ISDA®

International Swaps and Derivatives Association, Inc.

 

SCHEDULE

to the

2002 Master Agreement

 

dated as of December 27, 2012

 

between

 

Macquarie Bank Limited

(AFS Licence: 237502)

  and  

American Eagle Energy Corporation (“AEEC”)

and

AMZG, Inc. (“AMZG”)

 

(“Party A”) (individually and collectively, and   jointly and severally, “Party
B”)

 

established as a company

 

with limited liability with

 

Australian Business Number 46 008 583 542

 

under the laws of Australia

 

acting through its branches in Sydney and London

 

each established as a corporation

 

under the laws of the state of Nevada

 

Part 1.    Termination Provisions.

 

(a)“Specified Entity” means in relation to Party A for the purpose of:―

 

Section 5(a)(v), Nil Section 5(a)(vi), Nil Section 5(a)(vii), Nil Section
5(b)(v), Nil and in relation to Party B for the purpose of:―   Section 5(a)(v),
Affiliates Section 5(a)(vi), Affiliates Section 5(a)(vii), Affiliates Section
5(b)(v), Affiliates

 

(b)“Specified Transaction” will have the meaning specified in Section 14 of this
Agreement.

 

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(c)The “Cross-Default” provisions of Section 5(a)(vi) will apply to Party A and
Party B as amended such that the phrase “or becoming capable at such time of
being declared” is deleted from the seventh line of Section 5(a)(vi).

 

“Specified Indebtedness” has the meaning specified in Section 14, except that
for Party A it excludes an obligation for borrowed money where the creditor’s
recourse on the obligation is limited to assets for which the money was
borrowed.

 

“Derivative Transaction” means any obligation (whether present or future,
contingent or otherwise, as principal or surety or otherwise) in respect of any
transaction in the nature of a transaction as described in (a)(i) and (ii), (b)
and (c) of the definition of Specified Transaction.

 

For the purposes of Section 5(a)(vi)(1), any reference to the principal amount
of Specified Indebtedness becoming, or becoming capable of being declared, due
and payable shall, in the case of a Derivative Transaction, refer to the amount
that becomes, or would become, due and payable as a result of the termination of
such Derivative Transaction.

 

“Threshold Amount” means:

 

(i)            with respect to Party A, an amount in USD equivalent to 3% of the
Shareholders’ Equity of Macquarie Group Limited (ABN 94 122 169 279). For the
purposes of the definition of Threshold Amount, “Shareholders’ Equity” means, at
any time, the amount of paid-in capital in respect of all issued and fully-paid
shares of capital of the relevant entity, plus the contributed surplus, plus the
cumulative translation adjustment (if any), plus the retained earnings, all of
the foregoing as calculated in accordance with generally accepted accounting
principles in the country in which the entity is organized, consistently
applied; and

 

(ii)           with respect to Party B, USD100,000.00.

 

(d)The “Credit Event Upon Merger” provisions of Section 5(b)(v) will apply to
Party B.

 

(e)The “Automatic Early Termination” provision of Section 6(a) will not apply to
Party A and will not apply to Party B.

 

(f)“Termination Currency” means United States Dollars.

 

(g)The following Additional Termination Events will apply to Party B if at any
time:

 

(i)the ratio of:

 

(x)the sum of (I) the PV10 Value of PDP Projected Production and (II) Most
Current Cash Position (as defined in Part 3) less (III) Most Current Past Due
Payables (as defined in Part 3); to

 

(y)Close-out Amount, calculated as if such day were an Early Termination Date,

 

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is less than 1.3, as determined by Party A on the basis of the most recent
Reserve Report, provided (x) and (y) will be determined based upon the same
prices for Hydrocarbons;

 

(ii)Party B fails to comply with any covenant under Part 6 of this Agreement and
failure is not remedied within ten (10) Local Business Days following the
earlier of: (i) Party B’s actual notice of such failure or (ii) Party A
providing written notice to Party B of such failure;

 

(iii)A Change of Control results with regard to Party B;

 

(iv)Party B fails to enter into a Deposit Account Control Agreement, a Three
Party Lockbox Agreement and a Lockbox Management Agreement within thirty (30)
days following the execution of this Agreement;

 

(v)Party B fails to enter into an amendment to the Mortgage adding the property
interests acquired by Party B pursuant to the SM Energy Acquisition and/or the
NextEra Acquisition within 30 days following the closing of each of the SM
Energy Acquisition and/or the NextEra Acquisition, as applicable;

 

(vi)A judgement for more than $100,000 is entered against Party B and not
appealed or bonded or fully stayed, vacated, paid or discharged within 30 days
of its entry unless the judgment relates to a claim that is fully covered by
insurance and for which the insurance company has unconditionally accepted
liability;

 

(vii)A Material Adverse Effect results with regards to Party B;

 

(viii)Party B fails to comply with any covenant set out in any Credit Support
Document and such failure is not remedied within ten (10) Local Business Days
following the earlier of: (i) Party B’s actual notice of such failure or (ii)
Party A providing written notice to Party B of such failure; or

 

(ix)Any representation or warranty by Party B hereunder or under any Credit
Support Document proves to be false or misleading in any material respect.

 

For the purpose of each of the foregoing Termination Events, the Affected Party
will be Party B, and the following definitions will apply:

 

“Deposit Account Control Agreement” means a Deposit Account Control Agreement by
and among the parties hereto and Bank of the West, in form and substance
reasonably acceptable to the parties thereto.

 

“Lockbox Management Agreement” means a lockbox management agreement by and
between the parties hereto, in form and substance reasonably acceptable to the
parties hereto.

 

“NextEra Acquisition” means the acquisition by Party B of certain working
interests as more particularly described in Appendix XVII hereto.

 

“Production” means the net Hydrocarbons (defined in Part 6 of this Agreement)
produced and saved from the Property (defined in Part 6 of this Agreement).

 

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“PDP Projected Production” means projected Production as referenced in the most
recent Reserve Report (defined in Part 6 of this Agreement) except for pricing,
for which strip pricing determined by Party A based on average NYMEX settlement
pricing shall be used.

 

“PV10 Value” means the net present value expected to accrue from the PDP
Projected Production, calculated using a discount rate of ten percent (10.00%)
per annum and estimates of reserves, prices, production rates, taxes and costs
in the most recently delivered Reserve Report.

 

“Three Party Lockbox Agreement” means a three party lockbox agreement amendment
to Cash Management Terms and Conditions by and between the parties hereto and
Bank of the West, in form and substance reasonably acceptable to the parties
thereto.

 

“SM Energy Acquisition” means the acquisition by Party B of certain working
interest as more particularly described in Appendix XVIII hereto.

 

32

 

 

Part 2.    Tax Representations.

 

(a)Payer Representations.  For the purpose of Section 3(e) of this Agreement,
Party A and Party B each make the following representation:―

 

It is not required by any applicable Law, as modified by the practice of any
relevant governmental revenue authority, of any Relevant Jurisdiction to make
any deduction or withholding for or on account of any Tax from any payment
(other than interest under Section 9(h) of this Agreement) to be made by it to
the other party under this Agreement. In making this representation, it may rely
on (i) the accuracy of any representations made by the other party pursuant to
Section 3(f) of this Agreement, (ii) the satisfaction of the agreement contained
in Section 4(a)(i) or 4(a)(iii) of this Agreement and the accuracy and
effectiveness of any document provided by the other party pursuant to
Section 4(a)(i) or 4(a)(iii) of this Agreement, and (iii) the satisfaction of
the agreement of the other party contained in Section 4(d) of this Agreement,
except that it will not be a breach of this representation where reliance is
placed on clause (ii) above and the other party does not deliver a form or
document under Section 4(a)(iii) by reason of material prejudice to its legal or
commercial position.

 

(b)Payee Representations.  For the purpose of Section 3(f) of this Agreement,
each of Party A and Party B make the representations specified below, as
applicable:―

 

(1)Jurisdiction of residence for tax purposes.

 

The following representations will apply to all Transactions:

 

(i)Party A represents that it is resident for tax purposes in Australia.

 

(ii)Party B represents that it is resident for tax purposes in the United States
of America.

 

(2)Both parties transacting in same jurisdiction.

 

The following representation will apply to Transactions in respect of which
Party A Specified Jurisdiction is the same as Party B Specified Jurisdiction:

 

(i)Party A Payee Representation

 

Each payment received or to be received by it in connection with the Transaction
will be effectively connected with its conduct of a trade or business in Party B
Specified Jurisdiction carried on through a permanent establishment in Party B
Specified Jurisdiction.

 

(ii)Party B Payee Representation

 

Each payment received or to be received by it in connection with the Transaction
will be effectively connected with its conduct of a trade or business in Party A
Specified Jurisdiction carried on through a permanent establishment in Party A
Specified Jurisdiction.

 

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(3)Parties transacting out of different jurisdictions with no double tax
agreement.

 

The following representation will apply to any payments made in relation to
Transactions in respect of which representation (2) does not apply and there is
no Specified Treaty under which the payee of such payment is eligible for
benefits:

 

(i)Party A Payee Representations

 

Party A represents that it does not derive the payments under the Transaction in
part or in whole in carrying on business at or through a permanent establishment
of itself in Party B Specified Jurisdiction.

 

(ii)Party B Payee Representations

 

Party B represents that it does not derive the payments under the Transaction in
part or in whole in carrying on business at or through a permanent establishment
of itself in Party A Specified Jurisdiction.

 

(4)Parties transacting out of different jurisdictions with a double tax
agreement.

 

The following representation will apply to any payments made in relation to
Transactions in respect of which neither representation (2) nor representation
(3) applies:

 

(i)Party A Payee Representations

 

It is fully eligible for the benefits of the “Business Profits” or “Industrial
and Commercial Profits” provision (or equivalent provision whether or not
actually so named), as the case may be, the “Interest” provision or the “Other
Income” provision (if any) of the Specified Treaty with respect to any payment
described in such provisions and received or to be received by it in connection
with the Transaction and no such payment is attributable to a trade or business
carried on by it through a permanent establishment in Party B Specified
Jurisdiction.

 

(ii)Party B Payee Representations

 

It is fully eligible for the benefits of the “Business Profits” or “Industrial
and Commercial Profits” provision (or equivalent provision whether or not
actually so named), as the case may be, the “Interest” provision or the “Other
Income” provision (if any) of the Specified Treaty with respect to any payment
described in such provisions and received or to be received by it in connection
with the Transaction and no such payment is attributable to a trade or business
carried on by it through a permanent establishment in Party A Specified
Jurisdiction.

 

(5)Other payments under the Agreement

 

Solely for the purposes of the representations made under Section 3(f) of the
Agreement, any payments made under the Agreement but not as part of a
Transaction, including any payments made in accordance with Section 6(e), shall
be deemed to be payments in relation to a Transaction.

 

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(6)Definitions

 

(i)“Party A Specified Jurisdiction” means :

 

(a)the country in which is located the office identified in the applicable
Confirmation as the office through which Party A is acting for the purpose of
the Transaction; and

 

(b)if no office is expressly identified in the applicable Confirmation, the
country in which is located the office from which the applicable Confirmation
originated.

 

(ii)For the purpose of the representations made by Party A, “Specified Treaty”
means the income tax convention applicable between Party B Specified
Jurisdiction and the country of residence of Party A.

 

(iii)“Party B Specified Jurisdiction” means:

 

(a)the country in which is located the office identified in the applicable
Confirmation as the office through which Party B is acting for the purpose of
the Transaction; and

 

(b)if no office is expressly identified in the applicable Confirmation, the
country in which is located the office from which the applicable Confirmation
originated.

 

(iv)For the purpose of the representations made by Party B, “Specified Treaty”
means the income tax convention applicable between Party A Specified
Jurisdiction and the country of residence of Party B.

 

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Part 3.    Agreement to Deliver Documents.

 

For the purpose of Sections 4(a)(i) and 4(a)(ii) of this Agreement, each party
agrees to deliver the following documents, as applicable:―

 

(a)Tax forms, documents or certificates to be delivered are :―

 

Party required to
deliver document  

Form/Document/

Certificate

 

Date by which

to be delivered

         

Party A and

Party B

  Any form or document requested by the other party under Section 4(a)(iii).  
As soon as possible after request

 

(b)Other documents to be delivered are :―

 

Party required to
deliver document  

Form/Document/

Certificate

 

Date by which

to be delivered

  Covered by Section 3(d) Representation              

Party A and

Party B

 

A list of authorised signatories for the party (and, as applicable, any Credit
Support Provider of such party) and evidence of the authority of the authorised
signatories of such party to execute this Agreement (and, as applicable, any
Credit Support Document).

 

  At the execution of this Agreement   Yes

Party A and

Party B

 

  Any Credit Support Document(s) specified in Part 4 of this Schedule.   At the
execution of this Agreement.   Yes Party A  

A copy of Party A’s audited consolidated financial statements prepared in
accordance with accounting principles that are generally accepted in Party A’s
country of organisation and certified by independent certified public
accountants for each financial year.

 

  Upon request, if such financial statements are not available from public
sources or at www.macquarie.com.au   No Party B  

A copy of Party B’s annual audited consolidated and consolidating financial
statements prepared in accordance with accounting principles that are generally
accepted in such party’s country of organisation and certified by independent
certified public accountants for each financial year.

  Within 120 days from party’s financial year end, commencing with the fiscal
year ending December 31, 2012.   No

 

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Party A  

A copy of Party A’s semi-annual unaudited consolidated financial statements
prepared in accordance with accounting principles that are generally accepted in
such party’s country of organisation.

 

  If publicly available, within 60 days from party’s financial half-year end. If
Party A’s semi-annual financial statements are available on Party A’s website,
then such website publication shall be deemed delivery to Party B under this
Agreement.   No               Party B  

A copy of Party B’s quarterly unaudited consolidated and consolidating financial
statements prepared in accordance with accounting principles that are generally
accepted in such party’s country of organisation.

 

  Within 75 days from Party B’s financial quarter end.   No Party B  

Final lease operating statement relating to, the Property including Hydrocarbon
production, revenue and operating expenses.

 

  Within 45 days from Party B’s each calendar month end.   Yes Party B   Reserve
Report as defined in Part 6(n) of this Agreement.   In accordance with Part 6(n)
of this Agreement.   Yes               Party B   Certificates of insurance and
copies of insurance policies.   In accordance with Part 6(b) of this Agreement.
  Yes              

Party A and

Party B

  Copies of the party’s standard settlement instructions.  

At the execution of this Agreement and at any time there is a change to those
standard settlement instructions.

 

  Yes

Party A and

Party B

 

A list of authorised signatories for the Party and evidence of the authority of
the authorised signatories of the party to execute Confirmations on behalf of
the party.

 

  Upon execution of this Agreement and at any time there is a change to the list
of those authorised to sign Confirmations.   Yes

 

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Party B   Contact details for settlement purposes, including telephone,
facsimile (and email details if relevant), addresses and names of the relevant
contacts.   At the execution of this Agreement and at any time there is a change
to those contacts details.   Yes               Party B   Satisfactory legal
opinions, including (i) the enforceability opinions in relation to this
Agreement and the Credit Support Documents, (ii) the due authorization,
formation and existence of Party B and (iii) the proper form and content of the
Credit Support Documents to be filed in North Dakota, each in form and substance
satisfactory to Party A in its sole and absolute discretion.   Prior to entering
into the first Transaction after the date of this Agreement.   Yes              
Party B   Satisfactory searches of the UCC filing records or similar public
(including applicable county) records to evidence and confirm the first priority
ranking rights and remedies of Party A in and to the Collateral granted by Party
B pursuant to the Credit Support Documents.   Prior to entering into the first
Transaction after the date of this Agreement.   Yes               Party B  
Certificates certified by the secretary of Party B as to the truth, completeness
and accuracy of (i) the resolutions authorizing the transactions hereunder by
Party B, (ii) Party B’s governing documents and (iii) the existence and good
standing of Party B in the applicable states.   At the execution of this
Agreement, or as otherwise agreed by Party A.   Yes               Party B  
Extract from Party B’s management accounts evidencing its cash position at close
of business on the date of such extract (“Most Current Cash Position”) and its
past due payables at close of business on the date of such extract (“Most
Current Past Due Payables”).   Within 3 Local Business Days of request by Party
A.   Yes

 

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Part 4.    Miscellaneous.

 

(a)Addresses for Notices.  For the purpose of Section 12(a) of this Agreement:―

 

Address for notices or communications to Party A:―

 

Address:   Macquarie Bank Limited     No. 1 Martin Place     Sydney NSW 2000    
Australia       Attention:   Executive Director, Legal Risk Management Division,
    Fixed Income, Currencies and Commodities Group       Facsimile No.:   +(612)
8232 4540   Telephone No.:        +(612) 8232 3333 E-mail:   for Section 5 and 6
Notices only:  ‘ficc.notices@macquarie.com’       With a copy to:          
Address:   Macquarie Bank Limited     Level 23, Citypoint,     1 Ropemaker
Street     London EC2Y 9HD     England       Attention:   Legal Risk Management,
Fixed Income, Currencies and Commodities Group Facsimile No.:   +(44) 20 3037
4301 Telephone No.:    +(44) 20 7065 2000       Address for notices or
communications to Party B:―       Address:   American Eagle Energy Corporation  
  2549 W. Main Street, Suite 202     Littleton, Colorado  80120       Attention:
  Brad Colby       Facsimile No.:   +1 303-798-5767   Telephone No.: +1 303 798
5235 Email:   bradcolby@amzgroup.com       With a copy to:           Address:  
Roberts & Olivia, LLC     2060 Broadway, Suite 250     Boulder, CO 80302      
Attention:   William R. Roberts       Facsimile No.:   +1
720-210-5447   Telephone No.: +1 720-210-5447 x71 Email:   wrroberts@wrrlaw.com

 

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(b)Process Agent.  For the purpose of Section 13(c) of this Agreement:―

 

Party A appoints as its Process Agent:

 

Macquarie Bank Limited Representative Office

125 West 55th Street, 22nd Floor,

New York NY 10019

Attn: Legal Risk Management, Fixed Income, Currencies and Commodities

Telephone: (+1 212) 231 1000

Facsimile: (+1 212) 231 2177

 

In the event of service of process in any Proceedings by Party B, Party B must
also send copies of all documents initiating that process immediately to Party A
in Australia at the address given in Part 4(a) above.

 

Party B appoints as its Process Agent: Not Applicable

 

(c)Offices.  The provisions of Section 10(a) will apply to this Agreement.

 

(d)Multibranch Party.  For the purpose of Section 10(b) of this Agreement:―

 

Party A is a Multibranch Party and may enter into a Transaction through any of
the following Offices:― London or Sydney

Party B is not a Multibranch Party.

 

(e)Calculation Agent.  The Calculation Agent is Party A, unless otherwise
specified in a Confirmation in relation to the relevant Transaction.

 

For the avoidance of doubt, if a party hereto is designated as the Calculation
Agent, Section 5(a)(ii) shall not include any failure by that party to comply
with its obligations as Calculation Agent.

 

(f)Credit Support Document.  Details of any Credit Support Document:―

 

In relation to Party A: None.

 

In relation to Party B: (i) (North Dakota) Mortgage, Security Agreement, Fixture
Filing, Financing Statement and Assignment of Production and Revenue
(“Mortgage”), (ii) Security Agreement, (iii) Financing Statements, (iv) Deposit
Account Control Agreement, (v) Three Party Lockbox Agreement (together with a
Lockbox Management Agreement between Party A and Party B), (vi) Letter in Lieu,
and (vii) Notice of Assignment of Proceeds.

 

(g)Credit Support Provider.

 

Credit Support Provider means in relation to Party A, none.

 

Credit Support Provider means in relation to Party B, none.

 

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(h)Governing Law.  This Agreement will be governed by and construed in
accordance with the Laws of the State of New York (without reference to choice
of law doctrine).

 

Waiver of Jury Trial. Each party waives, to the fullest extent permitted by
applicable Law, any right it may have to a trial by jury in respect of any suit,
action or proceeding relating to this Agreement or any Transaction. Each party:

 

(i)certifies that no representative, agent or attorney of the other party has
represented, expressly or otherwise, that such other party would not seek to
enforce the foregoing waiver in the event of any such suit, action or
proceeding; and

 

(ii)acknowledges that it and the other party have entered into this Agreement,
in reliance on, among other things, the mutual waivers and certifications of
this provision.

 

(i)Netting of Payments.  ”Multiple Transaction Payment Netting” will apply for
the purpose of Section 2(c) of this Agreement to any Transactions of the same
product type (in each case starting from the date of this Agreement).

 

(j)“Affiliate” will have the meaning specified in Section 14 of this Agreement.

 

(k)Absence of Litigation. For the purpose of Section 3(c):―

 

“Specified Entity” means in relation to Party A, not applicable.

 

“Specified Entity” means in relation to Party B, not applicable.

 

(l)No Agency.  The provisions of Section 3(g) will apply to this Agreement.

 

(m)Additional Representations will apply. For the purpose of Section 3 of this
Agreement, each of the following will constitute an Additional Representation:―

 

(i)Relationship Between Parties.   Each party will be deemed to represent to the
other party on the date on which it enters into a Transaction that (absent a
written agreement between the parties that expressly imposes affirmative
obligations to the contrary for that Transaction):―

 

(A)Non-Reliance.  It is acting for its own account, and it has made its own
independent decisions to enter into that Transaction and as to whether that
Transaction is appropriate or proper for it based upon its own judgment and upon
advice from such advisers as it has deemed necessary. It is not relying on any
communication (written or oral) of the other party as investment advice or as a
recommendation to enter into that Transaction, it being understood that
information and explanations related to the terms and conditions of a
Transaction will not be considered investment advice or a recommendation to
enter into that Transaction. No communication (written or oral) received from
the other party will be deemed to be an assurance or guarantee as to the
expected results of that Transaction.

 

(B)Assessment and Understanding.  It is capable of assessing the merits of and
understanding (on its own behalf or through independent professional advice),
and understands and accepts, the terms, conditions and risks of that
Transaction. It is also capable of assuming, and assumes, the risks of that
Transaction.

 

41

 

 

(C)Status of Parties.  The other party is not acting as a fiduciary for or an
adviser to it in respect of that Transaction.

 

(ii)Party B represents to Party A (with such representations deemed to be
repeated by Party B on each date on which a Transaction is entered into) that:

 

(A)Licenses, Permits, Authorizations. Party B has fulfilled all requirements for
obtaining and has obtained and maintained all licenses, permits, operating
authorities and other authorizations necessary for the conduct of the business
of Party B or for Party B or any Operators to operate or maintain the Property
which the failure to obtain and maintain could result in the breach of
representations regarding Defensible Title, and Party B or any such Operator is
fully qualified to own and hold such Property and to exercise in all material
respects the rights under all leases, contracts or other documents governing the
operation or maintenance of the Property. The continuation, validity and
effectiveness of each such license, permit and other authorization are not and
will in no way be adversely affected by the Transactions contemplated by this
Agreement. Except as set forth on Appendix I attached hereto, as of the date
hereof, Party B is not in material breach of, or in default under the terms of,
and has not engaged in any activity which would cause revocation or suspension
of, any of its licenses, permits or authorizations necessary for the conduct of
the business of Party B or for Party B or any Operators to operate or maintain
the Property.

 

(B)Basic Documents. Party B’s Basic Documents as of the date hereof are set
forth on Appendix II attached hereto. With respect to the Basic Documents:

 

(a)all are in full force and effect in accordance with their terms and
constitute valid and binding obligations, except as limited by applicable
bankruptcy or other debtor relief laws and by general equitable principles;

 

(b)to Party B’s knowledge, no other party to any Basic Document (or any
successor in interest to that party) is in breach or default with respect to any
of its obligations under the Basic Documents;

 

(c)no party to any Basic Document has given Party B or has threatened to give
Party B notice of any action to terminate, cancel, rescind or procure a judicial
reformation of any Basic Document or any of their provisions; and

 

(d)the execution and delivery of this Agreement and the consummation of the
Transactions contemplated by this Agreement will not result in a breach of, a
default under, or other violation of the provisions of any Basic Document.

 

42

 

 

(C)Farmout Agreements and Subject Contracts, Etc. With respect to the oil, gas
and/or mineral leases comprising the Properties, and except as expressly set out
on Appendix II attached hereto:

 

(a)there are no outstanding farmout agreements, obligations to drill additional
wells or agreements to engage in other development operations, except for
obligations arising under offset well provisions or obligations arising under
provisions of any Operating Agreement which allow the parties to elect whether
or not they will participate in development activities other than as specified
in those leases, contracts and other agreements;

 

(b)there are no limitations as to the depths covered or substances to which such
interests purport to apply other than as specified in those leases, contracts
and other agreements; and

 

(c)there are no royalty provisions (other than those allowing a lessor the right
to take in kind) requiring the payment of royalties on any basis other than as
specified in those leases, contracts and other agreements.

(D)Operating Agreements. With respect to the operating agreements (“Operating
Agreements”) relating to Party B’s Working Interest and Net Revenue Interest in
the Property,

 

(a)Appendix II lists all Operating Agreements to which the Property is subject
and the Operators for such Property, which Operators are hereby Approved by
Party A;

 

(b)there are no outstanding payments which are past due or which Party B or, to
the best of Party B’s knowledge, any predecessor of Party B has committed to
make which have not been or are not being paid within the terms required; and

 

(c)there are no operations under any of the Operating Agreements with respect to
which Party B has become a non-consenting party nor are there any non-consenting
penalties binding or that will become binding upon Party B that are not
reflected in the Net Revenue Interest or Working Interest as set out on Appendix
III.

(E)Debt Instruments. Appendix IV attached hereto sets forth a complete and
correct list of all documents, instruments and agreements that as of the date
hereof require or could in the future require payments by Party B or its
Subsidiaries that relate to payments that are not usual, customary and recurring
in the oil and gas, exploration and production industry.

 

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(F)Hedging Agreements. Other than this Agreement, Appendix V attached hereto
sets forth, as of the date hereof, a true and complete list of all hedging
agreements of Party B, the material terms thereof (including the type, term,
effective date, termination date and notional amounts or volumes), the net mark
to market value thereof, all credit support agreements relating thereto
(including any margin required or supplied) and the counterparty to each such
agreement.

 

(G)Marketing of Production. Except as set forth on Appendix VI attached hereto,
no purchase or sale agreements exist as of the date hereof which are not
cancellable on sixty (60) days notice or less without penalty or detriment for
the sale of production from Party B’s Hydrocarbons attributable to the Property
(including, without limitation, calls on or other rights to purchase,
production, whether or not the same are currently being exercised) that (a)
pertain to the sale of production at a fixed price and (b) have a maturity or
expiry date of longer than six (6) months from the date hereof. Each Purchaser
as at the date of this Agreement is identified on Appendix XIII attached hereto
together with such Purchaser’s contact information.

 

(H)Preferential Rights and Consents. There are no outstanding preferential
rights or consents to assign affecting the Property that have not been satisfied
in full by Party B.

 

(I)Name; Executive Offices. The name of Party B, as listed in its Charter
Documents on file in the public records of its jurisdiction of organization, is
American Eagle Energy Corporation and AMZG, Inc., respectively. Party B’s
principal place of business and chief executive offices are located at the
address specified in Part 4(a).

 

(J)Capitalization; Ownership; Subsidiaries. AEEC owns one hundred percent (100%)
of all outstanding Equity Interests of AMZG, Inc. There are no other classes,
types or designations of Equity Interests in AMZG, and no Person holds any right
that could result in the transfer or issuance of any Equity Interest in AMZG.
Except as listed on Appendix VII, Party B has no Subsidiaries.

 

(K)Solvency. Party B is Solvent and will be Solvent after giving effect to the
transactions contemplated by this Agreement.

 

(L)Omissions and Misstatements. Party B has disclosed in writing to Party A all
agreements, and all other matters known to Party B, that could, individually or
in the aggregate, reasonably be expected to have a Material Adverse Effect. All
financial and other information furnished in writing by or on behalf of Party B
to Party A in connection with the negotiation or performance of this Agreement
or any other Credit Support Document, when taken as a whole, do not contain any
material misstatement of fact or omit to state any material fact necessary to
make the statements therein, in the light of the circumstances under which they
were made, not misleading; but, with respect to financial projections, Party B
represents only that such information was prepared in good faith based upon
assumptions believed to be reasonable at the time. There is no fact peculiar to
Party B which could reasonably be expected to have a Material Adverse Effect or
in the future is reasonably likely to have a Material Adverse Effect and which
has not been set forth in this Agreement or the Credit Support Documents. There
are no statements or conclusions in any Reserve Report which are based upon or
include misleading information or fail to take into account material information
regarding the matters reported therein.

 

44

 

 

(M)Commissions; Expenses. Except for the commission that will be due to
C.K.Cooper & Company, no broker’s or finder’s fees or commissions have been paid
or will be payable by Party B to any Person in connection with the transactions
contemplated by this Agreement, except as payable to Party A or its Affiliates.

 

(N)Tax Returns; Taxes. Party B has timely filed (after giving effect to any
applicable extensions) all U.S. federal income tax and all other material tax
returns (foreign, state and local) required to be filed and has paid all taxes
(including interest and penalties) due and payable and required to be paid by
them, except for amounts contested in good faith by Party B through appropriate
proceedings timely filed and against which Party B maintains adequate reserves
in accordance with GAAP. No assessments have been made by any Governmental
Authority against Party B or any of the Collateral that have not been paid
(except for assessments protested in good faith by Party B through appropriate
proceedings timely filed and against which Party B maintains adequate reserves
in accordance with GAAP) nor has any penalty or deficiency been assessed by any
Governmental Authority. As of the effective date of this Agreement, no
Governmental Authority has notified Party B that any U.S. federal income tax or
other tax return is under examination, nor is the result of any prior
examination being contested by Party B. Except with respect to taxes being
contested in good faith by Party B through appropriate proceedings timely filed
and against which Party B maintains adequate reserves in accordance with GAAP,
no material tax Liens have been filed against Party B or any of the Collateral.

 

(O)Litigation; Governmental Proceedings. Except as set forth on Appendix VIII,
no claim, action, suit or other proceeding (collectively, an “Action”) by any
Governmental Authority or any other Person is pending or, to Party B’s
knowledge, threatened against Party B or that relates to any of the Collateral.
With respect to the Actions set forth on Appendix VIII, Party B has not accepted
liability in connection with any Action except in the specific instances
described on Appendix VIII, none of which could reasonably be expected to have a
Material Adverse Effect.

 

(P)Debt. Upon consummation of the transactions contemplated by this Agreement,
Party B will have no Debt outstanding for borrowed money owing to any third
party, other than the obligations under this Agreement and Debt permitted under
Part 6(i).

 

45

 

 

(Q)USA PATRIOT Act Representation. Party B is not a country, individual or
entity named on the Specifically Designated National and Blocked Persons list
issued by the Office of Foreign Asset Control of the Department of the Treasury
of the United States of America.

 

(R)Contingent Liabilities. Except for (a) obligations arising under bonds
required by Law and identified on Appendix IX, (b) indemnity and other customary
obligations of a customary nature assumed or incurred (excluding Debt for
borrowed money) in favor of any Person from whom Party B acquired any of the
Collateral, and (c) Debt permitted by Part 6(i), Party B has not assumed,
guaranteed, endorsed or otherwise become directly, indirectly or contingently
liable for any liability of any other Person.

 

(S)Investment Company. Party B is not an “investment company” within the meaning
of the Investment Company Act of 2005, as amended.

 

(T)No Pending Sale or Financing. Except as described on Appendices XVII and
XVIII, no agreement, whether written or oral, exists between Party B and any
other Person regarding the purchase, sale or financing of any of the Collateral.

 

(U)Employee Plans. Except as set forth on Appendix X, Party B has no Employee
Plans.

 

(V)No Material Adverse Effect. Since the later of (i) January 1, 2012 and (ii)
date of the most recent audited financial statements delivered to Party A, no
Material Adverse Effect has occurred.

 

(W)Deposit Accounts. Except as set forth on Appendix XI, Party B does not
maintain any deposit accounts (as defined in the UCC).

 

(X)Labor Matters. Party B is not in violation of any Law relating to labor
matters and all payments due and payable by Party B for employee health and
welfare insurance have been paid or accrued as a liability on its books.

 

(Y)No Default. No default exists or is reasonably likely to result from Party
B’s entry into or performance under any Credit Support Document or under this
Agreement. No event or circumstance exists which, with the expiry of a grace
period, the giving of notice or the making of any determination by any other
Person would constitute a default under any other agreement, whether written or
oral, by which Party B is bound or to which any of the Collateral is subject.

 

(Z)Priority. Subject to Permitted Liens, the Security Documents have or will
have first ranking priority and none is subject to any prior ranking or pari
passu ranking Lien.

 

46

 

 

(AA)Use of Proceeds. The prepayment proceeds advanced by Party A to Party B
under this Agreement will be used by Party B only for the purposes described in
Part 6(t).

 

(n)Recording of Conversations. Each party:

 

(i)acknowledges that telephone conversations between the trading, marketing and
other relevant personnel of the parties in connection with this Agreement or any
potential Transaction will be recorded;

 

(ii)consents to the recording of telephone conversations between the trading,
marketing and other relevant personnel of the parties in connection with this
Agreement or any potential Transaction;

 

(iii)has obtained any necessary consent of, and has given any necessary notice
of such recording to, its relevant personnel;

 

(iv)agrees, to the extent permitted by applicable Law, that recordings may be
submitted in evidence in any Proceedings and that such party will not object to
the admissibility of the recording on the basis that the same was not originated
or maintained in documentary form; and

 

(v)agrees, to the extent permitted by applicable Law, this section constitutes
effective notice of and consent to such recording.

 

47

 

 

Part 5.    Other Provisions.

 

(a)Definitions. Unless otherwise specified in a Confirmation, this Agreement and
each Transaction between the parties are subject to the latest set of any
published ISDA Definitions in existence from time to time which are specifically
relevant to the Transaction (the “Definitions”) each as published by either the
International Swaps & Derivatives Association, Inc., or the International Swap
Dealers Association, Inc., as the case may be. Any amendment to such Definitions
subsequent to their initial publication, or any new Definitions published, will
only be effective as to Transactions entered into on or after the date of
amendment or publication.

 

(b)Inconsistency. At the end of Section 1(b), the following sentence is
inserted:

 

“In the event of any inconsistency between the Definitions and this Master
Agreement (including the Schedule), the Master Agreement will prevail.”

 

(c)Amendment of Section 2. A new Section 2(a)(iv) is inserted as follows:

 

“(iv)The condition precedent in Section 2(a)(iii)(1) does not apply to a payment
or delivery due to be made to a party if it has satisfied in full all its
payment and delivery obligations under Section 2(a)(i) and Section 9(h) of this
Agreement and has no future payment or delivery obligations, whether absolute or
contingent, under Section 2(a)(i) or Section 9(h).”

 

(d)Change of Accounts. For the purposes of Section 2(b) of this Agreement both
parties agree that such new account so designated shall be in the same tax
jurisdiction as the original account.”

 

(e)Tax Events. Section 5(b)(iii) is amended by deleting the words “, or there is
a substantial likelihood that it will,” where they appear in that clause.

 

(f)Procedures for Confirming Transactions. Section 9(e) of this Agreement is
amended by the addition of the following terms:

 

“(iii)With respect to each Transaction entered into pursuant to this Agreement
and for the purposes of Section 9(e)(ii), Party A shall, on or promptly after
the relevant Trade Date, send Party B a Confirmation confirming that Transaction
and Party B shall promptly then confirm the accuracy of or request the
correction of such Confirmation. In the absence of manifest error, where Party B
fails to confirm the accuracy of or request the correction of a Confirmation
within three Local Business Days after it was sent, the terms of a Confirmation
will be binding on and conclusive against Party B.

 

Delivery of a Confirmation is effected whether a party uses facsimile, email or
an electronic messaging system, and irrespective of the form of delivery used by
the other party to confirm the terms of the relevant Transaction. The
requirement of this Agreement that the parties exchange Confirmations shall for
all purposes be satisfied by following the procedure set out in this paragraph.

 

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Where a Transaction is confirmed by means of a facsimile, email or an electronic
messaging system, such message will constitute a Confirmation even where not so
specified in that Confirmation.”

 

(i)Notices. Section 12 of the Agreement is amended by deleting the following
words where they appear on lines 2 and 3 of Section 12(a):

 

“(except that a notice or other communication under Section 5 or 6 may not be
given by electronic messaging system or email).”

 

and replacing it with:

 

“(except that a notice or other communication under Section 5 or 6 may not be
given by electronic messaging system).”

 

(j)Close-out Amount. At the end of the definition of Close-out Amount in Section
14, the following sentence is inserted:

 

“A Close-out Amount is not required to be the market value of the Terminated
Transaction or group of Terminated Transactions and, subject to Section
6(e)(ii)(3), the Determining Party is not obliged to use the mid-market
quotations or mid-market valuations in determining a Close-out Amount.”

 

(k)2002 Master Agreement Protocol. The parties agree that, with effect from the
date of this Agreement, the terms of each Annex to the 2002 Master Agreement
Protocol published by the International Swaps and Derivatives Association Inc.,
(the “Protocol”) shall apply to this Agreement as if the parties had adhered to
the Protocol without amendment.

 

(l)Miscellaneous. With effect from and including the date of this Agreement the
parties agree that every transaction between them is a Transaction governed by
this Agreement (whether or not the parties refer to this Agreement when entering
into or confirming the transaction) unless the terms of this Agreement have been
expressly excluded or any confirmation of such transaction is expressed to be
governed by another agreement. Furthermore, AEEC and AMZG acknowledge that their
obligations under this Agreement and any Transaction are joint and several.

 

For the purpose of this clause ‘transaction’ means a transaction between the
parties, whether entered into before, on or after the commencement of this
Agreement, of the nature of a Specified Transaction.

 

(m)Payment of Premium     Unless otherwise agreed in writing by the parties,
with respect to any premium related to a Transaction that is an option, if any
such premium is not paid on the date such premium is due to be paid under the
terms of the Transaction, the seller of such Transaction may elect:

 

(i)to accept a late payment of such premium;

 

(ii)to give written notice of such non-payment and, if such payment shall not be
received within one Local Business Day of such notice, treat the related
Transaction as void; or

 

49

 

 

(iii)to give written notice of such non-payment and, if such payment shall not
be received within one Local Business Day of such notice, treat such non-payment
as an Event of Default under Section 5(a)(i) of this Agreement.

 

If the seller of such option Transaction elects to act under either (i) or (ii)
above, the buyer of such Transaction shall pay all out-of-pocket costs and
actual damages incurred in connection with such unpaid or late premium or void
Transaction, including, without limitation, interest on such premium in the same
currency as such premium at the then prevailing market rate and any other costs
or expenses incurred by the seller of the Transaction in covering its
obligations (including, without limitation, a delta hedge) with respect to such
Transaction.

 

(n)ISDA August 2012 DF Supplement The parties agree that the ISDA August 2012 DF
Supplement Schedules 1, 2 and 3 (“August 2012 DF Supplement”) as published by
the International Swaps and Derivatives Association, Inc. (“ISDA”), are
incorporated into this Agreement, and shall apply to and form part of this
Agreement, effective as of the later of the date of this Agreement and the date
of registration by Party A as a swap dealer with the U.S. Commodity Futures
Trading Commission (“CFTC”) (such later date the “Implementation Date”).

 

(o)Complaints

Any complaints with respect to Party A may be directed as follows:

Name/Department: Complaints Officer Address: Macquarie Bank Limited, GPO Box
4294, SYDNEY NSW 1164, Australia Email: swapcomplaints@macquarie.com   Phone:
         +61 2 8232 3333

 

(p)Swap disclosures

Party A hereby provides Party B with the disclosures contained in the General
Disclosure Statement and annexes thereto (together, the “ISDA DF Disclosure”) at
www.macquarie.com/mgl/com/swap-disclosures, and Party B agrees to such
disclosures. The ISDA DF Disclosure will apply to all standard Transactions (as
defined in the ISDA DF Disclosure) between the parties. Where the ISDA DF
Disclosure is not sufficient to address all material risks and characteristics
related to Transactions between the parties, Party A may provide Party B with
alternative (or supplementary) disclosures suitable for such Transactions.

 

(q)Required Notifications and Disclosures

Party B agrees (i) that the following e-mail address may be used for the
delivery by Party A of notifications and any informational disclosures given
pursuant to CFTC Regulations, and (ii) for the purposes of Schedule 2, Part 1,
Section 2.3 of the August DF Protocol, the “Notices Procedures” applicable to
Party B includes written notice by e-mail delivered to the following address:

Email: bradcolby@amzgcorp.com

 

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(r)Questionnaires

Party B agrees to provide to Party A, upon or prior to execution of this
Agreement, a completed questionnaire in the form of (i) the ISDA August 2012 DF
Protocol Questionnaire, including any Addenda thereto, published by ISDA (“ISDA
Questionnaire”), or (ii) the “Macquarie Bank Limited/Macquarie Energy LLC
Onboarding Questionnaire for Swap Counterparties” provided by Party A to Party B
(“Macquarie Questionnaire”). Party B agrees that all information and
representations provided by it in either the ISDA Questionnaire or the Macquarie
Questionnaire will constitute DF Supplement Information for the purposes of the
August 2012 DF Supplement. In the event of any conflict between the August 2012
DF Supplement Schedules incorporated in Part 5(m) above and the DF Schedules
referred to in any ISDA Questionnaire, Part 5(m) shall govern.

 

51

 

 

Part 6.    Additional Covenants

 

Party B covenants and agrees that, so long as there are any Transactions (or any
amounts due from Party B to Party A are) outstanding under this Agreement, Party
B will comply with the following covenants:

 

(a)Affiliate Transactions.     Party B shall not enter into any transaction with
any Affiliates without the Approval of Party A unless such Affiliate has
executed a subordination agreement with Party A and in a form and substance
satisfactory to Party A, in which case, Party B must give no less than ten (10)
days written notice to Party A in advance of such transaction, and, if Approved
by Party A, Party B shall conduct those transactions on an arm’s length basis.

 

(b)Insurance. Party B shall:

 

(i)continuously keep all Personal Property together with all improvements on
real property insured for replacement value of like kind and quality with
insurance companies licensed or approved to do business in the jurisdictions in
which the Property are located with a Best’s Rating of A or better, or as
otherwise reasonably satisfactory to Party A, against loss or damage by fire or
other risk usually insured against by other prudent owners in similar businesses
similarly situated under extended coverage endorsement and against theft,
burglary, and pilferage together with other insurance covering any other hazards
as Party A may from time to time reasonably request;

 

(ii)deliver certificates of insurance and copies of insurance policies as
required under Part 6(b)(i) above. All such insurance shall contain endorsements
in form satisfactory to Party A showing Party A as a loss payee and additional
insured as its interest may appear. Subject to Part 6(b)(i) above, all casualty
and property damage insurance proceeds received by Party A will be retained (or,
if Party B receives any such insurance proceeds, it shall promptly deposit such
insurance proceeds into an account nominated by Party A to be retained) by Party
A at its option, for application to the payment of such portion of any amounts
owed to Party A pursuant to this Agreement as Party A may determine in its
reasonable discretion or shall be applied to repair, restore or replace any such
insurable loss or damage, provided that the proceeds of the insurance shall be
deposited by Party B into an account nominated by Party A and, so long as no
Event of Default, Termination Event or Additional Termination Event shall have
occurred and be continuing, at the request of Party B, such proceeds shall be
disbursed to Party B upon such terms and conditions as Party A may deem
appropriate for its protection to pay the cost of repairing, replacing or
restoring Collateral or purchasing replacement Collateral;

 

(iii)promptly, upon Party B becoming aware thereof, notify Party A of the
occurrence or existence of an event resulting in a material claim in excess of
$100,000 under any insurance and the estimated amount thereof. In furtherance,
but not in limitation of the requirements of the preceding sentence, Party B
shall continuously keep and maintain in full force and effect during the term of
this Agreement, at Party B’s sole cost and expense, original insurance policies
for which the payment of premiums are current containing waivers of subrogation
by the respective insurers and non contributory standard mortgagee clauses or
their equivalent or a satisfactory mortgagee loss payable endorsement in favor
of Party A providing the types of insurance covering each of the Property and
the interest and liabilities incident to the ownership, possession and operation
thereof as specified on Appendix XII, in each case to the extent such insurance
is available on commercially reasonable terms;

 

52

 

 

(iv)deliver to Party A all certificates of insurance (and if requested by Party
A, copies of all insurance policies and endorsements) which are required to be
obtained and maintained by Party B. Such certificates shall show that (i) such
insurance is in full force and effect in accordance with the provisions of this
Agreement, (ii) such insurance is non cancelable without at least fifteen (15)
days prior written notice to the Party A sent by United States registered or
certified mail, return receipt requested, and (iii) written notice shall be sent
to the Party A in the same manner at least fifteen (15) days prior to any non
renewal of such policies;

 

(v)obtain at least fifteen (15) days prior to the expiration date of each policy
maintained pursuant to this Part 6(b)(v) hereof, a renewal or replacement
thereof and deliver to Party A a certificate of such renewal or replacement
policy; and

 

(vi)notwithstanding the foregoing, Party B shall at all times employ industry
standard practices for insurance coverages to include, but not limited to,
drilling, workovers, flowline repairs, rig work and facilities work. Party B
will exercise commercially reasonable efforts to ensure that third-party
operators also carry such insurance coverages. To the extent Party B’s existing
coverage is not in compliance or falls below those standard for the industry for
the type and location of the Property and Personal Property, as reasonably
determined by Party A, Party B shall promptly act to increase, if necessary,
insurance coverages and coverage amounts to come into compliance with such
industry standards, in each case to the extent such insurance is available to
Party B on commercially reasonable terms.

 

(c)Hedging Hydrocarbon Production.  (i) Party B shall enter into one or more
Confirmations at the request of Party A from time to time including, without
limitation, in connection with Party B’s (A) lease operating expenses and (B)
taxes and other assessments; (ii) Party B will not enter into any Hedging
Agreements or transactions thereunder (with any party including Party A) unless
Approved by Party A, which Approval may be conditioned upon the hedged
production, when taken in aggregate, does not exceed eighty percent (80%) of the
PDP Projected Production produced in the following five (5) years. Additionally,
Party B will not purchase, assume, or hold a speculative position in any
commodities market or futures market or enter into any Hedging Agreement or
similar hedge arrangements for speculative purposes; or other than the Hedging
Agreements required to be entered into and maintained pursuant to Part (c)(i),
be party to or otherwise enter into any Hedging Agreement which (A) is entered
into for reasons other than as a part of its normal business operations as a
risk management strategy and/or hedge against changes resulting from changes in
Hydrocarbon commodity prices, or (B) contains provisions requiring or providing
for (w) margin calls, (x) credit support of any kind (including letters of
credit), (y) security interests or liens on any of Party B’s Property or
recourse to Party B or to the Property or other Collateral or (z) adequate
assurance.

 

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(d)Purchasers of Hydrocarbons.  Party B shall:

 

(i)in the event that any Purchaser of Hydrocarbons has its senior-most unsecured
debt assigned a rating of less than investment grade by either of Standard &
Poor’s Ratings Group or Moody’s Investors Services, Inc., upon the request of
Party A, Party B will (I) use all reasonable efforts to cause the Purchaser to
provide cash deposits or one or more letters of credit, in form and substance
and from a bank satisfactory to Party A in connection with its purchase of
Hydrocarbons from the Property, (II) to the extent allowed under applicable
contracts, sell Hydrocarbons only to Purchasers who are creditworthy in Party
A’s reasonable judgment or who prepay, or (III) exercise its right to take the
Hydrocarbons in kind and sell to Purchasers of Hydrocarbons who are creditworthy
in Party A’s reasonable judgment; to the extent Party B is legally entitled to
take such action;

 

(ii)after the date of this Agreement, give Party A thirty (30) days prior
written notice if a Person other than the Purchasers identified in Appendix XIII
to this Agreement which have been issued a Notice of Assignment of Proceeds that
are executed on the date of this Agreement will become a Purchaser of
Hydrocarbons. The notice will contain the Person’s name and address (including
contact person).    

(e)Dividends and Distributions. Without the Approval of Party A, Party B will
not:

 

(a)declare or pay any cash dividends or distributions;

 

(b)declare or make any non-cash distribution;    

(c)(other than issuances in one or more transactions of stock by AEEC to the
extent such issuance does not result in a Change of Control) issue additional
Equity Interests of any class to any Person unless such Equity Interests are
subordinated to Party A and documented to the satisfaction of Party A; or

 

(d)take any other action that has substantially the same effect as any of the
actions prohibited under items (a)–(c) above.

 

(f)Ownership and Business Operations. Party B will not contract for operation of
the Property except with an Operator Approved by Party A who has executed a
Subordination Agreement acceptable to Party A.

 

(g)Liens and Encumbrances. Except for Permitted Liens, Party B will not:

 

(i)suffer to exist any Lien or consent to the filing of any financing statement
on any of its Property; or

 

(ii)dedicate, sell, encumber or dispose of, or suffer to exist any agreement for
the sale, disposition or encumbrance of the Property or of any Hydrocarbon
production attributable to the Property except the sale of Hydrocarbons in the
ordinary course of business.

 

(h)Subsidiaries and Divestitures. Party B will not create any direct or indirect
Subsidiary or divest any of the Collateral by (i) transferring them to any
future Subsidiary or (ii) by entering into a partnership, joint venture, or
similar arrangement without the Approval of Party A. Party B shall not enter
into any management contract permitting a third party to exercise management
rights with respect to Party B’s business, without the Approval of Party A.

 

54

 

 

(i)Debt. Party B will not create, incur, assume or suffer to exist any Debt,
except:

 

(i)Debt pursuant to this Agreement or any Credit Support Document;

 

(ii)Capital Leases which are identified in Appendix XIV to this Agreement
(including such updates to Appendix XIV to this Agreement that are prepared by
Party B from time to time);

 

(iii)accounts payable and accrued expenses, liabilities or other obligations to
pay the deferred purchase price of property or services, from time to time
incurred in the ordinary course of business;

 

(iv)letters of credit, surety or other bonds incurred in the ordinary course of
business, and if any such letter of credit, surety or other bond is for an
amount in excess of $250,000, Approved by Party A; provided, however, that any
of the foregoing shall be permitted if required by a competent regulator having
jurisdiction over Party B or the Property;

 

(v)endorsements of negotiable instruments for collection in the ordinary course
of business;

 

(vi)other Debt to third parties not to exceed $250,000 in the aggregate;

 

(vii)amounts owed to NextEra Energy Gas Producing, LLC pursuant to Carry
Agreement dated April 16, 2012, as amended; and

 

(viii)other Debt incurred with the Approval of Party A, and fully subordinated
(pursuant to a Subordination Agreement in a form and substance satisfactory to
Party A) to all amounts owing or to be owing by Party B to Party A pursuant to
this Agreement.

 

(j)Taxes. Party B will pay, or will cause Operator to pay, all taxes and
assessments of every kind and character charged, levied or assessed against the
Property, or any part thereof, and all franchise taxes, production, severance or
other similar taxes or charges, before any such taxes and assessments shall
become delinquent; but Party B shall have the right to contest any such tax in
good faith, and while any such contest is pending shall not be in default
hereunder.

 

(k)Books and Records; Visit Property. Party B will keep accurate books and
records in accordance with GAAP in which full, true and correct entries shall be
promptly made with respect to operations on the Property, and all such books and
records shall during reasonable business hours upon three (3) Local Business
Days prior written notice be subject to inspection by Party A and its duly
accredited representatives, but not as to unreasonably interfere with the
business of Party B. In addition, Party A and its duly accredited
representatives shall have the right to visit the Property during reasonable
business hours upon three (3) Local Business Days prior written notice, but not
as to unreasonably interfere with the business of Party B; provided further,
however, that Party A executes a form of release and indemnity satisfactory to
Party B with respect to Party A’s visit to the Property.

 

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(l)Guaranties. Other than Debt permitted by Part 6(i), Party B will not assume,
guaranty or endorse or otherwise become directly or contingently liable for any
Debt of any other Person, except for the indemnification obligations contained
in this Agreement and the Credit Support Documents and agreements entered into
in the ordinary course of business with indemnifications common in the industry
that are directly related to the Property. For purposes of this Part 6(l), the
term “guaranty” includes any agreement, whether contingent or otherwise, to
purchase, repurchase or otherwise acquire any obligation or liability of any
other Person, or to purchase, sell or lease, as lessee or lessor, property or
services, in any case primarily for the purpose of enabling another Person to
make payment of any Debt, or to make any payment (whether as a capital
contribution, purchase of an equity interest or otherwise) to assure a minimum
equity, asset base, working capital or other balance sheet or financial
condition, in connection with a Debt of another Person, or to supply funds to or
in any manner invest in another Person in connection with that Person’s Debt.

 

(m)Environmental Matters.

 

(i)Party B shall, at its expense: (i) comply, and shall cause its Property and
operations to comply, with all applicable Environmental Laws, the breach of
which could be reasonably expected to have a Material Adverse Effect; (ii) not
dispose of or otherwise release, any Crude Oil, Crude Oil and Natural Gas waste,
Hazardous Material, or solid waste on, under, about or from any of Party B’s
Property or any other property to the extent caused by Party B’s operations
except in compliance with applicable Environmental Laws, the disposal or release
of which could reasonably be expected to have a Material Adverse Effect; (iii)
timely obtain or file all notices, permits, licenses, exemptions, approvals,
registrations or other authorizations, if any, required under applicable
Environmental Laws to be obtained or filed in connection with the operation or
use of Party B’s Property, which failure to obtain or file could reasonably be
expected to have a Material Adverse Effect; (iv) promptly commence and
diligently prosecute to completion any assessment, evaluation, investigation,
monitoring, containment, cleanup, removal, repair, restoration, remediation or
other remedial obligations (collectively, the “Remedial Work”) in the event any
Remedial Work is required under applicable Environmental Laws because of or in
connection with the actual or suspected past, present or future disposal or
other release of any Crude Oil, Crude Oil and Natural Gas waste, hazardous
substance or solid waste on, under, about or from any of Party B’s Property,
which failure to commence and diligently prosecute to completion could
reasonably be expected to have a Material Adverse Effect; and (v) establish and
implement such procedures as may be necessary to continuously determine and
assure that Party B’s obligations under this subsection (m)(i) are timely and
fully satisfied, which failure to establish and implement could reasonably be
expected to have a Material Adverse Effect.

 

(ii)Party B will promptly, but in no event later three (3) days of the
occurrence of a triggering event, notify Party A in writing of any threatened
action, investigation or inquiry by any Governmental Authority or any threatened
demand or lawsuit by any landowner or other third party against Party B or the
Property of which Party B has knowledge in connection with any Environmental
Laws (excluding routine testing and corrective action) if Party B reasonably
anticipate that such action will result in liability (whether individually or in
the aggregate) in excess of $100,000, not fully covered by insurance, subject to
normal deductibles.

 

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(iii)Party B will provide environmental audits and tests in accordance with
American Society of Testing Materials standards upon reasonable request by Party
A and no more than once per year in the absence of any Event of Default,
Termination Event or Additional Termination Event (or as otherwise required to
be obtained by Party A by any Governmental Authority), or in connection with any
material future acquisitions of any other Property.

 

(n)Reserve Reports.

 

(i)Beginning on January 1, 2013 and continuing annually (each report is dated
effective as of January 1 throughout the term of this Agreement, Party B shall,
at its sole expense, cause an engineering reserve report relating to the
Property to be prepared by the Engineers and delivered to Party A (in each case,
the “Reserve Report”). The Reserve Reports will set forth, without limitation,
the projected recoverable reserves attributable to the Working Interests and Net
Revenue Interests of Party B. Party B shall deliver each Reserve Report to Party
A within sixty (60) days of its effective date.

 

(ii)Preparation of Reports. Party B shall cause each Reserve Report to be
prepared in a manner acceptable to Party A in all respects and similar to those
generally prepared and delivered to financial institutions. For the avoidance of
all doubt, each such acceptable Reserve Report will be prepared in accordance
with at least the following assumptions:

 

(A)reserves shall be adjusted for cumulative production since the effective date
of the prior Reserve Report;

 

                (B)(I) for all Natural Gas to be sold by Party B, the purchase
price for each calendar year will be strip pricing determined by Party A based
on average NYMEX settlement pricing for Natural Gas (as adjusted for appropriate
quality, transportation and location differentials approved by Party A); and

 

(II)for Crude Oil to be sold by Party B, the purchase price for each calendar
year shall be strip pricing determined by Party A based on average NYMEX
settlement pricing for Crude Oil (as adjusted for appropriate quality,
transportation and location differentials reasonably approved by Party A).

 

(C)reserves will be adjusted to reflect revisions to volume estimates of
reserves since the effective date of the last Reserve Report;

 

(D)projected operating expenses and capital expenditures will be adjusted to
reflect (a) actual expense levels incurred since the effective date of the last
Reserve Report and (b) projected increases or decreases in anticipated operating
expenses and capital expenditure levels; and

 

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(E)each Reserve Report will separately report on PDP Reserves, PDNP Reserves and
PUD Reserves and will utilize any other assumptions that Party A may reasonably
request from time to time.

 

(iii)Preparation of Additional Reserve Reports. Party A or Party B, at the sole
option of either of them so long as there are any Transactions outstanding under
this Agreement, may cause additional Reserve Reports meeting the requirements of
the preceding paragraph to be prepared by any of the Engineers to be delivered
to the other party. Except for the Reserve Report each year required in this
Part 6(n) which will be paid for by Party B, the costs and expenses of any
additional reports will be borne by the party requesting the report.
Notwithstanding the foregoing, if an Event of Default, Termination Event or
Additional Termination Event has occurred and is continuing, then Party A may
request an additional Reserve Report to be prepared at the sole expense of Party
B.

 

(o)Certificates

AMZG will deliver to Party A a certified copy of a Certificate of Good Standing
issued by the Secretary of State of North Dakota with regard to AMZG no later
than January 15, 2013.

 

(p)Notices of Default and Other Significant Events

Party B will provide written notice to Party A promptly (but, in any event,
within three (3) Local Business Days) after Party B becomes aware that a default
has occurred or that any event has occurred or that any circumstance exists that
could reasonably be expected have a Material Adverse Effect, including:

 

(i)any dispute that arises between Party B and any Governmental Authority;

 

(ii)the making of a demand or the commencement of any proceeding against Party B
or related to the Properties with an amount in controversy in excess of
$100,000;

 

(iii)a proposal by any Governmental Authority to acquire any of the Collateral
by condemnation or eminent domain;

 

(iv)any change in (i) Party B’s company name (including the creation or change
of any trade name); (ii) the location of Party B’s principal office; (iii) Party
B’s company structure or the jurisdiction in which Party B is organized; (iv)
Party B’s organizational identification number; or (v) Party B’s federal
taxpayer identification number;

 

(v)the revocation, suspension, forfeiture, expiration or material modification
of any permit;

 

(vi)any loss of or damage to any material portion of the Collateral;

 

(vii)the failure or refusal to make any payment when due in respect of any Debt;
and

 

(viii)the occurrence of any event or circumstance that could, if it continues,
constitute a default by any Person under any of the Basic Documents.

 

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(q)Charter Documents. Party B shall deliver to Party A true and complete copies
of all amendments to any of its charter documents; but this Part 6(q) does not
constitute Party A’s Approval of any such amendment.

 

(r)Compliance with Law. Party B will: Comply (and use commercially reasonable
efforts to Cause the Operators to comply), in all material respects, with all
Laws, including, without limitation, Laws regarding the collection, payment and
deposit of employees’ income, unemployment and Social Security taxes.

 

i.Make (and Cause the Operators to make), properly and timely, all royalty or
overriding royalty payments and payments to all other interest owners in the
Properties.

 

ii.Comply (and Cause the Operators to comply), in all material respects, with
all Laws affecting the ownership and operation of any of the Properties,
including, all Environmental Laws.

 

iii.Operate (and Cause the Operators to operate) all Properties (whether or not
such Property constitutes a “facility” under CERCLA) so that no cleanup or other
obligation is imposed under CERCLA or any other Law (including other Hazardous
Substance Laws) intended to protect the environment or relating to the
generation, transportation or disposal of hazardous waste which could allow any
Person to assert a Lien to secure that obligation on the Collateral, but
excluding Liens being protested in good faith by Party B through appropriate
proceedings timely filed and against which Party B maintains adequate reserves
in accordance with Australian Accounting Standards.

 

(s)Solvency. Party B will conduct its business in a manner as is necessary to
remain Solvent.

 

(t)Use of Proceeds. Party B will use the prepayment proceeds advanced hereunder
from Party A to Party B only for: (i) development of the Property to increase
production or Hydrocarbons, (ii) acquisition of new oil and gas properties,
which if they are additional interests in the Property, shall be included as
part of the Property, and (iii) general corporate purposes that are usual and
customary in the oil and gas exploration and production business.

 

(u)Evidence of Title. Party B will:

 

(i)Deliver to Party A, on or before the date of this Agreement for the Property
set forth on Exhibit A-1 to the Mortgage, title opinions or other evidence of
title (including, without limitation, “run sheets” and a title memo, in each
case, certified by a landman Approved by Party A) acceptable to Party A covering
no less than 90% of the PV10 value of the Proved Reserves of the Properties and
showing Defensible Title to those Properties vested in Party B subject only to
the Permitted Liens.

 

(ii)Deliver to Party A, within 90 days after the completion of each new Well, a
division order title opinion or other evidence of title acceptable to Party A
covering such new Well and showing Defensible Title to Party B’s interest in
those Properties on which such new Well is located vested in Party B subject
only to Permitted Liens.

 

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(iii)Deliver to Party A, within 20 days after Party A’s request, title opinions
or updated run sheets or other documentation reasonably acceptable to Party A
reflecting (i) Defensible Title in the Party B’s interest in Property that
comprises no less than 90% of the PV10 value of the Proved Reserves of the Party
B’s interest in the Properties, (ii) the recordation of Party A’s Lien related
to the Mortgage over all Property for which Party B has not previously delivered
a title opinion under 6(u)(i) above, and (iii) the absence of any Lien other
than Permitted Liens.

 

(v)Investments. Party B will not make any Investment except: (i) certificates of
deposit or other obligations issued by a bank Approved by Party A; (ii)
obligations of the United States government or any of its agencies; (iii)
Investments consisting of the other Hedging Agreements to the extent consistent
with Part 6(c); and (iv) Investments existing on the date hereof as reflected on
Appendix XV.

 

(w)Modifications to Documents. Party B will not waive or modify (or agree to
waive or modify) the terms of any Operating Agreement, any Hedging Agreement or
any Basic Document except (i) in the ordinary course of business and (ii) only
to extent any such waiver or modification does not result in an adverse effect
on Party A or any eights hereunder or any Credit Support Document.

 

(x)Nature of Business. Party B will not allow any change to be made in the
character of Party B’s business as an independent Hydrocarbon exploration and
production company. Party B will not acquire or make any other expenditure
(whether such expenditure is capital, operating or otherwise) in or related to,
any oil and gas assets not located within the geographical boundaries of the
United States or Canada.

 

(y)Fees, Costs and Expenses. Party B will promptly (and, in any event, within 10
days after the presentation of any invoice by Party A) pay (a) all Related
Costs, (b) all transfer, stamp, mortgage, documentary or other similar taxes,
assessments or charges levied by any taxing authority in connection with this
Agreement and the Credit Support Documents or the transactions contemplated by
them, (c) all reasonable costs and expenses incurred by or on behalf of Party A
(including the reasonable fees, expenses and disbursements of its attorneys and
consultants) in connection with (i) preparing this Agreement and the Credit
Support Documents and any modifications to them, (ii) filing, recording and
registering any Credit Support Documents, (iii) administering the transactions
and Confirmation and monitoring Party B’s compliance with the terms of this
Agreement and the Credit Support Documents, (v) enforcing Party A’s rights and
remedies under the Credit Support Documents, and (vi) investigating, prosecuting
or defending any claim or alleged claim arising under or in connection with the
Credit Support Documents and the transactions contemplated by them.

 

(z)Early Repayment. Party B may at any time prepay the payments advanced to
Party B by Party A (the “Early Repayment”), provided that (i) such Early
Repayment shall be for the full amount set forth in the Confirmations under this
Agreement (including Party A’s expected internal rate of return or other returns
set forth therein) and (ii) such Early Repayment shall also include the amount
of the Balloon Payment set forth in the Confirmations.

 

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(aa)Definitions. For the purposes of this Agreement the following definitions
will apply:

 

“Approval” and “Consent” mean, with respect to any consent or approval sought by
Party B and given by Party A, the written instruments executed by Party A that
(a) authorize Party B to take the action (prior to taking such action) for which
the consent or approval is sought and (b) set forth the conditions, if any, upon
which the consent or approval is given by Party A. “Approve” and “Approved” have
the correlative meaning.

 

“Basic Documents” means mineral grants and oil, gas and/or mineral leases (or
other documents evidencing its ownership in the Property), operating agreements,
Hydrocarbon purchase, sales, exchange, processing, gathering, treatment,
compression and transportation agreements; farm out or farm in agreements;
exploration agreements; participation agreements; carry agreements, unitization
agreements; joint venture, limited or general partnership, dry hole, bottom
hole, acreage contribution, purchase and acquisition agreements; area of mutual
interest agreements; salt water disposal agreements, servicing contracts;
easement and/or pooling agreements; surface leases, permits, licenses,
rights-of-way, servitudes, or other interests appertaining to the Party B’s
interest in the Property and all other executory contracts and agreements
relating to Party B’s Interest in the Property.

 

“Capital Leases” means, in respect of any Person, all leases which shall have
been, or should have been, in accordance with GAAP, recorded as capital leases
on the balance sheet of the Person liable (whether contingent or otherwise) for
the payment of rent thereunder.

 

“Cause” means, when any Person is obligated to cause another Person to take or
refrain from taking any action, (a) that the obligor in fact causes its
Affiliates to take or refrain from taking the specified action, or (b) that the
obligor uses all commercially reasonable efforts to cause any non-Affiliate to
take or refrain from taking the specified action, as applicable.

 

“CERCLA” means the Comprehensive Environmental Response, Compensation and
Liability Act of 1980, as amended.

 

“Change of Control” means the occurrence of any event pursuant to which (a) AEEC
ceases to own 100% of the outstanding Equity Interests in AMZG; or (b) AEEC
ceases to be a publicly traded company.

 

“Collateral” means all of Party B’s right title and Interest in and to the
Property and all other assets of Party B covered by the Credit Support
Documents.

 

“Crude Oil” means all crude oil, condensate and other liquid hydrocarbon
substances (excluding liquid hydrocarbon substances defined as Natural Gas).

 

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“Debt” means, for any Person, the sum of the following (without duplication):
(a) all obligations of such Person for borrowed money or evidenced by bonds,
bankers’ acceptances, debentures, notes or other similar instruments; (b) all
obligations of such Person (whether contingent or otherwise) in respect of
letters of credit, surety or other bonds and similar instruments; (c) all
accounts payable and all accrued expenses, liabilities or other obligations of
such Person to pay the deferred purchase price of property or services; (d) all
obligations under Capital Leases which are required to be recorded as a
liability on the balance sheet of such Person in accordance with GAAP; (e) all
obligations under Synthetic Leases; (f) all Debt (as defined in the other
clauses of this definition) of others secured by a Lien on any property of such
Person, whether or not such Debt is assumed by such Person to the extent of the
lesser of the amount of such Debt and the fair market value of such property
(only if such Debt is non-recourse to such Person and is secured by a Lien upon
such property); (g) all Debt (as defined in the other clauses of this
definition) of others guaranteed by such Person or in which such Person
otherwise assures a creditor against loss of the Debt (howsoever such assurance
shall be made) to the extent of the lesser of the amount of such Debt and the
maximum stated amount of such guarantee or assurance against loss; (h) all
obligations or undertakings of such Person to maintain or cause to be maintained
the financial position or covenants of others or to purchase the Debt or
property of others; (i) obligations to deliver commodities, goods or services,
including, without limitation, Hydrocarbons, in consideration of one or more
advance payments, other than Natural Gas balancing arrangements in the ordinary
course of business; (j) obligations to pay for goods or services whether or not
such goods or services are actually received or utilized by such Person; (k) any
Debt of a partnership or limited liability company for which such Person is
liable either by agreement, by operation of law or by a governmental requirement
but only to the extent of such liability; (l) Disqualified Capital Stock; and
(m) the undischarged balance of any production payment created by such Person or
for the creation of which such Person directly or indirectly received payment.
The Debt of any Person shall include all obligations of such Person of the
character described above to the extent such Person remains legally liable in
respect thereof notwithstanding that any such obligation is not included as a
liability of such Person under GAAP.

 

“Default Rate” shall be amended in the Agreement to delete the existing language
and replace with “means a rate per annum equal to the lesser of (a) ten percent
(10%) and (b) the highest interest rate permitted under New York law”.

 

“Defensible Title” means with respect to each Property, title that (a) entitles
the Person to receive (free and clear of all royalties, overriding royalties and
net profits interests or other burdens on or measured by production of
Hydrocarbons without regard to whether such interest appears of record) not less
than the Net Revenue Interest set forth on Appendix III (or in such other
certificate or writing provided to Party A by Party B representing the interests
in the Property, including, without limitation, any Credit Support Documents) in
all Hydrocarbons produced, saved and marketed from the Property for the
productive life of the Property, free and clear of any Lien other than Permitted
Liens.

 

“Disqualified Capital Stock” means any Equity Interest that, by its terms (or by
the terms of any security into which it is convertible or for which it is
exchangeable) or upon the happening of any event, matures or is mandatorily
redeemable for any consideration other than other Equity Interests (which would
not constitute Disqualified Capital Stock), pursuant to a sinking fund
obligation or otherwise, or is convertible into or exchangeable for Debt or
redeemable for any consideration other than other Equity Interests (which would
not constitute Disqualified Capital Stock) at the option of the holder thereof,
in whole or in part, on or prior to the date that is one (1) year after (a) the
final scheduled payment date hereunder; and (b) the date on which Party A agrees
in writing that this Agreement is terminated.

 

“Early Repayment” has the meaning given to such term in Part 6(aa).

 

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“Employee Plan” means an employee pension benefit plan covered by Title IV of
ERISA.

 

“Engineers” means MHA Petroleum Consultants LLC, or any other an independent
petroleum engineering firm selected by Party B and approved by Party A in
writing from time to time.

 

“Environmental Laws” shall mean any and all Governmental Requirements and
Environmental and Safety Regulations pertaining to health or the environment in
effect in any and all jurisdictions in which Party B is conducting or at any
time has conducted business, or where any Property of Party B is located,
including without limitation, the OPA, CERCLA, RCRA, the Safe Drinking Water
Act, as amended, the Toxic Substances Control Act, as amended, the Superfund
Amendments and Reauthorization Act of 1986, as amended, the Hazardous Materials
Transportation Act, as amended, and other environmental conservation or
protection Laws. The term “oil” shall have the meaning specified in OPA, the
terms “hazardous substance” and “release” (or “threatened release”) have the
meanings specified in CERCLA, and the terms “solid waste” and “disposal” (or
“disposed”) have the meanings specified in RCRA; provided, however, that (a) in
the event either OPA, CERCLA or RCRA is amended so as to broaden the meaning of
any term defined thereby, such broader meaning shall apply subsequent to the
effective date of such amendment and (b) to the extent the Laws of the state in
which any Property of Party B is located establish a meaning for “oil,”
“hazardous substance,” “release,” “solid waste” or “disposal” which is broader
than that specified in either OPA, CERCLA or RCRA, such broader meaning shall
apply to those issues covered by the applicable state Laws.

 

“Environmental and Safety Regulations” means all applicable federal, state or
local Laws, ordinances, codes, rules, orders and regulations with respect to any
environmental, pollution, toxic or hazardous waste or health and safety Law,
including, without limitation, those promulgated by the United States
Environmental Protection Agency, the Federal Energy Regulatory Commission, the
Department of Energy, the Occupational Safety and Health Administration, the
Department of the Interior, or any other Governmental Authority, or any of their
predecessor or successor agencies.

 

“Equipment” has the meaning assigned to that term in the UCC and includes all
surface or subsurface machinery, goods, equipment, fixtures, inventory,
facilities, supplies or other personal or moveable property of whatsoever kind
or nature (excluding property rented by Party B or taken to the premises for
temporary uses) now owned or hereafter acquired by Party B which are now or
hereafter located on or under any of the lands attributable to the Property
which are used for the production, gathering, treatment, processing, storage or
transportation of Hydrocarbons and whether or not attributable to the Property
(together with all accessions, additions and attachments to any thereof),
including, without limitation, all Wells, casing, tubing, tubular goods, rods,
pumping units and engines, Christmas trees, platforms, separators, compressors,
gun barrels, flow lines, water injection lines, tanks, gas systems (for
gathering, treating and compression), pipelines (including gathering lines,
laterals and trunklines), chemicals, solutions, water systems (for treating,
disposal and injection), power plants, poles, lines, transformers, starters and
controllers, machine shops, tools, storage yards and equipment stored therein,
telegraph, telephone and other communication systems, loading docks, loading
racks, shipping facilities, platforms, well equipment, wellhead valves, meters,
motors, pumps, tankage, regulators, furniture, fixtures, automotive equipment,
forklifts, storage and handling equipment, together with all additions and
accessions thereto, all replacements and all accessories and parts therefor, all
manuals, blueprints, documentation and processes, warranties and records in
connection therewith including, without limitation, any and, to the extent
permitted, all rights against suppliers, warrantors, manufacturers, sellers or
others in connection therewith, and together with all substitutes for any of the
foregoing.

 

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“Equity Equivalents” means, with respect to any Person (other than an
individual), any rights, warrants, options, convertible securities, exchangeable
securities, indebtedness or other rights, in each case exercisable for or
convertible or exchangeable into, directly or indirectly, Equity Interests of
such Person or securities exercisable for or convertible or exchangeable into
Equity Interests of such Person, whether at the time of issuance or upon the
passage of time or the occurrence of some future event.

 

“Equity Interests” means shares of capital stock, partnership interests,
membership interests in a limited liability company, beneficial interests in a
trust or other equity ownership interests in a Person (other than an
individual), and any Equity Equivalents of such Person.

 

“G&A Expenses” means the actual general and administrative expenses of Party B,
including capitalized general and administrative expenses, calculated in
accordance with GAAP, (excluding all (i) costs associated with closing of Party
B’s acquisition of the Properties; (ii) reasonable legal and professional
expenses; and (ii) non-cash charges and performance-based compensation pursuant
to a plan approved by Party A in writing).

 

“GAAP” means generally accepted accounting principles recognized as such by the
Financial Accounting Standards Board (or generally recognized successor)
consistently applied and maintained throughout the period indicated and
consistent with applicable Laws, except for changes mandated by the Financial
Accounting Standards Board or any similar accounting authority of comparable
standing. If any change in any accounting principle or practice is required by
the Financial Accounting Standards Board (or generally recognized successor) in
order for such principle or practice to continue as a generally accepted
principle or practice, all financial reports or statements required hereunder or
in connection herewith may be prepared in connection with such change, but all
calculations and determinations to be made hereunder may be made in accordance
with such change only if Party B and Party A agree to do so. Whenever any
accounting term is used herein which is not otherwise defined, it shall be
interpreted in accordance with GAAP.

 

“Governmental Authority” means the government of the United States of America,
any other nation or any political subdivision thereof, whether state, local or
tribal, and any agency, authority, instrumentality, regulatory body, court,
central bank or other entity exercising executive, legislative, judicial,
taxing, regulatory or administrative powers, jurisdiction or functions of or
pertaining to government over the Property, Party A, Party B or any of their
respective Affiliates.

 

“Governmental Requirements” means, with respect to any Person, any law, statute,
code, ordinance, order, determination, rule, regulation, judgment, decree,
injunction, franchise, permit, certificate, license, authorization or other
directive or requirement, whether now or hereinafter in effect, including,
without limitation, Environmental Laws, energy regulations and occupational,
safety and health standards or controls, of any Governmental Authority
applicable to such Person.

 

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“Hazardous Materials” means and include (i) all elements or compounds that are
contained in the list of hazardous substances adopted by the United States
Environmental Protection Agency and the list of toxic pollutants designated by
the United States Congress or the Environmental Protection Agency or under any
Hazardous Substance Laws (as hereinafter defined), and (ii) any “hazardous
waste,” “hazardous substance,” “toxic substance,” “regulated substance,”
“pollutant” or “contaminant” as defined under any Hazardous Substance Laws.

 

“Hazardous Substance Laws” means CERCLA, RCRA, the Federal Water Pollution
Control Act, as amended, 33 U.S.C. 1251 et seq., the Toxic Substances Control
Act, 15 U.S.C. 2601 et seq., the Hazardous Liquid Pipeline Safety Act of 1979,
as amended, 40 U.S.C. 2001 et seq., the Federal Insecticide, Fungicide, and
Rodenticide Act, 7 U.S.C. 136 et seq., the Federal Clean Air Act, 42 U.S.C. 7401
et seq., any so called federal, state or local “superfund” or “super lien”
statute, and any other applicable federal, state or local law, rule, regulation
or ordinance related to the remediation, clean up or reporting of environmental
pollution or contamination or imposing liability (including strict liability) or
standards of conduct concerning any Hazardous Materials.

 

“Hydrocarbons” means all Crude Oil and Natural Gas.

 

“Law” means any current or future law, statute, code, ordinance, order,
determination, rule, regulation, judgment, decree, injunction, franchise,
permit, certificate, license, authorization or other directive or requirement
enacted, promulgated, adopted or imposed by any Governmental Authority.

 

“Lien” means any interest in property (real or personal) securing an obligation
owed to, or a claim by, a Person other than the owner of the Property, whether
such interest is based on the common law, statute or contract, and whether such
obligation or claim is fixed or contingent, and including but not limited to (a)
the lien or security interest arising from a mortgage, encumbrance, pledge,
security agreement, financing statements, conditional sale or trust receipt or a
lease, consignment or bailment for security purposes, or (b) production payments
and the like payable out of oil and gas properties and the Property. The term
“Lien” shall include easements, servitudes, restrictions, permits, conditions,
covenants, exceptions or reservations. For the purposes of this Agreement, Party
B shall be deemed to be the owner (to the extent of its interest therein) of any
Property which it has acquired or holds subject to a conditional sale agreement,
or leases under a financing lease or other arrangement pursuant to which title
to the Property has been retained by or vested in some other Person in a
transaction intended to create a financing.

 

“Material Adverse Effect” means any effect or matter:

 

(a)which has a materially adverse effect on:

 

(i)the business, assets, liabilities, prospects or condition (financial or
otherwise) of Party B; or

 

(ii)the ability of Party B to perform any payment obligations under this
Agreement or any Credit Support Documents; or

 

(b)which could reasonably be expected to result in any Credit Support Document
not providing to Party A the Liens and/or security interests in the assets
expressed to be secured under that Credit Support Document.

 

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“Natural Gas” means all natural gas, and any natural gas liquids and all
products recovered in the processing of natural gas (other than condensate)
including, without limitation, natural gasoline, casinghead gas, iso butane,
normal butane, propane and ethane (including such methane allowable in
commercial ethane) produced from or attributable to the Property.

 

“Net Revenue Interest” means, with respect to any Property, the decimal or
percentage share of Hydrocarbons produced and saved from or allocable to such
Property, after deduction of Royalty Interests and other burdens on or paid out
of such production; provided that if Party B’s ownership is in the form of a
mineral fee or interest, such decimal or percentage share shall be equal to such
mineral fee or interest.

 

“OPA” means the Oil Pollution Act of 1990, as amended.

 

“Operating Cash Flow” means, on a cash accounting basis, Party B’s gross cash
receipts from sales of Production Volumes and all other cash receipts from
whatever source (including, without limitation, if applicable, cash payments
received under this Agreement).

 

“Operator” means each Person identified in Appendix XVI to this Agreement or any
other operator Approved by Party A.

 

“Permitted Liens” means (i) minor irregularities in title which do not (a)
materially interfere with the occupation, use and enjoyment by Party B of any of
the Properties in the normal course of business as presently conducted, or (b)
materially impair the value of such Properties; and (ii) Liens arising in the
ordinary course of business or incidental to the ownership of the Properties
(including, liens of landlords, vendors, carriers, warehousemen, taxing
authorities, mechanics, laborers and material men arising by applicable Law, and
of Operators arising by contract) for sums not yet due or being contested in
good faith by appropriate action promptly initiated and diligently conducted, if
such reserves as may be required by GAAP, consistently applied, have been made;
provided that any such Liens do not materially interfere with the occupation,
use and enjoyment by Party B of any of the Property or the proceeds and
Hydrocarbons to be attributable thereto; provided further there is no intent to
subordinate Party A’s Liens under the Credit Support Documents.

 

“Person” means an individual, corporation, partnership, limited liability
company, joint venture, trust or unincorporated organization, joint stock
company or other similar organization, governmental authority or any other legal
entity, whether acting in an individual, fiduciary or other capacity.

 

“Personal Property” means all personal property of every kind, whether now owned
or later acquired, including all goods (including Equipment), documents,
accounts, chattel paper (whether tangible or electronic), money, deposit
accounts, letters of credit and letter-of-credit rights (without regard to
whether the letter of credit is evidenced by a writing), documents, securities
and all other investment property, supporting obligations, any other contract
rights (including all rights under Basic Documents) or rights to the payment of
money, insurance claims and proceeds, all general intangibles (including all
payment intangibles and rights to seismic and other geophysical data) and all
permits, licenses, books and records related to the Property or the business of
Party B as it relates to the Property in any way whatsoever.

 

66

 

 

“Production Volumes” means, with respect to the Property, the product of Party
B’s Net Revenue Interest multiplied by gross Hydrocarbons produced and saved
from the Property.

 

“Property” shall mean the oil and gas properties described in Appendix III to
this Agreement and the interest thereunder and production of Hydrocarbons
attributable or allocable to the Property.

 

“Proved Reserves” has the meaning given that term in the definitions promulgated
by the Society of Petroleum Evaluation Engineers and the World Petroleum
Congress as in effect at the time in question; “Proved Developed Producing
Reserves” or “PDP Reserves” means Proved Reserves which are categorized as both
“Developed” and “Producing” in such definitions; “Proved Developed Non Producing
Reserves” or “PDNP Reserves” means Proved Reserves which are categorized as both
“Developed” and “Non Producing” in such definitions; and “Proved Undeveloped
Reserves” or “PUD Reserves” means Proved Reserves which are categorized as
“Undeveloped” in such definitions.

 

“Purchaser” means all Persons, including each Person identified in Appendix XIII
to this Agreement or otherwise Approved pursuant to Part 6(d), who purchase
Hydrocarbons from Party B which is attributable or allocable to the Property.

 

“RCRA” means the Resource Conservation and Recovery Act of 1976, as amended.

 

“Related Costs” means the reasonable and documented fees and out-of-pocket
expenses of counsel for Party A and consultants for Party A and such other
reasonable and documented out-of-pocket, third-party expenses incurred by Party
A in connection with the due diligence, negotiation and preparation of documents
relating to this Agreement and the Credit Support Documents and execution,
delivery and filing and/or recording of the Credit Support Documents together
with any amendments, supplements or modifications thereto or administration or
enforcement thereof.

 

“Reserve Report” has the meaning assigned to that term in Part 6(n) of this
Agreement.

 

“Solvent” means, as to any Person on any date, (a) the fair saleable value of
that Person’s assets exceed the total amount of its liabilities (including
income tax liabilities) as they become absolute and matured; and (b) that Person
is able to meet its debts as they mature.

 

“Subsidiary” means, as to any Person, an entity of which fifty percent (50%) or
greater of the issued and outstanding securities having ordinary voting power
for the election of directors, members or general partners is owned, directly or
indirectly, by such Person and/or one or more of its subsidiaries.

 

“Synthetic Leases” means, in respect of any Person, all leases which have been,
or should have been, in accordance with GAAP, treated as operating leases on the
financial statements of the Person liable (whether contingently or otherwise)
for the payment of rent thereunder and which were properly treated as
indebtedness for borrowed money for purposes of U.S. federal income taxes, if
the lessee in respect thereof is obligated to either purchase for an amount in
excess of, or pay upon early termination an amount in excess of, eighty percent
(80%) of the residual value of the property subject to such operating lease upon
expiration or early termination of such lease.

 

67

 

 

“Well” means any existing or future oil or gas well, salt water disposal well,
injection well, water supply well or any other well located on or related to the
Property, and any facility or equipment in addition to or replacement of any
well.

 

“Working Interest” means the property interest which entitles the owner thereof
to explore and develop certain land for oil and gas production purposes, whether
under an oil and gas lease or unit, a compulsory pooling order or otherwise.

 

[SIGNATURE PAGE AND APPENDICES FOLLOW]

 

68

 

 

IN WITNESS WHEREOF the parties have executed this document on the respective
dates specified below with effect from the date specified on the first page of
this Agreement.

 

Macquarie Bank Limited   American Eagle Energy Corporation       By:     By:    
Name:   Name:   Title:   Title:

 

    AMZG, Inc.           By:     By:     Name:   Name:   Title:   Title:

 

Signature Page

to

Schedule to the 2002 ISDA Master Agreement

 

 

 

 

Appendix I

Operating Permits, Licenses and Authorizations

 

None

 

 

 

 

Appendix II

Basic Documents

(Including Farmout Agreements, Subject Contracts, and Operating Agreements)

 

1.Carry Agreement dated April 16, 2012, but effective as of January 1, 2012, by
and between American Eagle Energy Corporation and NextEra Energy Gas Producing,
LLC (as amended).

 

2.Confidentiality Agreement dated November 20, 2012 by and between SM Energy and
American Eagle Energy Corporation.

 

3.Operating Agreement dated October 26, 2006 by and among Rover Resources, Inc.
as operator, Eternal Energy Corp., as non-operator.

 

4.Operating Agreement dated November 1, 2010 by and among SM Energy Company, as
operator, Crescent Point Energy U.S. Corp. and Eternal Energy Corp., as
non-operators.

 

5.Operating Agreement dated May 1, 2011 by and among Eternal Energy Corporation,
as operator, NextEra Energy Gas Producing, LLC and American Eagle Energy, Inc.,
as non-operators.

 

6.Operating Agreement dated January 1, 2011 by and among Continental Resources,
Inc., as operator, Crescent Point Energy U.S. Corporation, Black Stone Minerals
Company, Eternal Energy Corporation, Geronimo Holdings Company, Kasmer & Aafedt
Oil, Inc. and Lario Oil & Gas Company, as non-operators.

 

7.Operating Agreement dated March 1, 2011 by and among SM Energy Company, as
operator, Crescent Point Energy U.S. Corp, Eternal Energy Corp., Richard
Gallegos, Samson Resources Company, Baytex Energy USA Ltd., Murex Petroleum
Corporation, Rich Slagle Minerals Trust, Williston Hunter, Inc., Kent M. Lynch,
The Dublin Company and Empire Oil Company, as non-operators.

 

8.Operating Agreement dated January 1, 2012 by and among American Eagle Energy
Corporation, as operator, NextEra Energy Gas Producing, LLC, SM Energy Company,
American Standard Energy Corporation, Harms-Wold Family Group, LLP, Murex
Petroleum Corporation, Geronimo Holding Corporation, MBI Oil & Gas, LLC, Cody
Oil & Gas Corporation, ASEN 2 Corp., Stewart Geological, Inc., Roy G. & Opal
Barton Revocable Trust, and Kasmer & Aafedt Oil, Inc., as non-operators.

 

9.Operating Agreement dated March 1, 2012 by and among American Eagle Energy
Corporation, as operator, NextEra Energy Gas Producing, LLC, SM Energy Company,
Crescent Point Energy US Operations, Black Stone Minerals Company, LP, Missouri
River Royalty Corporation, BRP, LLC, MBI Oil & Gas, LLC, Murex Petroleum
Corporation, ASEN 2 Corp., Stewart Geological, Inc., Cody Oil & Gas Corporation,
Harms-Wold Family Group, LLP, and Geronimo Holding Corporation, as
non-operators.

 

10.Operating Agreement dated April 1, 2012 by and among American Eagle Energy
Corporation, as operator, NextEra Energy Gas Producing, LLC, SM Energy Company,
Black Stone Minerals Company, LP, Samson Resources Company, Empire Oil Company,
Crescent Point Energy US Corp., Cody Oil & Gas Corporation, Inland Oil & Gas
Corporation, Luella M. Boss, Sanish Properties, LLC, Benjamin Fliginger, Blair
Fliginger, Trust for the Hill Foundation Trust, Virginia W. Hill Foundation
Minerals Trust, and Jon Wiltfong, as non-operators.

 

11.Operating Agreement dated May 1, 2012 by and among American Eagle Energy
Corporation, as operator, NextEra Energy Gas Producing, LLC, Nodana Petroleum
Corporation, Williston Projects, Inc., Crescent Point Energy U.S. Corp., Onnhi,
Inc., Roy G. Barton, Sr. and Opal Barton Revocable Trust, Rosemary A. Scherer,
Linda Petroleum, Heringer/Herco Minerals, LLC, and Murex Petroleum Corporation,
as non-operators.

 

 

 

  

12.Operating Agreement dated August 1, 2012 by and among American Eagle Energy
Corporation, as operator, NextEra Energy Gas Producing, LLC, Samson Resources
Company, Crescent Point Energy U.S. Corp, SM Energy, Michelene G. Toomey, Ursula
G. Lusk, WLCUM Oil & Gas, Ltd., Enchanted Royalty Partners, Sam G. Harrison,
Jr., Stockdale Royalty Partners, Heather C. Harrison, Margo S. Harrison,
Marshall C. Harrison, Parker L. Harrison, and Steven Lane Harrison, Jr., as
non-operators.

 

13.Operating Agreement dated June 1, 2012 by and among American Eagle Energy
Corporation, as operator, NextEra Energy Gas Producing, LLC, Crescent Point
Energy U.S. Corp., Samson Resources Company, J. Hiram Moore Ltd., Brennand
Energy, Ltd., MHM Resources LP, AP Assets, LLC, Onnhi, Inc., Hancock
Enterprises, Frank C. and LaRaine E. Greider, Barbara Bargsten, Shari R. Weber
Trust, The Roy G. Barton Sr., and Opal Barton Rev. Trust, Edwin M. Avery, John
A. Redeker, William H. Watson, and Bobby L. Jarrett, as non-operators.

 

14.Operating Agreement dated January 1, 2011 by and among SM Energy Company, as
operator, Samson Resources Company, Baytex Energy USA LTD, Williston Hunter,
Inc., J. Hiram Moore, LTD, Madelon L. Bradshaw, MHM Resources, LP, Pfanenstiel
Company, LLC, Chevron USA, Inc., Come Big or Stay Home, LLC, PANAN Energy, Inc.,
Prince Petroleum Company, Inc., VML Resources, Inc., Eternal Energy Corp.

 

15.Operating Agreement dated November 1, 2012 by and among American Eagle Energy
Corporation, as operator, NextEra Energy Gas Producing, LLC, Crescent Point
Energy U.S. Corp., Empire Oil Company, Kasmer & Aafedt Oil, Inc., Thomas T.
Ritter, Timothy J. Ritter, Steven C. Ritter, Pamela J. Hegge, Sanish Properties,
LLC, Tracy B. Witherspoon, Dale Williston Minerals 2010, LP, John J. Kasmer, as
non-operators.

 

16.Operating Agreement dated November 1, 2012 by and among American Eagle Energy
Corporation, as operator, NextEra Energy Gas Producing, LLC, Crescent Point
Energy U.S. Corp., Baytex Energy USA, LTD, J. Hiram Moore, LTD, WLCUM Oil & Gas,
LTD, Ursula G. Lusk, Michelene Toomey, MHM Resources, AP Assets, LLC, Enchanted
Royalty Partners, Stockade Royalty Partners, Sam G. Harrison, Jr., Parker L.
Harrison, Margo S. Harrison, Heather C. Harrison, Marshall C. Harrison, Steven
Lane Harrison, Jr., Roy G. Barton Sr. and Opal Barton Revocable Trust, as
non-operators.

 

17.Operating Agreement dated December 1, 2012 by and among American Eagle Energy
Corporation, as operator, NextEra Energy Gas Producing, LLC, SM Energy Company,
Geronimo Holding Corporation, ASEN 2, Corp., Empire Oil Company, as
non-operators.

 

18.First Amendment to Carry Agreement dated July 15, 2012 by and between
American Eagle Energy Corporation and NextEra Energy Gas Producing, LLC.

 

19.Midstream Proposal for Spyglass AMI production dated October 29, 2012, by and
between USG Midstream Bakken 1, LLC and American Eagle Energy Corporation

 

20.Gas Gathering, Processing and Purchase Agreement, pending execution, by and
between USG Midstream Bakken 1, LLC and American Eagle Energy Corporation

 

21.Gas Purchase Agreement, dated May 1, 2012, by and between Oneok Rockies
Midstream, L.L.C. and SM Energy Company

 

22.Lease Crude Oil Purchase Agreement, dated August 10, 2012, by and between
Power Energy Partners, LP and American Eagle Energy Corporation

 

23.Lease Crude Oil Purchase Agreement, dated November 23, 2012, by and between
Power Energy Partners, LP and American Eagle Energy Corporation (Not yet
executed)

 

 

 

 

24.Crude Oil Purchase Agreement, dated November 28, 2012, by and between Power
Freepoint Commodities, LLC and American Eagle Energy Corporation

 

25.See Appendix III for a listing of oil and gas leases.

 

 

 

 

Appendix III

Property Description and Net Revenue Interests

 

Operated        BPO   APO  Well Name  Location  Status  WI   NRI   WI   NRI 
Christianson 15-12-163-101  T163N, R101W - Sections 1 & 12  120% over AFE 
 17.81%   14.12%   35.62%   28.24% Cody 15-11-163-101  T163N, R101W - Sections 2
& 11  120% over AFE   18.45%   14.26%   35.74%   27.79% Coplan 1-3-163-101 
T163N, R101W - Sections 3 & 10  NEE Carry   0.00%   5.39%   13.57%   10.78%
Anton 3-4-163-101  T163N, R101W - Sections 4 & 9  NEE Carry   0.00%   18.35% 
 45.74%   36.70% Elizabeth 3-4N-163-101  T164N, R101W - Sections 28 & 33  120%
over AFE + Non-Consent   22.68%   17.88%   41.84%   33.29% Silas 3-2N-163-101 
T164N, R101W - Sections 26 & 35  NEE Carry + Non-Consent   6.65%   20.01% 
 35.92%   28.86% Megan 14-12-163-101  T163N, R101W - Sections 1 & 12  NEE Carry
+ Non-Consent   0.07%   14.17%   35.62%   28.24% Haagenson 3-2S-163-101  T163N,
R101W - Sections 2 & 11  No Carry   35.81%   27.85%   35.74%   27.79%
Christianson Brothers 15-33N-164-101  T164N, R101W - Sections 28 & 33  NEE Carry
+ Non-Consent   1.77%   17.88%   41.84%   33.29% Muzzy 15-33S-164-101  T163N,
R101W - Sections 4 & 9  NEE Carry   0.00%   18.35%   45.74%   36.70% Violet
3-3-163-101  T163N, R101W - Sections 3 & 10  Not subject to Carry   19.79% 
 15.94%   19.79%   15.94% Terri Lynn 3-3-163-101  T164N, R101W - Sections 27 &
34  Not subject to Carry   33.83%   27.53%   26.38%   21.32% Stanley
8-1E-163-102  T163N, R101W - Sections 5 & 6  NEE Carry   0.00%   14.39% 
 36.25%   28.78% Mona Johnson 1-3N  T164N, R101W - Sections 27 & 34  Not subject
to Carry   33.83%   27.53%   26.38%   21.32%                            
Non-Operated - PDP        WI   NRI            Adams 2-18H  T163N-R100W -
Sections 6 & 7      18.52%   14.81%           Adams 4-18H  T163N-R100W -
Sections 6 & 7      18.52%   14.81%           August 4-26H  T163N-R101W -
Sections 14 & 23      6.53%   5.19%           Bagley 4-30H  T163N-R100W -
Sections 18 & 19      3.87%   3.05%           Baja 1522-04TFH  T163N-R99W -
Sections 15 & 22      0.63%   0.50%           Blazer 2-11-163-98H  T163N-R98W -
Sections 2 & 11      0.94%   0.75%          

 

 

 

 

 

Non-Operated - PDP        WI   NRI            Border Farms 3130-1H  T163N-R99W -
Sections 6 & 7, T164N-R99W - Sections 30 & 31      8.77%   7.01%          
Border Farms 3130-2TFH  T163N-R99W - Sections 6 & 7, T164N-R99W - Sections 30 &
31      8.77%   7.01%           Border Farms 3130-3  T163N-R99W - Sections 6 &
7, T164N-R99W - Sections 30 & 31      8.77%   7.01%           Border Farms
3130-5  T163N-R99W - Sections 6 & 7, T164N-R99W - Sections 30 & 31      8.77% 
 7.01%           Border Farms 3130-6TFH  T163N-R99W - Sections 6 & 7, T164N-R99W
- Sections 30 & 31      8.77%   7.01%           Camino 5-8-163-98H  T163N-R98W -
Sections 5 & 8      1.25%   1.00%           Denali 31-21  T163N-R98W - Sections
13 & 24      0.03%   0.02%           Gerhardson 1-10H  T160N-R97W - Sections 3 &
10      2.37%   1.90%           Gulbranson 1-1H  T163N-R100W - Sections 1 & 12 
    11.37%   9.02%           Gulbranson 2-1H  T163N-R100W - Sections 1 & 12    
 11.37%   9.02%           Jurasin 32-29-163N-100W  T163N-R100W - Sections 29 &
32      0.61%   0.48%           Lancaster 2-11H  T162N-R102W - Sections 2 & 11 
    6.21%   4.97%           Legaard 4-25H  T163N-R101W - Sections 13 & 24    
 4.09%   3.27%           Montclair 0112-2TFH  T163N-R99W - Sections 1 & 12,
T164N-R99W - Sections 25 & 36      1.09%   0.87%           Karen Bailard
3625-1TFH  T163N-R99W - Sections 1 & 12, T164N-R99W - Sections 25 & 36    
 1.09%   0.87%           Montclair 1-12-163-99H  T163N-R99W - Sections 1 & 12 
    1.57%   1.26%           Mustang 7-6-163-98H  T163N-R98W - Sections 6 & 7    
 0.31%   0.25%           Nielsen 1-12H  T160N-R97W - Sections 1 & 12      0.44% 
 0.35%          

 

 

 

  

Non-Operated - PDP        WI   NRI            Nomad 0607-1H (PUD)  T163N-R99W -
Sections 6 & 7, T164N-R99W - Sections 30 & 31      8.77%   7.01%           Nomad
0607-2TFH (PUD)  T163N-R99W - Sections 6 & 7, T164N-R99W - Sections 30 & 31    
 8.77%   7.01%           Nomad 0607-3TFH (PUD)  T163N-R99W - Sections 6 & 7,
T164N-R99W - Sections 30 & 31      8.77%   7.01%           Nomad 0607-5H 
T163N-R99W - Sections 6 & 7, T164N-R99W - Sections 30 & 31      8.77%   7.01% 
         Nomad 0607-6TFH  T163N-R99W - Sections 6 & 7, T164N-R99W - Sections 30
& 31      8.77%   7.01%           Nomad 6-7 163-99H  T163N-R99W - Sections 6 &
7, T164N-R99W - Sections 30 & 31      14.41%   11.53%           Olson
15-22-162-100H 1CN  T162N-R100W - Sections 15 & 22      0.78%   0.63%          
Prochnick 15-35HSA  T163N-100W - Sections 2 & 11      0.35%   0.28%          
Prochnick 15-35HSB  T163N-100W - Sections 2 & 11      0.35%   0.28%          
Reide 4-14H  T163N-R100W - Sections 2 & 11      0.34%   0.27%           Ridgeway
25-36-163N-101W  T163N, R101W - Sections 25 & 36      1.88%   1.50%          
Thomte 0508-03TFH (PUD)  T163N-R99W - Sections 5 & 8, T164N-R99W - Sections 29 &
32      1.97%   1.58%           Thomte 8-5-163-99H  T163N-R99W - Sections 5 & 8 
    3.18%   2.50%           Titan 36-25-164-99H  T163N-R99W - Sections 6 & 7,
T164N-R99W - Sections 30 & 31      0.18%   0.15%           Torgeson 1-15H 
T163N-R100W - Sections 3 & 10      4.38%   3.48%           Torgeson 4-15 (PUD) 
T163N-R100W - Sections 3 & 10      4.38%   3.48%           Wolter 1-28H 
T163N-R100W - Sections 16 & 21      1.30%   1.04%          

  

 

 

 

Non-Operated - PDP        WI   NRI            Wolter 13-9H  T163N-R100W -
Sections 4 & 9      5.90%   4.64%           Wolter 15-8H  T163N-R100W - Sections
5 & 8      1.54%   1.21%           Yukon 12-1  T163N-R98W - Sections 1 & 12    
 1.25%   1.00%          

 

[See following pages for lease schedule]

 

 

 

 

Appendix IV

Debt Instruments

 

1.Carry Agreement dated April 16, 2012, but effective as of January 1, 2012, by
and between American Eagle Energy Corporation and NextEra Energy Gas Producing,
LLC (as amended).

 

 

 

 

Appendix V

Hedging Agreements

 

None

 

 

 

 

Appendix VI

Marketing of Production

 

1.Lease Crude Oil Purchase Agreement, dated November 23, 2012, by and between
Power Energy Partners, LP and American Eagle Energy Corporation, not cancellable
within 60 days. (not yet executed)

 

 

 

 

Appendix VII

Subsidiaries

 

1.AMZG, Inc. (wholly-owned by American Eagle Energy Corporation)

 

2.EERG Energy ULC (wholly-owned by American Eagle Energy Corporation)

 

3.AEE Canada Inc. (wholly-owned by AMZG, Inc.)

 

The consolidate corporate structure is as follows:

 

[tpg53.jpg]

 

 

 

 

Appendix VIII

Litigation and Governmental Proceedings

 

·The Company received a series of comment letters from the Securities Exchange
Commission regarding certain disclosures related to the Form 10-K that was filed
on April 14, 2012. The Company has formally responded to all comment letters and
is awaiting further comment or final resolution of the matter.

 

·The Company’s management is unaware of any threatened or pending claims,
litigation, proceedings, arbitration, investigations or other inquiries.

 

 

 

 

Appendix IX

Contingent Liabilities

 

1.North Dakota Surety Bonds - $100,000

 

2.Bureau of Indian Affairs (Montana) Surety Bond - $1,500

 

 

 

 

Appendix X

Employee Plans

 

·Non-Qualified Stock Option Plan

 

 

 

 

Appendix XI

Deposit Accounts

 

American Eagle Energy Corporation:

·Key Bank Payables Account - 765070012958

·Key Bank Revenue Account - 765071003428

·Key Bank Money Market Account - 765070014095

·Wells Fargo Advisors Investment Account – 1592-9837

 

AMZG, Inc.:

·Key Bank Checking Account – 765071002552

 

EERG Energy ULC:

·Key Bank Checking Account - 765071001042

·Royal Bank of Canada Checking Account – 09591 103-921-3

 

 

 

 

Appendix XII

Insurance

 

·Directors, Officers and Organization Liability – Travelers Insurance

 

·Commercial General Liability & Umbrella – Chubb Insurance Company

 

·Operator’s Extra (Well Control) – Lloyd’s of London

 

·Workers’ Compensation – Pinnacol Assurance

 

·Group Medical – UnitedHealthcare

 

·Group Dental – Delta Dental

 

·Group Vision – Vision Service Provider (VSP)

  

 

 

 

Appendix XIII

Purchaser

 

1.Freepoint Commodities, LLC

Crude Oil Purchase Agreement

-November 28, 2012

-terminates December 31, 2012

-Contact:Jeremy Weil

Crude Oil Trader, Vice President

58 Commerce Road

Stamford, CT 06902

Telephone: 203-542-6262

 

2.Power Energy Partners, LP

-August 10, 2012

-Covers the Christianson, Cody and Coplan wells

-Contact:William Jegen

CEO

778 Frontage Road Suite 122

Northfield, IL 60093

Telephone: 847-730-3844

 

3.Power Energy Partners, LP

-November 23, 2012 (not yet executed)

-effective February 1, 2013

-Contact:William Jegen

CEO

778 Frontage Road Suite 122

Northfield, IL 60093

Telephone: 847-730-3844

 

4.USG Midstream Bakken 1, LLC

-Pending execution

-Contact:Attn: Contract Administration

601 Travis, Suite 1900

Houston, Texas 77002

Telephone: 713-374-1582

 

5.Oneok Rockies Midstream, L.L.C.

-May 1, 2012

-only covers lands acquired from SM Energy

-Contact:Contract Administration 17-5

P.O. Box 871

Tulsa, OK 74102-0871

Telephone: 918-732-1354

Fax: 918-588-7533

 

 

 

  

Appendix XIV

Capital Leases

 

None

 

 

 

  

Appendix XV

Investments

 

·25,107 shares of Crescent Point Energy Corp. common stock

 

·2,000,000 shares of Passport Energy Ltd. common stock

  

 

 

  

Appendix XVI

Operators

  

1.SM Energy Company

550 North 31st Street, Suite 500

Billings, MT 59101

 

2.Samson Resources Company

370 17th Street, Suite 3000

Denver, CO 80222

 

3.Crescent Point Energy U.S. Corp.

555 17th Street, Suite 750

Denver, CO 80202

 

4.Continental Resources, Inc.

302 N. Independence Ave.

Enid, OK 73702

 

5.Baytex Energy USA Ltd.

600 Seventeenth Street, Suite 1600S

Denver, CO 80202

 

 

 

 

Appendix XVII

NextEra Acquisition

 

Well Name  Location  Working Interest   Net Revenue Interest  Nomad 6-7 163-99H 
T163N-R99W - Sections 6 & 7   14.41%   11.53% Border Farms 3130-1H  T163N-R99W -
Sections 6 & 7, T164N-R99W - Sections 30 & 31   8.77%   7.01% Border Farms
3130-2TFH  T163N-R99W - Sections 6 & 7, T164N-R99W - Sections 30 & 31   8.77% 
 7.01% Border Farms 3130-6TFH  T163N-R99W - Sections 6 & 7, T164N-R99W -
Sections 30 & 31   8.77%   7.01% Nomad 0607-1TFH  T163N-R99W - Sections 6 & 7,
T164N-R99W - Sections 30 & 31   8.77%   7.01% Nomad 0607-05H  T163N-R99W -
Sections 6 & 7, T164N-R99W - Sections 30 & 31   8.77%   7.01% Nomad 0607-6TFH 
T163N-R99W - Sections 6 & 7, T164N-R99W - Sections 30 & 31   8.77%   7.01%
Thomte 8-5-163-99H  T163N-R99W - Sections 5 & 8   3.18%   2.50% Thomte
0508-2TFH  T163N-R99W - Sections 5 & 8, T164N-R99W - Sections 29 & 32   1.97% 
 1.58% Thomte 0508-03TFH  T163N-R99W - Sections 5 & 8, T164N-R99W - Sections 29
& 32   1.97%   1.58% Bakke 3229-2TFH  T163N-R99W - Sections 5 & 8, T164N-R99W -
Sections 29 & 32   1.97%   1.58% Bakke 3229-3TFH  T163N-R99W - Sections 5 & 8,
T164N-R99W - Sections 29 & 32   1.97%   1.58%

 

 

 

 

Lease   Lessor   Lessee   Lease Date   Recording Data   Legal Description
LSE-00594   KATHY K. SCOTT SPOON, JOHN THUMMA, AND CHARLENE JUDGE, CO-TRUSTEES
OF THE HENRY RUSSELL FAMILY MINERAL TRUST, U/T/D MARCH 10, 2010   DIAMOND
RESOURCES CO.   1/6/2011   Document #: 255585

Book:305M Page: 142   INSOFAR AND ONLY INSOFAR AS SAID LEASE COVERS:
Township 163 North, Range 99 West
Section 7:  LOTS 1 (37.61), 2 (37.71), E2NW4, NE4 LSE-00634   DOROTHY M.
TORGESON, A WIDOW   DIAMOND RESOURCES CO.   1/6/2011   Document # 254924

Book: 302M
 Page: 578   INSOFAR AND ONLY INSOFAR AS SAID LEASE COVERS:
Township 163 North, Range 99 West
Section 6: LOTS 6 (37.32), 7 (37.48), E2SW4 LSE-00635   RANDAL TORGESON AND
ELIZABETH ELSBERND, TRUSTEES OF THE HOWARD TORGESON FAMILY TRUST   DIAMOND
RESOURCES CO.   1/6/2011   Document # 254930

Book: 302M
 Page: 592   INSOFAR AND ONLY INSOFAR AS SAID LEASE COVERS:
Township 163 North, Range 99 West
Section 6: LOTS 6 (37.32), 7 (37.48), E2SW4 LSE-00838   ROSE HANSEN, TRUSTEE OF
THE ROBERT H. HANSEN TRUST DATED 10-18-1989   DIAMOND RESOURCES CO.   6/14/2011
  Document # 25883

Book: 316M
 Page: 158   INSOFAR AND ONLY INSOFAR AS SAID LEASE COVERS:
Township 163 North, Range 99 West
Section 7:  LOTS 1 (37.61), 2 (37.71), E2NW4, NE4 LSE-00841   JILL LUKE, A
MARRIED WOMAN   DIAMOND RESOURCES CO.   6/27/2011   Document # 259060

Book: 316M
 Page: 579   INSOFAR AND ONLY INSOFAR AS SAID LEASE COVERS:
Township 163 North, Range 99 West
Section 7:  LOTS 1 (37.61), 2 (37.71), E2NW4, NE4 LSE-00842   KERIN KNIGHT, A
SINGLE WOMAN   DIAMOND RESOURCES CO.   6/8/2011   Document # 258741

Book: 315M
 Page: 568   INSOFAR AND ONLY INSOFAR AS SAID LEASE COVERS:
Township 163 North, Range 99 West
Section 7:  LOTS 1 (37.61), 2 (37.71), E2NW4, NE4 LSE-00843   BEN LEROY CLARK, A
MARRIED MAN   DIAMOND RESOURCES CO.   6/15/2011   Document # 258886

Book: 316M
 Page: 164   INSOFAR AND ONLY INSOFAR AS SAID LEASE COVERS:
Township 163 North, Range 99 West
Section 7:  LOTS 1 (37.61), 2 (37.71), E2NW4, NE4

 

 

 

 

LSE-00844   STEVEN HORSWELL, A MARRIED MAN   DIAMOND RESOURCES CO.   6/10/2011  
Document # 258887

Book: 316M
 Page: 166   INSOFAR AND ONLY INSOFAR AS SAID LEASE COVERS:
Township 163 North, Range 99 West
Section 7:  LOTS 1 (37.61), 2 (37.71), E2NW4, NE4 LSE-00845   LINDA SUE
O'DONNELL, A MARRIED WOMAN   DIAMOND RESOURCES CO.   6/15/2011   Document #
258889

Book: 316M
 Page: 170   INSOFAR AND ONLY INSOFAR AS SAID LEASE COVERS:
Township 163 North, Range 99 West
Section 7:  LOTS 1 (37.61), 2 (37.71), E2NW4, NE4 LSE-00846   SHARON K. PISESKI,
A MARRIED WOMAN   DIAMOND RESOURCES CO.   6/10/2011   Document # 258888

Book: 316M
 Page: 168   INSOFAR AND ONLY INSOFAR AS SAID LEASE COVERS:
Township 163 North, Range 99 West
Section 7:  LOTS 1 (37.61), 2 (37.71), E2NW4, NE4 LSE-00849   SHARON DEATON, A
MARRIED WOMAN   DIAMOND RESOURCES CO.   6/15/2011   Document # 258891

Book: 316M
 Page: 174   INSOFAR AND ONLY INSOFAR AS SAID LEASE COVERS:
Township 163 North, Range 99 West
Section 7:  LOTS 1 (37.61), 2 (37.71), E2NW4, NE4 LSE-00850   KATHRYN M. GAMBLE,
A WIDOW   DIAMOND RESOURCES CO.   5/31/2011   Document # 259055

Book: 316M
 Page: 569   INSOFAR AND ONLY INSOFAR AS SAID LEASE COVERS:
Township 163 North, Range 99 West
Section 7:  LOTS 1 (37.61), 2 (37.71), E2NW4, NE4 LSE-00851   ANTON C. HARRIS,
JR., A MARRIED MAN   DIAMOND RESOURCES CO.   6/1/2011   Document # 258571
Book: 315M
 Page: 127   INSOFAR AND ONLY INSOFAR AS SAID LEASE COVERS:
Township 163 North, Range 99 West
Section 7:  LOTS 1 (37.61), 2 (37.71), E2NW4, NE4 LSE-00852   AMANDA HEGSTROM, A
SINGLE WOMAN   DIAMOND RESOURCES CO.   6/9/2011   Document # 259057

Book: 316M
 Page: 573   INSOFAR AND ONLY INSOFAR AS SAID LEASE COVERS:
Township 163 North, Range 99 West
Section 7:  LOTS 1 (37.61), 2 (37.71), E2NW4, NE4

 

 

 

 

LSE-00853   JENNIFER HEGSTROM PRIVIA, A MARRIED WOMAN   DIAMOND RESOURCES CO.  
6/9/2011   Document # 259059

Book: 316M
 Page: 577   INSOFAR AND ONLY INSOFAR AS SAID LEASE COVERS:
Township 163 North, Range 99 West
Section 7:  LOTS 1 (37.61), 2 (37.71), E2NW4, NE4 LSE-00854   ERICA HEGSTROM, A
SINGLE WOMAN   DIAMOND RESOURCES CO.   6/9/2011   Document # 258890

Book: 316M
 Page: 172   INSOFAR AND ONLY INSOFAR AS SAID LEASE COVERS:
Township 163 North, Range 99 West
Section 7:  LOTS 1 (37.61), 2 (37.71), E2NW4, NE4 LSE-00856   JASON L. PALMER, A
MARRIED MAN   DIAMOND RESOURCES CO.   7/1/2011   Document # 259173

Book: 317M
 Page: 45   INSOFAR AND ONLY INSOFAR AS SAID LEASE COVERS:
Township 163 North, Range 99 West
Section 7:  LOTS 1 (37.61), 2 (37.71), E2NW4, NE4 LSE-00857   CHAD D. PALMER, A
SINGLE MAN   DIAMOND RESOURCES CO.   7/1/2011   Document # 259058

Book: 316M
 Page: 575   INSOFAR AND ONLY INSOFAR AS SAID LEASE COVERS:
Township 163 North, Range 99 West
Section 7:  LOTS 1 (37.61), 2 (37.71), E2NW4, NE4 LSE-00858   RONDA S. PETERS A
SINGLE WOMAN   DIAMOND RESOURCES CO.   6/29/2011   Document # 259174

Book: 317M
 Page: 47   INSOFAR AND ONLY INSOFAR AS SAID LEASE COVERS:
Township 163 North, Range 99 West
Section 7:  LOTS 1 (37.61), 2 (37.71), E2NW4, NE4 LSE-00859   EDWARD JAMES
HEGSTROM, A SINGLE MAN   DIAMOND RESOURCES CO.   6/9/2011   Document # 258575

Book: 315M
 Page: 135   INSOFAR AND ONLY INSOFAR AS SAID LEASE COVERS:
Township 163 North, Range 99 West
Section 7:  LOTS 1 (37.61), 2 (37.71), E2NW4, NE4 LSE-00860   JOHN RUSSELL
HEGSTROM, A MARRIED MAN   DIAMOND RESOURCES CO.   6/9/2011   Document # 258740

Book: 315M
 Page: 566   INSOFAR AND ONLY INSOFAR AS SAID LEASE COVERS:
Township 163 North, Range 99 West
Section 7:  LOTS 1 (37.61), 2 (37.71), E2NW4, NE4 LSE-00861   MICHAEL WAYNE
HEGSTROM, A MARRIED MAN   DIAMOND RESOURCES CO.   6/9/2011   Document # 258574

Book: 315M
 Page: 133   INSOFAR AND ONLY INSOFAR AS SAID LEASE COVERS:
Township 163 North, Range 99 West
Section 7:  LOTS 1 (37.61), 2 (37.71), E2NW4, NE4

 

 

 

 

LSE-00862   ANN LOUISE HEGSTROM,  A SINGLE WOMAN   DIAMOND RESOURCES CO.  
6/9/2011   Document # 258743

Book: 315M
 Page: 572   INSOFAR AND ONLY INSOFAR AS SAID LEASE COVERS:
Township 163 North, Range 99 West
Section 7:  LOTS 1 (37.61), 2 (37.71), E2NW4, NE4 LSE-00863   MARTIN G.
MORANVILLE, A MARRIED MAN   DIAMOND RESOURCES CO.   6/8/2011   Document # 258885

Book: 316M
 Page: 162   INSOFAR AND ONLY INSOFAR AS SAID LEASE COVERS:
Township 163 North, Range 99 West
Section 7:  LOTS 1 (37.61), 2 (37.71), E2NW4, NE4 LSE-00864   LYNN ANDERSON, A
MARRIED WOMAN   DIAMOND RESOURCES CO.   6/15/2011   Document # 259054

Book: 316M
 Page: 567   INSOFAR AND ONLY INSOFAR AS SAID LEASE COVERS:
Township 163 North, Range 99 West
Section 7:  LOTS 1 (37.61), 2 (37.71), E2NW4, NE4 LSE-00865   JULIE ELLEN
HEGSTROM BEYERINK, A MARRIED WOMAN   DIAMOND RESOURCES CO.   6/9/2011   Document
# 258882

Book: 316M
 Page: 156   INSOFAR AND ONLY INSOFAR AS SAID LEASE COVERS:
Township 163 North, Range 99 West
Section 7:  LOTS 1 (37.61), 2 (37.71), E2NW4, NE4 LSE-00866   RUSSELL W. STARRY,
TRUSTEE OF THE RUSSELL AND LEAH STARRY LIVING TRUST 1992   DIAMOND RESOURCES CO.
  7/1/2011   Document # 259053

Book: 316M
 Page: 563   INSOFAR AND ONLY INSOFAR AS SAID LEASE COVERS:
Township 163 North, Range 99 West
Section 7:  LOTS 1 (37.61), 2 (37.71), E2NW4, NE4 LSE-00867   KRAIG BROWER, A
MARRIED MAN   DIAMOND RESOURCES CO.   6/8/2011   Document # 258572

Book: 315M
 Page: 129   INSOFAR AND ONLY INSOFAR AS SAID LEASE COVERS:
Township 163 North, Range 99 West
Section 7:  LOTS 1 (37.61), 2 (37.71), E2NW4, NE4

 

 

 

 

LSE-00868   RICHARD D. CHAPMAN, A MARRIED MAN   DIAMOND RESOURCES CO.  
6/10/2011   Document # 25884

Book: 316M
 Page: 160   INSOFAR AND ONLY INSOFAR AS SAID LEASE COVERS:
Township 163 North, Range 99 West
Section 7:  LOTS 1 (37.61), 2 (37.71), E2NW4, NE4 LSE-00885   MARILYN LEISSLER,
A MARRIED WOMAN   DIAMOND RESOURCES CO.   6/10/2011   Document # 258742

Book: 315M
 Page: 570   INSOFAR AND ONLY INSOFAR AS SAID LEASE COVERS:
Township 163 North, Range 99 West
Section 7:  LOTS 1 (37.61), 2 (37.71), E2NW4, NE4 LSE-00890   MARILYN J HAMMAN,
A MARRIED WOMAN   DIAMOND RESOURCES CO.   6/10/2011   Document # 259172

Book: 317M
 Page: 43   INSOFAR AND ONLY INSOFAR AS SAID LEASE COVERS:
Township 163 North, Range 99 West
Section 7:  LOTS 1 (37.61), 2 (37.71), E2NW4, NE4 LSE-00891   KEITH RIDNOUR, A
MARRIED MAN   DIAMOND RESOURCES CO.   6/3/2011   Document # 259769

Book: 319M Page: 34   INSOFAR AND ONLY INSOFAR AS SAID LEASE COVERS:
Township 163 North, Range 99 West
Section 7:  LOTS 1 (37.61), 2 (37.71), E2NW4, NE4 LSE-00896   GLORIA SELVOG,
A/K/A GLORIA J. SELVOG, A MARRIED WOMAN   DIAMOND RESOURCES CO.   7/18/2011  
Document # 259349

Book: 317M
 Page: 430   INSOFAR AND ONLY INSOFAR AS SAID LEASE COVERS:
Township 163 North, Range 99 West
Section 7:  LOTS 1 (37.61), 2 (37.71), E2NW4, NE4 LSE-00899   TRICIA L. PARKER
SCANTLIN, A MARRIED WOMAN   DIAMOND RESOURCES CO.   6/9/2011   Document # 258573

Book: 315M
 Page: 131   INSOFAR AND ONLY INSOFAR AS SAID LEASE COVERS:
Township 163 North, Range 99 West
Section 7:  LOTS 1 (37.61), 2 (37.71), E2NW4, NE4 LSE-00911   CLELL MCGUIGAN, A
WIDOWER   DIAMOND RESOURCES CO.   7/18/2011   Document # 259575

Book: 318M
 Page: 250   INSOFAR AND ONLY INSOFAR AS SAID LEASE COVERS:
Township 163 North, Range 99 West
Section 7:  LOTS 1 (37.61), 2 (37.71), E2NW4, NE4 LSE-00918   GARY L.
MORANVILLE, A MARRIED MAN   DIAMOND RESOURCES CO.   6/13/2011   Document #
259576

Book: 318M
 Page: 252   INSOFAR AND ONLY INSOFAR AS SAID LEASE COVERS:
Township 163 North, Range 99 West
Section 7:  LOTS 1 (37.61), 2 (37.71), E2NW4, NE4

  

 

 

 

LSE-00405   KEITH BRAATEN, A MARRIED MAN   DIAMOND RESOURCES CO.   10/1/2010  
Document:
253132
Book: 297M
 Page: 83   Township 163 North, Range 99 West
Section 8: SW4 LSE-00406   KIM BRAATEN, A SINGLE MAN   DIAMOND RESOURCES CO.  
10/8/2010   Document:
253319
Book: 297M
 Page: 506   Township 163 North, Range 99 West
Section 8: SW4 LSE-00439   DONOVAN DISETH, A MARRIED MAN   DIAMOND RESOURCES,
CO.   10/4/2010   Document: 253134

Book: 297M
 Page: 87   Township 163 North, Range 99 West
Section 8: SW4 LSE-00440   DOYLE DISETH, A SINGLE MAN   DIAMOND RESOURCES, CO.  
10/4/2010   Document: 253137
Book: 297M Page: 93   Township 163 North, Range 99 West
Section 8: SW4 LSE-00441   SCOTT DISETH, A MARRIED MAN   DIAMOND RESOURCES, CO.
  10/4/2010   Document: 253138

Book: 297M Page: 95   Township 163 North, Range 99 West
Section 8: SW4 LSE-00442   SHANE DISETH, A MARRIED MAN   DIAMOND RESOURCES, CO.
  10/4/2010   Document: 254073

Book: 299M
 Page: 653   Township 163 North, Range 99 West
Section 8: SW4 LSE-00463   DALE GJERTSEN, A MARRIED MAN   DIAMOND RESOURCES CO.
  10/1/2010   Document: 253133
Book: 297M
 Page: 85   Township 163 North, Range 99 West
Section 8: SW4 LSE-00464   DENNIS GJERTSEN, A MARRIED MAN   DIAMOND RESOURCES
CO.   10/1/2010   Document: 253126
Book: 297M
 Page: 71   Township 163 North, Range 99 West
Section 8: SW4

 

 

 

 

LSE-00465   HOWARD GJERTSEN, A MARRIED MAN   DIAMOND RESOURCES CO.   10/1/2010  
Document: 253124
Book: 297M
 Page: 66   Township 163 North, Range 99 West
Section 8: SW4 LSE-00466   LORRETTA GJESDAL, A MARRIED WOMAN   DIAMOND RESOURCES
CO.   10/1/2010   Document: 253139

Book: 297M
 Page: 97   Township 163 North, Range 99 West
Section 8: SW4 LSE-00535   JANE MELLAND, A MARRIED WOMAN   DIAMOND RESOURCES CO.
  10/1/2010   Document: 253135

Book: 297M Page: 89   Township 163 North, Range 99 West
Section 8: SW4 LSE-00552   BRAD NESS, A MARRIED MAN   DIAMOND RESOURCES CO.  
10/4/2010   Document: 253141

Book: 297M Page: 101   Township 163 North, Range 99 West
Section 8: SW4 LSE-00553   BRENT NESS,  A MARRIED MAN   DIAMOND RESOURCES CO.  
10/4/2010   Document: 253130

Book: 297M Page: 79   Township 163 North, Range 99 West
Section 8: SW4 LSE-00554   JACQUELINE NESS,  A SINGLE WOMAN   DIAMOND RESOURCES
CO.   10/4/2010   Document: 253137
Book: 297M
 Page: 502   Township 163 North, Range 99 West
Section 8: SW4 LSE-00555   KENT NESS, A MARRIED MAN   DIAMOND RESOURCES CO.  
10/4/2010   Document: 253131
Book: 297M
 Page: 81   Township 163 North, Range 99 West
Section 8: SW4 LSE-00598   CORRINE SANDERSON, A WIDOW   DIAMOND RESOURCES CO.  
10/1/2010   Document: 253324
Book: 297M
 Page: 516   Township 163 North, Range 99 West
Section 8: SW4

 

 

 

 

LSE-00599   JOHN SANDERSON, A MARRIED MAN   DIAMOND RESOURCES CO.   10/1/2010  
Document: 253136

Book: 297M
 Page: 91   Township 163 North, Range 99 West
Section 8: SW4 LSE-00600   LLOYD SANDERSON, A MARRIED MAN   DIAMOND RESOURCES
CO.   10/1/2010   Document: 253316

Book: 297M
 Page: 500   Township 163 North, Range 99 West
Section 8: SW4 LSE-00601   RONALD SANDERSON, A MARRIED MAN   DIAMOND RESOURCES
CO.   10/1/2010   Document: 253125
Book: 297M
 Page: 69   Township 163 North, Range 99 West
Section 8: SW4 LSE-00606   JILL SCHLECHT FKA JILL NESS, A MARRIED WOMAN  
DIAMOND RESOURCES CO.   10/4/2010   Document: 253318

Book: 297M Page: 504   Township 163 North, Range 99 West
Section 8: SW4 LSE-00608   BEVERLY SILVA, A MARRIED WOMAN   DIAMOND RESOURCES
CO.   10/1/2010   Document: 253128
Book: 297M
 Page: 75   Township 163 North, Range 99 West
Section 8: SW4 LSE-00609   ARCHIE SMITH, A WIDOWER   DIAMOND RESOURCES CO.  
10/1/2010   Document: 253129

Book: 297M Page: 77   Township 163 North, Range 99 West
Section 8: SW4 LSE-00616   GREG STRAND, A SINGLE MAN   DIAMOND RESOURCES CO.  
10/1/2010   Document: 253142
Book: 297M
 Page: 103   Township 163 North, Range 99 West
Section 8: SW4 LSE-00636   KIETH A TORGESON & KATHY L RADENIC   DIAMOND
RESOURCES CO.   10/1/2010   Document: 254284

Book: 300M
 Page: 423   Township 163 North, Range 99 West
Section 5: SW4

 

 

 

 

LSE-00639   KENNETH VALLIER, A SINGLE MAN   DIAMOND RESOURCES CO.   10/1/2010  
Document: 253322

Book: 297M
 Page: 512   Township 163 North, Range 99 West
Section 8: SW4 LSE-00640   DAWN VALLIER-BEAN, A MARRIED WOMAN   DIAMOND
RESOURCES CO.   10/1/2010   Document: 253127

Book: 297M
 Page: 73   Township 163 North, Range 99 West
Section 8: SW4 LSE-00659   LAUREL WINTER, A MARRIED WOMAN   DIAMOND RESOURCES
CO.   10/1/2010   Document: 2531470

Book: 297M Page: 99   Township 163 North, Range 99 West
Section 8: SW4

  

 

 

Appendix XVIII

SM Energy Acquisition Well Schedule

 

Well
No.  Lease Name  Description  County/State  GWI   NWI                          
32553  Christianson 15-12-163-101  Sections 1 & 12 - T163N-R101W  Divide, North
Dakota   19.598907%   16.316138%    33138  Cody 15-11-163-101  Sections 2 & 11 -
T163N-R101W  Divide, North Dakota   17.795680%   14.829740%    33447  Coplan
1-3-163-101  Sections 3 & 10 - T163N-R101W  Divide, North Dakota   34.131811% 
 28.221292%    33798  Megan 14-12-163-101  Sections 1 & 12 - T163N-R101W 
Divide, North Dakota   19.598907%   16.316138%    34067  Haagenson 3-2-163-101 
Sections 2 & 11 - T163N-R101W  Divide, North Dakota   17.795680%   14.829740%   
34269  Violet 3-3-163-101  Sections 3 & 10 - T163N-R101W  Divide, North Dakota 
 34.131811%   28.221292%    34022  Silas 3-2N-163-101  Sections 26 &
35-T164-R101W  Divide, North Dakota   0.000000%   0.000000%  BPO 34022  Silas
3-2N-163-101  Sections 26 & 35-T164-R101W  Divide, North Dakota   4.969961% 
 4.141634%  APO

 

 

 

 

 

Appendix XVIII

SM Energy Acquisition Lease Schedule

 

LEASE               BOOK         #               PAGE         TRACT
#   LESSOR   LESSEE   DATED  

DOC.

NO.

  DESCRIPTION  

COUNTY,

STATE

                          496966A   ROBERT C. HAAGENSON AND SANDRA K. HAAGENSON,
TRUSTEES OF THE HAAGENSON   ST. MARY LAND & EXPLORATION COMPANY   2/25/2010  
281M   Insofar and only insofar as said lease covers   Divide, ND 57868   FAMILY
MINERAL TRUST, CREATED BY AGREEMENT DATED DECEMBER 24, 2002           264   and
affects the following:                     248493   T163N R101W                
        SEC 1: LOTS 3-4, S/2NW/4                         T164N R101W            
            SEC 35: SE/4                               496966B   VERONA POWERS,
AKA VERONA G. POWERS, FKA VERONA G. BAKER, A SINGLE   ST. MARY LAND &
EXPLORATION COMPANY   3/1/2010   282M   Insofar and only insofar as said lease
covers   Divide, ND 57868   WOMAN           300   and affects the following:    
                248800   T163N R101W                         SEC 1: LOTS 3-4,
S/2NW/4                         T164N R101W                         SEC 35: SE/4
    496966C   MARJORIE A. LETSCH, A MARRIED WOMAN DEALING IN HER SOLE AND
SEPARATE   ST. MARY LAND & EXPLORATION COMPANY   3/5/2010   282M   Insofar and
only insofar as said lease covers   Divide, ND 57868   PROPERTY           636  
and affects the following:                     248936   T163N R101W            
            SEC 1: LOTS 3-4, S/2NW/4                         T164N R101W        
                SEC 35: SE/4                              

 

 

 

 

497021A   JOHN M. CASHMAN, A MARRIED MAN DEALING IN HIS SOLE AND SEPARATE   ST.
MARY LAND & EXPLORATION COMPANY   3/31/2010   284M   Insofar and only insofar as
said lease covers   Divide, ND 57968   PROPERTY           194   and affects the
following:                     249358   T163N R101W                         SEC
10: S/2                               497021B   MARY C. AUSTIN, A MARRIED WOMAN
DEALING IN HER SOLE AND SEPARATE    ST. MARY LAND & EXPLORATION COMPANY  
3/31/2010   284M   Insofar and only insofar as said lease covers   Divide, ND
57968   PROPERTY           174   and affects the following:                    
249352   T163N R101W                         SEC 10: S/2                        
      497021C   KATHLEEN A. CYPHER, A MARRIED WOMAN DEALING IN HER SOLE AND
SEPARATE   ST. MARY LAND & EXPLORATION COMPANY   3/31/2010   284M   Insofar and
only insofar as said lease covers   Divide, ND 57968   PROPERTY           170  
and affects the following:                     249351   T163N R101W            
            SEC 10: S/2                               497070A   DELORES C.
TUBBS, AKA DELORES CLARA SEYFERT TUBBS, A WIDOW   ST. MARY LAND & EXPLORATION
COMPANY   5/10/2010   288M   Insofar and only insofar as said lease covers  
Divide, ND 58305               182   and affects the following:                
    250439   T163N R101W                         SEC 11: NW/4    

 

 

 

 

497070B   MIDGE SEYFERT, AKA EMANUEL F. SEYFERT, AKA EMANUEL FREDERICK SEYFERT  
ST. MARY LAND & EXPLORATION COMPANY   5/10/2010   288M   Insofar and only
insofar as said lease covers   Divide, ND 58305   AND SANDRA SEYFERT, HUSBAND
AND WIFE           678   and affects the following:                     250670  
T163N R101W                         SEC 11: NW/4                              
497070C   DONALD A. SEYFERT, AKA DONALD ALFRED SEYFERT AND THELMA SEYFERT,   ST.
MARY LAND & EXPLORATION COMPANY   5/10/2010   288M   Insofar and only insofar as
said lease covers   Divide, ND 58305   HUSBAND AND WIFE           173   and
affects the following:                     250436   T163N R101W                
        SEC 11: NW/4                               497076A   JOHN FREDERICK
SEYFERT, A MARRIED MAN DEALING IN HIS SOLE AND SEPARATE   ST. MARY LAND &
EXPLORATION COMPANY   4/26/2010   287M   Insofar and only insofar as said lease
covers   Divide, ND 58308   PROPERTY           102   and affects the following:
                    250139   T163N R101W                         SEC 11: NE/4  
                            497076B   LETA MARLENE FISHER, A SINGLE WOMAN   ST.
MARY LAND & EXPLORATION COMPANY   4/26/2010   290M   Insofar and only insofar as
said lease covers   Divide, ND 58308               659   and affects the
following:                     251273   T163N R101W                         SEC
11: NE/4                               497076C   BARBARA PETERSON AND JAMES K.
PETERSON, WIFE AND HUSBAND   SM ENERGY COMPANY   6/2/2010   290M   Insofar and
only insofar as said lease covers   Divide, ND 58308               210   and
affects the following:                     251055   T163N R101W                
        SEC 11: NE/4    

 

 

 

 

497076D   DEWEY WRIGHT, A SINGLE MAN   ST. MARY LAND & EXPLORATION COMPANY  
4/26/2010   294M   Insofar and only insofar as said lease covers   Divide, ND
58308               344   and affects the following:                     252311
  T163N R101W                         SEC 11: NE/4                              
                          497891A   KASMER & AAFEDT OIL INC.   SM ENERGY COMPANY
  7/28/2011   318M   Insofar and only insofar as said lease covers   Divide, ND
61771               632   and affects the following:                     259720
  T163N R101W                         SEC 3: S/2                              
495078C   FRED SEYFERT AND CHERYL SEYFERT, HUSBAND AND WIFE   ST. MARY LAND &
EXPLORATION COMPANY   4/9/2010   286M   Insofar and only insofar as said lease
covers   Divide, ND 52207                   and affects the following:          
          249866   T163N R 101W                         SEC 12: N/2NW/4,
SW/4NW/4                               495078D   DENNIS SEYFERT AND BEVERLY
SEYFERT, HUSBAND AND WIFE   ST. MARY LAND & EXPLORATION COMPANY   4/12/2010  
287M   Insofar and only insofar as said lease covers   Divide, ND 52207        
      91   and affects the following:                     250136   T163N R 101W
                        SEC 12: N/2NW/4, SW/4NW/4    

 

 

 

 

495078E   PAMELA HULME, A MARRIED WOMAN DEALING IN HER SOLE AND SEPARATE   ST.
MARY LAND & EXPLORATION COMPANY   4/12/2010   287M   Insofar and only insofar as
said lease covers   Divide, ND 52207   PROPERTY           343   and affects the
following:                     250241   T163N R101W                         SEC
12: N/2NW/4, SW/4NW/4                               495078F   ELAINE LACASSE,
EXECUTOR OF THE ESTATE OF GLADYS IRENE SEYFERT, AKA   ST. MARY LAND &
EXPLORATION COMPANY   4/12/2010   294M   Insofar and only insofar as said lease
covers   Divide, ND 52207   GLADYS SEYFERT, DECEASED           336   and affects
the following:                     252309   T163N R101W                        
SEC 12: N/2NW/4, SW/4NW/4                               495080H   PATSY BROWN, A
WIDOW   ST. MARY LAND & EXPLORATION COMPANY   3/31/2010   285M   Insofar and
only insofar as said lease covers   Divide, ND 60591               534   and
affects the following:                     249719   T163N R101W                
        SEC 12: NW/4NE/4, S/2NE/4, SE/4NW/4                              
495080I   MARTIN L. BROWN, A MARRIED MAN DEALING IN HIS SOLE AND SEPARATE   ST.
MARY LAND & EXPLORATION COMPANY   4/1/2010   284M   Insofar and only insofar as
said lease covers   Divide, ND 60591   PROPERTY           642   and affects the
following:                     249532   T163N R101W                         SEC
12: NW/4NE/4, S/2NE/4, SE/4NW/4    

 

 

 

 

495080J   KATHLEEN C. HOLT, FKA KATHLEEN C. LIETZKE, A MARRIED WOMAN DEALING IN
  ST. MARY LAND & EXPLORATION COMPANY   4/1/2010   286M   Insofar and only
insofar as said lease covers   Divide, ND 6591   HER SOLE AND SEPARATE PROPERTY
              and affects the following:                     249869   T163N
R101W                         SEC 12: NW/4NE/4, S/2NE/4, SE/4NW/4              
                495080K   HELEN B. RYDER AND CHARLES RYDER, WIFE AND HUSBAND  
ST. MARY LAND & EXPLORATION COMPANY   3/31/2010   285M   Insofar and only
insofar as said lease covers   Divide, ND 60591               431   and affects
the following:                     249680   T163N R101W                        
SEC 12: NW/4NE/4, S/2NE/4, SE/4NW/4                                            
                                                                               
                                                              495080L   STEPHEN
P. BROWN, A MARRIED MAN DEALING IN HIS SOLE AND SEPARATE   ST. MARY LAND &
EXPLORATION COMPANY   4/1/2010   285M   Insofar and only insofar as said lease
covers   Divide, ND 60591   PROPERTY           412   and affects the following:
                    249675   T163N R101W                         SEC 12:
NW/4NE/4, S/2NE/4, SE/4NW/4    

 

 

 

 

495080M   ERIN A. SARDINAS, A MARRIED WOMAN DEALING IN HER SOLE AND SEPARATE  
ST. MARY LAND & EXPLORATION COMPANY   4/1/2010   285M   Insofar and only insofar
as said lease covers   Divide, ND 60591   PROPERTY           612   and affects
the following:                     249752   T163N R101W                        
SEC 12: NW/4NE/4, S/2NE/4, SE/4NW/4                               495091B  
ARCHIE R. KRESS, AKA ARCHIE KRESS AND ELAINE M. KRESS, HUSBAND AND   ST. MARY
LAND & EXPLORATION COMPANY   3/26/2010   284M   Insofar and only insofar as said
lease covers   Divide, ND 52309   WIFE           159   and affects the
following:     52205               249348   T163N R101W                        
SEC 11: SW/4                         SEC 12: SW/4                              
495091C   RUSSELL E. KRESS AND DONNA M. KRESS, HUSBAND AND WIFE   ST. MARY LAND
& EXPLORATION COMPANY   3/26/2010   284M   Insofar and only insofar as said
lease covers   Divide, ND 52309               166   and affects the following:  
  52205               249350   T163N R101W                         SEC 11: SW/4
                        SEC 12: SW/4                               495091F  
BEULAH E. MAHANY, A WIDOW   ST. MARY LAND & EXPLORATION COMPANY   4/8/2010  
284M   Insofar and only insofar as said lease covers   Divide, ND 52205        
      609   and affects the following:                     249509   T163N R101W
                        SEC 12: SW/4    

 

 

 

 

495091G   DONALD E. BUSCH, A SINGLE MAN   ST. MARY LAND & EXPLORATION COMPANY  
4/8/2010   287M   Insofar and only insofar as said lease covers   Divide, ND
52205               88   and affects the following:                     250135  
T163N R101W                         SEC 12: SW/4                              
495116C   FRED SEYFERT AND CHERYL SEYFERT, HUSBAND AND WIFE   ST. MARY LAND &
EXPLORATION COMPANY   4/9/2010   286M   Insofar and only insofar as said lease
covers   Divide, ND 52380               162   and affects the following:        
            249867   T163N R101W                         SEC 11: SE/4          
                    495116D   DENNIS SEYFERT AND BEVERLY SEYFERT, HUSBAND AND
WIFE   ST. MARY LAND & EXPLORATION COMPANY   4/12/2010   287M   Insofar and only
insofar as said lease covers   Divide, ND 52380               95   and affects
the following:                     250137   T163N R101W                        
SEC 11: SE/4                               495116E   PAMELA HULME, A MARRIED
WOMAN DEALING IN HER SOLE AND SEPARATE   ST. MARY LAND & EXPLORATION COMPANY  
4/12/2010   287M   Insofar and only insofar as said lease covers   Divide, ND
52380   PROPERTY           339   and affects the following:                    
250240   T163N R101W                         SEC 11: SE/4    

 

 

 

 

495116F   ELAINE LACASSE, EXECUTOR OF THE ESTATE OF GLADYS IRENE SEYFERT, AKA  
ST. MARY LAND & EXPLORATION COMPANY   4/12/2010   294M   Insofar and only
insofar as said lease covers   Divide, ND 52380   GLADYS SEYFERT, DECEASED      
    340   and affects the following:                     252310   T163N R101W  
                      SEC 11: SE/4                               495116G  
SANDRA JEAN MEYER, TRUSTEE OF THE ARVIE TERNQUIST FAMILY MINERAL TRUST   SM
ENERGY COMPANY   9/2/2010   296M   Insofar and only insofar as said lease covers
  Divide, ND 52380   DATED THE 11TH DAY OF JULY, 2007           692   and
affects the following:                     253093   T163N R101W                
        SEC 11: SE/4                               495116H   EVELYN TERNQUIST,
TRUSTEE OF THE CLAYTON TERNQUIST FAMILY MINERAL   SM ENERGY COMPANY   9/2/2010  
299M   Insofar and only insofar as said lease covers   Divide, ND 52380   TRUST
DATED 12/6/07           268   and affects the following:                    
253882   T163N R101W                         SEC 11: SE/4                      
        498363A   LINDA ST. AORO, A MARRIED WOMAN DEALING IN HER SOLE AND
SEPARATE   SM ENERGY COMPANY   8/4/2011   319M   Insofar and only insofar as
said lease covers   Divide, ND 62118   PROPERTY           684   and affects the
following:                     260093   T163N R101W                         SEC
12: SE/4                               498363B   BLANCHE B. LESTER, A MARRIED
WOMAN DEALING IN HER SOLE AND SEPARATE   SM ENERGY COMPANY   8/4/2011   321M  
Insofar and only insofar as said lease covers   Divide, ND 62118   PROPERTY    
      441   and affects the following:                     260646   T163N R101W
                        SEC 12: SE/4    

 

 

 

 

498363C   RONALD BROCKAMP, A MARRIED MAN DEALING IN HIS SOLE AND SEPARATE   SM
ENERGY COMPANY   8/4/2011   322M   Insofar and only insofar as said lease covers
  Divide, ND 62118   PROPERTY           172   and affects the following:        
            260856   T163N R101W                         SEC 12: SE/4          
                    498363D   BRIAN BROCKAMP, A SINGLE MAN   SM ENERGY COMPANY  
8/4/2011   318M   Insofar and only insofar as said lease covers   Divide, ND
62118               610   and affects the following:                     259710
  T163N R101W                         SEC 12: SE/4                              
497574A   WILLIAM J. WITHERSPOON III, A SINGLE MAN   SM ENERGY COMPANY  
3/31/2011   310M   Insofar and only insofar as said lease covers   Divide, ND
60628               70   and affects the following:                     257040  
T163N R101W                         SEC 10: N/2                              
497574B   KASMER & AAFEDT OIL INC.   SM ENERGY COMPANY   7/28/2011   318M  
Insofar and only insofar as said lease covers   Divide, ND 60628              
629   and affects the following:                     259719   T163N R101W      
                  SEC 10: N/2    

 

 

 

 

497813A   RED CROWN ROYALTIES LLC   SM ENERGY COMPANY   8/1/2011   318M  
Insofar and only insofar as said lease covers   Divide, ND 61608              
647   and affects the following:                     259735   T163N R101W      
                  SEC 3: Lots 1-4, S/2N/2