persons it deemed appropriate concerning the consequences of
the provisions of this Agreement and hereby waives any and all rights to claim
that it is an unsophisticated investor in oil and gas properties. The Sale
Interests are being acquired for Buyer’s own account for the purpose of
investment or consumption and not with a view to reselling or distributing the
Sale Interests in violation of any securities registration or qualification
requirements of any securities laws.
3.
No Warranty

- Buyer acknowledges that, except as expressly provided for otherwise in this
Agreement or in the Conveyances, Sellers and the Participating Third Party
Owners have not made any representation, covenant or warranty, express or
implied, at common law, by statute or otherwise, relating to the title or
condition of the Assets, including, without limitation, any implied or express
warranty of merchantability, of fitness for any particular purpose, or of
conforming to models or samples of materials as to any personal property,
fixtures or structures conveyed pursuant to this Agreement. Buyer further
acknowledges that no Claim(s) may be asserted nor may any proceeding be
commenced by Buyer against Sellers arising out of or related to a breach of any
warranty of Sellers pursuant to this Agreement (including any warranty of
Sellers set forth in the Conveyances) for which Buyer failed to deliver a timely
written notice to Sellers in accordance with the terms and conditions of this
Agreement, and that any such Claim(s) shall be deemed to have been waived by
Buyer under the terms of Section 7.3 below.
4.
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 duly qualified to carry
on its business in the State(s) where the Assets are located.
5.
Authority

- Buyer has all requisite power and authority to carry on its business as
presently conducted, to enter into this Agreement and to perform its obligations
under this Agreement. Furthermore, as of the Execution Date, Buyer has obtained
all necessary board of directors and/or such other internal approvals as may be
required under its own corporate governance requirements to close this
transaction. This Agreement constitutes the legal, valid and binding obligation
of Buyer and is enforceable against Buyer in accordance with its terms, subject
to (i) applicable bankruptcy, insolvency, reorganization, moratorium and other
similar laws of general application with respect

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to creditors, (ii) general principles of equity, and (iii) the power of a court
to deny enforcement of remedies generally based upon public policy. The
execution, delivery and performance of this Agreement (and such documents) and
the consummation of the transactions contemplated hereby (and thereby) do not
violate, or conflict with, any material provision of Buyer’s governing documents
or any material provisions of any agreement or instrument to which it is a party
or by which it is bound, or any judgment, decree, order, statute, rule or
regulation applicable to Buyer.
6.
Liability for Broker’s Fees

- Buyer has not incurred any liability, contingent or otherwise, for broker’s or
finder’s fees relating to the transactions contemplated by this Agreement for
which Sellers shall have any responsibility whatsoever.
7.
Bankruptcy

- There are no bankruptcy, reorganization or arrangement proceedings pending,
being contemplated by, or, to the knowledge of Buyer, threatened against Buyer.
8.
Qualification to Assume Operatorship

- At Closing, Buyer will be qualified to own and assume operatorship of oil, gas
and mineral leases, including the Assets, in all jurisdictions where the Assets
are located, and the consummation of the transactions contemplated in this
Agreement will not cause Buyer to be disqualified as such an owner or operator.
To the extent required by the applicable state, tribal and federal governmental
bodies or agencies, Buyer currently has, and will continue to maintain, lease
bonds, area-wide bonds, or any other surety bonds or insurance policies as may
be required by, and in accordance with, any Governmental Authorities with
jurisdiction over the ownership and/or operation of such Assets or any operating
agreement.
9.
Consents

. No consent, approval, authorization or permit of, or filing with or
notification to, any Person is required for or in connection with the execution
and delivery of this Agreement by Buyer or for or in connection with the
consummation of the transactions and performance of the terms and conditions
contemplated hereby by Buyer.
10.
Litigation

. There is no suit, action, demand, proceeding, lawsuit or other litigation by
any person or Governmental Authority pending or, to Buyer’s knowledge,
threatened against Buyer that impedes or is likely to impede Buyer’s ability to
consummate the transactions contemplated by this Agreement and to assume the
liabilities to be assumed by Buyer under this Agreement.
ARTICLE 7

.

.
TITLE

1.
Title Defects

- Buyer shall notify WEC in writing of any Title Defect relating to any Well
promptly after discovering the Title Defect but in no event later than than 5:00
p.m. CDT on Friday, August 5, 2016 (the “Due Diligence Period”). For the purpose
of this Agreement, a “Title Defect” shall mean a material deficiency which
individually per Well exceeds Twenty-Five Thousand and No/100 U.S. Dollars
($25,000.00) or individually per Lease exceeds Twenty-Five Thousand and No/100
U.S. Dollars ($25,000.00) in one (or more) of the following respects (other than
Permitted Encumbrances):
(a)
Adverse Claims - The title of Sellers and the Participating Third Party Owners
as to all or part of a Well or Lease is subject to (i) an outstanding mortgage
which is not released on or before Closing; (ii) a deed of trust which is not
released on or before Closing; (iii) a lien or encumbrance which is not released
on or before Closing, save and except the contractual liens set forth in the
governing operating agreement; or (iv) a pending claim or cause of action in
which a competing ownership interest in a Well or Lease is claimed or implied;

(b)
Decreased Net Revenue Interest - Sellers and the Participating Third Party
Owners, in the aggregate, own less than the net revenue interest shown on
Exhibit “G” for a particular Well; and

(c)
Increased Working Interest - Sellers and the Participating Third Party Owners,
in the aggregate, own more than the working interest shown on Exhibit “G” for a
particular Well without a proportionate increase in the corresponding net
revenue interest shown on Exhibit “G”;

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provided, however, that no Title Defect shall be deemed to exist and/or be
asserted by Buyer with respect to (i) any Well operated by Buyer (or any of its
affiliates), or (ii) any Lease in which Buyer (or any of its affiliates) owns an
interest, in each case, as of the Execution Date or at any point during the Due
Diligence Period.
Notwithstanding the foregoing, there shall no Title Defects in connection with
the Undeveloped Leases. If Closing should otherwise occur under this Agreement,
Buyer is obligated to acquire the Undeveloped Leases, without title objection,
paying Sellers for their Out-of-Pockets Costs in connection with such Leases.
The Raymond No. 1 Well, located on the Raymond Lease described in Exhibit “A-1”
is now shut-in. The Raymond Lease remains within its primary term. No value is
allocated to the Raymond No. 1 Well in Exhibit “C-1”. Notwithstanding the
foregoing, there shall no Title Defects in connection with the Raymond Lease. If
Closing should otherwise occur under this Agreement, Buyer is obligated to
acquire the Raymond Lease, and the Raymond Well, without title objection.
The McAdams Lambert Unit No. 1 Well, located on the McAdams Lambert Unit, which
unit comprises lands out of the McAdams Leases described in Exhibit “A-1” and
lands out of the Lambert Tract Leases described in Exhibit “A-1”, is now
shut-in. No value is allocated to this Well in Exhibit “C-1”. It is the belief
of Sellers that the McLambert Tract Leases may have expired according to their
terms. There shall be no Title Defects in connection with the Lambert Tract
Leases. If Closing should otherwise occur under this Agreement, and Buyer
acquires any interest in the McAdams Leases, then Buyer shall be obligated to
acquire the McAdams Lambert Unit No. 1 Well, without title objection regarding
the McAdams Lambert Unit or the Lambert Tract Leases.
There are three Key Facilities servicing the Wells and Leases, described in the
Schedules attached, and being the following:
(i) Pipeline easement (921/90) servicing the Joe Young Lease and the various Joe
Young Wells located on the leased premises of the Joe Young Lease, the Sisters
Lease and the Sisters No. 2 Well located on the Sisters Lease; the Sims Lease
and the Sims No. 1 and No. 2 Wells located on the Sims Lease; and the Young Boyd
Oil Unit, and the Young Boyd Unit No. 1 Well located on this unit;
(ii) Surface Use Agreement (1170/84) servicing the McAdams Lease and the McAdams
Nos. 2, 3 and 4 wells located on this lease and the McAdams Lambert Unit 1 Well
located on this lease, the Jimmy Fry Lease and the Fry No. 1 Well located on
this lease, and Raymond Lease and the Raymond No. 1 Well located on this lease.
(iii) Pace 68-1 Well servicing the Pace Heirs Leases and the Pace Heirs Unit No.
1 Well located on such leases, and the 303X Well Leases and the Pace No. 303X
Well located on such leases.
Title examination relating to any Well shall be inclusive of any easements
servicing such Well and the Key Facilities servicing such Well. In this regard,
any Title Defects relating to any easements and/or Key Facility shall be
reported to Sellers in connection with the particular Well or Wells serviced by
the easement or Key Facility.
2.
Additional Interests

- During the Due Diligence Period, Buyer shall promptly notify WEC in writing if
Buyer determines (or is made aware of the possibility) that Sellers and the
Participating Third Party Owners have (i) a lesser working interest (without a
proportionate decrease in the corresponding net revenue interest) with respect
to all or any part of any Well than shown on Exhibit “B”, or (ii) a greater net
revenue interest with respect to all or any part of any Well than that set forth
in Exhibit “B”, or (iii) the Out-of-Pocket Costs exceed the Allocated Value to
the Undeveloped Leases set forth in Schedule C-2 (collectively, such items shall
be referred to as an “Additional Interest”). At any point during the Due
Diligence Period, Sellers may notify Buyer in writing of any Additional
Interest.
3.
Notices

- Any Title Defect notice pursuant to Section 7.1 or Additional Interest notice
pursuant to Section 7.2 shall include appropriate documentation to substantiate
the applicable position and the estimated value of the Title Defect or
Additional Interest. To be effective, Buyer’s Title Defect notice or Sellers’
Additional Interest notice must be asserted in good faith, delivered in writing,
and include (i) a description of the alleged Title Defect or Additional Interest
as to the affected Lease or Well, (ii) the Allocated Value of the affected Well
or Undeveloped Lease as well as the alleged amount of the Title Defect or
Additional Interest being claimed in good faith, (iii) a brief description of
the matter constituting the asserted Title Defect or Additional Interest and the
basis for such Title

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Defect or Additional Interest, (iv) the computations for such Title Defect
amount or Additional Interest amount, (v) to the extent then known by the
claiming Party, the necessary curative for each Title Defect or documentation or
evidence verifying such Additional Interest, and (vi) supporting documentation
reasonably necessary for the Party to whom such notice has been delivered (as
well as any title attorney or examiner hired thereby) to verify the existence of
such asserted Title Defect or Additional Interest. If any such notice is not
timely delivered, the claimant shall thereafter be deemed to have forever waived
and shall have no right to assert such Title Defect or Additional Interest as
the basis for an adjustment to the Base Purchase Price or make a Claim for any
indemnity hereunder or pursuant to the Conveyances.
4.
Adjustments to Base Purchase Price

- Upon timely delivery of a notice pursuant to Section 7.1 or 7.2, either by
Buyer or by Sellers, Buyer and Sellers shall meet on or before Wednesday, August
10, 2016 and use their reasonable commercial efforts to agree upon the validity
of any claims for Title Defects or Additional Interests and the amount of any
Base Purchase Price adjustment using the following criteria:
(a)
Liquidated Charges - If the adjustment is based upon a lien, encumbrance, or
other charge upon a Well, or the Lease or Leases on which such Well is located,
or the easement or Key Facilities servicing such Well, which is liquidated in
amount or which can be estimated with reasonable certainty, then the adjustment
shall be the sum necessary to be paid to the obligee to remove the encumbrance
from the affected Well, Lease or Leases, easement or Key Facility, but in no
event will such adjustment exceed fifty percent (50%) of the Allocated Value of
the affected Sale Interest(s). For purposes of the foregoing, if a Title Defect
affects multiple Sale Interests, the adjustment amount shall be deemed allocated
between the multiple Sale Interests.

(b)
Ownership Variance - If the adjustment is based upon Sellers and the
Participating Third Party Owners owning in the aggregate a lesser or greater net
revenue interest with a corresponding proportionate lesser or greater working
interest in a Well than that shown on Exhibit “B”, then the adjustment shall be
proportionate to the amount allocated to the affected Well on Exhibit “C-1”. If
the adjustment is based upon a lesser or greater net revenue interest without a
corresponding proportionate lesser or greater working interest in a Well than
that shown on Exhibit “B”, then the Parties shall use their best efforts to
agree upon a mutually acceptable Base Purchase Price adjustment based upon the
Allocated Value for such Well as set forth on Exhibit “C-1”.

(c)
Valuation of Title Defects and Additional Interests - If the adjustment is for
an item other than as set forth in (a) or (b) above, Buyer and Sellers shall
endeavor to mutually agree on the amount of the Base Purchase Price adjustment.
If the Parties cannot agree to the existence of a Title Defect or Additional
Interests or the applicable adjustment, the matter shall be resolved in
accordance with the dispute resolution provisions in Section 20.3. Any such item
shall be referred to as an “Open Defect”. Notwithstanding any of the preceding
provisions of this Article 7, all adjustments applicable to Title Defects or
Additional Interests shall be made prior to Closing which Closing shall be
extended until resolution of any disputes relating to the Title Defects or
Additional Interests; provided, however, that if adjustments for alleged Title
Defects, Environmental Defects, Casualty Defects and Open Defects do not, in the
aggregate, exceed five percent (5%) of the Base Purchase Price, then Closing
shall occur as to the other Assets that are not subject to the dispute (with the
portion of the Assets subject to the dispute being excluded, and the Base
Purchase Price reduced for the entire Allocated Values thereof) and Closing
shall subsequently occur with respect to the Assets made the subject of the
dispute within thirty (30) days following the final resolution of the dispute
unless Sellers elect exclusion of the affected Assets. For purpose of the
foregoing, if an Open Defect applies to a Key Facility, then the Assets serviced
by such Key Facility shall be deemed subject to the dispute and shall be
excluded from Closing, and subject to the subsequent Closing following final
resolution of the dispute.

Notwithstanding anything to the contrary herein, the amount of any Base Purchase
Price adjustment for any Title Defect shall be determined without duplication of
any costs or losses included in any other adjustments for Title Defects
hereunder, or for which Buyer otherwise receives a downward adjustment in the
Base Purchase Price. For all Title Defects and Additional Interests, subject to
the proviso of Section 7.1, Sellers shall (i) in the case of Title Defects,
elect to either: (1) sell to Buyer the entire Well(s) or Lease(s) affected by
the Title Defect but reduce the Base Purchase Price by the agreed upon amount
associated with such Title Defect, (2) exclude from this transaction any Well or
Lease affected by the Title Defect and reduce the Base Purchase Price for the
entire Allocated Value of the Well(s) or Lease(s) so excluded, or (3) if the
Asset is excluded from this transaction pursuant to clause (2) above and Sellers
cure the Title Defect to Buyer’s reasonable satisfaction prior to one hundred
eighty (180) days after Closing, Buyer shall purchase the said excluded Asset
for its Allocated Value

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as of the Effective Time; or (ii) in the case of an Additional Interest, sell to
Buyer the entire Well(s) affected by the Additional Interest at the original
Allocated Value set forth on either Exhibit “C-1” attributable to such Wells
increased by the agreed upon amount associated with such Additional Interest.
In regard to Buyer’s election to exclude set forth above, common ownership is
considered essential for the following groups of Assets (each an “Asset Group”)
because of common facilities and common infrastructure, and operational
efficiencies:
Asset Group 1: Joe Young Lease and the various Joe Young Wells located on the
leased premises of Joe Young Lease (including the mineral interest in the leased
premises of the Joe Young Lease); the Sisters Lease and the Sisters No. 2 Well
located on the Sisters Lease; the Sims Lease and the Sims No. 1 and No. 2 Wells
located on the Sims Lease; and the Young Boyd Oil Unit, and the Young Boyd Unit
No. 1 Well located on this unit.
Asset Group 2: The Brown Lease and the various Brown Wells located on the Brown
Lease.
Asset Group 3: The McAdams Lease and the McAdams Nos. 2, 3 and 4 Wells located
on this lease and the McAdams Lambert Unit 1 Well located on this lease, the
Jimmy Fry Lease and the Fry No. 1 Well located on the Jimmy Fry Lease, and the
Raymond Lease and the Raymond No. 1 Well located on the Raymond Lease.
Asset Group 4: Pace Heirs Leases and the Pace Heirs Unit No. 1 Well located on
such leases, and the 303X Well Leases and the Pace No. 303X Well located on such
leases.
Notwithstanding any terms in this Agreement to the contrary, any Sale Interest
in an Asset Group shall not be conveyed under this Agreement unless all Sale
Interests in the particular Asset Group are conveyed under this Agreement. If
any Sale Interest in an Asset Group is excluded by Buyer’s election under this
Agreement, then all Assets in the particular Asset Group shall be deemed to be
also excluded.
5.
Deductible for Title, Environmental, or Casualty Defects

- Notwithstanding the provisions set forth above, no individual Title Defect,
Environmental Defect, or Casualty Defect shall result in an adjustment to the
Base Purchase Price unless the aggregate net value of the sum (as a deductible
and not a threshold) of (a) all Title Defects, (b) all Environmental Defects
agreed to by the Parties, and (c) Casualty Defects are greater than three
percent (3%) of the Base Purchase Price (the “Deductible Amount”). In such
event, the Base Purchase Price on the Closing shall be adjusted by the aggregate
net value of the sum of (a) all Title Defects, (b) all Environmental Defects and
(c) Casualty Defects, which collectively exceed the Deductible Amount.
6.
Termination Threshold for Defects

- If, because of Title Defects, Environmental Defects, Open Defects and Casualty
Defects, in the aggregate, the Base Purchase Price is to be adjusted downward by
an amount exceeding five percent (5%) of the Base Purchase Price (the
“Termination Threshold”) either Party may, upon written notice to the other
Party, cancel this Agreement.
ARTICLE 8

.

.
ENVIRONMENTAL AND ENVIRONMENTAL INDEMNITY

1.
Acceptance of Environmental Condition

- Buyer shall give WEC notice (an “Environmental Notice”) of any fact or
circumstance that (i) indicates a violation of a currently existing
Environmental Law associated with a Well or any Key Facility and (ii) was not
disclosed to Buyer by any Seller prior to the execution of this Agreement
(“Environmental Defect”). For the purpose of this Agreement, an Environmental
Defect shall mean: (i) a material deficiency which individually per Well exceeds
Twenty-Five Thousand and No/100 U.S. Dollars ($25,000.00); or (ii) a material
deficiency which individually exceeds Twenty-Five Thousand and No/100 U.S.
Dollars ($25,000.00) with respect to any Key Facility and, in each case,
complies with all of the following conditions precedent:
(a)
The Environmental Notice must be received by WEC as soon as reasonably practical
after discovery of the Environmental Defect by Buyer, but in any event on or
before 5:00 p.m. CDT on Friday, August 5, 2016, and thereafter any such claim
shall be deemed to have been waived;

(b)
The Environmental Notice must be based on credible and probative evidence
substantiated in good faith by Buyer’s environmental experts (which may include
internal employees or personnel of Buyer,

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its affiliates or third parties) that shows it is more likely than not that
there exists an Environmental Defect;
(c)
The evidence referred to in Section 8.1(b) must be fully described,
substantiated in good faith by Buyer’s environmental experts, and in the case of
documentary evidence, enclosed;

(d)
The Environmental Notice must reasonably describe the remediation and/or
restoration required to remedy the Environmental Defect, or the potential
damages claimed or likely to be claimed by a third party (the “Cleanup”), each
as recommended or estimated in good faith by Buyer’s environmental experts; and

(e)
To the extent practicable, the Environmental Notice must state Buyer’s good
faith estimate of the amount of potential Loss to be incurred by Buyer as a
result of the Environmental Defect. For purposes of this Agreement, the term
“Loss” shall include any estimated Cleanup, costs, losses, expenses, liabilities
(including civil fines), damages, demands, suits, sanctions, reasonable fees and
expenses of attorneys, technical experts and expert witnesses.

If Buyer does not provide WEC with an Environmental Notice within the period set
forth above, then at Closing, Buyer shall be deemed to have accepted such
Well(s) and/or the Key Facility(ies) in their current condition and to have
forever waived Buyer’s right to assert an Environmental Defect with respect
thereto.
2.
Remedy for Environmental Defects

- If Buyer gives a valid Environmental Notice in accordance with Section 8.1,
Sellers may provide for one of the remedies in Section 8.2(a) with respect to
the Environmental Defect that is subject to such Environmental Notice, but each
such remedy, and the aggregate of all remedies, shall be limited in accordance
with Section 7.5, and shall be subject to termination under Section 7.6.
(a)
Remedy - If Buyer delivers a valid Environmental Notice to Sellers, Sellers, at
their election, shall have the option of (i) remediating the Environmental
Defect and resolving the Losses arising from such Environmental Defect to the
reasonable satisfaction of Buyer or the appropriate state and federal agencies
having jurisdiction, (ii) contesting the existence of an Environmental Defect or
Buyer’s estimate of the amount of all Losses associated with the Environmental
Defect pursuant to Section 8.2(c), (iii) paying Buyer’s good faith estimate of
the amount of all Losses associated with the Environmental Defect in the form of
a reduction to the Purchase Price (an “Environmental Adjustment”), or (iv)
excluding the Well or, in the event of a Key Facility, excluding the Key
Facility and the Wells and Leases serviced by the particular Key Facility
pursuant to Section 8.2(b).

(b)
Exclusion of Affected Well or any Key Facility - At Sellers’ option, an
exclusion adjustment may be made in an amount equal to the Allocated Value of
the Well which is the subject of a valid Environmental Notice (in the event of a
Key Facility, the Wells serviced by the Key Facility). In such event Sellers
shall retain the Well or the Key Facility and the Wells serviced by the Key
Facility, and the Base Purchase Price shall be reduced by the Allocated Value of
such Wells, as applicable.

(c)
Contested Environmental Defects - If Sellers contest the existence of any
Environmental Defect or Buyer’s estimate of the Loss associated with such
Environmental Defect, Sellers shall notify Buyer no later than 5:00 p.m. CDT on
Tuesday, August 9, 2016, after Sellers’ receipt of the Environmental Notice. The
notice shall state the basis for Sellers’ contest of the Environmental Defect or
the estimate of the Cleanup cost. By no later than Wednesday, August 10, 2016,
representatives of Sellers and Buyer, knowledgeable in environmental matters,
shall meet in person or otherwise, and, prior to Closing, either: (i) agree to
reject the Environmental Defect, in which case Buyer shall waive the
Environmental Defect, or (ii) agree on the validity of the Environmental Defect
and the estimated Loss, in which case Sellers shall have the options described
in Section 8.2(a) (except the right to contest) and Section 8.2(b). If Sellers
and Buyer cannot agree on either option (i) or (ii) in the preceding sentence,
the Environmental Defect or the estimated Loss subject to the Environmental
Notice shall be resolved in accordance with the dispute resolution provisions
set forth in Section 20.3. Notwithstanding any of the preceding provisions of
this Section 8.2(c), all Environmental Adjustments shall be made prior to
Closing, which Closing shall be extended until resolution of any disputes
relating to the Environmental Defects; provided, however, that if adjustments
for alleged Title Defects, Environmental Defects, Casualty Defects and Open
Defects do not, in the aggregate, exceed the Termination Threshold, then Closing
shall occur as to the other Assets that are not subject to the dispute (with the
portion of the Assets subject to the dispute being excluded, and the Base
Purchase Price reduced for the entire Allocated Values thereof) and Closing
shall subsequently occur with respect to the Assets made the subject of the
dispute within thirty (30) days following the final resolution of the dispute
unless Sellers elect exclusion of the affected Assets. IT IS SPECIFICALLY
UNDERSTOOD AND AGREED THAT ONCE AN ENVIRONMENTAL DEFECT HAS BEEN REMEDIATED AND
THE LOSSES RELATED TO

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SUCH ENVIRONMENTAL DEFECT HAVE BEEN RESOLVED OR AN ENVIRONMENTAL ADJUSTMENT HAS
BEEN MADE, BUYER SHALL ASSUME ANY AND ALL FUTURE ENVIRONMENTAL OBLIGATIONS
ASSOCIATED WITH SUCH ASSET.
(d)
Implementing Cleanup - If Sellers elect to Cleanup an Environmental Defect
pursuant to Section 8.2(a), Sellers shall select the means and methods of
effecting the Cleanup in accordance with applicable Environmental Laws,
applicable industry standards, and any applicable agreement, provided, however,
that Sellers shall not be required to plug and abandon any currently unplugged
wells if the cost thereof would be customary and normal site remediation costs
assumed by Buyer in the transfer of the Sale Interests hereunder, including
without limitation, plugging and abandonment of Wells. Sellers’ responsibility
for remediation under this Section 8.2 shall be limited to a standard
appropriate for the use of an Asset for oil and gas activities and in accordance
with all applicable laws.

3.
Acceptance of Environmental Condition

- SUBJECT TO THE OTHER TERMS AND PROVISIONS SET FORTH IN THIS AGREEMENT, UPON
CLOSING, BUYER AGREES TO ACCEPT THE ENVIRONMENTAL CONDITION OF THE ASSETS,
INCLUDING, BUT NOT LIMITED TO, COSTS TO CLEAN UP OR REMEDIATE; AND SUBJECT TO
THE OTHER TERMS AND PROVISIONS SET FORTH IN THIS AGREEMENT, BUYER HEREBY AGREES
TO RELEASE SELLERS FROM ANY AND ALL LIABILITY AND RESPONSIBILITY THEREFOR AND
AGREES TO INDEMNIFY, DEFEND, AND HOLD SELLERS HARMLESS FROM ANY AND ALL CLAIMS,
CAUSES OF ACTION, FINES, EXPENSES, COSTS, LOSSES, AND LIABILITIES WHATSOEVER
(INCLUDING, WITHOUT LIMITATION, REASONABLE ATTORNEYS’ FEES AND COSTS) IN
CONNECTION WITH THE ENVIRONMENTAL CONDITION OR BUYER’S FAILURE TO PROPERLY
REMEDIATE THE CONDITION. BUYER ACKNOWLEDGES AND AFFIRMS THAT THE ASSETS HAVE
BEEN UTILIZED FOR THE PURPOSE OF EXPLORATION, PRODUCTION AND DEVELOPMENT OF OIL
AND GAS, AND EXCEPT AS OTHERWISE SET FORTH IN THIS AGREEMENT, AT CLOSING, THE
SALE INTERESTS IN THE ASSETS WILL BE ACQUIRED IN THEIR “AS IS, WHERE IS”
ENVIRONMENTAL CONDITION. BUYER HAS CONDUCTED AN INDEPENDENT INVESTIGATION OF THE
PHYSICAL AND ENVIRONMENTAL CONDITION OF THE ASSETS, TO THE EXTENT BUYER DEEMS
NECESSARY OR APPROPRIATE.
4.
NORM

- Buyer acknowledges that the Assets have been used for exploration, development
and production of oil, gas and water and that there may be petroleum, produced
water, wastes or other materials located on, under or associated with the
Interests. Equipment and sites included in the Assets may contain NORM. NORM may
affix or attach itself to the inside of wells, materials and equipment as scale,
or in other forms; the wells, materials and equipment located on or included in
the Assets may contain NORM and other wastes or hazardous substances/materials;
and NORM containing material and other wastes or hazardous substances/materials
may have been buried, come in contact with the soil or otherwise been disposed
of on or around the Assets. Special procedures may be required for the
remediation, removal, transportation or disposal of wastes, asbestos, hazardous
substances/materials, including hydrogen sulfide gas and NORM from the Assets.
From and after the Closing, Buyer shall assume responsibility for the control,
storage, handling, transporting and disposing of or discharge of all materials,
substances and wastes from the Assets (including produced water, hydrogen
sulfide gas, drilling fluids, NORM and other wastes), whether present before or
after the Effective Time, in a safe and prudent manner and in accordance with
all applicable Environmental Laws (as defined below).
5.
Environmental Indemnities

- EXCEPT AS OTHERWISE SET FORTH IN THIS ARTICLE 8, THIS SALE IS MADE ON AN “AS
IS, WHERE IS” BASIS AND BUYER RELEASES SELLERS FROM ANY LIABILITY WITH RESPECT
TO THE ENVIRONMENTAL CONDITION OF THE ASSETS, WHETHER OR NOT CAUSED BY OR
ATTRIBUTABLE TO SELLERS’ NEGLIGENCE. FROM AND AFTER CLOSING, SUBJECT TO THE
OTHER TERMS AND PROVISIONS SET FORTH IN THIS AGREEMENT, BUYER SHALL BE LIABLE TO
SELLERS FOR AND SHALL, IN ADDITION, INDEMNIFY, DEFEND, RELEASE AND HOLD SELLERS
HARMLESS FROM AND AGAINST ANY AND ALL CLAIMS, IN FAVOR OF ANY THIRD PARTY OR
ENTITY FOR INJURY, ILLNESS OR DEATH OF ANY PERSON(S) OR FOR DAMAGE, LOSS,
POLLUTION OR CONTAMINATION OF ANY REAL OR PERSONAL PROPERTY, GROUNDWATER OR THE
ENVIRONMENT ATTRIBUTABLE TO THE ENVIRONMENTAL CONDITION OF THE ASSETS,
INCLUDING, WITHOUT LIMITATION, CLAIMS ARISING UNDER ENVIRONMENTAL LAWS OR, FOR
ANY OTHER CLAIMS ARISING DIRECTLY OR INDIRECTLY FROM, OR INCIDENT TO, THE USE,
OCCUPATION, OWNERSHIP, OPERATION, CONDITION (WHETHER LATENT OR PATENT),

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MAINTENANCE OR ABANDONMENT OF ANY OF THE ASSETS AND WHETHER ARISING FROM OR
CONTRIBUTED TO BY THE ACTIVE, PASSIVE, JOINT, SOLE OR CONCURRENT NEGLIGENCE, OR
STRICT LIABILITY OF SELLERS, OR SELLERS’ CONTRACTORS OR SUBCONTRACTORS OR THE
OFFICERS, DIRECTORS, AGENTS OR EMPLOYEES OF SELLERS’ CONTRACTORS OR
SUBCONTRACTORS, INCLUDING ANY STRICT LIABILITY UNDER ENVIRONMENTAL LAWS,
REGARDLESS OF WHETHER ANY SUCH CLAIMS RESULT FROM ANY CONDITIONS, EVENTS,
ACTIONS OR INACTIONS ARISING, OCCURRING OR ACCRUING PRIOR TO, ON OR AFTER THE
EFFECTIVE TIME. Buyer and Sellers shall treat all information regarding any
environmental conditions as confidential and shall not make any contact with any
Governmental Authority or third party regarding same without the prior express
written consent from the other Party unless such contact is required by
applicable law.
ARTICLE 9

.

.
THIRD-PARTY CONSENTS AND PREFERENTIAL PURCHASE RIGHTS

1.
Third Party Notices

- Sellers shall (i) request, from the appropriate parties (and in accordance
with the Contract(s) and/or Material Contracts creating such rights and/or
requirements), any consent or approval of any third party, person or
Governmental Authority (“Consents”), and (ii) send notices to all persons or
parties to whom such notices may be required for all options, rights of first
refusal, or similar preferential purchase rights burdening any Asset(s) (each a
“Preferential Purchase Right”), in compliance with the terms of the Contract(s)
providing for or creating such Preferential Purchase Rights against the
applicable Asset(s). Sellers agree to use all commercially reasonable efforts,
but without obligation to incur any unreasonable cost or expense, to obtain
waivers of, or to comply with, any such Preferential Purchase Right prior to
Closing.
2.
Third-Party Exercise

- If a third-party exercises a Preferential Purchase Right on any Asset(s), the
affected Asset(s) shall be removed from this Agreement and the Base Purchase
Price shall be adjusted by the dollar amount allocated to the affected Asset(s)
as set forth on Exhibits “C-1” and “C-2”.
3.
Third-Party Failure to Purchase

- If a third-party exercises a Preferential Purchase Right for any Sale
Interests in any Asset(s), but fails to close the purchase for any reason within
sixty (60) days after Closing (or such longer period as may be provided for
under the applicable Contract(s) creating such Preferential Purchase Right),
Sellers shall give written notice to Buyer of such failure to close, and Buyer
shall purchase such Sale Interests in the Asset(s) for the Allocated Value
therefor as set forth on Exhibits “C-1” and “C-2”, and on the terms and
conditions set forth in this Agreement (including the Effective Time as set
forth in this Agreement).
4.
Consents

. If any Sales Interests is subject to a Consent, then (i) the portion of the
Sale Interests for which such Consent applies shall be conveyed at the Closing,
(ii) the Allocated Value for that Sale Interests shall be paid to Sellers, and
(iii) Sellers shall use its reasonable efforts to obtain such Consent as
promptly as possible following Closing. Buyer shall reasonably cooperate with
Sellers in obtaining any Consent including providing assurances of reasonable
financial conditions, but Buyer shall not be required to expend funds or make
any other type of financial commitments a condition of obtaining such Consent.
If such Consent has not been obtained by the Settlement Date and if the failure
to obtain such Consent would cause (1) the Assignment of the Sale Interests
affected thereby to be void or the termination of a Lease or Contract under the
express terms thereof, or (2) such Consent requested by Sellers is denied in
writing, then the portion of the Sale Interests applicable to such Consent shall
be deemed to be excluded from the Transaction and shall be reassigned to Sellers
(the “Excluded Assets”), and the Final Purchase Price shall be reduced by the
Allocated Value of such Excluded Assets (with such adjustment being an
“Exclusion Adjustment”).
ARTICLE 10

.

.
CONDITIONS TO CLOSING; Settlement Statement; CLOSING

1.
Sellers’ Conditions to Closing

- The obligations of Sellers at the Closing are subject to the satisfaction at
or prior to the Closing, or waiver in writing by Sellers, of the following
conditions:
(a)
All representations and warranties of Buyer contained in this Agreement, to the
extent qualified with respect to materiality, shall be true and correct in all
respects, and to the extent not so qualified, shall be true and correct in all
material respects, in each case as if such representations and warranties were

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made at and as of the Closing Date (except to the extent such representations
and warranties are made as of a specified date, in which case such
representations and warranties shall be true and correct as of the specified
date); and Buyer shall have performed and satisfied in all material respects all
covenants and agreements required to be performed and satisfied by it under this
Agreement at or prior to the Closing.
(b)
On the Closing Date, no injunction, order or award enjoining or otherwise
prohibiting the consummation of the transactions contemplated by this Agreement
shall have been issued by a Governmental Authority and remain in force.

(c)
All material consents and approvals required of Governmental Authorities in
order to sell and transfer the Assets to Buyer and otherwise close and
consummate the transaction contemplated herein, except consents and approvals of
assignments by Governmental Authorities that are customarily obtained after
Closing, shall have been received or waived in writing, or the necessary waiting
period shall have expired, or early termination of the waiting period shall have
been granted.

(d)
Buyer shall have provided Sellers evidence satisfactory to Sellers that Buyer,
as of Closing (i) is qualified to do business and to own and operate the Assets
in all jurisdictions in which the Assets are located and (ii) has posted all
bonds and obtained all insurance required by any Governmental Authority or other
body to own and operate the Assets or by any applicable operating agreement.

(e)
The aggregate adjustments to the Base Purchase Price attributable to Title
Defects, Environmental Defects, Open Defects and Casualty Defects shall not have
exceeded the Termination Threshold.

(f)
Buyer shall have performed its obligations set forth in Section 10.5.

(g)
Sellers shall have executed the Closing Settlement Statement defined under
Section 10.3.

2.
Buyer’s Conditions to Closing

- The obligations of Buyer at the Closing are subject to the satisfaction at or
prior to the Closing, or waiver in writing by Buyer, of the following
conditions:
(a)
All representations and warranties of Sellers and Zebra contained in this
Agreement, to the extent qualified with respect to materiality, shall be true
and correct in all respects, and to the extent not so qualified, shall be true
and correct in all material respects, in each case as if such representations
and warranties were made at and as of the Closing Date (except to the extent
such representations and warranties are made as of a specified date, in which
case such representations and warranties shall be true and correct as of the
specified date), and Sellers shall have performed and satisfied in all material
respects all covenants and agreements required to be performed and satisfied by
it under this Agreement at or prior to the Closing.

(b)
On the Closing Date, no injunction, order or award enjoining or otherwise
prohibiting the consummation of the transactions contemplated by this Agreement
shall have been issued by a Governmental Authority and remain in force.

(c)
All material consents and approvals required of Governmental Authorities in
order to sell and transfer the Assets to Buyer and otherwise close and
consummate the transaction contemplated herein, except consents and approvals of
assignments by Governmental Authorities that are customarily obtained after
Closing, shall have been received or waived in writing, or the necessary waiting
period shall have expired, or early termination of the waiting period shall have
been granted.

(d)
The aggregate adjustments to the Base Purchase Price attributable to Title
Defects, Environmental Defects, Open Defects and Casualty Defects shall not have
exceeded the Termination Threshold.

(e)
Sellers shall have performed its obligations set forth in Section 10.5.

(f)
Zebra shall have performed its obligations set forth in Article 19.

(g)
Sellers shall have executed the Closing Settlement Statement defined under
Section 10.3, including WEC executing the Closing Statement on behalf of the
Participating Third Party Owners pursuant to the authority granted under the
Election Agreements.

(h)
The execution and deliveries of the Participating Third Party Owners set forth
in Section 10.5 shall have been performed.

3.
Closing Settlement Statement

- By August 10, 2016, WEC, for itself and on behalf of the other Sellers and the
Participating Third Party Owners, shall provide Buyer with a closing settlement
statement covering the adjustments (including the Deposit), without duplication,
to the Base Purchase Price to be made at Closing under this Agreement (the
“Closing Settlement Statement”). To the extent available, actual numbers shall
be used. If not available, WEC shall use reasonable and good faith estimates of
the same, which estimates shall be adjusted to take into account actual numbers
in connection with the Final Settlement Statement described in Section 11.3
below. In preparing the Closing Settlement Statement, WEC shall have no
obligation to make an accrual for revenues not received as of Closing.

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4.
Closing Date and Place

- The closing of the transaction contemplated by this Agreement shall be held on
the first Business Day after the satisfaction or waiver of the latest to occur
of the conditions set forth in Sections 10.1 and 10.2 (other than those
conditions that by their nature are to be satisfied by actions taken at the
Closing, but subject to their satisfaction) (the “Closing Date”), which the
Parties intend to occur no later than Friday, August 12, 2016, at the office of
Sellers at 6116 N. Central Expressway, Suite 313, Dallas, Texas 75206 or at such
other time and place as the Parties mutually agree (the “Closing”).
5.
Closing Activities

- The following actions shall take place at Closing:
(a)
Certificates - Each Party shall deliver to the other Party a certificate in a
form reasonably satisfactory to the other Party, dated as of the Closing, and
executed by a duly authorized officer, partner, attorney-in-fact or owner, as
appropriate, of such Party, certifying that the conditions to Closing as set
forth in Sections 10.1(a) or 10.2(a), as the case may be, have been met.

(b)
Conveyances from Sellers - Sellers and Buyer shall execute, acknowledge and
deliver two (2) counterpart copies of each of the Conveyances (substantially in
the form set forth as Exhibit “D” attached hereto) to be filed in Nolan County,
Texas, where the Assets are located, assigning and conveying the Sellers’ Sale
Interests in the Assets to Buyer, as well as the requisite number of applicable
governmental assignment forms.

(c)
Election Agreements - WEC shall deliver to Buyer the originally executed
Election Agreements having been executed by the Participating Third Party
Owners.

(d)
Conveyances from Participating Third Party Owners - WEC shall deliver to Buyer
two (2) counterpart copies of an assignment and conveyance, in a mutually agreed
form, executed and acknowledged by the Participating Third Party Owner,
assigning and conveying the Participating Third Party Owner’s Sale Interests in
the Assets to Buyer.

(e)
Payment - Buyer shall deliver to an account designated in writing by WEC by wire
transfer of same day funds in the amount as set forth on the Closing Settlement
Statement.

(f)
Resignation of Operator - WEC shall execute and deliver to Buyer resignation of
operator letters with respect to all of the Wells in forms reasonably acceptable
to Buyer;

(g)
Additional Documents - Buyer shall (i) furnish to Sellers such evidence
(including evidence of satisfaction of all applicable bonding or insurance
requirements) as Sellers may require demonstrating that Buyer is qualified with
the applicable Governmental Authorities or pursuant to any operating agreement
to succeed Sellers as the owners and, where applicable, the operator of the
Assets, (ii) with respect to Assets operated by Sellers where Buyer intends to
succeed WEC as operator, execute and deliver to Sellers appropriate evidence
reflecting change of operator as required by applicable Governmental
Authorities, and (iii) execute and deliver to Sellers such forms as Sellers may
reasonably request for filing with applicable Governmental Authorities to
reflect Buyer’s assumption of plugging and abandonment liabilities with respect
to all of the Assets. As to any of the Wells and Leases in which Buyer does not
acquire all of the leasehold interest governed by the applicable operating
agreement, Buyer shall hold the designation of operatorship subject to the
succession election under the governing operating agreement, and shall indemnify
and hold Sellers harmless from any and all claims of third parties arising from
the delivery by Sellers of the operator succession to Buyer.

(h)
Possession -Sellers shall (subject to the terms of any applicable operating
agreements and to the other provisions hereof) deliver to Buyer possession of
the Assets to be conveyed at the Closing.

(i)
Letters-in-Lieu - Sellers and Buyer shall execute and deliver to Buyer the
Letters-in-Lieu of Transfer Orders, all as provided for in Section 13.3. WEC
shall deliver to Buyer Letters-in-Lieu of Transfer Orders executed by the
Participating Third Party Owners, all as provided in Section 13.3.

(j)
Release of Mortgages, Deeds of Trusts, Liens, Encumbrances and Financing
Statements - Sellers shall deliver to Buyer duly executed releases of any
mortgages, deeds of trust, liens, encumbrances and financing statements, if any,
placed by Sellers upon and encumbering Sellers’ interest in the Assets, other
than Permitted Encumbrances. WEC shall deliver to Buyer duly executed releases
of any mortgages, deeds of trust, liens, encumbrances and financing statements,
if any, placed by the Participating Third Party Owners upon and encumbering any
of their interest in the Assets, other than Permitted Encumbrances.

(k)
Seismic License - Sellers and Buyer shall execute and deliver the Seismic
License.

ARTICLE 11

.

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.
POST-CLOSING OBLIGATIONS

Sellers and Buyer agree to the following post-Closing obligations:
1.
Recordation and Filing of Documents

- After the Closing, Buyer shall file or record the Conveyances in the
appropriate county and governmental records. Buyer shall provide a copy of same,
including recording date, to WEC, all at the sole cost of Buyer.
2.
Records

- Within ten (10) Business Days after the Closing, WEC shall furnish Buyer the
Records and the seismic data subject to the Seismic License. All costs
associated with delivering or copying the Records and the seismic data shall be
borne solely by Buyer. Insofar as Sellers reasonably believe the Records may be
needed or useful in connection with federal, tribal, state or local regulatory
or tax matters or resolution of disputes, litigation, or contract compliance
issues, Buyer (for a period of seven (7) years after the Closing) shall further
make available to Sellers or their affiliates (at the location of such Records
in Buyer’s organization) access to the Records during normal business hours,
upon not less than two (2) Business Days prior written request by Sellers, and
Sellers shall have the right to copy at their own expense and retain such copies
of the Records as Sellers, in good faith, believes may be useful or needed in
connection with the above-described matters. If, however, Buyer elects to
destroy any of the Records prior to the expiration of the seven (7) year period,
Buyer shall give to Sellers written notice of such intent at least thirty (30)
days prior to such destruction and Sellers shall have the option, at their
expense, of having such Records delivered to it.
3.
Final Settlement Statement

- WEC, for itself and on behalf of the other Sellers and the Participating Third
Party Owners, shall issue a final settlement statement covering all adjustments,
without duplication, to the Base Purchase Price that were not included in the
Closing Settlement Statement (the “Final Settlement Statement”) within one
hundred twenty (120) days after Closing. Buyer shall respond to WEC with
objections and proposed corrections within thirty (30) days of the issuance of
the Final Settlement Statement. If Buyer does not respond with objections and
the support therefor to the Final Settlement Statement in writing within thirty
(30) days of the issuance of the Final Settlement Statement, said Statement
shall be deemed approved by Buyer. In the event that Buyer does respond and
objects within this time period, WEC, on behalf of itself, the other Sellers and
the Participating Third Party Owners, and Buyer shall meet within fifteen (15)
days following Sellers’ receipt of Buyer’s objections and attempt to resolve the
disputed items. If WEC and Buyer are unable to resolve the disputed items by the
end of such fifteen-day period, the dispute shall be resolved in accordance with
the dispute resolution provisions set forth in Section 20.3. After approval by
both Parties (or after final resolution of the same under Section 20.3), the net
adjustment due pursuant to the Final Settlement Statement for the Sale Interests
conveyed shall be summarized and a net check or invoice shall be sent to the
Buyer or WEC, on behalf of Sellers and the Participating Third Party Owners, as
the case may be. Buyer or Sellers, as the case may be, agrees to promptly pay
any such invoice within ten (10) days after their receipt thereof.
4.
Cooperation with Sellers’ Retained Assets

- Buyer agrees to use reasonable efforts to cooperate in connection with
Sellers’ removal of all personal property associated with the Retained Assets
(to the extent applicable), including, but not limited to, the equipment and
personal property identified on Schedule 2.2(g) (if any). Sellers shall remove
such retained personal property within one hundred twenty (120) days after
Closing.
5.
Suspense Accounts

- As set forth and itemized on Schedule 11.5 attached hereto, WEC currently
maintains suspense accounts pertaining to oil and gas heretofore produced
comprising monies payable to royalty owners, mineral owners and other persons
with an interest in production associated with the Assets that Sellers has been
unable to pay (the “Suspense Accounts”). As identified in the Closing Settlement
Statement, a downward adjustment to the Base Purchase Price will be made at
Closing to reflect the Suspense Accounts as of the Closing Date and the Suspense
Accounts shall be further adjusted, if necessary, in the Final Settlement
Statement. Subject to the other provisions hereof, Buyer shall assume full and
complete responsibility and liability for proper payment of the funds comprising
the Suspense Accounts as set forth on the “Final Suspense Account Statement,”
which shall be provided by WEC to Buyer with the Final Settlement Statement
required in Section 11.3, (including any liability under any unclaimed property
law or escheat statute). Buyer agrees to indemnify, defend and hold Sellers,
their parent, subsidiary and affiliated entities, together with their respective
officers, directors, employees, agents and their respective successors and
assigns, harmless from and against any and all liabilities, claims, demands,
penalties and expenses (including reasonable attorneys’ fees) arising out of or
pertaining to the proper payment and

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administration of the Suspense Accounts in accordance with the Final Suspense
Account Statement, limited, however to the total amount of the Suspense
Accounts.
6.
Further Assurances

- Buyer and Sellers further agree that each shall, from time to time and upon
reasonable request, use reasonable efforts to execute, acknowledge, and deliver
in proper form, any instrument of conveyance, assignment, transfer, or other
instruments reasonably necessary for transferring title in the Sale Interests to
Buyer or otherwise to implement the transactions contemplated herein.
ARTICLE 12

.

.
TAXES

1.
Property Taxes

- All ad valorem taxes, property taxes, and similar obligations (“Property
Taxes”) applicable to the Sale Interests with respect to the 2016 tax period in
which the Effective Time occurs (the “Current Tax Period”) shall be apportioned
between Sellers, Participating Third Party Owners, and Buyer as of the Effective
Time based on the Current Tax Period’s assessment. The apportionment method
shall be an allocation based on the number of days the Sale Interests were
owned. The amount apportioned to the Sellers and the Participating Third Party
Owners, as the case may be, shall be the number of days the Sale Interests were
owned from January 1, 2016, to the day prior to the Effective Time. The amount
apportioned to the Buyer shall be the number of days the Sale Interests were
owned from the Effective Time to December 31, 2016. Each Seller shall reimburse
Buyer for each Seller’s portion of the Current Tax Period at Closing or in
connection with any post-closing settlement provided for herein. Each
Participating Third Party Owner shall reimburse Buyer for its portion of the
Current Tax Period at Closing or in connection with any post-closing settlement
provided herein. Buyer shall pay, and defend and hold Sellers and Participating
Third Party Owners harmless, with respect to payment of all Property Taxes on
the Sale Interests for the Current Tax Period and thereafter, regardless of the
taxing agency’s basis for calculating such taxes, together with any interest or
penalties assessed thereon. If Sellers or Participating Third Party Owners, as
the case may be, pay the Property Taxes assessed for the Current Tax Period,
Buyer agrees to reimburse the paying parties for Buyer’s portion of said taxes
at Closing or in connection with any post-closing settlement provided for
herein.
2.
Production Taxes

- All taxes (other than Property Taxes, income, franchise, or similar taxes)
imposed on or with respect to the production of oil, natural gas, or other
hydrocarbons or minerals, or the receipt of proceeds therefrom (including, but
not limited to, severance, production and excise taxes) shall be apportioned
between the selling parties and Buyer based upon the respective shares of
production taken by the parties. Payment or withholding of all such taxes that
have accrued prior to the Effective Time and filing of all statements, returns
and documents pertinent thereto shall be the responsibility of each selling
party, to the extent applicable to the interests of each selling party. Payment
or withholding of all such taxes that have accrued from and after the Effective
Time and the filing of all statements, returns and documents incident thereto
shall be the responsibility of Buyer. In the event any such taxes attributable
to the Sale Interests and to periods on or after the Effective Time become due
and payable prior to Closing, Sellers and the Participating Third Party Owners,
to the extent attributable to their respective interests, shall timely pay and
satisfy the same and appropriate adjustments therefor shall be made to the Base
Purchase Price under Section 3.3 above.
3.
Other Taxes

- As may be required by relevant taxing agencies, Sellers shall collect and
Buyer shall pay at Closing all applicable state and local sales tax, use tax,
gross receipts tax, business license tax, and other taxes attributable to the
consummation of the transactions under this Agreement except taxes imposed by
reason of income to (or capital of) Sellers. The tax collected shall be based
upon the Allocated Values as provided in Section 3.4 and reflected on Exhibits
“C-1 and C-2” and shall be added to the Base Purchase Price at Closing. Any
state or local tax specified above, inclusive of any penalty and interest,
assessed at a future date against Sellers with respect to the transaction
covered herein shall be paid by Buyer or, if paid by Sellers and/or the
Participating Third Party Owners, Buyer shall promptly reimburse WEC on behalf
of the paying parties. Any documentary stamp tax which may be due shall be paid
by Buyer.
ARTICLE 13

.

.
OWNERSHIP OF ASSETS

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1.
Distribution of Production

- All oil in storage above the pipeline connection or gas beyond the meters at
the Effective Time, to the extent attributable to the Sale Interests, shall be
credited to Sellers and the Participating Third Party Owners, as the case may
be, less applicable royalties and severance taxes to which the interests of such
parties are subject. For Seller-operated Assets, Sellers have gauged the oil in
storage and read all gas meter charts as of the Effective Time. For Seller
non-operated Assets, the quantity of such oil in storage or gas beyond the
meters shall be determined on the same basis as that used for Seller-operated
Assets based on operator reports or applicable state regulatory agency
production reports or records. As part of the Closing Settlement Statement, the
price for such oil in storage shall be at the price that Sellers have contracted
to sell the oil at the Effective Time. If there is no such price, the price
shall be the average of the two highest prices that are posted at the Effective
Time (plus any premium) by other purchasing companies, as determined by Sellers
in the field or locality where the Assets are located for oil of like grade and
gravity. Subject to the occurrence of the Closing, title to the oil in storage
for both Seller-operated and Seller non-operated Assets, to the extent
attributable to the Sale Interests, shall pass to Buyer as of the Effective
Time, and an upward adjustment shall be made to the Base Purchase Price due at
Closing, less applicable royalties and severance taxes.
2.
Proration of Income and Expenses

- Except as otherwise provided in this Agreement, all proceeds (including
proceeds held in suspense or escrow), receipts, credits, and income attributable
to the Sale Interests for all periods of time prior to the Effective Time shall
belong to Sellers and the Participating Third Party Owners, as the case may be,
and all proceeds, receipts, credits, and income attributable to the Sale
Interests for all periods of time from and after the Effective Time shall belong
to Buyer. Except as otherwise provided in this Agreement, all costs, expenses,
disbursements, and obligations attributable to the Sale Interests for periods of
time prior to the Effective Time shall be the obligation of Sellers, and Sellers
shall promptly pay, or if paid by Buyer, promptly reimburse Buyer for and hold
Buyer harmless from and against same. Except as otherwise provided in this
Agreement, all costs, expenses, disbursements and obligations attributable to
the Sale Interests for periods of time from and after the Effective Time shall
be the obligation of Buyer, and Buyer shall promptly pay, or if paid by Sellers,
promptly reimburse Sellers for and hold Sellers harmless from and against same.
3.
Notice to Remitters of Proceeds

- Buyer shall be responsible for informing all purchasers of production or other
remitters to pay Buyer and obtain from the remitter revenues accrued after the
Effective Time. The remitter shall be informed by Sellers, Participating Third
Party Owners, and Buyer via Letters-in-Lieu of Transfer Order or such other
reasonable documents which remitter may require.
4.
Notice to Third Party Users of Key Facilities

- Buyer shall be responsible for informing all third-party users of the Key
Facilities of the change in ownership of the Key Facilities, and Sellers agree
to work in good faith with Buyer in providing information necessary to assist
Buyer in its efforts to notify such third parties.
5.
Production Imbalances

- Set forth on Schedule 13.5 is a listing of all gas imbalance volumes derived
from the most recent imbalance statement from the Operator of each Well where a
known imbalance exists measured in MCFs and the aggregate net volume of
overproduction or underproduction, as applicable, with respect to the Assets
(the “Represented Imbalance”). As part of the Final Settlement Statement, the
Base Purchase Price shall be adjusted, upward or downward as appropriate, to
reflect the value of the difference between the aggregate net volume of
overproduction or underproduction associated with the Sale Interests set forth
on Schedule 13.5 and the aggregate net volume of overproduction or
underproduction associated with the Sale Interests as of the Effective Time (the
“Assumed Imbalances”). The value of said difference between the aggregate net
volume (less royalties) of overproduction or underproduction, as applicable,
shall be the product obtained by multiplying $2.90 by the volume of such
difference in MCFs. Buyer shall be solely responsible for any liability and
solely entitled to any benefit from such production imbalances relating to the
Sale Interests, whether occurring on, before or after the Effective Time.
6.
Pipeline and Other Non-Wellhead Imbalances

- To the extent there exists any imbalances attributable to the Sale Interests’
share of Hydrocarbons produced from the Assets as of the Effective Time with
respect to any gas pipeline, storage or processing facility (the “Pipeline
Imbalances”), at Closing the Base Purchase Price shall be adjusted upward or
downward, as appropriate, to reflect the value of said Pipeline Imbalance. The
value of said Pipeline Imbalance shall be calculated by summing

--------------------------------------------------------------------------------

the product(s) obtained by multiplying the volume of each net over-position or
under-position, as the case may be, measured in the same manner as it is
measured by the pipeline, storage or processing facility, as applicable, by the
value at which the Pipeline Imbalance was either cashed out, made up or sold, or
if otherwise undeterminable then using existing fair market value of, or price
for, said Hydrocarbons. Buyer shall be solely responsible for any liability and
solely entitled to any benefit from such pipeline imbalances relating to the
Sale Interests from and after the Effective Time; provided, that Buyer shall not
be liable for any penalties or surcharges payable to the pipeline transport for
periods prior to the Effective Time. If the Pipeline Imbalance cannot be
determined by Closing or if the pipeline storage or processing facility makes
any adjustments attributable to any period prior to the Effective Time after
Closing but before the Final Settlement Statement, then the value adjustment
associated with any imbalance will be made in connection with the Final
Settlement Statement.
ARTICLE 14

.

.
INTERIM OPERATIONS

1.
Standard of Care

- - During the period from the Execution Date to Closing, (i) Sellers shall not,
except for emergency action taken in the face of risk to life, property or the
environment, without the prior written consent of Buyer (which shall not be
unreasonably withheld, conditioned or delayed) approve or authorize any AFEs or
capital expenditures over Twenty-Five Thousand and No/100 U.S. Dollars
($25,000.00) net to the interest of Sellers which is received by Sellers with
respect to any Assets, incur costs for discretionary expenditures for operations
in excess of Twenty-Five Thousand and No/100 U.S. Dollars ($25,000.00) net to
the interest of Sellers for which AFEs are not prepared; (ii) Sellers shall not
transfer, sell, hypothecate, encumber, abandon or otherwise dispose of any
interests which they may have in portion of the Assets (other than the
replacement or disposition of Equipment or the sale of Hydrocarbons, in each
case, in the ordinary course of business or as required in connection with the
exercise by third-parties of Preferential Purchase Rights); (iii) Sellers shall
assist the Buyer (without incurring any third party expenses) in preserving the
present relationships related to the Assets with Persons having significant
business relations therewith, such as suppliers, customers, brokers, agents or
otherwise; and (iv) Sellers shall not waive, compromise or settle any material
right or claim if such waiver, compromise or settlement would adversely affect
the use, ownership or operation of any of the Assets in any material respect.
2.
Liability of Operator

- Notwithstanding Section 14.1, Sellers shall not be liable to Buyer for any
claims, demands, causes of action, damages, or liabilities arising out of
Sellers’ operation of the Assets after the Effective Time, insofar as Sellers
continue to operate and maintain the Assets in accordance with the terms of this
Agreement (including, without limitation, Section 14.1 above), and insofar as no
such Claims, demands, causes of action, damages, or liabilities relating to such
interim operation are not attributable to the gross negligence or willful
misconduct of Sellers.
3.
Removal of Signs

- Buyer shall promptly, but no later than required by applicable rules and
regulations or thirty (30) days thereafter, whichever is earlier, remove any
signs and references to Sellers and shall erect or install all signs complying
with any applicable governmental rules and regulations, including, but not
limited to, those showing the Buyer or its affiliates as operator of the Assets.
4.
Third-Party Notifications

- Buyer shall make all notifications to all Governmental Authorities, “one call
services” and similar groups associated with the operation of the Assets within
ten (10) days of Closing. A copy of all such notifications shall be provided to
Sellers pursuant to the notice provisions contained in Article 17 hereof.
5.
Seller Credit Obligations

- The Parties understand that none of the bonds, letters of credit, guarantees
and insurance, if any, posted or owned by Sellers with any Governmental
Authority or third party and relating to the Assets (“Seller Credit
Obligations”) are to be transferred to Buyer. On or before the Closing Date,
Buyer shall obtain, or cause to be obtained in the name of Buyer or any of its
affiliates, replacements for such Seller Credit Obligations. If any such Seller
Credit Obligation remains outstanding as of the Closing Date, (i) Buyer shall
indemnify each member of the Seller Group and hold them harmless against any
Losses that the Seller Group may incur under any such Seller Credit Obligations
from and after the Effective Date, and (ii) Buyer shall promptly take all action
reasonable and necessary to cause the removal or cancellation of such Seller
Credit Obligations which remain outstanding as of the Closing Date.

--------------------------------------------------------------------------------

6.
Notification of Breaches

- If after the Execution Date Buyer or any affiliate of Buyer obtains knowledge
of any fact, circumstance or matter which could result in any representation or
warranty of Sellers in Article 5 being breached, Buyer will promptly furnish
Sellers written notice thereof.
ARTICLE 15

.

.
ASSUMPTION OF LIABILITY AND GENERAL INDEMNIFICATION

1.
Buyer’s Assumption of Obligations. Subject to the Closing occurring, and further
subject to the Sellers’ indemnification provisions of Section 15.4, and unless
expressly provided for otherwise hereunder, Buyer hereby assumes and agrees to
fulfill, perform, pay and discharge (or cause to be fulfilled, performed, paid
or discharged) all of the obligations and liabilities of the Sellers, known or
unknown, with respect to the Assets, whether arising before, on or after the
Effective Time, REGARDLESS OF WHETHER ANY OF SUCH OBLIGATIONS, LIABILITIES OR
CLAIMS MAY BE ATTRIBUTABLE, IN WHOLE OR IN PART, TO THE STRICT LIABILITY OR
NEGLIGENCE OF SELLER GROUP, BUYER OR THIRD PARTIES, WHETHER SUCH NEGLIGENCE IS
ACTIVE OR PASSIVE, JOINT, CONCURRENT OR SOLE (collectively, the “Assumed
Obligations”). The Assumed Obligations do not cover or include Sellers’
indemnity obligations as set forth in Section 15.4, prior to the expiration of
such Sellers’ indemnity obligations, and any and all duties and obligations or
claims which would fall under Sections 15.4(i) through (vi), inclusive. Subject
to the Sellers’ indemnification provisions of Section 15.4, the Assumed
Obligations include, without limitation, the payment and/or performance of all
taxes, leasehold and equipment rentals and release payments, royalties, excess
royalties, in-lieu royalties, overriding royalty interests, production payments,
net profit obligations, carried working interests, payments for the purchase of
third party production from the Key Facilities or fees charged for services
provided on the Key Facilities, and any other matters with which the Assets may
be burdened, insofar as the same are attributable to the periods before, on or
after the Effective Time. Subject to the Sellers’ indemnification provisions of
Section 15.4:

(a)
THE ASSUMED OBLIGATIONS SHALL INCLUDE, AND BUYER, FROM AND AFTER THE CLOSING
ACCEPTS SOLE RESPONSIBILITY FOR AND AGREES TO PAY, ALL COSTS AND EXPENSES
INCURRED FROM AND AFTER THE EFFECTIVE TIME AND ASSOCIATED WITH PLUGGING AND
ABANDONMENT OF ALL WELLS, DECOMMISSIONING OF ALL FACILITIES (INCLUDING THE KEY
FACILITIES) AND PLATFORMS, AND CLEARING AND RESTORATION OF ALL SITES, IN EACH
CASE INCLUDED IN, OR ASSOCIATED WITH, THE ASSETS, AND BUYER MAY NOT CLAIM THE
FACT THAT PLUGGING AND ABANDONMENT, DECOMMISSIONING, SITE CLEARANCE OR
RESTORATION OPERATIONS ARE NOT COMPLETE OR THAT ADDITIONAL COSTS AND EXPENSES
ARE REQUIRED TO COMPLETE ANY SUCH OPERATIONS AS A BREACH OF SELLERS’
REPRESENTATIONS OR WARRANTIES MADE HEREUNDER OR THE BASIS FOR ANY OTHER REDRESS
AGAINST SELLERS.

(b)
SUBJECT TO ARTICLE 8, THE ASSUMED OBLIGATIONS SHALL INCLUDE, AND BUYER, FROM AND
AFTER THE CLOSING ACCEPTS SOLE RESPONSIBILITY FOR AND AGREES TO PAY, ANY AND ALL
COSTS AND EXPENSES ARISING OUT OF ENVIRONMENTAL LAWS (INCLUDING, WITHOUT
LIMITATION, ANY COMPLIANCE OR NON-COMPLIANCE THEREWITH, ANY ADVERSE
ENVIRONMENTAL CONDITIONS, AND THE DISPOSAL, RELEASE, DISCHARGE OR EMISSION OF
HYDROCARBONS, HAZARDOUS SUBSTANCES, HAZARDOUS WASTES, HAZARDOUS MATERIALS, SOLID
WASTES OR POLLUTANTS INTO THE ENVIRONMENT), KNOWN OR UNKNOWN, WITH RESPECT TO
THE ASSETS, REGARDLESS OF WHETHER SUCH OBLIGATIONS OR LIABILITIES AROSE PRIOR
TO, ON, OR AFTER THE EFFECTIVE TIME. BUYER EXPRESSLY AGREES TO ASSUME THE RISK
THAT THE ASSETS MAY CONTAIN WASTE MATERIALS, INCLUDING, WITHOUT LIMITATION,
NORM, HAZARDOUS SUBSTANCES, HAZARDOUS WASTES, HAZARDOUS MATERIALS, SOLID WASTES,
OR OTHER POLLUTANTS.

2.
Definitions

- For purposes of this Article 15 and all other provisions of this Agreement
which contain an indemnification provision, the term “Buyer Group” shall be
deemed to include Buyer and its affiliates, all successors, heirs and assigns of
Buyer and its affiliates, and the officers, directors, shareholders, employees,
representatives, co-owners, contractors, subcontractors, or agents of any of the
foregoing. For purposes of this Article 15 and all other provisions of this
Agreement which contain an indemnification provision, the term “Seller Group”
shall be deemed to include Sellers, their direct parent, and all subsidiaries
thereof, all successors, heirs and assigns of

--------------------------------------------------------------------------------

any of the foregoing, and each of their respective officers, directors,
shareholders, employees, representatives, co-owners, contractors,
subcontractors, or agents of any of the foregoing.
3.
Buyer’s General Indemnity

- Buyer shall, upon Closing, defend, indemnify, release and hold Seller Group
harmless from and against any and all Claims in favor of any person arising from
or relating to:
(i)
Buyer’s breach of any of its representations and warranties in this Agreement;

(ii)
Buyer’s breach of any of its covenants in and under this Agreement; and

(iii)
the Assumed Obligations.

4.
Sellers’ General Indemnity

- Each Seller shall, upon Closing, defend, indemnify, release and hold Buyer
Group harmless from and against any and all Claims in favor of any person
arising from or related to:
(i)
Such Seller’s breach of any of its representations and warranties in this
Agreement, excluding, any Claims relating to title or environmental matters;

(ii)
Such Seller’s breach of any of their covenants in and under this Agreement;

(iii)
except as otherwise provided in this Agreement, any and all duties and
obligations of such Seller, express or implied with respect to the Assets, or
the use, ownership, operation or disposition of the Assets arising before (or
otherwise attributable to periods, or to actions, occurrences or operations
conducted prior to) the Effective Time under any theory of liability, including,
without limitation, by virtue of the Leases, Easements, Contracts and/or any
permit, applicable statute, rule, regulation or order of any Governmental
Authority;

(iv)
subject to the provisions of Article 8, any Claims for damage to or property
owned by a third party or for personal injury, illness, bodily injury, or death
of any person arising before the Effective Time;

(v)
except as otherwise provided in this Agreement, any other Claims arising
directly or indirectly from, or incident to, the use, occupation, operation
(including, but not limited to, royalty and accounting Claims) or maintenance of
any of the Assets, and arising or accruing prior to the Effective Time; and

(vi)
the failure of Sellers to properly pay when due all taxes, royalties, overriding
royalties, production payments, working interest payments, relating to the
Assets and attributable to periods prior to the Effective Time, other than
amounts included in Suspense Accounts;

REGARDLESS OF WHETHER ANY OF SUCH CLAIMS MAY BE ATTRIBUTABLE, IN WHOLE OR IN
PART, TO THE STRICT LIABILITY OR negligence of BUYER GROUP, SELLERS or third
parties, whether such negligence is active or passive, joint, concurrent or
sole; provided, however, that Sellers’ obligation to indemnify buyer pursuant to
SECTIONS 15.4(i) THROUGH (vi) above shall apply only for a period of SIX (6)
Months following the closing date, AND tHEREAFTER, BUYER SHALL, PURSUANT TO
SECTIONs 15.1 and 15.3, ASSUME RESPONSIBILITY FOR, AND SHALL ALSO AGREE TO
PROTECT, DEFEND, INDEMNIFY AND HOLD SELLER GROUP HARMLESS FROM AND AGAINST ANY
AND ALL CLAIMS ARISING IN FAVOR OF ANY PERSON FOR PERSONAL INJURY, ILLNESS,
BODILY INJURY, DEATH, DAMAGE TO PROPERTY OR FOR ANY OTHER CLAIMS ARISING
DIRECTLY OR INDIRECTLY FROM, OR INCIDENT TO, THE USE, OCCUPATION, OPERATION OR
MAINTENANCE OF ANY OF THE ASSETS OR ANY OTHER CLAIMS WHICH WOULD OTHERWISE BE
SUBJECT TO SELLERS’ GENERAL INDEMNITY UNDER SECTIONS 15.4(i) THROUGH (vi).
EACH SELLER’S OBLIGATIONS UNDER SECTIONS 15.4(iv) through (vi) SHALL BE SEVERAL
AND NOT JOINT, AND, IN THIS RESPECT, EACH SELLER’S OBLIGATIONS SHALL BE
PROPORTIONAL TO ITS OWNERSHIP INTEREST, IN RELATION TO THE OWNERSHIP INTERESTS
OF ALL OTHER SELLERS, IN THE INTERESTS RELATING TO THE PARTICULAR INDEMNIFIED
OBLIGATION.
NOTHING IN THIS AGREEMENT SHALL BE CONSTRUED AS AMENDING OR ABRIDGING THE
OPERATING AGREEMENTS GOVERNING THE ASSETS. IN THIS RESPECT, IN THE EVENT WEC
BECOMES LIABLE TO BUYER UNDER ANY INDEMNITY OBLIGATIONS OR OTHER OBLIGATIONS
UNDER THIS AGREEMENT, ANY SUCH LIAIBLITY MAY BE

--------------------------------------------------------------------------------

CHARGED BY WEC TO OTHER SELLERS AS A COST AND EXPENSE UNDER THE GOVERNING
OPERATING AGREEMENT, IF SUCH LIABILITY, ABSENCE THIS AGREEMENT, WOULD HAVE BEEN
A PERMITTED EXPENSE CHARGEABLE TO THE NON-OPERATORS UNDER THE GOVERNING
OPERATING AGREEMENT.

5.
Limitation on Indemnification

- Notwithstanding anything to the contrary contained herein, Sellers shall have
no obligation to indemnify Buyer unless, and then only to the extent that, (i)
any individual claim exceeds Twenty-Five Thousand and No/100 U.S. Dollars
($25,000.00) per item and (ii) the aggregate Losses to which Buyer would be
entitled to indemnification (but for the provision of this Section 15.5) exceed
a deductible (and not a threshold) equal to two percent (2%) of the Base
Purchase Price. Notwithstanding anything to the contrary contained herein,
Sellers’ aggregate liability for the indemnification under Sections 15.4(i)
through (vi) above shall not exceed twenty-five percent (25%) of the Base
Purchase Price.
6.
Further Limitation on Indemnification

- Neither Party shall have any obligation under Article 15 with respect to any
amount which has already been taken into account and applied to or against the
Base Purchase Price in the Closing Settlement Statement or the Final Settlement
Statement, provided such Party has paid all amounts due pursuant to this
Agreement.
7.
Indemnification Procedures

1.
General - All claims for indemnification under this Agreement shall be asserted
and resolved pursuant to this Section 15.7. Any person claiming indemnification
hereunder is hereinafter referred to as the “Indemnified Party” and any person
against whom such claims are asserted hereunder is hereinafter referred to as
the “Indemnifying Party.”

2.
Claim Notice - In the event that a Party wishes to assert a claim for indemnity
hereunder, such Party shall with reasonable promptness provide to the
Indemnifying Party a written notice of the indemnity claim it wishes to assert
on behalf of itself or another Indemnified Party, including the specific details
of and specific basis under this Agreement for its indemnity claim (a “Claim
Notice”). To the extent any Losses for which indemnification is sought are
asserted against or sought to be collected from an Indemnified Party by a third
party, such Claim Notice shall include a copy of all papers served on the
applicable Indemnified Party with respect to such claim.

3.
Notice Period - The Indemnifying Party shall have thirty (30) days from the
personal delivery or receipt of the Claim Notice (the “Notice Period”) to notify
the Indemnified Party (i) whether or not it disputes its liability hereunder
with respect to such Losses and/or (ii) with respect to any Losses arising out
of, associated with, or relating to third party claims, whether or not it
desires, at the sole cost and expense of the Indemnifying Party, to defend the
Indemnified Party against any such Losses. In the event that the Indemnifying
Party notifies the Indemnified Party within the Notice Period that it desires to
defend the Indemnified Party against such Losses, the Indemnifying Party shall
have the right to defend all appropriate proceedings with counsel of its own
choosing. If the Indemnified Party desires to participate in, but not control,
any such defense or settlement it may do so at its sole cost and expense.

4.
Cooperation - If requested by the Indemnifying Party, the Indemnified Party
agrees to cooperate with the Indemnifying Party and its counsel in contesting
any Losses that the Indemnifying Party elects to contest or, if appropriate and
related to the claim in question, in making any counterclaims against the third
party asserting such Losses, or any cross-complaint against any third party
(other than a Seller Indemnified Party, if the Indemnified Party is a Seller
Indemnified Party; and other than a Buyer Indemnified Party, if the Indemnified
Party is a Buyer Indemnified Party). Such cooperation shall include the
retention and provision to the Indemnifying Party of all records and other
information that are reasonably relevant to the losses at issue.

5.
Settlement - No third party claim that is the subject of indemnification
hereunder may be settled or otherwise compromised without the prior written
consent of the Indemnifying Party. No such claim may be settled or compromised
by the Indemnifying Party without the prior written consent of the Indemnified
Party unless such settlement or compromise (i) entails a full and unconditional
release of the Indemnified Party (and any other members of the Indemnified
Party’s group, i.e., all Seller Indemnified Parties or all Buyer Indemnified
Parties) without any admission or finding of fault or liability and (ii) does
not impose on the Indemnified Party any material non-financial obligation or any
financial obligation that is not fully paid by the Indemnifying Party.

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8.
Exclusive Remedy. Sellers and Buyer acknowledge and agree that from and after
the Closing the indemnification provisions of this Article 15 are the sole and
exclusive remedy of Sellers and Buyer for the breach of any representation or
warranty or nonfulfillment of any covenant or agreement on the part of Sellers
or Buyer under this Agreement or confirmed in any certificate delivered pursuant
hereto, and Sellers do hereby release, acquit and forever discharge all Buyer
Indemnified Parties and Buyer does hereby release, acquit, and forever discharge
all Seller Indemnified Parties from any such other remedies; provided, however,
that a Party shall be entitled to pursue all remedies available at law or in
equity (including specific performance and injunctive relief without the
necessity of posting bond) for any breach by another Party of the provisions of
Section 4.2.

ARTICLE 16

.

.
CASUALTY LOSS

If prior to Closing any of the Assets are substantially damaged or destroyed by
fire or other casualty (“Casualty Defect”), Sellers shall notify Buyer promptly
after Sellers learn of such event. Sellers shall have the right, but not the
obligation, to cure any such Casualty Defect by repairing such damage or, in the
case of Equipment, replacing the damaged Equipment with equivalent items, no
later than the Closing, insofar as the same are done to Buyer’s reasonable
satisfaction. Subject to Section 7.6, if any Casualty Defect exists at Closing,
at Sellers’ option, Buyer shall proceed to purchase the damaged Assets, and the
Base Purchase Price shall be reduced by the aggregate reduction in value of all
affected Assets on account of such Casualty Defect. In the event the Parties
cannot agree on the value, the dispute shall be resolved in accordance with the
dispute resolution provisions set forth in Section 20.3. Notwithstanding any of
the preceding provisions of this Article 16, all adjustments applicable to
Casualty Defects shall be made prior to Closing, and Closing shall be extended
until resolution of any disputes relating to the Casualty Defects; provided,
however, that if adjustments for alleged Title Defects, Environmental Defects,
Casualty Defects and Open Defects do not, in the aggregate, exceed the
Termination Threshold, then Closing shall occur as to the other Assets that are
not subject to the dispute (with the portion of the Assets subject to the
dispute being excluded, and the Base Purchase Price reduced for the entire
Allocated Values thereof) and Closing shall subsequently occur as to the Assets
made the subject of the dispute within thirty (30) days following the final
resolution of the dispute. Notwithstanding anything to the contrary contained in
this Article 16, Sellers shall be entitled to retain all insurance proceeds, if
any, and claims against other parties relating to any such Casualty Defect. For
purposes of this provision, normal wear and tear shall not be considered a
Casualty Defect.
ARTICLE 17

.

.
NOTICES

All communications between Buyer and Sellers required or permitted under this
Agreement shall be in writing and addressed as set forth below. Any
communication or delivery hereunder must be given by personal delivery (if
signed for receipt), by certified or registered United States mail (postage
prepaid, return receipt requested), by a nationally recognized overnight
delivery service for next day delivery, transmitted via electronic mail or by
facsimile transmission shall be deemed to have been made and the receiving Party
charged with notice, when received except that if received after 5:00 p.m. (in
the recipient’s time zone) on a Business Day or if received on a day that is not
a Business Day, such notice, request or communication will not be effective
until the next succeeding Business Day. All notices shall be addressed as
follows:

--------------------------------------------------------------------------------

SELLERS
 
 
 
WALTER EXPLORATION COMPANY
Attn: J. Brian Walter
Suite 313
6116 North Central Expressway
Dallas, Texas 75206
Fax: (214) 369-7679
Email: brian@walterx.com

and to

Kurt M. Daniel
Kurt M. Daniel, P.C.
4849 Greenville Avenue
Suite 1111
Dallas, Texas 75206
Fax: 214-890-7628
Email: kurt@kurtmdanielpc.com
 
 
 
 
BUYER
 
 
 
MID-CON ENERGY PROPERTIES, LLC
 
2431 E. 61st Street, Suite 850
 
Tulsa, Oklahoma 74136
 
Attention: Charles L. McLawhorn, III
 
Phone: 918-743-7575
 
Fax: 918-743-8859
 
Email: cmclawhorn@midcon-energy.com

ARTICLE 18

.

.
TERMINATION

1.
Termination

- This Agreement and the transactions contemplated hereby may be terminated at
any time prior to the Closing:
(a)
by the mutual written agreement of Buyer and Sellers;

(b)
by written notice from either Buyer or Sellers if Closing has not occurred on or
before 5:00 p.m. CDT on August 12, 2016; provided, however, that no Party may
terminate this Agreement pursuant to this Section 18.1(b) if such Party’s breach
of its representations and warranties or its failure to comply with its
obligations or covenants under this Agreement caused the Closing not to occur on
or before the above date; or

(c)
by written notice from either Buyer or Sellers if the aggregate sum of (i) the
Title Defect amounts for all Title Defects timely and properly asserted pursuant
to Article 7, (ii) the Environmental Defect

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amounts for all Environmental Defects timely and properly asserted pursuant to
Article 8, and (ii) the Casualty Defect amounts pursuant to Article 16, exceed
the Termination Threshold.

2.
Liabilities Upon Termination; Deposit Amount

- If this Agreement terminates, as described in Section 18.1 above, then the
entire Deposit shall be returned and paid to Buyer and all obligations of the
Parties under this Agreement shall thereafter terminate and be of no further
force and effect, except that the provisions of Sections 4.2, 20.3, 20.4, 20.5
20.15 shall survive; provided, however, that if this Agreement is terminated
because of either:
(a)
a willful or intentional breach of this Agreement by Sellers or because Buyer’s
conditions to Closing are not satisfied as a result of Sellers’ willful or
intentional failure to comply with its obligations under this Agreement (and, as
a result, Buyer elects to terminate this Agreement under Section 18.1(b) above),
then Buyer shall be entitled to the immediate return of the Deposit and shall
also be entitled to pursue all remedies available at law for damages or other
relief, in equity or otherwise; or

(b)
a willful or intentional breach of this Agreement by Buyer or because Sellers’
conditions to Closing are not satisfied as a result of Buyer’s willful or
intentional failure to comply with its obligations under this Agreement (and, as
a result, Sellers elect to terminate this Agreement under Section 18.1(b)
above), then Sellers shall be entitled to retain the Deposit as liquidated
damages (and the parties hereby acknowledge that the extent of damages to
Sellers occasioned by such breach or default or failure to proceed by Buyer
would be impossible or extremely impractical to ascertain and that the Deposit
is a fair and reasonable estimate of such damage; provided, however, that
nothing in this Section 18.2(b) shall be deemed to limit Sellers’ right to seek
and obtain specific performance.

ARTICLE 19

.

.
JOINDER OF ZEBRA INVESTMENTS, INC. Zebra Investments, Inc. (herein “Zebra”), a
Texas corporation, joins in this Agreement for the following limited purposes:

1.
Pace 1-68 Well. By special warranty of title only, Zebra represents that it
holds title to an undivided 96.875% of the Pace 1-68 Well which is used for
water disposal for salt water produced from the Pace Heirs Unit No. 1 Well and
the Pace No. 303X Well. If Closing shall occur, and the Sale Interests in the
Pace Heirs Unit No. 1 Well and the Pace No. 303X Well are conveyed by Sellers to
Buyer at Closing, then at Closing Zebra shall assign and convey to Buyer,
effective as of the Effective Time, all of Zebra’s right, title and interest in
the Pace 1-68 Well, and all Contracts and Equipment relating to such Well.

2.
Sisters Lease. Zebra represents that it holds title to the leasehold interest of
the Sisters Lease as nominee for the Sellers and Third Party Owners having an
interest in such Lease, as reflected in Exhibit “G”. If Closing shall occur, and
the Sale Interests of the Sellers and the Third Party Owners having an interest
in the Sisters Lease are to be conveyed to Buyer at Closing, then at Closing
Zebra shall assign and convey to Buyer, effective as of the Effective Time, all
of the right, title and interest held by Zebra in the Sisters Lease. On the
other hand, if at Closing all of the interests of Sellers and the Third Party
Owners having an interest in the Sisters Lease are to be conveyed to Buyer, save
and except any Excluded Third Party Owner Interest, then, in such event, at
Closing Zebra shall assign and convey to the Excluded Third Party Owner its
Excluded Third Party Interest in the Sisters Lease, in a form reasonably
approved by the Excluded Third Party Owner and Buyer, and then Zebra shall
assign and convey to Buyer all of the remaining right, title and interest held
by Zebra in the Sisters Lease.

3.
Undeveloped Leases covering Tract 1 through Tract 5. Title to the Undeveloped
Leases covering Tract 1 through Tract 5, described in Exhibit “A-2” are held by
Zebra as nominee for Sellers. Such leases are subject to a one-half of one
percent (0.5%) overriding royalty interest to Kent Fouret. If Closing shall
occur, and the Sale Interests of the Sellers in such Leases are to be conveyed
to Buyer at Closing, then at Closing Zebra shall assign and convey to Buyer,
effective as of the Effective Time, all of the right, title and interest held by
Zebra in such Undeveloped Leases, less and except and subject to the overriding
royalty interest of Kent Fouret, which overriding royalty interest shall be
conveyed to Kent Fouret in a form reasonably approved by the Kent Fouret and
Buyer.

4.
Mineral Interest in leased premises of Joe Young Lease. By special warranty of
title only, Zebra represents that it holds title to the mineral interest in the
leased premises of the Joe Young Lease, identified in item 2 under the Joe Young
Lease heading of Exhibit “A-2,” as nominee for Sellers. If Closing shall occur,
and the Sale Interests of Sellers in such mineral interest is to be conveyed to
Buyer at Closing, then at Closing Zebra shall grant and convey to Buyer,
effective as of the Effective Time, all of Zebra’s right, title and interest in
such mineral interest, by form of mineral deed reasonably approved by Buyer.

5.
Representations. Zebra makes the same representations to Buyer as made by
Sellers under Article 5 above, provided, however, such representations by Zebra
are limited to the Assets described in this Article 19 in which title is owned
or held by Zebra.

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6.
Form of Conveyance. Subject to this Article 19, and as otherwise set forth in
this Article 19, the conveyances to be made by Zebra at Closing shall be in the
form of Exhibit D.

7.
Breach of Covenant. In the event of a breach by Zebra of any of its covenants
herein, Zebra shall be subject to the same remedies set forth herein for Buyer
in the event of a breach by Seller of a covenant herein of such Seller.

ARTICLE 20

.

.
MISCELLANEOUS

1.
Entire Agreement

- This Agreement and all Exhibits and Schedules attached hereto and incorporated
herein constitute the entire agreement between the Parties. Any previous
negotiations or communications between the Parties are merged herein.
2.
Survival

- This Agreement shall be binding upon and shall inure to the benefit of the
undersigned, their successors, heirs, assigns and corporate successors and may
be supplemented, altered, amended, modified, or revoked by writing only, signed
by both Parties. The representations made by Sellers and Buyer under Article 5
and Article 6 shall continue in full force and effect for a period of six (6)
months from and after the Closing Date.
3.
Arbitration

•
- All disputes arising out of, or in connection with, this Agreement or any
determination required to be made by Buyer and Sellers as to which the parties
cannot reach an agreement shall be settled by arbitration in Dallas, Texas. Any
matter to be submitted to arbitration shall be determined by a panel of three
(3) arbitrators, unless otherwise agreed by the Parties. Each arbitrator shall
be a person experienced in both the oil and gas industry and the subject matter
of the dispute and shall be appointed:

(a)
by mutual agreement of Buyer and Sellers; or

(b)
failing such agreement, within sixty (60) days of the request for arbitration,
each Party shall appoint one arbitrator, and the third arbitrator shall be
appointed by the other two arbitrators, or, if they cannot agree, by a Judge of
the United States District Court, Northern District of Texas.

In the event of the failure or refusal of the Parties to appoint the
arbitrator(s) within one hundred twenty (120) days of the request for
arbitration, the arbitrator remaining to be named shall be selected in
accordance with the Rules of the American Arbitration Association. The
arbitration shall be conducted in accordance with reasonable rules established
by the arbitrators. Any award by the arbitrator shall be final, binding and
non-appealable, and judgment may be entered thereon in any court of competent
jurisdiction. The fees charged by the arbitrators for the arbitration shall be
paid one-half by Buyer and one-half by Sellers.
4.
Memorandum of Understanding

- The Parties understand and agree that the terms and provisions of that certain
Memorandum shall remain in full force and effect until the Closing of this
transaction and shall expire and be of no further force or effect thereafter,
subject to the remaining provisions of this Section 20.4. In the event of
termination of this Agreement pursuant to Article 18, the Buyer agrees to keep
all of the terms of this transaction confidential for a period equal to the
later of the date of termination of the Memorandum or one (1) year following
termination of this Agreement. Furthermore, any additional information obtained
as a result of Buyer’s access to the Assets which does not specifically relate
to the Assets shall continue to be treated as confidential for a period of one
(1) year following the Execution Date and shall not be disclosed by the Buyer
without the prior written consent of the Sellers. The above restrictions on
disclosure and use of information obtained pursuant to this Agreement shall not
apply to information to the extent it:
(a)
is or becomes publicly available through no act or omission of the Buyer or any
of its consultants or advisors;

(b)
is subsequently obtained lawfully from a third party, where the Buyer has made
reasonable efforts to insure that such third party is not a party to or bound by
any confidentiality agreement with the Sellers; or

(c)
is already in the Buyer’s possession at the time of disclosure, without
restriction on disclosure.

If the Buyer employs consultants, advisors or agents to assist in its review of
the Assets, Buyer shall be responsible to Sellers for ensuring that such
consultants, advisors and agents comply with the restrictions on the use and
disclosure of information set forth in this Section 20.4.
5.
Choice of Law

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- THIS AGREEMENT AND ITS PERFORMANCE SHALL BE CONSTRUED IN ACCORDANCE WITH, AND
GOVERNED BY, THE LAWS OF THE STATE OF TEXAS.
6.
Assignment

- The rights and obligations under this Agreement may not be assigned by any
Party without the prior written consent of the other Party; provided however,
that Buyer may substitute one of its affiliates as the purchaser of the Assets.
7.
No Admissions

- Neither this Agreement, nor any part hereof, nor any performance under this
Agreement shall constitute or be construed as a finding, evidence of, or an
admission or acknowledgment of any liability, fault, or past or present
wrongdoing, or violation of any law, rule, regulation, or policy, by either
Sellers or Buyer or by their respective officers, directors, employees, or
agents.
8.
Waivers and Amendments

- Except for waivers specifically provided for in this Agreement, this Agreement
may not be amended nor any rights hereunder waived except by an instrument in
writing signed by the Party to be charged with such amendment or waiver and
delivered by such Party to the other Party claiming the benefit of such
amendment or waiver.
9.
Counterparts

- This Agreement may be executed by Buyer and Sellers in any number of
counterparts, each of which shall be deemed an original instrument, but all of
which together shall constitute one and the same instrument. Execution can be
evidenced by facsimile or email transmission of signature pages with original
signature pages to promptly follow in due course.
10.
Third-Party Beneficiaries

•
- Neither this Agreement nor any performances hereunder by Sellers or Buyer
shall create any right, claim, cause of action, or remedy on behalf of any
person not a party hereto.

11.
Specific Performance

- Buyer and Sellers acknowledge and agree that Buyer would be irreparably
damaged if any of the provisions of this Agreement are not performed in
accordance with their specific terms and that any breach of this Agreement by
Sellers could not be adequately compensated in all cases by monetary damages
alone. Accordingly, in addition to any other right or remedy to which Buyer may
be entitled, at law or in equity, Buyer shall be entitled to enforce any
provision of this Agreement by a decree of specific performance. Furthermore,
the Parties acknowledge and agree that Sellers would be irreparably damaged if
Buyer breaches any of the provisions of this Agreement and that any such breach
of this Agreement by Buyer could not be adequately compensated in all cases by
monetary damages alone. Accordingly Sellers shall be entitled to enforce any
provision of this Agreement by a decree of specific performance. In either case,
Buyer or Sellers, as the case may be, shall not be required to provide any bond
or other security in connection with seeking an injunction or injunctions to
enforce specifically the terms and provisions of this Agreement.
12.
Public Communications

- After the Execution Date, either Party may make a press release or public
communication concerning this transaction with the exception that any such
communication shall not include the name of the non-disclosing Party without
their prior written consent; provided, however, any such press release or public
communication is subject to the other Party’s prior review and approval (which
shall not be unreasonably withheld, conditioned or delayed); provided, further,
however, that, notwithstanding the foregoing, prior to or after Closing, if
Buyer (including any of its parent entities), on the one hand, or Sellers
(including any of its parent entities), on the other is required to make any
statement, declaration, or public announcement regarding this Agreement or the
transactions contemplated hereunder pursuant to (i) law, (ii) applicable rules
or regulations of any national securities exchange, or (iii) the terms of such
Party’s (including such Party’s respective parent entities) indentures, loan
agreements, credit agreements or other similar debt agreements or financial
instruments, then the same may be made without the approval of the other Party,
but only to the extent the name of Sellers are omitted from such statement,
declaration, or announcement if permitted by such law, rules, regulations or
terms.
13.
Headings

- The headings of the Articles and Sections of this Agreement are for guidance
and convenience of reference only and shall not limit or otherwise affect any of
the terms or provisions of this Agreement.
14.
Expenses

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- Except as otherwise provided in this Agreement, each of the Parties hereto
shall pay its own fees and expenses incident to the negotiation and preparation
of this Agreement and consummation of the transaction contemplated hereby,
including brokers’ fees. Buyer shall be responsible for the cost of all fees for
the recording of the Conveyances relating to the Assets. All other costs shall
be borne by the Party incurring them.
15.
No Recourse

- Notwithstanding anything that may be expressed or implied in this Agreement or
any document, agreement, or instrument delivered contemporaneously herewith, and
notwithstanding the fact that any Party may be a partnership or limited
liability company, each Party, by its acceptance of the benefits of this
Agreement, covenants, agrees and acknowledges that no Persons other than the
Parties shall have any obligation hereunder and that it has no rights of
recovery hereunder against, and no recourse hereunder or under any documents,
agreements, or instruments delivered contemporaneously herewith or in respect of
any oral representations made or alleged to be made in connection herewith or
therewith shall be had against, any former, current or future director, officer,
agent, affiliate, manager, assignee, incorporator, controlling Person,
fiduciary, representative or employee of any Party (or any of their successors
or permitted assignees), against any former, current, or future general or
limited partner, manager, stockholder or member of any Party (or any of their
successors or permitted assignees) or any affiliate thereof or against any
former, current or future director, officer, agent, employee, affiliate,
manager, assignee, incorporator, controlling Person, fiduciary, representative,
general or limited partner, stockholder, manager or member of any of the
foregoing, but in each case not including the Parties (each, but excluding for
the avoidance of doubt, the Parties, a “Party Affiliate”), whether by or through
attempted piercing of the corporate veil, by or through a claim (whether in
tort, contract or otherwise) by or on behalf of such party against the Party
Affiliates, by the enforcement of any assessment or by any legal or equitable
proceeding, or by virtue of any statute, regulation or other applicable law, or
otherwise; it being expressly agreed and acknowledged that no personal liability
whatsoever shall attach to, be imposed on, or otherwise be incurred by any Party
Affiliate, as such, for any obligations of the applicable party under this
Agreement or the transactions contemplated hereby, under any documents or
instruments delivered contemporaneously herewith, in respect of any oral
representations made or alleged to be made in connection herewith or therewith,
or for any claim (whether in tort, contract or otherwise) based on, in respect
of, or by reason of, such obligations or their creation.
[Signature page follows]