Exhibit 10.1

 

[NOTE: Certain information has been excluded from this exhibit because it is
both (i) not material and (ii) would likely be competitively harmful if publicly
disclosed.]

 

 

 

 

 

 

 

 

PURCHASE AND SALE AGREEMENT

 

BETWEEN

 

EXXON MOBIL CORPORATION,

 

MOBIL OIL EXPLORATION & PRODUCING SOUTHEAST INC.,

 

XH, LLC,

 

EXXON MOBILE BAY LIMITED PARTNERSHIP,

 

EXXONMOBIL U.S. PROPERTIES INC.

 

AND

 

W&T OFFSHORE, INC.

 

EFFECTIVE TIME:

 

JANUARY 1, 2019

 

 

 

 

 

 

 

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

 

 

TABLE OF CONTENTS

 

Page

 

Article 1. DEFINITIONS

1

   

1.01.

Ad Valorem Taxes

1

1.02.

Additional Instruments

1

1.03.

Affiliate

1

1.04.

Allocation

1

1.05.

Associated Party or Parties

1

1.06.

Base Purchase Price

1

1.07.

Business Day(s)

2

1.08.

Claim or Claims

2

1.09.

Closing

2

1.10.

Closing Date

2

1.11.

Closing Settlement Statement

2

1.12.

Code

2

1.13.

Condition

2

1.14.

Effective Time

2

1.15.

Environmental Laws

2

1.16.

Execution Date

2

1.17.

ExxonMobil-operated

2

1.18.

Final Settlement Statement

2

1.19.

Interest or Interests

2

1.20.

Lender

4

1.21.

Liability or Liabilities

4

1.22.

Material Difference

4

1.23.

Material Related Agreements

4

1.24.

NORM

4

1.25.

Occurrence

4

1.26.

Oil

4

1.27.

Operator

4

1.28.

PCB

4

1.29.

Performance Deposit

4

1.30.

Person

4

1.31.

Property or Properties

4

1.32.

Property Sales Accounting Agreement

4

1.33.

Raw Make

4

1.34.

RCRA

5

1.35.

Related Agreements

5

1.36.

Strict Liability

5

1.37.

TSCA

5

1.38.

Title Defect

5

1.39.

Transition Services Agreement

5

1.40.

Well or Wells

5

 

i

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Article 2. PURCHASE AND SALE

5

   

Article 3. PURCHASE PRICE

5

   

3.01.

Base Purchase Price

5

3.02.

Performance Deposit and Payment

5

3.03.

Allocation of Base Purchase Price

6

     

Article 4. INTENTIONALLY LEFT BLANK

6

   

Article 5. BUYER’S REVIEW

6

   

5.01.

Buyer’s Review before Sinning this Agreement

6

5.02.

Access to ExxonMobil-Operated Interests

7

5.03.

Environmental Assessment

7

5.04.

Access to Interests Operated by Others

8

5.05.

Material, Facilities, Platforms, and Equipment

8

5.06.

No Warranty of Accuracy; Disclaimer

8

5.07.

Buyer’s Confidentiality Obligations

8

     

Article 6. TITLE AND TITLE DEFECTS

9

   

6.01.

Title Defect

9

6.02.

Adjustments to Base Purchase Price based on Allocations

9

6.03.

Description and Other Errors

11

6.04.

Restrictions on Use

12

6.05.

Engineering Controls

12

6.06.

Covenants Running with the Land

13

6.07.

Retention of Title for Gas

13

     

Article 7. PRE-CLOSING OBLIGATIONS

13

   

7.01.

Preferential Rights.

13

7.02.

Related Agreements

14

7.03.

Third Party Notifications and Approvals

14

7.04.

Change of Operator

15

7.05.

Employees

15

     

Article 8. CLOSING

15

   

8.01.

Closing Date

15

8.02.

Buyer’s Right to Delay Closing

16

8.03.

ExxonMobil’s Right to Delay Closing

16

8.04.

Closing Obligations

16

8.05.

Offset of Amounts Owed to ExxonMobil and Affiliates

21

8.06.

Conditions Precedent

22

8.07.

Buyer’s Representation by Closing

22

8.08.

Insurance

22

8.09.

Right to Terminate

24

 

ii

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

 

 

Article 9. POST-CLOSING OBLIGATIONS

24

   

9.01.

Filing and Recording

24

9.02.

Copies

24

9.03.

Further Assurances

25

9.04.

Post-Closing Third-Party Consents

25

9.05.

Reassignment

25

9.06.

Buyer’s Compliance

25

9.07.

Property Sales Accounting Agreement

25

9.08.

Plugging and Abandoning Wells: Remediation

25

     

Article 10. TAXES

26

   

10.01.

Ad Valorem Taxes

26

10.02.

Production Taxes

26

10.03.

Other Taxes

26

10.04.

Tax-Deferred Exchange

27

     

Article 11. OIL IN STORAGE, PROCEEDS, COSTS, EXPENSES, CLAIMS, AND DISBURSEMENTS

27

   

11.01.

Oil in Storage

27

11.02.

Proceeds, Costs, and Expenses

28

11.03.

Notice to Remitters of Proceeds

29

11.04.

Reservation of Claims

29

     

Article 12. EXXONMOBIL-OPERATED INTERESTS

29

   

12.01.

Operation by ExxonMobil

29

12.02.

Charges Paid by Buyer

29

12.03.

Risk of Loss

30

12.04.

Selection of Operator

30

12.05.

Removal of Signs

30

     

Article 13. INTERESTS OPERATED BY OTHERS

31

   

13.01.

Charges Paid by Buyer

31

13.02.

Risk of Loss

31

     

Article 14. [****]

31

   

Article 15. INTENTIONALLY LEFT BLANK

31

   

Article 16. RELEASE, DISCHARGE, AND COVENANT NOT TO SUE; OBLIGATIONS TO
INDEMNIFY, DEFEND, AND HOLD HARMLESS; LIMITATION OF DAMAGES

31

   

16.01.

Buyer’s Release and Discharge of ExxonMobil and its Associated Parties

31

16.02.

Buyer’s Covenant Not to Sue ExxonMobil or its Associated Parties

31

16.03.

Obligations to Indemnify, Defend, and Hold Harmless, Limitation of Damages

32

16.04.

Buyer’s Obligations

33

 

iii

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

 

 

16.05.

Buyer’s Duty to Defend

35

16.06.

Buyer’s Waiver of Consumer Rights Under the Texas Deceptive Trade Practices
Consumer Protection Act and Other Consumer Protection Laws

35

16.07.

Retroactive Effect

35

16.08.

Inducement to ExxonMobil

35

     

Article 17. ALTERNATE DISPUTE RESOLUTION AND ARBITRATION

35

   

17.01.

General

35

17.02.

Negotiations

36

17.03.

Arbitration

36

17.04.

Notice

36

     

Article 18. ENVIRONMENTAL MATTERS

37

   

18.01.

Buyer’s Acknowledgment Concerning Possible Contamination of the Interests and
Property

37

18.02.

Adverse Environmental Conditions

37

18.03.

Remediation

38

18.04.

Disposal of Materials, Substances, and Wastes; Compliance with Law

40

     

Article 19. BUYER’S AND EXXONMOBIL’S REPRESENTATIONS

41

   

19.01.

Representations Not Exclusive

41

19.02.

Securities Laws

41

19.03.

Basis of Buyer’s Decision

41

19.04.

Material Factor

42

19.05.

ExxonMobil’s Representations

42

     

Article 20. GAS IMBALANCES

42

   

20.01.

ExxonMobil’s and Buyer’s Respective Obligations

42

20.02.

Settlement

43

     

Article 21. FINAL SETTLEMENT STATEMENT

43

   

Article 22. INTENTIONALLY LEFT BLANK

44

   

Article 23. COMMUNICATIONS

44

   

Article 24. [****]

44

   

Article 25. HART-SCOTT-RODINO ANTITRUST IMPROVEMENTS ACT OF 1976; REQUIRED
FILINGS IN FOREIGN JURISDICTIONS

45

   

25.01.

Obligation to Make Filings

45

25.02.

Cooperation on Making Filings

45

 

iv

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

 

 

Article 26. EXXONMOBIL’S DISCLAIMER OF WARRANTIES AND REPRESENTATIONS

46

   

Article 27. MISCELLANEOUS

46

   

27.01.

No Joint and Several Obligations

46

27.02.

Entire Agreement

46

27.03.

Successors and Assigns; Amendment; Survival

46

27.04.

Choice of Law

47

27.05.

Assignment

47

27.06.

No Admissions

47

27.07.

No Third-Party Beneficiaries

48

27.08.

Public Communications

48

27.09.

Audit Clause

48

27.10.

Headings and Titles

48

27.11.

Exhibits

49

27.12.

Includes

49

27.13.

Severability

49

27.14.

Counterparts

49

27.15.

Conflicts

49

27.16.

Not to Be Construed against the Drafter

49

27.17.

No Waiver

49

27.18.

Conspicuousness

49

27.19.

Execution by the Parties

49

 

 

EXHIBIT A. 

DESCRIPTION OF THE INTERESTS

A-1

EXHIBIT A-1. 

INTERESTS

A-1-1

EXHIBIT B. 

EASEMENTS, PERMITS, ETC

B-1

EXHIBIT C. 

FORM OF ASSIGNMENT AND BILL OF SALE

C-1

EXHIBIT D. 

PROPERTY SALES ACCOUNTING AGREEMENT

D-1

EXHIBIT E. 

GAS-PRODUCTION-IMBALANCE ACCOUNTS

E-1

EXHIBIT F. 

ENVIRONMENTAL ASSESSMENT AND TESTING CONFIDENTIALITY, RELEASE AND
INDEMNIFICATION AGREEMENT

F-1

EXHIBIT G. 

EMPLOYEES AND BENEFITS

G-1

EXHIBIT H. 

PERFORMANCE BOND

H-1

EXHIBIT H-1. 

PERFORMANCE BOND ESCALATION

H-1-1

EXHIBIT I. 

TRANSITION SERVICES AGREEMENT

I-1

EXHIBIT J. 

SPECIAL WARRANTY DEED

1- I

EXHIBIT K. 

RIGHT-OF-WAY

K-1

 

 

NOTE: Certain exhibits have been omitted  from this document pursuant to Item
601(b)(2) of Regulation S-K. The registrant hereby undertakes to furnish
supplementally copies of any of the omitted exhibits upon request by the SEC.

***** Indicates that commercial terms have been omitted.

††††† Indicates that personal information has been omitted. 

 

v

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PURCHASE AND SALE AGREEMENT

 

This Purchase and Sale Agreement (“Agreement”) is between Exxon Mobil
Corporation, a New Jersey corporation with an address of 22777 Springwoods
Village Parkway, Spring, Texas 77389, Mobil Oil Exploration & Producing
Southeast Inc., a Delaware corporation with an address of 22777 Springwoods
Village Parkway, Spring, Texas 77389, XH, LLC, a Delaware limited liability
company with an address of 22777 Springwoods Village Parkway, Spring, Texas
77389, Exxon Mobile Bay Limited Partnership, a Delaware limited partnership with
an address of 22777 Springwoods Village Parkway, Spring, Texas 77389, and
ExxonMobil U.S. Properties Inc., a Delaware corporation with an address of 22777
Springwoods Village Parkway, Spring, Texas 77389, as sellers, and W& T Offshore,
Inc., a Texas corporation with an address of Nine Greenway Plaza, Suite 300,
Houston, Texas 77046 (“Buyer”), as buyer, (each a “Party” and collectively, the
“Parties”) effective on the Execution Date as of the Effective Time. Sellers are
hereinafter sometimes referred to collectively as “ExxonMobil” solely for
convenience and simplicity; such reference is not intended to in any way affect
the corporate separateness of these separate legal entities.

 

Buyer desires to purchase certain Interests (as defined hereafter) from
ExxonMobil, and ExxonMobil desires to sell such Interests to Buyer, subject to
the terms and conditions of this Agreement. It is the Parties’ intent that Buyer
have responsibility and liability for all matters relating to the Interests
assigned, whether related to events occurring before or after closing this
transaction, except to the limited extent provided in this Agreement.

 

In consideration of their mutual promises under this Agreement, the benefits to
be derived by each Party, and other good and valuable consideration, Buyer and
ExxonMobil agree as follows:

 

Article 1.     DEFINITIONS

 

The following terms, when used in this Agreement, will have the following
definitions:

 

1.01.     Ad Valorem Taxes. Defined in Section 10.01.

 

1.02.     Additional Instruments. The instruments executed by Buyer before
Closing and delivered to ExxonMobil in connection with this transaction,
including Buyer’s investigation of and bid for the Interests.

 

1.03.     Affiliate. In relation to a Person, any Person controlled by,
controlling or under common control with, such Person.

 

1.04.     Allocation. The amount allocated by Buyer to each individual part of
the Interests.

 

1.05.     Associated Party or Parties. Successors, assigns, directors, officers,
employees, agents, contractors, subcontractors, insurers, and Affiliates.

 

1.06.     Base Purchase Price. The amount set forth in Section 3.01.

 

1

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

 

 

1.07.     Business Day(s). Any day that the offices of ExxonMobil, in Houston,
Texas, are scheduled to be and are open for business.

 

1.08.    Claim or Claims. Collectively, claims, demands, causes of action, and
lawsuits asserted or filed by any Person; a local, state, or federal
governmental entity; a Person holding rights under any Related Agreement; an
Associated Party of Buyer or ExxonMobil; or a third party.

 

1.09.     Closing. The delivery of the conveyancing instruments and funds by the
Parties to close the purchase and sale of the Interests.

 

1.10.     Closing Date. The date on which Closing is scheduled to and does
occur.

 

1.11.     Closing Settlement Statement. Defined in Section 8.04(c).

 

1.12.     Code. The Internal Revenue Code of 1986, as amended.

 

1.13.     Condition. Defined in Section 18.02.

 

1.14.     Effective Time. 7 a.m. local time where the Interests are located, on
January 1, 2019.

 

1.15.     Environmental Laws. Applicable federal, state, and local laws,
including statutes, regulations, orders and ordinances, previously or currently
enacted or enacted in the future, and common law, relating to protection of
public health, welfare, and the environment, including those laws relating to
storage, handling, and use of chemicals and other hazardous materials; those
relating to the generation, processing, treatment, storage, transport, disposal,
cleanup, remediation, or other management of waste materials or hazardous
substances of any kind; and those relating to the protection of environmentally
sensitive or protected areas. “Environmental Laws” includes the Comprehensive
Environmental Response, Compensation and Liability Act of 1980, the Resource
Conservation and Recovery Act of 1976, the Clean Water Act, the Safe Drinking
Water Act, the Hazardous Materials Transportation Act, the Toxic Substance
Control Act, and the Clean Air Act, as each is amended from time to time.

 

1.16.     Execution Date. The date on which the last of the Parties executes
this Agreement.

 

1.17.     ExxonMobil-operated. The interests and facilities of which ExxonMobil
is Operator.

 

1.18.     Final Settlement Statement. Defined in Article 21.

 

1.19.    Interest or Interests. ExxonMobil’s interest in the oil and gas
leasehold estates or other interests set forth on Exhibits A and B, together
with ExxonMobil’s interest in the following:

 

 

(a)

each Well located on the leases and land described on Exhibits A and B;

 

2

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

 

 

 

(b)

the easements, permits, licenses, surface and subsurface leases, rights-of-way,
servitudes, and other surface and subsurface rights affecting the land and
leases described on Exhibit A, including those set forth on Exhibit B;

 

 

(c)

material, equipment, pipelines, fixtures, personal property, buildings and
facilities in and on the leases, units or Properties and (i) used or held for
use solely in connection with the use or operation of the leasehold estates and
other interests described on Exhibits A and B for oil or gas purposes or (ii) no
longer in use but located on or appurtenant to the foregoing material,
equipment, pipelines, fixtures, personal property, buildings, facilities or
Properties unless expressly excluded from the Interests;

 

 

(d)

surface fees further described on Exhibit A;

 

 

(e)

additional rights-of-way granted by ExxonMobil to Buyer, as further described on
Exhibit K;

 

 

(f)

the facilities and pipelines located pursuant to the rights described in (b) and
(e);

 

 

(g)

contracts to which the Interests are subject, including agreements for sale or
purchase of oil, gas, and other hydrocarbons, processing agreements, division
orders, unit agreements, and operating agreements, including those listed on
Exhibits A and B;

 

 

(h)

2009 Hankos aluminum boat, Hull No. [†††††], two 2018 Yamaha 150 engines, Serial
No. [†††††] and [†††††], and utility boat trailer; and

 

 

(i)

250 Taylor Forklift, Model No. TE-250M, VIN No. [†††††].

 

Any references to ExxonMobil Accounting Codes are for ExxonMobil use only and
are not a part of the description of the Interests.

 

The following are specifically excluded from the Interests:

 

 

(a)

reservations, exceptions and exclusions listed in Exhibits A and B;

 

 

(b)

surface fee properties not listed on Exhibit A;

 

 

(c)

pipelines, fixtures, equipment, and interests in land owned by third parties
such as lessors, purchasers, or transporters of Oil or gas;

 

 

(d)

computer equipment (including process control software), telecommunications
equipment, vehicles, tools, pulling machines, and other equipment and material
temporarily located on the Property or expressly excluded from the sale;

 

 

(e)

any gas processing plant not listed on Exhibit A; and

 

3

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

 

 

 

(f)

ExxonMobil inter-Affiliate service agreements and any interest or interests
owned by any ExxonMobil Affiliate that is not a party to this Agreement.

 

1.20.     Lender. The financial institution from which Buyer will obtain
financing for its purchase of the Interests, which financing Buyer represents to
ExxonMobil is a line of credit.

 

1.21.     Liability or Liabilities. Collectively, all damages (including
consequential and punitive damages), including those for personal injury, death,
or damage to personal or real property (both surface and subsurface) and costs
for remediation, restoration, or cleanup of contamination, whether the injury,
death, or damage occurred or occurs on or off the Property by migration,
disposal, or otherwise, losses, fines, penalties, expenses, costs to remove or
modify facilities on or under the Property, plugging liabilities for all Wells,
attorneys’ fees, court and other costs incurred in defending a Claim, liens, and
judgments, in each instance, whether these damages and other costs are
foreseeable or unforeseeable.

 

1.22.      Material Difference. Defined in Section 20.02.

 

1.23.     Material Related Agreements. Written agreements or commitments (a)
that would, or would reasonably be expected to, cause Buyer to incur an expense
or liability in excess of $[****] or (b) without the assignment or transfer of
which, Buyer would not be able to own or operate the Interests as a reasonably
prudent operator.

 

1.24.      NORM. Naturally occurring radioactive material.

 

1.25.      Occurrence. Defined in Section 18.03(g).

 

1.26.      Oil. Crude oil, distillate, drip gasoline, condensate, and other
liquid hydrocarbons, including Raw Make.

 

1.27.      Operator. The Person recognized as operator of an Interest by the
applicable regulatory agency.

 

1.28.      PCB. Polychlorinated Biphenyls.

 

1.29.      Performance Deposit. Defined in Section 3.02.

 

1.30.     Person. Any individual, firm, corporation, partnership, limited
liability company, joint venture, association, trust, unincorporated
organization, government or agency or subdivision thereof, or any other entity.

 

1.31.      Property or Properties. The real property in which and on which the
Interests exist or are located, whether in whole or in part.

 

1.32.      Property Sales Accounting Agreement. An agreement substantially in
the form of Exhibit D.

 

1.33.      Raw Make. [****].

 

4

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

 

 

1.34.     RCRA. The Resource Conservation and Recovery Act of 1976.

 

1.35.     Related Agreements. Defined in Section 7.02.

 

1.36.     Strict Liability. Includes strict statutory liability and strict
products liability.

 

1.37.     TSCA. The Toxic Substances Contract Act of 1976.

 

1.38.     Title Defect. Defined in Section 6.01.

 

1.39.     Transition Services Agreement. An agreement substantially in the form
of Exhibit I.

 

1.40.     Well or Wells. All wellbores, both abandoned and unabandoned,
including oil wells, gas wells, injection wells, disposal wells, and water
wells, including, without limitation, wells drilled from the leases conveyed
pursuant to this Agreement that cross or bottomhole on leases not conveyed under
this Agreement.

 

Article 2.     PURCHASE AND SALE

 

Pursuant to Buyer’s offer, ExxonMobil agrees to sell the Interests to Buyer, and
Buyer agrees to buy them from ExxonMobil, for the consideration recited in and
subject to the terms of this Agreement.

 

Article 3.     PURCHASE PRICE

 

3.01.     Base Purchase Price. The Base Purchase Price is two hundred million
United States dollars ($200,000,000.00), subject to adjustment only as provided
in this Agreement.

 

3.02.     Performance Deposit and Payment.

 

 

(a)

As evidence of good faith, simultaneous with the execution of this Agreement,
Buyer has deposited with ExxonMobil a performance deposit of ten million United
States dollars ($10,000,000.00) (the “Performance Deposit”). The Performance
Deposit will be credited to the Base Purchase Price at Closing, will not bear
interest, and is not refundable except as provided in this Agreement. If Closing
does not occur as to any Interest, and this Agreement provides that the
Performance Deposit allocable on a pro rata basis to that Interest is to be
refunded for any reason, ExxonMobil will deduct any amounts due to it under this
Agreement and remit the remainder of the Performance Deposit to Buyer, without
interest. [****]

 

5

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

 

 

 

(b)

If, prior to the Closing Date, Buyer (i) notifies ExxonMobil, in writing, that
the condition precedent relating to Lender’s obligation to provide loans to
Buyer for this transaction has not been satisfied or waived due to a “Material
Adverse Change” in Buyer’s consolidated financial condition or business; and
(ii) Buyer has used reasonable commercial efforts to obtain a waiver of such
condition from Lender; and (iii) Buyer provides ExxonMobil with a copy of
Buyer’s request for such waiver and Lender’s written response denying such
waiver, then this Agreement shall terminate and ExxonMobil shall retain the
Performance Deposit as liquidated damages, and notwithstanding anything else to
the contrary in this Agreement, ExxonMobil shall have no other rights and
remedies against Buyer for failure to perform under this Agreement.

 

3.03.     Allocation of Base Purchase Price. Buyer has delivered to ExxonMobil,
either prior to or simultaneous with the execution of this Agreement, an
Allocation of the Base Purchase Price to each individual part of the Interests
listed on the form (including an Allocation for non-investment account balances
such as gas-production-imbalance accounts and, as required for compliance with
applicable law, for equipment or other items). Buyer represents that it has made
reasonable Allocations, in good faith. ExxonMobil may rely on the Allocations
for all purposes. The Allocations will be used – to notify holders of
preferential rights of Buyer’s offer, – to collect taxes, to the extent required
by law and as provided in Article 10, – as a basis for adjustments to the Base
Purchase Price, and – as otherwise provided in this Agreement. ExxonMobil,
solely at its discretion, may rely on the Allocations and reserves the right to
review the basis of the allocation and/or use a different allocation for all tax
purposes other than those provided in Article 10.

 

Article 4.     INTENTIONALLY LEFT BLANK

 

Article 5.     BUYER’S REVIEW

 

5.01.     Buyer’s Review before Sinning this Agreement. ExxonMobil gathered data
relating to the Interests and the Property for Buyer’s review before Buyer
submitted a bid and signed this Agreement. Buyer must notify ExxonMobil in
writing if it wishes to review files, contracts or data in addition to those
provided, but ExxonMobil’s obligation to provide additional files, contracts or
data is limited to files and data that are reasonably available to it through
the use of reasonable efforts. ExxonMobil has no obligation to provide access
to, and Buyer waives all claims to inspect, ExxonMobil’s interpretive,
predictive, confidential, private, proprietary, or privileged information
(including personnel records), or information whose dissemination is restricted
by agreements between ExxonMobil and third parties. ExxonMobil has no obligation
to provide any information to Buyer that is available to the general public,
whether in the public records or from a governmental entity or agency on
request.

 

By entering into this Agreement, Buyer acknowledges and represents that, subject
to its rights to conduct an Environmental Assessment under Section 5.03, it has
reviewed the Interests and Property to its satisfaction to enable it to make its
bid and execute this Agreement and that it may request adjustments to the
Allocations and the Base Purchase Price after the Execution Date only for Title
Defects, Conditions, and Material Differences, as provided in this Agreement.
Buyer has undertaken all appropriate inquiry, to its satisfaction, and has made
an informed decision to acquire the Interests on the basis of its own
investigations and without reliance on statements or investigations by any other
Person, including ExxonMobil and its Associated Parties.

 

6

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

 

 

5.02.     Access to ExxonMobil-Operated Interests. Subject to its rights to
conduct an Environmental Assessment under this Section 5.03, Buyer had the
opportunity to inspect and inventory the ExxonMobil-operated Interests and
Property before signing this Agreement. On Buyer’s request, ExxonMobil will
provide access to the ExxonMobil-operated Interests and Property and associated
facilities, at any reasonable time before Closing.

 

All visits to the premises and facilities by Buyer and on Buyer’s behalf will be
scheduled by mutual consent of the Parties, subject to Buyer’s providing
ExxonMobil at least [****] written notice of the locations that it wishes to
visit and the proposed times. ExxonMobil may accompany Buyer and its Associated
Parties during their site visits. Entry onto the ExxonMobil-operated Interests,
Property, and facilities will be subject to third-party restrictions, if any,
and to ExxonMobil’s safety, industrial hygiene, and drug and alcohol
requirements and at Buyer’s sole risk and expense.

 

Within two (2) years of Closing, ExxonMobil shall cooperate and grant to a
mutually agreeable accounting firm access to ExxonMobil’s financial and
accounting information directly relating to the Interests as needed for the
preparation of certain financial statements that may be required of Buyer
pursuant to the rules and regulations of the Securities and Exchange Commission
(“SEC”) including SEC Regulation S-X and Rule 3-05. Such access shall be limited
to information for the calendar years 2016, 2017 and 2018 that exists in
ExxonMobil’s offices, as may reasonably be required to prepare audited financial
statements reflecting gross revenues and direct lease operating expenses related
to the Interests. Buyer shall provide at least [****] prior notice to ExxonMobil
before the accounting firm shall commence such review. It is understood that
such review will only be required to be carried out one time. Furthermore,
unless otherwise agreed by ExxonMobil, the accounting firm shall not disclose
information to Buyer that is proprietary to ExxonMobil or its Associated
Parties, including gas and liquids sales prices.

 

5.03.     Environmental Assessment. Buyer and its Associated Parties may inspect
the premises and conduct an environmental assessment (including a Phase I
environmental assessment) of the Interests and Property, including
investigations to identify wetlands and sensitive and protected habitats, but
Buyer must execute the form of environmental testing and confidentiality
agreement attached as Exhibit F before performing an assessment. If Buyer
undertakes an environmental assessment, both the consultant (if consultants are
employed) and the scope of the proposed assessment, including testing protocols,
must be approved in writing by ExxonMobil before the work may begin. If Buyer
and ExxonMobil cannot agree on Buyer’s proposed environmental assessment plan,
then ExxonMobil may, at its sole option, withdraw from this Agreement any of the
Interests that Buyer proposes to assess or all the Interests, and the Base
Purchase Price will be adjusted by the Allocation for each withdrawn Interest.
If ExxonMobil withdraws all the Interests, this Agreement will terminate, and
ExxonMobil will refund the Performance Deposit to Buyer. If ExxonMobil withdraws
less than all the Interests, then Buyer may terminate this Agreement by
providing written notice to ExxonMobil within five (5) Business Days after
receipt of ExxonMobil’s notice of the Interests so withdrawn and ExxonMobil will
refund the Performance Deposit to Buyer.

 

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If Buyer takes samples from the Property, ExxonMobil may require splitting of
each sample. Buyer will deliver copies of all draft and final reports, results,
data, and analyses of the site visits, inspections, and assessments to
ExxonMobil within five days of Buyer’s receipt of them, at Buyer’s cost.
ExxonMobil will have no confidentiality obligation with regard to this
information and may disclose it to third parties or use it for any purpose.

 

5.04.     Access to Interests Operated by Others. On request, ExxonMobil will
assist Buyer by making initial contact with the Operators of the Interests that
are operated by others, but Buyer will be responsible for contacting each
Operator to arrange for review of the Interests. ExxonMobil will provide Buyer
with access to ExxonMobil file information relating to the Interests operated by
others, to the extent described in Section 5.01.

 

5.05.     Material, Facilities, Platforms, and Equipment. By signing this
Agreement, Buyer acknowledges that it has had the opportunity to inspect and
inventory the material, facilities, platforms, and equipment and, subject to
Buyer’s rights to an Environmental Assessment under Section 5.03, is satisfied
with them. There will be no adjustment on the basis of material, facilities,
platforms, and equipment, whether for ExxonMobil-operated Interests or Interests
operated by others. Material, facilities, platforms, and equipment observed
during Buyer’s inspection may be used or replaced before Closing as a result of
normal and customary operations.

 

5.06.     No Warranty of Accuracy; Disclaimer. ExxonMobil makes no warranty, and
expressly disclaims all warranties, as to the accuracy or completeness of the
files and other information that it may provide to buyer or that may be provided
by others. If Buyer determines during its review that any ExxonMobil files or
data may be incomplete or inaccurate, it will either notify ExxonMobil of its
conclusions in writing not later than ten (10) days before the Closing Date or
be deemed to have waived complaints as to the incompleteness or inaccuracy of
the files or data.

 

5.07.     Buyer’s Confidentiality Obligations. Buyer will keep confidential all
information concerning the Interests, except to the extent that information
– was public knowledge when Buyer received the information; – becomes public
knowledge without breach of this Agreement by Buyer; – was known to Buyer before
receipt or discovery of the information in connection with its review of the
Interests, from a source that was authorized to disclose the information to
third parties; or – is required by applicable law or court order to be
disclosed. If information is required to be disclosed by law or court order,
Buyer will make every reasonable effort to give ExxonMobil notice of the
requirement as far in advance of the disclosure as possible. Buyer may not use
the information for any purpose other than evaluation of the Interests and may
not divulge the information to any Person except those who need to know it in
order to evaluate the Interests for Buyer under this Agreement. Buyer will
enforce this confidentiality obligation as to all Persons with whom it shares
the information and is liable to ExxonMobil for a breach of this obligation by
any Person to whom Buyer has disclosed the information. If this transaction does
not close, Buyer will return to ExxonMobil all information concerning the
Interests that it obtained from ExxonMobil, destroy all of its work papers and
analyses that incorporate the information, and be subject to these
confidentiality obligations for five (5) years after the Execution Date. Buyer’s
confidentiality obligation will not, however, survive Closing.

 

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Article 6.     TITLE AND TITLE DEFECTS

 

6.01.     Title Defect. “Title Defect” means any one of the following:

 

 

(a)

ExxonMobil’s title at the Effective Time as to all or any part of the Interests
is subject to an outstanding mortgage, deed of trust, lien, or other monetary
encumbrance or adverse claim not listed or referenced on Exhibit A or B that, in
the case of that claim, would induce a purchaser to suspend payment of proceeds
for the Interest or require the furnishing of security or indemnity;

 

 

(b)

ExxonMobil’s net revenue interest for an Interest at the Effective Time is less
than that shown on Exhibit A-1, or ExxonMobil’s working interest for an Interest
at the Effective Time is greater than shown on Exhibit A-1 without a
corresponding increase in the net revenue interest for such Interest;

 

 

(c)

ExxonMobil’s interest would be reduced if a third party were to exercise a
reversionary, back-in, or other similar right pursuant to an agreement not
listed or referenced on Exhibit A or B;

 

 

(d)

ExxonMobil is in default under some material provision of a lease, farmout
agreement, or other agreement, resulting in loss of all or any part of the
Interests; or

 

 

(e)

There exists any impairment, encumbrance, lien, encroachment, irregularity,
defect or dispute concerning ExxonMobil’s title to the Interests that would
reduce, impair or prevent Buyer from receiving payment from the purchasers of
production from the Interests or that would restrict or extinguish Buyer’s right
to use the Interests or Properties as owner, lessee, licensee or permittee, as
applicable.

 

“Title Defect” does not include (a) a lien or encumbrance in the form of a
judgment secured by a supersedeas bond or other security approved by the court
issuing the order; or (b) the loss of lease acreage between the Effective Time
and the Closing Date, because the lease term expires, unless it is a direct
result of ExxonMobil’s failure to comply with the terms of said lease.

 

Buyer must notify ExxonMobil in writing promptly if Buyer determines that
ExxonMobil’s net revenue interest or working interest for an Interest is greater
than shown on Exhibit A-1.

 

6.02.     Adjustments to Base Purchase Price based on Allocations.

 

 

(a)

Buyer may request an adjustment to the Base Purchase Price based on an
Allocation at any time on or before the [****] day before the Closing Date, if
the adjustment is based on a Title Defect. ExxonMobil may request an adjustment
to the Base Purchase Price based on an Allocation at any time before the [****]
day before the Closing Date, if ExxonMobil’s net revenue interest for the
Interest is greater than that shown on Exhibit A-1. A notice requesting an
adjustment must be timely and in writing and include appropriate documentation
to substantiate the adjustment, or the claimant will be deemed to have waived
its claim to adjust the Base Purchase Price based on an Allocation for the
matter stated in the notice.

 

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(b)

If either Party gives notice under the previous Section, the Parties will meet
and use their best efforts to agree on the validity of the claim and, if
applicable, the amount of the adjustment, using the following criteria:

 

 

(1)

If the claim is based on ExxonMobil’s owning a different net revenue interest
than that shown on Exhibit A-1, then the adjustment will be the absolute value
of the number determined by the following formula:

 

 Adjustment = A x (14B/CD

 

A     =     Allocation for the affected Interest

 

B     =     correct net revenue interest for the affected Interest

 

C     =     net revenue interest for the affected Interest as shown on
Exhibit A-1.

 

 

(2)

If the claim is based on an obligation or burden that is liquidated in amount,
then the adjustment will be the sum necessary to remove the obligation or burden
from the affected Interest.

 

 

(3)

If the claim is based on an obligation or burden that is not liquidated, but can
be estimated with reasonable certainty, the adjustment will be the sum necessary
to compensate Buyer on the Closing Date for the adverse economic effect on the
affected Interest.

 

 

(c)

If the amount of the adjustment for each Title Defect cannot be determined based
on the above criteria, and if the Parties cannot otherwise agree on the amount
of an adjustment by the Closing Date, ExxonMobil may, upon written notice to
Buyer, either:

 

 

(1)

terminate this Agreement and refund the Performance Deposit; or

 

 

(2)

remove the affected Interest from this Agreement and adjust the Base Purchase
Price by the Allocation for that Interest; provided, however, that in such event
Buyer shall be entitled to terminate this Agreement by providing prompt written
notice to ExxonMobil. If Buyer elects to so terminate, ExxonMobil shall refund
the Performance Deposit to Buyer; or

 

 

(3)

elect to cure the Title Defect pursuant to Section 6.02(e); or

 

 

(4)

elect to resolve the dispute pursuant to the provisions of Article 17.

 

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(d)

The Base Purchase Price will be adjusted only if the sum (i.e. offsetting of
increases and decreases) of all adjustments under this Section 6.02 is greater
than [****] percent ([****]%) of the Base Purchase Price. If the sum of all such
adjustments would result in the Base Purchase Price being reduced by more than
[****] percent ([****]%), then ExxonMobil may, upon written notice to Buyer,
either:

 

 

(1)

terminate this Agreement and refund the Performance Deposit; or

 

 

(2)

remove the affected Interest from the Agreement and adjust the Base Purchase
Price by the Allocation for that Interest; provided, however, in such event
Buyer shall be entitled to terminate this Agreement by providing prompt written
notice to ExxonMobil. If Buyer elects to so terminate, ExxonMobil shall refund
the Performance Deposit to Buyer.

 

 

(e)

ExxonMobil may, at its sole option, notify Buyer before the Closing Date that it
elects to cure some or all of the Title Defects, subject to the limitations
contained in Section 6.02(d). No adjustment will be made at Closing for the
Title Defects that ExxonMobil elects to cure and actually cures by the Closing
Date. If any Title Defect is not cured within [****] ([****]) days after
Closing, an adjustment to the Base Purchase Price will be calculated and made
under the criteria set forth in this Section 6.02 and subject to the limitations
set forth in Section 6.02(d).

 

6.03.     Description and Other Errors.

 

 

(a)

If either Party determines, either before or within [****] after Closing that:

 

 

(1)

certain Interests were erroneously included in or excluded from the Agreement or
the conveyancing instruments, including those owned by an ExxonMobil Affiliate;
or

 

 

(2)

certain gas-production imbalance accounts were erroneously included in or
erroneously excluded from this Agreement,

 

then ExxonMobil and Buyer will meet and use their best efforts to resolve the
error. If necessary, the Parties will execute and record (if after Closing)
appropriate correction instruments to correct the error.

 

 

(b)

If ExxonMobil and Buyer cannot resolve an error discovered before the Closing
Date, then ExxonMobil may, upon written notice to Buyer, either:

 

 

(1)

terminate this Agreement and refund the Performance Deposit; or

 

 

(2)

remove the affected Interest from this Agreement, if applicable, and adjust the
Base Purchase Price by the Allocation for such Interest; provided, however, in
such event Buyer shall be entitled to terminate this Agreement by providing
prompt written notice to ExxonMobil. If Buyer elects to so terminate, ExxonMobil
shall refund the Performance Deposit to Buyer; or

 

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(3)

elect to resolve the dispute pursuant to the provisions of Article 17.

 

 

(c)

If ExxonMobil and Buyer cannot resolve such an error with respect to an Interest
assigned to Buyer and discovered within [****] after the Closing Date, then the
matter shall be resolved pursuant to the provisions of Article 17.

 

Notwithstanding the foregoing, the Parties will cooperate at all times after
Closing to execute and record correction instruments to correct scrivener’s
errors in the preparation of Closing documents.

 

6.04.     Restrictions on Use. Where any of the Interests include a fee simple
interest in real property that has been used for oil, gas, or other mineral
operations, the following uses of the affected land, or any portion thereof, are
expressly prohibited and forbidden:

 

 

(a)

any “residential” construction, development, use or purpose, which shall,
without limitation, be interpreted to mean and include a prohibition against use
for single or multi-family residences, residences for children, the elderly or
the infirm, churches and places of worship, schools, nurseries and other
pre-school facilities, nursing or convalescent homes, hospitals, health clinics,
or other medical facilities, day care facilities, playgrounds, recreational
parks, hotels, motels, bed and breakfasts, parks and in addition to the above,
and other “Residential land use” restrictions or limitations set forth or
described in any and all building, zoning and land use ordinances, laws,
regulations and restrictions by municipal or other governmental authorities
applicable to the Property;

 

 

(b)

any purpose that would constitute a “Permitted Use” under any of the residential
zones, districts, or classifications set forth in any applicable municipal,
county or state zoning laws in effect at the Effective Time,

 

 

(c)

any agricultural use;

 

 

(d)

construction or installation of any basements, parking structures or other
sub-surface areas; or

 

 

(e)

any water wells for irrigation or drinking purposes.

 

6.05.      Engineering Controls. Buyer agrees to adopt and use all engineering
and related technical assistance available and standard to the industry and any
required by Environmental Laws to protect the health and safety of persons and
that Buyer will use and implement engineering controls to prevent the migration
of vapors and/or liquids containing contamination into any buildings,
underground utilities / spaces and / or storm water retention / detention ponds,
including without limitation, vapor installation systems, vapor barriers, sealed
sumps and storm pond liners as determined to be necessary by a professional
engineer license in the state with experience in the field. Buyer shall take
measure(s) to isolate building occupants from identified contamination as may be
required by Environmental Laws to protect the health of occupants / public.

 

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6.06.     Covenants Running with the Land. The covenants contained in provisions
6.04 and 6.05 of this Agreement shall be covenants running with the land, shall
be recorded in the real property records, and shall be binding on Buyer and its
successors and assigns.

 

6.07.     Retention of Title for Gas. During the period from the Effective Time
of this Agreement until the Closing Date, ExxonMobil (or a designated Affiliate)
shall be deemed to have title to all gas subject to this Agreement for the
purposes of contracting for and scheduling transportation of such gas, subject
to reconciliation of the net proceeds between ExxonMobil and Buyer in accordance
with Article 21 of this Agreement. Further, as of the Closing Date, Buyer shall
have title to all gas subject to this Agreement for purposes of contracting for
and arranging transportation of such gas; provided, however, that until
ExxonMobil has transferred to Buyer all commercial gas marketing activities
related to all gas subject to this Agreement, Buyer agrees that ExxonMobil (or a
designated affiliate) shall act as Buyer’s agent for purposes of marketing all
natural gas subject to this Agreement, including but not limited to the
arrangements for transportation of such gas on any interstate or intrastate
pipeline. ExxonMobil agrees to provide notification to Buyer when all such
marketing activities have been transferred, which transfer shall occur no later
than [****] days from the Closing Date, or such date as specified in the
Transition Services Agreement.

 

Article 7.     PRE-CLOSING OBLIGATIONS

 

7.01.     Preferential Rights.

 

 

(a)

Notice. ExxonMobil will notify the preferential rights holders, if any, of
applicable preferential rights to purchase the Interests.

 

 

(b)

Adjustment to Base Purchase Price. If a third party gives notice of its intent
to exercise a preferential right to purchase any of the Interests, the Base
Purchase Price will be adjusted by the Allocation for the preferential right
property. If Buyer has allocated a positive dollar amount to the preferential
right property, the Base Purchase Price will be reduced by the dollar amount of
the positive Allocation. If Buyer has allocated a negative dollar amount to the
preferential right property, the Base Purchase Price will be increased by the
absolute value of the negative Allocation.

 

 

(c)

Third Party Failure to Purchase. If a third party gives notice of its intent to
exercise a preferential right to purchase any of the Interests, but does not
close the purchase for any reason either before or within a reasonable time
after Closing (which time shall be no sooner than the time allowed such third
party under the terms of the preferential right), Buyer will be obligated to
acquire the preferential right property under the terms of this Agreement, for
the positive dollar Allocation (or if the Allocation is a negative amount,
ExxonMobil will refund the absolute value of the negative amount to Buyer,
without interest). Closing on the preferential right property will be scheduled
to occur within [****] days after Buyer receives ExxonMobil’s notice that the
third party has not closed. The effective time for the preferential right
property will be the Effective Time under this Agreement and appropriate
adjustments will be made for pre and post effective date revenues and expenses.

 

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7.02.     Related Agreements. Except as otherwise provided in this Agreement,
the sale of the Interests will be subject to all oil, gas, and mineral leases,
assignments, subleases, farmout agreements, unit agreements, joint operating
agreements, pooling agreements, letter agreements, easements, rights-of-way,
gathering and transportation agreements, sales agreements, and other agreements
concerning or pertaining to the Interests (“Related Agreements”), to the extent
that they are binding on ExxonMobil or its successors or assigns. Buyer will
assume all of ExxonMobil’s obligations and liabilities under the Related
Agreements as of the Effective Time, insofar as the obligations or liabilities
concern or pertain to the Interests, and the Parties will execute all documents
necessary for Buyer to assume the Related Agreements. Buyer’s obligation applies
to all Related Agreements whether recorded or not.

 

7.03.     Third Party Notifications and Approvals. The sale of the Interests may
require the approval or consent of lessors, joint interest owners, farmors,
sublessors, assignors, grantors, parties to agreements, governmental bodies
having jurisdiction (in addition to applicable antitrust, trade and competition
law clearances, if any, required under Article 25), or other third parties.

 

 

(a)

ExxonMobil shall prepare and send notices to the holders of third party
approvals or consents required for the transfer or assignment to Buyer of those
Related Agreements identified on Schedule 7.03 to Exhibit A and will furnish
Buyer with proof of each consent or approval so obtained on or before the
Closing Date. Buyer shall cooperate and use reasonable efforts to assist
ExxonMobil (at no cost to ExxonMobil) in obtaining all such approvals and
consents. [****]. ExxonMobil shall not be liable to Buyer by reason of any third
party’s refusal to provide a consent or approval under this Section 7.03(a).
ExxonMobil will make reasonable efforts to obtain waivers of
maintenance-of-uniform interest provisions, if any, from joint interest owners.

 

 

(b)

Except as expressly provided in Section 7.03(a), Buyer shall be responsible for
obtaining, at its cost and expense, and shall use its reasonable efforts to
obtain, all other required consents and approvals for transfer or assignment of
an Interest, including but not limited to all required local, state and federal
governmental consents and approvals. Provided, however, that ExxonMobil, at is
sole discretion, may elect to obtain certain government approvals described in
this Section 7.03(b). Other than those governmental consents or approvals that
are typically obtained post-Closing (for example, Bureau of Ocean Energy
Management assignment approval) or that ExxonMobil agrees may be obtained
post-Closing for this transaction, Buyer shall furnish ExxonMobil with proof of
each required consent or approval on or before the Closing Date.

 

 

(c)

If the Parties are unable to obtain all material third party approvals or
consents applicable to the assignment of any Interest (other than those
governmental consents or approvals typically obtained post-Closing or to
transfer the Related Agreements identified on Schedule 7.03 to Exhibit A) in
accordance with and as required under Sections 7.03(a) and 7.03(b), then
ExxonMobil may, by written notice to Buyer, elect to either:

 

14

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(1)

delay Closing as to any or all of the Interests, with no charge to either Party
for the delay; or

 

 

(2)

with Buyer’s written consent (except that Buyer’s consent shall not be required
for governmental approvals typically obtained post-Closing), close without all
third party approvals or consents (except those required under Article 25);
provided, however, that if Buyer does not so consent, then each Party shall be
entitled to terminate this Agreement, with refund of the Performance Deposit, by
providing written notice of termination to the other; or

 

 

(3)

terminate this Agreement and refund the Performance Deposit; or

 

 

(4)

with Buyer’s written consent, remove the affected Interest from this Agreement
and adjust the Base Purchase Price by the Allocation for that Interest. If Buyer
does not so consent, then each Party shall be entitled to terminate this
Agreement, with refund of the Performance Deposit, by providing written notice
of termination to the other.

 

 

(d)

Except for any antitrust, trade or competition law clearances required under
Article 25, which are conditions precedent to Closing as provided in
Article 8.06(b), ExxonMobil and Buyer may mutually agree to close without all
third party approvals. If the Parties elect to close without such third party
approvals, ExxonMobil may require Buyer to reassign the affected Interest to
ExxonMobil if the third party refuses to approve the assignment after Closing.
The reassignment will be in the manner described in Section 9.05.

 

7.04.     Change of Operator. Unless otherwise provided by applicable law,
regulation, or Related Agreement, Buyer, at its sole cost, must apply for and
obtain any and all regulatory approvals and permits and satisfy requirements of
financial security to operate the Interests either that it will operate or for
which it intends to stand for election as Operator, and deliver copies or other
evidence of compliance to ExxonMobil before Closing.

 

7.05.     Employees. If Buyer elects to offer employment to the employees of
ExxonMobil (or its Affiliates) located on the Interests, the provisions of
Exhibit G shall apply.

 

Article 8.     CLOSING

 

8.01.     Closing Date. The Closing Date will be on or before August 30, 2019,
unless delayed as provided in this Agreement, at ExxonMobil’s offices at 22777
Springwoods Village Parkway, Spring, Texas, or at another place that ExxonMobil
designates. If the Parties agree, Closing may be handled by exchange of
documents (by mail or by courier). No price adjustment will be made if Closing
is delayed except in accordance with Section 8.04(c) and Article 21.

 

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8.02.     Buyer’s Right to Delay Closing. Buyer may, at its sole option and for
any reason, delay Closing for up to thirty (30) days after the
originally-scheduled Closing Date, upon written notice to ExxonMobil. If Buyer
elects to delay Closing, ExxonMobil may require Buyer to pay, an additional
performance deposit equal to [****] percent ([****]%) of the Base Purchase Price
within [****] ([****]) days. The additional performance deposit will be treated
as part of the Performance Deposit for all purposes under this Agreement.

 

8.03.     ExxonMobil’s Right to Delay Closing. In addition to its rights under
Article 7.03, ExxonMobil may, at its sole option and for any reason, delay
Closing for up to thirty (30) days after the originally-scheduled Closing Date,
upon written notice to Buyer.

 

8.04.     Closing Obligations.

 

 

(a)

Certificates of Authority. Buyer may require ExxonMobil to deliver, at least
five (5) days before the Closing Date, a copy of a power of attorney for each
individual executing the closing documents as evidence that the individual has
authority to act on behalf of ExxonMobil. ExxonMobil may require Buyer to
deliver, at least five (5) days before the Closing Date, certificates in form
and substance satisfactory to ExxonMobil, effective as of the Closing Date and
executed by Buyer’s duly authorized officer, partner, or owner, as appropriate,
to the effect that:

 

 

(1)

Buyer has all requisite corporate, partnership, or other power and authority to
purchase the Interests on the terms of this Agreement and to perform its other
obligations under this Agreement and has fulfilled all corporate, partnership,
or other prerequisites to closing this transaction; and

 

 

(2)

each individual executing the closing documents has the authority to act on
behalf of Buyer.

 

 

(b)

Change of Operatorship. For ExxonMobil-operated Interests, and except to the
extent typically obtained post-Closing or waived by ExxonMobil, Buyer will
deliver to ExxonMobil on or before the Closing Date evidence of the following:

 

 

(1)

that Buyer has complied with the requirements of all laws and regulations
relating to the transfer of operatorship, including those regarding the
assumption of responsibility for the plugging and abandoning of each Well that
is included in the applicable Interests or located on the Property, including
any financial security requirements; and

 

 

(2)

that Buyer has, to the extent possible under applicable regulations, obtained
all necessary permits or transfers of permits to operate the applicable
Interests and Property.

 

 

(c)

Closing Settlement Statement. Within [****] ([****]) days prior to the Closing
Date, ExxonMobil will provide a Closing Settlement Statement (the “Closing
Settlement Statement”) including items such as Base Purchase Price, adjustments
to the Base Purchase Price (if any), Performance Deposit, revenue received,
costs and expenses as provided in this Agreement, Ad Valorem Taxes, severance
taxes, federal excise and energy taxes, gas imbalance adjustments, and copying
and recording fees, to the extent this information is available at Closing.
ExxonMobil will use reasonable estimates in the Closing Settlement Statement to
the extent that estimates are necessary and may correct the estimates in the
Final Settlement Statement.

 

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The Purchase Price will be increased, without duplication, by the following
expenses and revenues:

 

 

(i)

ExxonMobil’s share of all actual production and operating costs and expenses,
overhead charges under applicable operating agreements, and capital expenditures
paid or incurred by ExxonMobil in connection with ownership or operation of the
Interests and Properties (including royalties, minimum royalties, rentals, and
prepaid charges), to the extent they are attributable to the Interests or
Properties for the period on and after the Effective Date;

 

 

(ii)

ExxonMobil’s share of any proceeds from the sale of hydrocarbons produced from
or attributable to the Interests and Properties and other income from the
Interests and Properties received by Buyer, and the value of any stock tank oil
and any pipeline inventory, to the extent they are attributable to the ownership
or operation of the Interests or Properties before the Effective Date; and

 

 

(iii)

Any other increases in the Purchase Price specified in this Agreement or
otherwise agreed in writing between ExxonMobil and Buyer prior to or at Closing.

 

The Purchase Price will be decreased, without duplication, by the following
expenses and revenues:

 

 

(i)

ExxonMobil’s share (Buyer’s share after Closing) of any proceeds from the sale
of hydrocarbons produced from or attributable to the Interests and Properties,
and other income attributable to the Interests and Properties and received by
ExxonMobil, and the proceeds from any sale by ExxonMobil of any stock tank oil
and any pipeline inventory, to the extent they are attributable to the ownership
and operation of the Interests or Properties on or after the Effective Date;

 

 

(ii)

Any other decreases in the Purchase Price specified in this Agreement or
otherwise agreed in writing between ExxonMobil and Buyer; and

 

 

(iii)

Any amounts received or to be received by ExxonMobil for the sale, salvage or
other disposition after the Effective Date of any equipment without Buyer having
received full payment therefor, unless otherwise adjusted under another
provision of this Agreement.

 

17

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(d)

Closing Documents. The Parties, as indicated, will execute the following
instruments to close this transaction:

 

 

(1)

An instrument in the form of the Assignment and Bill of Sale attached as
Exhibit C, modified to the extent necessary to conform to the terms of this
Agreement. The Assignment and Bill of Sale will be effective as of the Effective
Time, be without warranty of any kind (e.g., title, fitness, condition) other
than the special warranty expressly described in Article 5 of Exhibit C, and
restate the indemnities, releases, and waivers contained in this Agreement.
Exhibit A-1 to this Agreement states ExxonMobil’s working and net revenue
interests, to the best of ExxonMobil’s knowledge and belief The Assignment and
Bill of Sale will not, however, state or warrant the working or net revenue
interests assigned to Buyer.

 

If ExxonMobil will own an interest after Closing in any Interest or Property
(including overriding royalties, deep rights, and facilities, equipment, or
pipelines) or continue to own interests for which ExxonMobil requires access
across the Interests or Property in order to exercise its rights, then, in the
Assignment and Bill of Sale, ExxonMobil will reserve concurrent interests in the
applicable easements, rights-of-way, contracts, and other rights relating to the
retained or reserved interests. In the event ExxonMobil retains an overriding
royalty interest or other interest in production in the Interests, the
Assignment and Bill of Sale shall also grant ExxonMobil the right to audit
Buyer’s records relating to such retained interest.

 

ExxonMobil may require the Parties to execute separate instruments for each
state or county in which the Interests are located to facilitate timely
recording.

 

 

(2)

Letter-in-lieu-of-transfer order (or other instrument) to give notice of this
transaction to remitters of proceeds.

 

 

(3)

The Property Sales Accounting Agreement, substantially in the form of Exhibit D
attached hereto.

 

 

(4)

Special Warranty Deed(s), substantially in the form of Exhibit J attached
hereto.

 

 

(5)

Right(s)-of-Way, substantially in the form of Exhibit K attached hereto.

 

 

(6)

Other documents reasonably required to close this transaction and implement the
terms of this Agreement, including deeds, bills of sale, and the like and
instruments necessary under operating agreements, plans of unitization, laws,
and regulations affecting the Interests to transfer the Interests and related
obligations from ExxonMobil to Buyer.

 

18

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(7)

Change-of-operator forms for each Well that Buyer intends to operate after
Closing. If the Operator of a Well must be elected or designated after Closing,
the applicable instruments will be executed after the election or designation,
as applicable.

 

 

(8)

The Closing Settlement Statement.

 

 

(9)

A mutually acceptable Transition Services Agreement, substantially in the form
of Exhibit I attached hereto.

 

 

(10)

Subject to Section 7.03(b), any documents and permits necessary or required by
the applicable regulatory agency or governmental body to convey the Interests
and transfer operations to Buyer.

 

 

(e)

Third-Party Consents. At Closing, Buyer or ExxonMobil, as applicable, will
deliver proof of third-party consents and approvals as required in
Section 7.03(a) and Section 7.03(b), unless the Parties agree to close without
all required third-party consents and approvals, as provided in Section 7.03(c).

 

 

(f)

Financial Security. Contemporaneously with the execution of this Agreement,
Buyer has delivered to ExxonMobil a Performance Bond in the amount of $[****]
(the “Penal Sum”) in favor of ExxonMobil (“the Performance Bond”) as evidence of
Buyer’s financial security to guarantee Buyer’s obligations as provided in
Section 9.08, which Performance Bond will become effective if, as and when
Closing occurs.

 

 

(1)

Upon occurrence of any of the following and after prior notice to Buyer of at
least ten (10) Business Days, ExxonMobil may draw on the Performance Bond, in
whole or in part, but such a draw on the Performance Bond will not release or
discharge Buyer from its obligations under this Agreement:

 

 

(A)

ExxonMobil is required in any manner to perform obligations under Section 9.08,
whether pursuant to an order or directive issued by a governmental body or
regulatory agency or otherwise; or

 

 

(B)

Buyer is in default of any of its obligations under Section 9.08 and ExxonMobil
has opted to therefore perform any or all such obligations of Buyer (provided
however that nothing herein shall be construed as imposing an obligation upon
ExxonMobil to so perform).

 

 

(2)

If Surety has its certificate of suretyship revoked or its Issuer Rating by
Standard & Poor’s drops below A with a stable outlook, within [****] ([****])
days of such occurrence, the Buyer will replace the Performance Bond with
another performance bond in a form substantially similar to the form attached as
Exhibit H issued by a mutually agreeable financial institution, as replacement
Surety, (“Replacement Performance Bond”). In such event, ExxonMobil: (A) shall
execute such Replacement Performance Bond within fifteen (15) days after it is
provided to ExxonMobil by Principal and the replacement Surety, and (B) release
and discharge any prior Performance Bond and the obligations of Buyer and the
surety thereunder.

 

19

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(3)

[****].

 

 

(4)

The Parties agree and acknowledge that the Penal Sum does not represent the sum
of anticipated costs associated with all P&A Obligations contemplated by this
Agreement, nor is it intended to limit Buyer’s liability related to the P&A
Obligations.

 

 

(5)

Notwithstanding the above, if Buyer provides to the Bureau of Ocean Energy
Management, the Bureau of Safety and Environmental Enforcement, and/or the State
of Alabama (collectively “the Regulator”) supplemental bond(s) intended for any
of the P&A Obligations (“Supplemental Bond(s)”) and, with respect to any such
Supplemental Bond(s) provided to the Bureau of Ocean Energy Management and/or
the Bureau of Safety and Environmental Enforcement, ExxonMobil is named as a
co-obligee for such Supplement Bond(s) (“Co-Obligee Bonds”), then the Penal Sum
of the Performance Bond (and Replacement Performance Bond, if applicable) will
be reduced by the amount of such Supplemental Bond(s), proportionate to
ExxonMobil’s interest in the Lease(s) assigned to Buyer and to which the
Supplemental Bond applies; provided that, if the Regulator does not accept a
Co-Obligee Bond after reasonable efforts by Buyer to secure such acceptance, the
Penal Sum of the Performance Bond (and Replacement Performance Bond, if
applicable) will be reduced by the amount of any Supplemental Bond posted in
favor of the Regulator only. However, it is expressly agreed that the Penal Sum
of the Performance Bond (and Replacement Performance Bond, if applicable) shall
not be reduced or affected in any way by any area wide, base or general bonds
(including a State of Alabama Oil & Gas Board operator blanket bond) that Buyer
may provide to the Regulator. If the Regulator reduces any Supplemental Bond(s)
for reasons not due to a fulfillment of any P&A Obligation (for example if Buyer
has attained an exempt status as determined by the Regulator), then the amount
of the Performance Bond shall immediately increase to offset such reduction, but
in no event shall such increase be greater than the amount necessary to satisfy
the then current obligation under Exhibit H-1, and the new Penalty Sum shall be
determined in accordance with this Section 8.04(f).

 

 

(6)

At any time after [****], but no more often than once every [****] ([****])
months, Buyer shall have the right to request a review of the P&A Obligations
and potential reduction of the Penal Sum and a revision to Exhibit H-1 (each a
“Redetermination Review”). Buyer must submit a written request to ExxonMobil for
each Redetermination Review, which request shall not be unreasonably denied,
conditioned or withheld. The Parties shall schedule a Redetermination Review at
a time and place mutually convenient to the Parties. At each Redetermination
review, Buyer shall provide P&A Documentation, as described in
Section 8.04(f)(8) below.

 

20

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(7)

On or before the date that is [****] ([****]) days after each Redetermination
Review, ExxonMobil shall execute a release of an amount of the Penal Sum of the
Performance Bond, if determined necessary in the Redetermination Review.

 

 

(8)

For purposes of this Section 8.04(f) and Section 9.08, reasonably satisfactory
evidence that a P&A Obligation has been performed shall include executed forms
or other written documentation as may be provided to any governmental authority
under applicable law to reflect the completion of a P&A Obligation (including,
without limitations, forms and documentation related to plugging and abandonment
activities, site clearance activities and pipeline abandonment or removal
activities and completion of remediation activities (collectively, the “P&A
Documentation”).

 

 

(9)

Until such time as all of the P&A Obligations have been performed, ExxonMobil
reserves, with prior notice to Buyer of at least five (5) Business Days, access
rights to the Interests and Property for the limited purpose of documenting
and/or verifying the P&A Obligations, as needed.

 

 

(g)

Payment to ExxonMobil. At Closing, Buyer will pay ExxonMobil the net amount
shown on the Closing Settlement Statement by funds transfer as that term is
defined in Chapter 4 of the Texas Business and Commerce Code. This amount is
subject to further adjustment after Closing as provided in this Agreement.
Notwithstanding any other provision of this Agreement, Buyer must make payment
by the specific means stated, or ExxonMobil may refuse to proceed with Closing
until ExxonMobil, in its sole discretion, is satisfied that it has received full
payment. This right is in addition to all other rights and remedies ExxonMobil
may have under this Agreement, at law, or in equity.

 

 

(h)

Delivery of Possession. Subject to the terms of applicable joint operating
agreements, if any, the Related Agreements, and this Agreement, ExxonMobil will
deliver possession of the Interests to Buyer as soon as practicable after the
Closing Date.

 

8.05.     Offset of Amounts Owed to ExxonMobil and Affiliates. Before Closing,
ExxonMobil may review all outstanding accounts between Buyer and ExxonMobil and
its Affiliates and include any undisputed amounts due to ExxonMobil or any of
its Affiliates in the Closing Settlement Statement. Buyer will pay the
undisputed amounts due to ExxonMobil or any of its Affiliates, if any, as a
condition of Closing.

 

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8.06.       Conditions Precedent. The following are conditions precedent to
ExxonMobil’s obligation to close this transaction:

 

 

(a)

Buyer’s performance of its obligations under this Article 8 is a condition
precedent to ExxonMobil’s obligation to close this transaction; and

 

 

(b)

(i) any applicable waiting period under the HSR Act or other applicable
competition laws shall have expired or have been terminated; (ii) all applicable
waiting and other time periods under other applicable foreign, federal, or state
antitrust, competition or fair trade laws or applicable laws have expired,
lapsed, or been terminated (as appropriate) and all regulatory clearances and
consents in any relevant jurisdiction, and required to be obtained prior to
Closing, have been obtained; in each case, in respect of the transaction covered
by this Agreement; and

 

 

(c)

Buyer shall have furnished to ExxonMobil all material consents and approvals
under Section 7.03(b) (other than those governmental approvals typically
obtained post-Closing or that ExxonMobil agrees may be obtained post-Closing),
unless such consents or approvals have been waived under Section 7.03(c)(2) or
the affected Interests have been removed pursuant to Section 7.03(c)(4).

 

The following are conditions precedent to Buyer’s obligation to close this
transaction:

 

 

(a)

ExxonMobil’s performance of its obligations under this Article 8 is a condition
precedent to Buyer’s obligation to close this transaction; and

 

 

(b)

(i) any applicable waiting period under the HSR Act or other applicable
competition laws shall have expired or have been terminated; (ii) all applicable
waiting and other time periods under other applicable foreign, federal, or state
antitrust, competition or fair trade laws or applicable laws have expired,
lapsed, or been terminated (as appropriate); and (iii) all regulatory clearances
and consents in any relevant jurisdiction, and required to be obtained prior to
Closing, have been obtained; in each case, in respect of the transaction covered
by this Agreement; and

 

 

(c)

ExxonMobil shall have furnished to Buyer all material consents and approvals
under Section 7.03(a), unless Buyer has agreed to waive such consents or
approvals under Section 7.03(c)(2) or the affected Interests have been removed
pursuant to Section 7.03(c)(4).

 

8.07.       Buyer’s Representation by Closing. By closing this transaction,
Buyer will be deemed to represent to ExxonMobil that all Buyer’s representations
under this Agreement and the Additional Instruments are true as of the Closing
Date.

 

8.08.        Insurance.

 

 

(a)

ExxonMobil and Buyer acknowledge that Exxon Mobil Corporation maintains a
worldwide program of property and liability insurance coverage for itself and
its Affiliates, including ExxonMobil. This program has been designed to achieve
a co-coordinated risk management package for the entire ExxonMobil corporate
group. The program consists principally of four types of policies:

 

22

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(1)

policies issued to Exxon Mobil Corporation or its predecessors;

 

 

(2)

policies issued directly to Affiliates by ExxonMobil’s wholly-owned insurance
company, Ancon Insurance Company, Inc., (herein referred to as “ExxonMobil’s
Captive Insurer”);

 

 

(3)

policies issued to Affiliates by locally admitted insurers which are reinsured
by ExxonMobil’s Captive Insurer; and

 

 

(4)

policies issued to Affiliates by locally admitted insurers which are
self-insured by way of retrospective premiums paid by the relevant Affiliate.

 

All of the insurance policies through which the worldwide program of coverage is
presently or has previously been provided by or to Exxon Mobil Corporation, its
predecessors or Affiliates are herein referred to collectively as the
“ExxonMobil Policies.”

 

 

(b)

It is understood and agreed by Buyer that from and after the Closing Date:

 

 

(1)

No insurance coverage shall be provided under the ExxonMobil Policies to Buyer ;
and

 

 

(2)

Any and all policies insured or reinsured by ExxonMobil’s Captive Insurer which,
but for this provision, would have insured the transferred asset shall be deemed
terminated, commuted and cancelled ab initio; and

 

 

(3)

No Claims regarding any matter whatsoever, whether or not arising from events
occurring prior to the Closing, shall be made by Buyer against or with respect
to any of the ExxonMobil Policies regardless of their date of issuance.

 

If the Effective Time is before the Closing Date, the termination of insurance
will be retroactive to the Effective Time.

 

 

(c)

BUYER SHALL INDEMNIFY AND DEFEND EXXONMOBIL, ITS PARENTS AND AFFILIATES AGAINST,
AND SHALL HOLD THEM HARMLESS FROM, ANY CLAIM MADE AFTER THE CLOSING DATE AGAINST
ANY OF THE EXXONMOBIL POLICIES BY BUYER OR ITS AFFILIATES OR ANY COMPANY OR
PERSON CLAIMING ANY RIGHT TO COVERAGE UNDER THE EXXONMOBIL POLICIES, INCLUDING
ALL COSTS AND EXPENSES (INCLUDING ATTORNEYS’ FEES) RELATED THERETO. SUCH
INDEMNITY SHALL COVER, WITHOUT LIMITATION, ANY CLAIM BY AN INSURER FOR
REINSURANCE, RETROSPECTIVE PREMIUM PAYMENTS OR PROSPECTIVE PREMIUM INCREASES
ATTRIBUTABLE TO ANY SUCH CLAIM.

 

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Notwithstanding any provision of this agreement to the contrary, Buyer’s
insurance policy(ies) shall: (1) cover ExxonMobil and its Affiliates as
additional insureds for liabilities arising from or assumed under this
Agreement; and (2) be primary as to all other policies (including any
deductibles or self-insured retentions). It is further agreed that Buyer and its
insurer(s) providing coverage shall waive all rights of subrogation and/or
contribution against ExxonMobil and its Affiliates to the extent liabilities are
assumed by the Buyer.

 

8.09.     Right to Terminate. Notwithstanding anything herein to the contrary,
in the event that Closing has not occurred on or before February 28, 2020 for
reasons not within the control of ExxonMobil, ExxonMobil shall have a continuing
right thereafter to terminate this Agreement by providing written notice of
termination to Buyer. In the event of such termination, ExxonMobil shall refund
the Performance Deposit, however, ExxonMobil’s obligation to return the
Performance Deposit shall be subject to [****]. Notwithstanding anything herein
to the contrary, in the event that Closing has not occurred on or before
February 28, 2020 for reasons not within the control of Buyer, Buyer shall have
a continuing right thereafter to terminate this Agreement by providing written
notice of termination to ExxonMobil. In the event of such termination,
ExxonMobil shall refund the Performance Deposit, however, ExxonMobil’s
obligation to return the Performance Deposit shall be subject to [****].

 

Article 9.     POST-CLOSING OBLIGATIONS

 

9.01.     Filing and Recording. ExxonMobil will decide which Party will file or
record the conveyancing documents in the appropriate governmental records. The
recording Party will provide either the original or photocopies of the filed or
recorded document, including the recording data, as agreed by the Parties, to
the non-recording Party. Buyer will reimburse ExxonMobil for the filing,
recording, and other reasonable fees that ExxonMobil incurs if ExxonMobil files
or records the documents.

 

9.02.     Copies. Within [****] ([****]) days after the Closing Date, ExxonMobil
will deliver to Buyer, at Buyer’s cost and request, copies of data and records
relating to the Interests and Property (including, but not limited to,
geophysical data (subject to third party licensing obligations), well files,
seismic data, field surveys, field tapes and notes, and reprocessed data, if
available). ExxonMobil is not obligated to provide copies of any data or records
that would not have been made available to Buyer under Section 5.01. Buyer must
advise ExxonMobil before Closing which data and records that it wants to be
copied. If Buyer requests geophysical data and if ExxonMobil is not restricted
from releasing the data to Buyer, Buyer’s execution of a licensing agreement
satisfactory to ExxonMobil will be a condition of ExxonMobil’s delivering the
data to Buyer. For leases subject to the jurisdiction of the Bureau of Ocean
Energy Management and/or Bureau of Safety and Environmental Enforcement, and to
the extent requested by Buyer or as required by applicable law or regulation,
ExxonMobil will sign and deliver to Buyer a list of the copies of data and
records delivered to Buyer (with omissions noted and explained for records
required under federal regulations, but which are not available). Buyer will
sign the list and submit it to the Bureau of Ocean Energy Management and/or
Bureau of Safety and Environmental Enforcement in accordance with applicable
regulations. ExxonMobil retains the right to use and disclose any data and
records provided to Buyer.

 

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If originals or the last-remaining copies of any data or records are provided to
Buyer, ExxonMobil may have access to them at reasonable times and upon
reasonable notice during regular business hours for as long as any Interest is
in effect after the Effective Time (or for 21 years in the case of a mineral fee
or other non-leasehold interest or a longer period if required by law or
governmental regulation). ExxonMobil may, during this period and at its expense,
make copies of the data and records pursuant to a reasonable request. Without
limiting the generality of the two preceding sentences, for as long as any
Interest is in effect after the Effective time (or for 21 years in the case of a
mineral fee or other non-leasehold interest or for a longer period if required
by law or governmental regulation), Buyer may not destroy or give up possession
of any original or last-remaining copy of the data or records without first
offering ExxonMobil the opportunity, at ExxonMobil’s expense, to obtain the
original or a copy. After this period expires, Buyer must offer to deliver the
data and records (or copies) to ExxonMobil, at ExxonMobil’s expense, before
giving up possession or destroying them.

 

9.03.     Further Assurances. Buyer and ExxonMobil each will, from time to time
after Closing and upon reasonable request, execute, acknowledge, and deliver in
proper form any conveyance, assignment, transfer, or other instrument reasonably
necessary to accomplish the purposes of this Agreement.

 

9.04.     Post-Closing Third-Party Consents. If the Parties elect to close
without all third-party consents and approvals pursuant to Article 7.03 (except
for those governmental consents or clearances required to be obtained prior to
Closing under Article 25), ExxonMobil and Buyer will proceed diligently after
Closing to obtain them. [****]. This obligation will end only if an Interest is
reassigned under this Section 9.04.

 

9.05.    Reassignment. For reassignment of any Interest under this Agreement,
Buyer will execute and deliver to ExxonMobil a reassignment by special warranty,
in a form satisfactory to ExxonMobil and sufficient to place ExxonMobil in the
same position it occupied before the assignment to Buyer. Buyer’s release and
discharge of ExxonMobil and its Associated Parties, its covenant not to sue
ExxonMobil or its Associated Parties, and its obligations to indemnify, defend,
and hold ExxonMobil and its Associated Parties harmless will apply to Interests
that are reassigned for the period of Buyer’s ownership, and the reassignment
instrument will restate Buyer’s obligations.

 

9.06.     Buyer’s Compliance. Buyer will comply with all rules, regulations,
statutes, and laws applicable to Buyer’s ownership or operation of the Interests
or Property and with all Related Agreements, insofar as they concern or pertain
to the Interests.

 

9.07.     Property Sales Accounting Agreement. Buyer will perform all its
obligations under the Property Sales Accounting Agreement, including payment of
rentals, shut-in payments, and minimum royalties.

 

9.08.     Plugging and Abandoning Wells: Remediation. Buyer recognizes, and will
either perform or assure that performance is accomplished properly and in
accordance with applicable law and the Related Agreements, all obligations to
abandon, restore, and remediate the Interests and Property, whether arising
before or after the Effective Time, including obligations, as applicable, to:

 

 

(a)

obtain plugging exceptions in Operator’s name for each Well with a current
plugging exception, or permanently plug and abandon the Well;

 

25

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(b)

plug, abandon, and if necessary, re-abandon each Well;

 

 

(c)

remove all equipment and facilities, including flowlines, pipelines, and
platforms;

 

 

(d)

close all pits; and

 

 

(e)

restore the surface, subsurface, and offshore sites associated with the
Interests or Property.

 

Buyer will pay all costs and expenses associated with the obligations assumed
under this Section 9.08. Buyer shall obtain a performance bond as described in
Section 8.04(f) to guarantee Buyer’s obligations under this Section. Pursuant to
Section 8.04(f), Buyer will deliver the required performance bond at execution
of this Agreement.

 

Article 10.     TAXES

 

10.01.     Ad Valorem Taxes. Ad valorem taxes (including production-based ad
valorem taxes), real property taxes, and similar obligations imposed on the
Interests and Property according to their value (“Ad Valorem Taxes”) with
respect to the tax period in which the Effective Time occurs shall be
apportioned as of the Effective Time between ExxonMobil and Buyer. The Parties
will make settlement of all Ad Valorem Taxes by estimating the Ad Valorem Taxes
to be due for the tax period in which the Effective Time occurs based on the Ad
Valorem Taxes assessed and paid for the immediately prior tax period. Such
settlement of taxes shall be part of the Closing Settlement Statement. Buyer
will be responsible for all Ad Valorem Taxes and interest that are applied to
the Interests retroactively after the Effective Time.

 

10.02.     Production Taxes. All taxes (other than Ad Valorem Taxes and income
taxes) imposed on or with respect to the production of Oil, gas, or other
hydrocarbons or minerals, or the receipt of proceeds from their sale (including
severance, production, and excise taxes) will be apportioned between the Parties
as of the Effective Time. ExxonMobil will be responsible for paying or
withholding all taxes that have accrued before the Effective Time or as
otherwise provided in the Property Sales Accounting Agreement and for filing all
statements, returns, and documents pertinent to them. Buyer will be responsible
for paying or withholding all taxes that accrue or are applied retroactively
after the Effective Time or as otherwise provided in the Property Sales
Accounting Agreement; for filing all statements, returns, documents incident to
them; and for obtaining reimbursements, if any, relating to those taxes.

 

10.03.     Other Taxes. At Closing, ExxonMobil will collect, and Buyer will pay,
all applicable state and local sales taxes, use taxes, gross receipts taxes,
business license taxes, other taxes (except taxes imposed by reason of income to
ExxonMobil), conveyance, transfer and recording fees, and real estate transfer
stamps or taxes imposed on the transfer of the Interests pursuant to this
Agreement. The taxes collected will be based on Buyer’s Allocations, as adjusted
under this Agreement. Buyer will pay all state and local taxes, including
penalty and interest, if any, assessed after the Effective Time against either
Party with respect to this transaction or, if paid by ExxonMobil, Buyer will
promptly reimburse ExxonMobil for amounts paid.

 

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10.04.     Tax-Deferred Exchange. If applicable and if requested by a Party,
each Party agrees to reasonably cooperate to structure the transaction as a
like-kind exchange under Section 1031 of the Code of all or part of the
Interests (a “Like-Kind Exchange Transaction”) including executing escrow
instructions, documents, agreements or other instruments as reasonably requested
by a Party. Each Party may assign its rights and obligations under this
Agreement to its affiliate or a Qualified Intermediary (as that term is defined
in Section 1.1031(k)-1(g)(4)(v) of the Treasury Regulations) and/or to an
Exchange Accommodation Titleholder (as that term is defined in Rev. Proc.
2000-37) in connection with a Like-Kind Exchange Transaction.

 

However, ExxonMobil and Buyer acknowledge and agree that any assignment of this
Agreement to an affiliate or a Qualified Intermediary or Exchange Accommodation
Titleholder does not release either party from any of its respective liabilities
and obligations to the other party under this Agreement. If a Like-Kind Exchange
Transaction occurs, the parties recognize that IRS Form 8824, Like-Kind
Exchanges, will be required to be filed, and each party consents to the filing
of such Form and will fully cooperate, to the extent, necessary, with the other
party in filing such Form.

 

Article 11.     OIL IN STORAGE, PROCEEDS, COSTS, EXPENSES, CLAIMS, AND
DISBURSEMENTS

 

11.01.     Oil in Storage.

 

 

(a)

All Oil in storage at the Effective Time, including working inventory, belongs
to ExxonMobil. Title to Oil in storage for both ExxonMobil-operated Interests
and Interests operated by others will transfer to Buyer as of the Effective
Time.

 

 

(b)

ExxonMobil, at its sole option, may include as “Oil in storage” all Oil in the
system downstream of the wellhead at the Effective Time, including Oil in stock
tanks, wash tanks, heater treaters, flowlines, and pipelines. For
ExxonMobil-operated Interests, at the Effective Time ExxonMobil will:

 

 

(1)

at its sole option, either run or gauge the Oil in storage; and

 

 

(2)

read and replace all gas meter charts.

 

If the Effective Time is after the Execution Date, Buyer may be present for
these operations.

 

 

(c)

ExxonMobil will use measured Oil inventories in the Closing Settlement
Statement, if available or, if not available, then estimated Oil inventories.
The estimates will be based on the average month-end inventories of the three
most recent calendar months prior to the Effective Time. If there is a
difference between the value of the estimated Oil in storage and the value of
inventories run or gauged at the Effective Time, ExxonMobil may include the
difference in the Final Settlement Statement.

 

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(d)

Oil inventories will be credited in the Closing Settlement Statement. The
assessed value of the Oil in Storage will be priced at the price received for
the most recent full month of production preceding the Effective Time.

 

11.02.     Proceeds, Costs, and Expenses.

 

 

(a)

Except as otherwise provided in this Agreement and without prejudice to the
provisions of the Property Sales Accounting Agreement:

 

 

(1)

ExxonMobil reserves all rights to proceeds, receipts, reimbursements, credits,
and income attributable to the Interests and accruing before the Effective Time;
and

 

 

(2)

all proceeds, receipts, credits, income, and charges attributable to the
Interests and accruing after the Effective Time will be Buyer’s property and
responsibility.

 

For accounts held in suspense or escrow at Closing, ExxonMobil will disburse
funds to Buyer at Closing and Buyer shall assume the obligation to make payment
of such amounts as they become due and payable following Closing.

 

 

(b)

Except as otherwise provided in this Agreement and without prejudice to the
provisions of the Property Sales Accounting Agreement, ExxonMobil will make all
disbursements for:

 

 

(1)

payment of charges and invoices for costs and expenses accruing before the
Effective Time and attributable to the Interests; and

 

 

(2)

payments necessary as the result of sales of production from the Interests
occurring before the Effective Time (including disbursements out of proceeds
held in suspense or escrow).

 

 

(c)

Buyer will be responsible for all payments and disbursements after the Effective
Time but if ExxonMobil makes any of these payments or disbursements (including
rentals paid prior to the Effective time, but covering periods after the
Effective Time), Buyer will reimburse ExxonMobil for the amounts paid.
ExxonMobil will be responsible for all payments and disbursements before the
Effective Time but if Buyer makes any of these payments or disbursements
(including rentals paid after the Effective time, but covering periods before
the Effective Time), ExxonMobil will reimburse Buyer for the amounts paid. All
amounts due from one Party to the other under this Section 11.02 may be made by
debits and credits in the Closing Settlement Statement and Final Settlement
Statement.

 

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11.03.     Notice to Remitters of Proceeds. ExxonMobil will make reasonable
efforts to notify all remitters of proceeds from the sale of production of this
transaction. Except as otherwise provided in the Property Sales Accounting
Agreement, ExxonMobil is responsible for obtaining from the remitters revenues
accrued before the Effective Time, and Buyer is responsible for obtaining from
the remitters revenues accruing after the Effective Time. The Parties will
inform the remitters that this transaction has closed by
letter-in-lieu-of-transfer order or other documents required by each remitter.

 

11.04.     Reservation of Claims. ExxonMobil reserves all Claims and rights of
any kind concerning the Interests or Property against third parties that accrue
before the Effective Time (including those against overriding royalty owners,
royalty owners, working-interest owners, and gas purchasers), whether discovered
before or after Closing. Buyer reserves all Claims and rights of any kind
concerning the Interests or Property against third parties that accrue after the
Effective Time (including those against overriding royalty owners, royalty
owners, working-interest owners, and gas purchasers), whether discovered before
or after Closing.

 

Article 12.     EXXONMOBIL-OPERATED INTERESTS

 

12.01.     Operation by ExxonMobil. ExxonMobil will operate the
ExxonMobil-operated Interests and Properties (i) from the Execution Date and
until the later of: (1) the Closing Date, or (2) such time as the applicable
operating agreement, plan of unitization or law requires, or (3) the time
specified in the Transition Services Agreement, subject always to the
requirements of applicable operating agreements; (ii) in a manner consistent
with its past practices; and (iii) will not, without Buyer’s prior approval
(which approval shall not be unreasonably withheld), enter into any single
commitment for capital expenditure with respect to any of the
ExxonMobil-operated Interests or Property that would be binding on Buyer after
Closing and that would commit Buyer to spend more than [****] dollars ($[****])
on such Interest or Property, except for expenditures required or necessitated
under the applicable operating agreements and emergency expenditures. Subject to
the Transition Services Agreement, as soon as practicable thereafter, operations
will be turned over to, and become the responsibility of, ExxonMobil’s successor
as Operator. Notwithstanding anything to the contrary in this Agreement but
subject to the Transition Services Agreement, ExxonMobil may cancel its
applicable regulatory permits at any time and for any reason after it ceases to
operate an Interest, unless such permits are transferable to Buyer, in which
case the Parties shall meet to discuss such permits and the potential transferee
of the permits to Buyer. ExxonMobil will not sell, transfer, dispose or encumber
any of the Interests or Properties (whether operated by ExxonMobil or not)
without the prior written consent of Buyer, except for sales of hydrocarbons in
the ordinary course of business.

 

12.02.     Charges Paid by Buyer. For the period of operation by ExxonMobil
after the Effective Time, subject to the approvals required under Section 12.01,
Buyer will pay ExxonMobil as follows:

 

 

(a)

Operation and Maintenance Expenses. Operation and maintenance expenses in
accordance with upward adjustments to the Purchase Price as reflected in
Section 8.04(c).

 

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(b)

Other Costs. Reimbursement for workover costs, plugging, abandoning, and
re-abandoning costs, CO2 purchases, prepaid items (e.g., utility charges,
rentals, deposits and any other prepays excluding taxes) prorated before and
after the Effective Time, and other major costs incurred by ExxonMobil
incidental to the operation, protection, and maintenance of the Interests and
Property, on an actual-cost basis (but not duplicative of amounts reflected in
Section 8.04(c). The only exception to Buyer’s obligation for reimbursement
under this Section 12.02(b) is for fifty percent (50%) of the costs incurred
pursuant to ExxonMobil AFE No. [†††††] and directly attributable to the workover
of the Mobile Bay 827 No. 1 well (API No. 608154003000). ExxonMobil will be
responsible for the remaining fifty percent (50%) of such costs.

 

 

(c)

Overhead. Overhead at a rate equal to $[****] per month pro rata.

 

These charges will be included in the Closing Settlement Statement or Final
Settlement Statement, as applicable.

 

12.03.     Risk of Loss. Unless this Agreement is terminated as to an Interest,
the risk of loss for damage to or destruction of the ExxonMobil-operated
Interests and Property associated with that Interest will pass from ExxonMobil
to Buyer as of the Effective Time, even if such damage or destruction is caused
in whole or in part by the gross, sole, joint, concurrent, active or passive
negligence of ExxonMobil or any of its Associated Parties or any third party and
regardless of who may be at fault or otherwise responsible under any other
contract or any statute, rule or theory of law including theories of strict
liability, and any such damage or destruction will not be cause for Buyer to
delay Closing or terminate this Agreement.

 

12.04.     Selection of Operator. ExxonMobil may elect to poll the parties to
applicable joint operating agreements or plans of unitization before Closing to
select a successor Operator. The poll may stipulate that ExxonMobil will not
resign as Operator unless Closing occurs. ExxonMobil may resign as Operator
under applicable regulations if Buyer does not diligently pursue its designation
as Operator of the Interests that it will operate. If ExxonMobil does not poll,
then it will be Buyer’s responsibility to do so immediately after Closing.
Buyer’s selection as Operator, whether under a joint operating or similar
agreement or pursuant to applicable regulations, is not a condition of Buyer’s
performance under this Agreement.

 

12.05.     Removal of Signs. ExxonMobil may either remove its name and signs
from the ExxonMobil-operated Interests and Property or require Buyer to do so
for those Interests that it will operate. Once Buyer has become Operator, Buyer
must:

 

 

(a)

remove any remaining signs and references to ExxonMobil from the Property or
Interests promptly, but no later than the time required by applicable
regulations or forty-five (45) days after ExxonMobil ceases to be Operator,
whichever occurs first;

 

 

(b)

install signs complying with applicable governmental regulations, including
signs showing Buyer as Operator of the Interests it operates; and

 

30

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(c)

notify ExxonMobil of the removal of signs and references to ExxonMobil and
installation of new signs.

 

ExxonMobil reserves a right of access to the Interests and Property after it
ceases to be Operator to remove its signs and name from all Wells, facilities,
and Property, or to confirm that Buyer has done so for the Interests operated by
Buyer. If ExxonMobil removes signs because Buyer has not done so, ExxonMobil
will charge its costs to Buyer, and Buyer will pay the invoice within 15 days of
receipt.

 

Article 13.     INTERESTS OPERATED BY OTHERS

 

13.01.     Charges Paid by Buyer. Buyer will reimburse ExxonMobil for charges
made by the Operator of Interests not operated by ExxonMobil after the Effective
Time and paid by ExxonMobil and will pay overhead to ExxonMobil at a rate equal
$[****] per month pro rata.

 

13.02.     Risk of Loss. Unless this Agreement is terminated as to an Interest,
the risk of loss for damage to or destruction of each Interest operated by
others and the Property associated with that Interest will pass from ExxonMobil
to Buyer as of the Effective Time, even if such damage or destruction is caused
in whole or in part by the gross, sole, joint, concurrent, active or passive
negligence of ExxonMobil or any of its Associated Parties or any third party and
regardless of who may be at fault or otherwise responsible under any other
contract or any statute, rule or theory of law including theories of strict
liability. Any such damage or destruction will not be cause for Buyer to delay
Closing or terminate this Agreement.

 

Article 14.     [****]

 

Article 15.     INTENTIONALLY LEFT BLANK

 

Article 16.     RELEASE, DISCHARGE, AND COVENANT NOT TO SUE; OBLIGATIONS TO
INDEMNIFY, DEFEND, AND HOLD HARMLESS; LIMITATION OF DAMAGES

 

16.01.     Buyer’s Release and Discharge of ExxonMobil and its Associated
Parties. Buyer releases and discharges ExxonMobil and its Associated Parties
from each Claim and Liability relating to the Interests, Property, or this
transaction, regardless of when or how the Claim or Liability arose or arises or
whether the Claim or Liability is foreseeable or unforeseeable. Buyer’s release
and discharge of ExxonMobil and its Associated Parties includes claims and
liabilities caused in whole or in part by the gross, sole, joint, concurrent,
active or passive negligence of ExxonMobil or any of its Associated Parties or
any third party and apply regardless of who may be at fault or otherwise
responsible under any other contract or any statute, rule or theory of law
including theories of strict liability. The only exception to Buyer’s release
and discharge of ExxonMobil and its Associated Parties is stated in
Sections 16.03(b), and 16.04(e), and the release and discharge are binding on
Buyer and its successors and assigns.

 

16.02.     Buyer’s Covenant Not to Sue ExxonMobil or its Associated Parties.
Buyer covenants not to sue ExxonMobil or its Associated Parties with regard to
any Claim or Liability relating to the Interests, Property, or this transaction,
regardless of when or how the Claim or Liability arose or arises or whether the
Claim or Liability is foreseeable or unforeseeable. Buyer’s covenant not to sue
ExxonMobil or its associated parties includes claims and liabilities caused in
whole or in part by the gross, sole, joint, concurrent, active or passive
negligence of ExxonMobil or any of its associated parties or any third party and
applies regardless of who may be at fault or otherwise responsible under any
other contract or any statute, rule or theory of law including theories of
strict liability. The only exception to Buyer’s covenant not to sue ExxonMobil
or its Associated Parties is stated in Section 16.04(e), and the covenant is
binding on Buyer and its successors and assigns.

 

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16.03.     Obligations to Indemnify, Defend, and Hold Harmless, Limitation of
Damages.

 

 

(a)

Buyer will indemnify, defend, and hold ExxonMobil and its Associated Parties
harmless from each Claim and Liability relating to the Interests, Property, or
this transaction, regardless of when or how the Claim or Liability arose or
arises or whether the Claim or Liability is foreseeable or unforeseeable.
Buyer’s obligations to indemnify, defend, and hold ExxonMobil and its associated
parties harmless include claims and liabilities caused in whole or in part by
the gross, sole, joint, concurrent, active or passive negligence of ExxonMobil
or any of its associated parties or any third party and apply regardless of who
may be at fault or otherwise responsible under any other contract or any
statute, rule or theory of law including theories of strict liability. The only
exceptions to Buyer’s obligations to indemnify, defend, and hold ExxonMobil and
its Associated Parties harmless are stated in Sections 16.03(b), 16.04(c) and
16.04(e), and the obligations are binding on Buyer and its successors and
assigns.

 

 

(b)

ExxonMobil will release, discharge, indemnify, defend, and hold Buyer and its
Associated Parties harmless from any breaches of the covenants, representations
and warranties of ExxonMobil in Section 19.05. ExxonMobil’s obligations to
indemnify, defend, and hold buyer and its associated parties harmless include
claims and liabilities caused in whole or in part by the sole, joint,
concurrent, active or passive negligence of buyer or any of its Associated
Parties or any third party and apply regardless of who may be at fault or
otherwise responsible under any other contract or any statute, rule or theory of
law including theories of strict liability. Notwithstanding the foregoing,
ExxonMobil shall not be required to indemnify, defend or hold harmless Buyer or
its Associated Parties: (i) with respect to any Claim or Liability unless Buyer
has provided ExxonMobil with a Claim notice specifying the particulars of such
Claim within [****] after the Closing Date; and (ii) for any individual Claim or
Liability of less than [****] DOLLARS ($[****]); and (iii) unless, and then only
to the extent that, the aggregate amount of Claims and Liabilities pursuant to
this Section 16.03(b) exceeds [****] percent ([****]%) of the Purchase Price;
and (iv) for any amount of Claims and Liabilities that are, singularly or in the
aggregate, in excess of [****] percent ([****]%) of the Purchase Price.

 

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(c)

EXCEPT FOR THIRD-PARTY CLAIMS AND LIABILITIES FOR WHICH A PARTY HAS AN
INDEMNIFICATION OBLIGATION TO ANOTHER PARTY UNDER THIS SECTION 16.03, NO PARTY
SHALL BE LIABLE TO ANOTHER PARTY UNDER THIS AGREEMENT FOR INDIRECT DAMAGES,
CONSEQUENTIAL LOSS, PUNITIVE DAMAGES, EXEMPLARY DAMAGES OR SPECIAL DAMAGES, AND
EACH PARTY HEREBY WAIVES ITS RIGHT TO ASSERT SUCH LOSSES OR DAMAGES, HOWSOEVER
CAUSED AND REGARDLESS OF FAULT, INCLUDING THE NEGLIGENCE, GROSS NEGLIGENCE OR
WILFULL MISCONDUCT OF A PARTY.

 

16.04.     Buyer’s Obligations.

 

 

(a)

In each instance of Buyer’s obligations to release, discharge, indemnify,
defend, and hold ExxonMobil and its Associated Parties harmless and its covenant
not to sue ExxonMobil or its Associated Parties, the Claims and Liabilities
subject to the obligations include the following:

 

 

(1)

the ownership of the Interests by ExxonMobil, their operation by ExxonMobil or
its Associated Parties, and the acts or omissions of ExxonMobil or its
Associated Parties in connection with the Interests or the Related Agreements;

 

 

(2)

the ownership of the Interests by Buyer, their operation by Buyer or its
Associated Parties, and the acts or omissions of Buyer or its Associated Parties
in connection with the Interests or under this Agreement or the Related
Agreements; and

 

 

(3)

the acts or omissions of third parties relating to the Interests.

 

 

(b)

Buyer’s obligations under this Agreement to release, discharge, indemnify,
defend, and hold ExxonMobil and its Associated Parties harmless and its covenant
not to sue ExxonMobil or its Associated Parties include Claims and Liabilities
arising in any manner from the following:

 

 

(1)

Buyer’s Allocations;

 

 

(2)

preferential and similar rights held by third parties to purchase any portion of
the Interests;

 

 

(3)

the review, inspection, and assessment of the Interests and Property by Buyer
and its Associated Parties;

 

 

(4)

an error in describing the Interests or an error in the conveyancing
instruments;

 

 

(5)

rights and obligations of the parties or third parties under the Related
Agreements;

 

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(6)

closing without a third party consent or approval;

 

 

(7)

failure by third parties to approve or consent to any aspect of this transaction
after Closing;

 

 

(8)

obligations to plug and abandon Wells and remediate the Interests and Property;

 

 

(9)

payment of Real Property Taxes or other taxes applicable to the Interests and
Property;

 

 

(10)

payments or disbursements paid or payable by ExxonMobil or Buyer to third
parties;

 

 

(11)

a physical or environmental condition relating to the Interests and Property,
including Claims and Liabilities under the Environmental Laws, or failure to
comply with the Environmental Laws;

 

 

(12)

remediation activities, including damages incurred by Buyer or its Associated
Parties during or arising from remediation activities; and

 

 

(13)

lawsuits filed before the Effective Time, but amended after the Effective Time
to include the Interests or Property or ExxonMobil’s ownership of or activities
regarding the Interests or Property.

 

 

(c)

Buyer’s obligations to release, discharge, indemnify, defend, and hold
ExxonMobil and its Associated Parties harmless do not apply, however, to Claims
or Liabilities that result from a judgment rendered or settlement reached in a
lawsuit filed before the Effective Time, but only to the extent that acts or
omissions that gave rise to the cause of action are attributable to the conduct
or operation or ownership of ExxonMobil or its Associated Parties before the
Effective Time.

 

 

(d)

The Parties recognize that certain lawsuits may have been filed before the
Effective Time, but concern activities continuing after the Effective Time, so
that after Closing Buyer may be a proper party to the lawsuit. For these
lawsuits, Buyer’s obligations to release, discharge, indemnify, defend, and hold
ExxonMobil and its Associated Parties harmless will apply to activities
occurring after the Effective Time. ExxonMobil will continue to defend its own
interests and provide principal counsel, all at its own cost and expense, in an
action under this paragraph for which it remains a party after the Effective
Time.

 

 

(e)

Buyer’s release, discharge, indemnify, defend, and hold harmless ExxonMobil and
its Associated Parties and its covenant not to sue do not include Claims that
Buyer may enforce against contractors and subcontractors for work regarding the
Interests and the Properties. Notwithstanding anything in this Agreement to the
contrary, Buyer’s release and discharge of ExxonMobil and its Associated Parties
and its obligation to indemnify, defend and hold ExxonMobil and its Associated
Parties harmless under this Agreement and its covenant not to sue ExxonMobil and
its Associated Parties does not include Claims that ExxonMobil breached this
Agreement. Any such Claims will be resolved in accordance with Article 17.

 

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16.05.     Buyer’s Duty to Defend. Buyer acknowledges that its obligations to
indemnify, defend, and hold ExxonMobil and its Associated Parties harmless under
this Agreement include obligations to pay the attorneys’ fees and court and
other costs incurred by ExxonMobil and its Associated Parties in defending all
Claims. As to each Claim and Liability, ExxonMobil, at its sole option, may
elect to:

 

 

(a)

manage its own defense, in which event Buyer will reimburse ExxonMobil and its
Associated Parties for all attorneys’ fees and court and other costs reasonably
incurred in defending a claim, upon delivery to Buyer of invoices for these fees
and costs; or

 

 

(b)

tender its defense as to any Claim to Buyer, in which event Buyer will be
responsible for all aspects of defending the Claim at issue and resulting
Liabilities.

 

16.06.     Buyer’s Waiver of Consumer Rights Under the Texas Deceptive Trade
Practices Consumer Protection Act and Other Consumer Protection Laws. As partial
consideration to ExxonMobil to enter into this agreement, to the extent that the
Texas Deceptive Trade Practices Consumer Protection Act is applicable to this
transaction, Buyer can and does expressly waive its rights under the Texas
Deceptive Trade Practices Consumer Protection Act, Sections 17.41 through 17.63,
Texas Business and Commerce Code, a law that gives consumers special rights and
protections. After consultation with an attorney of its own selection, buyer
voluntarily consents to this waiver. In addition, buyer waives its rights under
all other consumer protection laws in other states applicable to this
transaction that may be waived by the parties.

 

16.07.     Retroactive Effect. Buyer acknowledges that its obligations to
release, discharge, defend, and hold ExxonMobil and its Associated Parties
harmless and its covenant not to sue ExxonMobil or its Associated Parties apply
to matters occurring or arising before the Execution Date to the extent provided
in this Agreement.

 

16.08.     Inducement to ExxonMobil. Buyer acknowledges that it evaluated its
obligations under this article 16 before it determined and submitted its bid for
the interests and that its assumption of these obligations is a material
inducement to ExxonMobil to enter into this Agreement with, and close the sale
to, Buyer.

 

Article 17.     ALTERNATE DISPUTE RESOLUTION AND ARBITRATION

 

17.01.     General.

 

 

(a)

This Article 17 applies to any dispute between the Parties, arising at any time,
that is not subject to Buyer’s release and discharge of ExxonMobil and its
Associated Parties or Buyer’s covenant not to sue ExxonMobil or its Associated
Parties or is not specifically excluded under this Article 17. Whether a dispute
is subject to Buyer’s release, discharge, or covenant not to sue or to this
Article (or is excluded from this Article by its terms), and whether there is a
contract between the Parties, are issues that will be resolved under the
alternate dispute resolution and arbitration provisions of this Article 17.

 

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(b)

As to the disputes subject to this Article 17, any Claim or controversy of
whatever nature, including an action in tort or contract or a statutory action
(“Disputed Claim”), or the arbitrability of a Disputed Claim, will be resolved
under the terms, conditions, and procedures of set forth in this Article 17 and
will be binding on both Parties and their respective successors and assigns.
Neither Party may prosecute or commence any suit or action against the other
Party relating to any matters that are subject to this Article 17, except as
provided in this Article 17.

 

 

(c)

ExxonMobil will determine, at its sole option, whether a Claim filed by a third
party against Buyer or ExxonMobil will be subject to this Article. If Buyer has
notified ExxonMobil before Closing of a Disputed Claim by Buyer before Closing
and the Disputed Claim is not resolved before Closing, the Disputed Claim will
not be subject to this Article unless agreed by the Parties.

 

17.02.     Negotiations. The Parties agree to attempt to resolve any dispute
arising out of or relating to this Agreement through negotiation. Within thirty
(30) days after one Party gives the other Party written notice describing the
dispute and requesting negotiations, representatives of the Parties with
authority to resolve the dispute shall meet at a mutually agreed upon location
to attempt to resolve the dispute. Negotiations shall continue until the Parties
have resolved the dispute or until one of the Parties gives written notice that
it will no longer continue to negotiate. If for any reason, the Parties’
representatives fail to meet within the thirty (30) day deadline or if a Party
gives written notice that it is no longer willing to continue negotiations,
either Party may commence binding arbitration of the dispute pursuant to
Section 17.03.

 

17.03.     Arbitration. Any dispute arising out of or relating to this Agreement
that the Parties fail to resolve by negotiation as set forth in Section 17.02
shall be resolved by arbitration before three arbitrators pursuant to the CPR
Institute for Dispute Resolution Rules for Non-Administered Arbitration as
modified herein. Each Party shall appoint one arbitrator as provided in CPR
Rules 3.3 and 3.5, and the two arbitrators so appointed shall appoint the third,
who shall chair the tribunal, selected as provided in CPR Rule 5.2. The place of
arbitration shall be Houston, Texas. The arbitrators shall apply the substantive
law of Texas to the merits of the dispute, except that the arbitrators shall not
apply any choice of law rules that would call for the application of the
substantive law of any other jurisdiction. The Federal Arbitration Act shall
apply to the arbitration. The arbitrators’ award shall be final and binding on
the Parties. Judgment on the award may be entered in any court of competent
jurisdiction.

 

17.04.     Notice. The addresses for notice under this Article 17 are:

 

ExxonMobil:

Buyer:

 

ExxonMobil Upstream Business Development Company

22777 Springwoods Village Parkway

Spring, TX 77389

Attention: Divestments Manager

 

W&T Offshore, Inc.

Nine Greenway Plaza

Houston, TX 77046

Attention: Land Manager

 

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Article 18.     ENVIRONMENTAL MATTERS

 

18.01.     Buyer’s Acknowledgment Concerning Possible Contamination of the
Interests and Property. Buyer is aware that the Interests and Property have been
used for exploration, development, and production of oil and gas and that there
may be petroleum, produced water, wastes, or other materials located on or under
the Property or associated with the Interests. Equipment and sites included in
the Interests or Property may contain asbestos, PCBs, hazardous substances, TSCA
/ RCRA regulated substances and / or NORM. NORM may affix or attach itself to
the inside of Wells, materials, and equipment as scale, or in other forms; the
Wells, materials, and equipment located on the Property or included in the
Interests may contain NORM and other wastes or hazardous substances; and
NORM-containing material and other wastes or hazardous substances may have been
buried, come in contact with the soil, or otherwise been disposed of on the
Property. Special procedures may be required for the remediation, removal,
transportation, or disposal of wastes, asbestos, PCBs / TCSA / RCRA regulated
substance, hazardous substances, and NORM from the Interests and the Property.

 

Buyer will assume all liability for the assessment, remediation, removal,
transportation, and disposal of wastes, asbestos, PCB’s, hazardous substances,
TSCA / RCRA regulated substances and norm from the interests and property and
associated activities and will conduct these activities in accordance with all
applicable laws and regulations, including environmental laws.

 

18.02.     Adverse Environmental Conditions.

 

 

(a)

Buyer will have until [****] ([****]) days after the Execution Date to notify
ExxonMobil of any material adverse environmental condition of the Interests or
Property that Buyer finds unacceptable and provide evidence of the condition to
ExxonMobil. Buyer’s notice shall include a report that includes analytical data,
proposed remediation criteria, remediation methods, and costs reasonably
estimated to remediate. An environmental condition is a material adverse
environmental condition (“Condition”) only if all the following criteria are
met:

 

 

(1)

the environmental condition is required to be remediated on the Execution Date
under the Environmental Laws in effect on the Execution Date; and

 

 

(2)

the total of the cost to remediate all environmental conditions identified by
Buyer to levels required by the Environmental Laws in effect on the Execution
Date is reasonably estimated to be more than two percent (2%) of the Base
Purchase Price; and

 

 

(3)

the environmental condition was not disclosed to Buyer before the Execution
Date.

 

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(b)

ExxonMobil will have [****] ([****]) days after receipt of Buyer’s notice under
the preceding paragraph, or until [****] ([****]) days before the Closing Date
if it determines that an adverse environmental condition (whether material or
not) may exist with respect to an Interest or Property, to elect any of the
following:

 

 

(1)

adjust the Base Purchase Price based on an Allocation for an Interest by a
mutually acceptable amount reflecting ExxonMobil’s proportionate share, based on
its working interest, of the cost reasonably estimated to remediate a Condition
affecting the Interest;

 

 

(2)

remove the affected Interest from this Agreement and adjust the Base Purchase
Price by the Allocation for the affected Interest;

 

 

(3)

remediate, or agree to remediate, the Condition, as provided below in 18.03
herein;

 

 

(4)

terminate this Agreement and return the Performance Deposit to Buyer; or

 

 

(5)

negotiate an alternative agreement that is acceptable to both Parties.

 

ExxonMobil may delay Closing until the end of this [****] period, which delay
will be in addition to and under the same terms as ExxonMobil’s right to delay
Closing under Section 8.03.

 

 

(c)

If ExxonMobil and Buyer agree to adjust the Base Purchase Price based on an
Allocation because of a Condition, the amount of the adjustment will be the cost
reasonably estimated to remediate the Condition, but only to the level required
by the Environmental Laws in effect on the Execution Date. ExxonMobil may
require Buyer to remit the full Allocation at Closing, without adjustment for
the Condition, but if it does so, it will pay the amount of the adjustment to
Buyer when the remediation is complete under applicable law within a defined
timeframe agreed to by the Parties. If the cost to remediate exceeds the amount
of the adjustment, Buyer will pay the additional costs to remediate the
Condition as required by applicable law.

 

18.03.     Remediation. If ExxonMobil agrees with Buyer to remediate a
Condition, the following will govern the remediation:

 

 

(a)

ExxonMobil will be responsible for all negotiations and contacts with federal,
state, and local agencies and authorities with regard to the Condition. Buyer
may not make any independent contacts with any agency, authority, or other third
party with respect to the Condition and will keep all information regarding the
Condition confidential, except in each instance to the extent required by
applicable law.

 

 

(b)

ExxonMobil will remediate the Condition to the level required by the
Environmental Laws in effect on the Execution Date.

 

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(c)

Buyer will grant access to the Interests and entry on the Property after
Closing, at no cost to ExxonMobil, its Associated Parties, and third parties
conducting assessments or remediation, to the extent and as long as reasonably
necessary to conduct and complete the assessment or remediation work, to remove
equipment and facilities, and to perform any other activities reasonably
necessary in connection with assessment or remediation.

 

 

(d)

Buyer will use reasonable efforts not to interfere with ExxonMobil’s ingress and
egress or assessment or remediation activities. ExxonMobil will make reasonable
efforts to perform the work so as to minimize disruption to Buyer’s business
activities and to the Interests and the Property. In addition Buyer will provide
the relevant regulatory agency any land use restrictions that may be necessary
for ExxonMobil to remediate the Condition to the level required by the
Environmental Laws in effect on the Execution Date.

 

 

(e)

ExxonMobil will continue remediation of the Condition until the first of the
following occurs: the appropriate governmental authorities provide written
notice to ExxonMobil or Buyer that no further remediation of the Condition is
required; or ExxonMobil has reasonably determined that the Condition has been
remediated to the level required by the Environmental Laws or as agreed by the
Parties.

 

Upon such occurrence, ExxonMobil will notify Buyer that remediation, of the
Condition is complete and provide a copy of the government notification
described above, if applicable. Upon delivery of ExxonMobil’s notice, ExxonMobil
will be released from all liability and have no further obligations under any
provisions of this Agreement in connection with the Condition covered by the
notice to the same extent as described in Article 16.

 

 

(f)

Until ExxonMobil completes remediation of a Condition, ExxonMobil and Buyer will
each notify the other of any pending or threatened Claim, action, or proceeding
by any authority or private party that relates to or would affect the
environmental condition, the assessment, or the remediation of the Interests or
Property.

 

 

(g)

After delivery of possession or Closing (whichever occurs first) and before
ExxonMobil has completed remediation of a Condition, if a leak, spill, or
discharge of any material or substance (“Occurrence”) occurs on the Property or
Interests, or any part of them, Buyer will promptly notify ExxonMobil, notify
appropriate regulatory authorities, and act promptly to minimize the effects of
the Occurrence. If a spill, leak or discharge occurs and ExxonMobil determines
that it may affect the area where ExxonMobil is conducting remediation or
assessment, Buyer will hire a consultant (who must be acceptable to ExxonMobil)
to assess the effect of the Occurrence on the environmental condition of the
Property, Interest, and ExxonMobil’s remediation work and the cost of the
additional work required as the result of the Occurrence. Unless the Occurrence
was caused solely by ExxonMobil, Buyer will be responsible for the incremental
cost of remediating the impact of the Occurrence. If ExxonMobil elects to expand
the remediation to incorporate the remediation of the Occurrence, Buyer will
promptly pay its share of costs and expenses to ExxonMobil as the work is
performed, within thirty (30) days of receipt of invoices for the work (with
supporting documentation). Payments not made timely will bear interest at a rate
of [****]% per annum or the maximum lawful rate, whichever is less, compounded
daily from the date of Buyer’s receipt of the invoice until paid.

 

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If the cost of the additional work equals or exceeds the cost which would have
been incurred but for the Occurrence, ExxonMobil may elect to pay Buyer the cost
that would have been incurred by ExxonMobil to complete the remediation but for
the Occurrence. As consideration for this payment, Buyer will accept the
Condition and environmental Condition of the Property and Interests as they
exist on the date of the payment, assume full responsibility for remediating the
Property and Interests and related off site contamination in accordance with
this Agreement, and agree to release, not to sue, indemnify, hold harmless, and
defend ExxonMobil and its Associated Parties as to Claims and Liabilities
arising from the Occurrence to the same extent as described in Article 16.

 

 

(h)

If ExxonMobil undertakes remediation as to any Interest in which ExxonMobil’s
ownership was less than 100%, Buyer will bill the other working interest owners
for their share of the remediation expenses (following receipt by Buyer of
appropriate documentation). Regardless of whether Buyer recoups any amount from
the other working interest owners, Buyer will refund to ExxonMobil, within sixty
(60) days of each ExxonMobil invoice, with documentation, any amounts expended
by ExxonMobil over the amount formerly attributable to ExxonMobil’s working
interest share.

 

 

(i)

If ExxonMobil will assess or remediate the Interests or Property after Closing,
the Assignment and Bill of Sale or other recordable instrument will restate the
rights and obligations of this Section 18.03.

 

18.04.     Disposal of Materials, Substances, and Wastes; Compliance with Law.
Buyer will store, handle, transport, and dispose of or discharge all materials,
substances, and wastes from the Interests and Property (including produced
water, drilling fluids, NORM, asbestos, PCBs, and other wastes), whether present
before or after the Effective Time, in accordance with applicable local, state,
and federal laws and regulations. Buyer will identify themselves as the
generator of the waste on all required regulatory documents and / or manifests
and be responsible for any reporting requirements. Buyer will keep records of
the types, amounts, and location of materials, substances, and wastes that are
stored, transported, handled, discharged, released, or disposed of onsite and
offsite. When any lease terminates, an interest in which has been assigned under
this Agreement, Buyer will undertake additional testing, assessment, closure,
reporting, or remedial action with respect to the Interests or Property affected
by the termination as is necessary to satisfy all local, state, or federal
requirements in effect at that time and necessary to restore the Property or
Interests.

 

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Article 19.     BUYER’S AND EXXONMOBIL’S REPRESENTATIONS

 

19.01.     Representations Not Exclusive. Buyer’s representations under this
Article are in addition to its other representations under this Agreement and
the Additional Instruments.

 

19.02.      Securities Laws.

 

 

(a)

Buyer acknowledges that the solicitation of an offer for and the sale of the
Interests by ExxonMobil has not been registered under any securities laws.

 

 

(b)

Buyer intends to acquire the Interests for its own benefit and account and is
not acquiring the Interests with the intent of distributing fractional undivided
interests in them or otherwise selling them in a manner that would be subject to
regulation by federal or state securities laws. If Buyer sells, transfers, or
otherwise disposes of the Interests or fractional undivided interests in them in
the future, it will do so in compliance with applicable federal and state laws.

 

 

(c)

Buyer represents that at no time has it been presented with or solicited by or
through any public promotion or other form of advertising in connection with
this transaction.

 

19.03.     Basis of Buyer’s Decision. Buyer represents that:

 

 

(a)

subject to its rights to conduct an Environmental Assessment under Section 5.03,
it has reviewed and investigated the Interests and Property to its satisfaction
in order to enter into this Agreement;

 

 

(b)

subject to its rights to conduct an Environmental Assessment under Section 5.03,
it has evaluated the Interests and Property to its satisfaction and has made an
informed decision, as a prudent and knowledgeable purchaser, to acquire the
Interests and Property;

 

 

(c)

it is knowledgeable and experienced in the evaluation, acquisition, and
operation of oil and gas properties;

 

 

(d)

it has evaluated the merits and risks of purchasing the Interests and has formed
an opinion based solely upon its knowledge and experience and not in reliance on
any statements or actions by ExxonMobil or its Associated Parties except the
representations and warranties of ExxonMobil set forth herein;

 

 

(e)

it will acquire the Interests and Property “as is, where is,” and with all
faults; and

 

 

(f)

it has incurred no brokerage fees, finder’s fees, agent’s commissions or other
similar forms of compensation to an intermediary as a result of undertakings or
agreements of Buyer or any Affiliate of Buyer in connection with the
negotiation, execution or delivery of this Agreement or any agreement or
transaction contemplated hereby for which ExxonMobil will have directly,
indirectly, any responsibility, liability or expense.

 

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19.04.     Material Factor. Buyer acknowledges that its representations under
this Article, the rest of this Agreement, and the Additional Instruments are a
material inducement to ExxonMobil to enter into this Agreement with, and close
the sale to, Buyer.

 

19.05.     ExxonMobil’s Representations. Each of the ExxonMobil entities
represents that as of the Execution Date:

 

 

(a)

Organization. It is a duly organized entity, validly existing and in good
standing, is duly qualified to carry on its business in connection with the
interests has full power and authority to enter into and perform pursuant to
this Agreement according to its terms.

 

 

(b)

No Conflict. Its execution, delivery and performance of this Agreement and the
transactions contemplated hereby have been duly authorized by all necessary
action in accordance with the terms of the applicable organizational agreements
and it will not violate or conflict with any agreement, law, rule, regulation,
or charter.

 

 

(c)

Validity of Agreement. It has the corporate or limited partnership power to
carry on its business as presently conducted, to execute and deliver this
Agreement and the other agreements and documents contemplated hereby and to
perform its obligations under this Agreement and the other agreements and
documents contemplated hereby. This Agreement has been duly executed and
delivered and constitutes a valid and binding obligation on ExxonMobil, duly
authorized and enforceable against it in accordance with the terms hereof

 

 

(d)

Bankruptcy. There are no bankruptcy, reorganization or receivership proceedings
pending, being contemplated or threatened against ExxonMobil.

 

 

(e)

Liability for Brokerage Fees. There are no brokerage fees, finder’s fees,
agent’s commissions or other similar forms of compensation to an intermediary as
a result of undertakings or agreements of ExxonMobil or any Affiliate of
ExxonMobil in connection with the negotiation, execution or delivery of this
Agreement or any agreement or transaction contemplated hereby for which Buyer
will have directly, indirectly, any responsibility, liability or expense.

 

 

(f)

Material Related Agreements. Based on ExxonMobil’s information and belief, after
reasonable inquiry to appropriate personnel, all Material Related Agreements are
identified on Exhibit A, Exhibit A-1, Exhibit B or Exhibit K.

 

Article 20.     GAS IMBALANCES

 

20.01.     ExxonMobil’s and Buyer’s Respective Obligations. For those Interests
with cumulative gas-production-imbalance accounts among working interest owners,
Buyer acknowledges that the amounts (i) are derived from either Operator’s
statements or ExxonMobil’s estimates based upon current production, prior sales
history, and contract information, (ii) were provided to Buyer before the
Execution Date, and (iii) were taken into consideration in Buyer’s calculation
of the Base Purchase Price and the Allocations. After the Effective Time, all
benefits, obligations, and liabilities associated with these
gas-production-imbalance accounts and related agreements will accrue to and
become Buyer’s responsibility. Buyer will assume ExxonMobil’s overproduced or
underproduced position as of the Effective Time. If there is a cash settlement
due ExxonMobil at the time of Closing under any operating agreement, plan of
unitization, or gas balancing agreement for an Interest, ExxonMobil shall retain
all rights to the cash settlement.

 

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Buyer represents that in calculating the Base Purchase Price and its
Allocations, it has considered ExxonMobil’s procedures for paying royalties and
severance taxes with regard to each gas-production-imbalance account.

 

20.02.     Settlement.

 

 

(a)

If either (1) before Closing, or (2) on the later of ExxonMobil’s preparation of
the Final Settlement Statement or [****] after Closing, either Party determines
that a Material Difference (as defined below) exists between the total of the
gas-production-imbalance accounts represented in Exhibit E and the total of the
gas-production-imbalance accounts as of the Effective Time, then the Base
Purchase Price will be adjusted if there is a Material Difference. The value of
the difference will be calculated by multiplying the volume difference by
$[****] per Mcf (thousand cubic feet). A “Material Difference” exists if the
absolute value of the difference exceeds $[****].

 

 

(b)

Regardless of whether a Material Difference exists, if the difference between
the represented and actual gas-production imbalance account for an Interest
exceeds $[****], then each Party shall have the election of withdrawing that
Interest from this Agreement and adjusting the Base Purchase Price by the
Allocation for the Interest. The difference in the gas-production-imbalance
account for the withdrawn Interest will not be used to determine whether a
Material Difference exists.

 

 

(c)

If a Material Difference identified before Closing exceeds [****] percent
([****]%) of the Base Purchase Price, then either Party may, upon written notice
to the other, terminate this Agreement, in which case, the Performance Deposit
will be returned to Buyer. Before terminating this Agreement, however,
ExxonMobil and Buyer will each make a good-faith effort to negotiate a
settlement.

 

Article 21.     FINAL SETTLEMENT STATEMENT

 

ExxonMobil will prepare a final settlement statement and submit it to Buyer
within [****] after the Closing Date (the “Final Settlement Statement”). The
Final Settlement Statement will deduct royalties, operating expenses, taxes,
overhead, and other amounts due to ExxonMobil from amounts due to Buyer as
provided in this Agreement, with adjustments as necessary for items identified
after Closing. Upon Buyer’s request, ExxonMobil will provide information
reasonably necessary to support the amounts set forth in the Final Settlement
Statement. ExxonMobil may set off any resulting amount due to Buyer against
amounts that Buyer may otherwise owe to ExxonMobil or its Affiliates when the
Final Settlement Statement is prepared.

 

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Buyer must respond in writing with objections and proposed corrections within
thirty (30) days of receiving the Final Settlement Statement. If the Parties
cannot resolve their differences within [****] days of ExxonMobil’s receipt of
Buyer’s objections, then the alternate dispute resolution and arbitration
procedures of Article 17 will be triggered. If Buyer does not respond to the
Final Settlement Statement by signing or objecting in writing within the 30-day
period, the statement will be deemed approved by Buyer. After approval of the
Final Settlement Statement, ExxonMobil will send payment or invoice to Buyer for
the net amount. If payment is not made within thirty (30) days of Buyer’s
receiving the invoice, the amount due may, at ExxonMobil’s option, bear interest
at a rate of [****] percent ([****]%) per annum or the maximum lawful rate,
whichever is less, compounded daily from the date of Buyer’s receipt of the
invoice until paid. Inquiries regarding the Final Settlement Statement must be
in writing, addressed to:

 

ExxonMobil Upstream Business Development Company

22777 Springwoods Village Parkway

Spring, TX 77389

Attention: Divestments Manager

 

Article 22.     INTENTIONALLY LEFT BLANK

 

Article 23.     COMMUNICATIONS

 

Unless otherwise provided in this Agreement, communications (including notices)
under this Agreement that must be in writing and delivered by a specified date
will be deemed to have been made when received at the following addresses by
registered or certified mail, postage prepaid, or by messenger:

 

ExxonMobil:

Buyer:

 

ExxonMobil Upstream Business Development Company

P.O. Box 2180

Houston, Texas 77252-2180

22777 Springwoods Village Parkway

Spring, Texas 77389

Attention: Divestments Manager

 

W&T Offshore, Inc. Nine Greenway Plaza Houston, TX 77046

Attention: Land Manager

 

Article 24. [****]

 

[****]

 

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Article 25.     HART-SCOTT-RODINO ANTITRUST IMPROVEMENTS ACT OF 1976; REQUIRED
FILINGS IN FOREIGN JURISDICTIONS

 

25.01.     Obligation to Make Filings. Each Party shall make all necessary
filings for which it is responsible pursuant to the Hart-Scott-Rodino Antitrust
Improvements Act of 1976 (the “HSR Act”), the EU Merger Regulation and any other
law that requires a mandatory merger control filing with respect to the
transaction covered by this Agreement, if applicable, within fifteen (15)
Business Days of the Execution Date and shall supply promptly all additional
information and documentary material requested by any government entity in
connection with such filings or as otherwise required under the HSR Act or other
applicable law.

 

Each Party shall be responsible for and shall timely pay all filing fees
required of such Party in connection with HSR Act filings and any other
antitrust, trade or competition law filings required in any other jurisdiction.

 

25.02.     Cooperation on Making Filings. Each Party to this Agreement shall
promptly notify the other Parties of any communication it or any of its
Affiliates receives from any governmental entity relating to the matters that
are the subject of this Agreement and permit the other Parties to review in
advance, to the extent permitted by law, any proposed communication by such
Party to any governmental entity. No Party to this Agreement shall agree to
participate in any meeting with any governmental entity in respect of any
filings, investigation or other inquiry unless it consults with the other
parties in advance and, to the extent permitted by such governmental authority,
gives the other parties the opportunity to attend and participate at such
meeting. The Parties will coordinate and cooperate fully and promptly with each
other in exchanging such information and providing such assistance as the other
parties may reasonably request in connection with the foregoing and in seeking
early termination of any applicable waiting periods, including those under the
HSR Act. To the extent permitted by law, the Parties will provide each other
with copies of all correspondence, filings or communications between them or any
of their representatives, on the one hand, and any governmental entity or
members of its staff, on the other hand, with respect to this Agreement and the
transactions contemplated by this Agreement.

 

Buyer agrees to use reasonable commercial efforts and to take promptly any and
all steps necessary to avoid or eliminate each and every impediment under any
antitrust, competition, or trade regulation law that may be asserted by any
governmental entity or any other person with respect to the transaction
contemplated by this Agreement so as to enable the Closing to occur
expeditiously, but in no case later than the scheduled date of Closing,
including providing information, proposing, negotiating, committing to and/or
effecting, by consent decree, hold separate orders, or otherwise, the sale,
divestiture or disposition of, or holding separate (through the establishment of
a trust or otherwise) such of its assets, properties or businesses or of the
assets, properties or businesses of the Interests to be acquired by it under
this Agreement as are required to be divested in order to avoid the entry of, or
to effect the dissolution of, any decree, order, judgment, injunction, temporary
restraining order or other order in any suit or proceeding, which would
otherwise have the effect of materially delaying or preventing the consummation
of the transaction or that would make the consummation of the transaction in
accordance with the terms of this Agreement unlawful. In addition, Buyer shall
use reasonable commercial efforts to defend through litigation on the merits any
claim asserted in court by any party in order to avoid entry of, or to have
vacated or terminated, any decree, order or judgment (whether temporary,
preliminary or permanent) that would restrain or prevent the Closing by the
scheduled date of Closing.

 

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Buyer shall use reasonable commercial efforts in making any settlement offers
and negotiating any consent decree or consent order with any governmental entity
in order to permit the transaction under this Agreement to be consummated prior
to the scheduled date of Closing. Buyer agrees that, at any time in an
investigation, if a governmental entity suggests or proffers a settlement of the
investigation to permit the transactions contemplated by this Agreement to
close, the Buyer shall promptly (and in any event within one (1) Business Day)
communicate the terms of the offer to ExxonMobil. Buyer, in its sole discretion,
may accept or reject any settlement of the investigation proposed by any
governmental entity.

 

The parties agree, pursuant to Article 8.06(b), that receipt of all required
competition law or merger control consents or clearances, or expiration of
applicable waiting period under the HSR Act or any other applicable competition
laws, is a condition precedent to Closing. In the event that all required such
consents or clearances required under this Article 25 are not obtained, or any
such waiting periods have not expired, prior to the scheduled date of Closing,
then subject to Article 8.09 the Closing date will be extended until all such
consents and clearances are received or waiting periods have expired.

 

Article 26.     EXXONMOBIL’S DISCLAIMER OF WARRANTIES AND REPRESENTATIONS

 

Except as expressly set out in section 19.05 herein and in Article 5 of
Exhibit c, ExxonMobil has not made, and will not make, any warranty or
representation, express, implied, or statutory, whatsoever in connection with
this Agreement or the transaction contemplated by it, including the accuracy or
completeness of data, information, or materials furnished at any time to Buyer
in connection with the interests or property, or the quality (including the
presence of hydrogen sulfide) or quantity of hydrocarbon reserves (if any)
attributable to the interests, or the ability of the interests to produce
hydrocarbons. None of ExxonMobil’s Associated Parties is authorized to make any
warranty or representation on ExxonMobil’s behalf. All data, information, and
other materials furnished by ExxonMobil are provided to buyer as a convenience,
and reliance on or use of them is at Buyer’s sole risk.

 

Article 27.     MISCELLANEOUS

 

27.01.     No Joint and Several Obligations. In the event that there are
multiple sellers under this Agreement, the obligations of each seller are
several, and not joint and several.

 

27.02.     Entire Agreement. This Agreement and the Additional Instruments
constitute the entire agreement between the Parties as to the transaction
described in this Agreement. All previous negotiations and communications
between the Parties as to these matters are merged into this Agreement and the
Additional Instruments.

 

27.03.     Successors and Assigns; Amendment; Survival.

 

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(a)

This Agreement is binding on and inures to the benefit of the Parties and their
respective successors, heirs, representatives, and assigns and may be
supplemented, altered, amended, modified, or revoked only in writing signed by
both Parties. Neither the assignment of this Agreement nor of the Interests or
any part of them will relieve Buyer of its obligations under this Agreement
unless and to the extent ExxonMobil consents in writing to release Buyer, which
consent may be withheld for any reason.

 

 

(b)

All provisions of this Agreement and the Additional Instruments that cannot be
performed before Closing and all representations, promises, releases, and
indemnities under this Agreement and the Additional Instruments will survive
Closing.

 

 

(c)

The following provisions survive the termination of this Agreement:

 

 

(1)

Section 5.02 (Access to ExxonMobil-Operated Interests);

 

 

(2)

Section 5.03 (Environmental Assessment), including Exhibit F;

 

 

(3)

Section 5.07 (Buyer’s Confidentiality Obligations);

 

 

(4)

Article 16 (Release, Discharge, and Covenant not to Sue and Obligations to
Indemnify, Defend, and Hold Harmless);

 

 

(5)

Article 17 (Alternate Dispute Resolution and Arbitration);

 

 

(6)

Article 18 (Environmental Matters);

 

 

(7)

Article 19 (Buyer’s Representations);

 

 

(8)

Article 22 (Broker’s and Finder’s Fees);

 

 

(9)

Article 23 (Communications);

 

 

(10)

Article 26 (ExxonMobil’s Disclaimer of Warranties and Representations); and

 

 

(11)

Article 27 (Miscellaneous).

 

27.04.     Choice of Law. This Agreement and its performance will be construed
in accordance with, and enforced under, the internal laws of the State of Texas,
without regard to choice of law rules of any jurisdiction, including Texas.

 

27.05.     Assignment. Neither this Agreement nor the rights and obligations
under it may be assigned or delegated by Buyer without ExxonMobil’s prior
written consent, which consent may be withheld for any reason, and an attempted
assignment or delegation is void.

 

27.06.     No Admissions. Neither this Agreement, nor any part of it, nor any
performance under this Agreement, nor any payment of any amount under this
Agreement will constitute or may be construed as a finding, evidence of, or an
admission or acknowledgment of any liability, fault, past or present wrongdoing,
or violation of law, rule, regulation, or policy, by either ExxonMobil or Buyer
or their respective Associated Parties.

 

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27.07.     No Third-Party Beneficiaries. There are no third party beneficiaries
of this Agreement.

 

27.08.     Public Communications. Unless provided otherwise in this Agreement,
Buyer will not make any press release or public communication concerning this
transaction or ExxonMobil’s operation of the Interests without ExxonMobil’s
prior written consent, which consent may be withheld for any reason. ExxonMobil
shall not require remuneration of any kind for such consent. Without prejudice
to the foregoing, Buyer shall provide ExxonMobil with any proposed press release
or public communication at least [****] ([****]) Business Days prior to its
proposed release date. Notwithstanding the foregoing, if Buyer determines in
good faith after consultation with legal counsel that it is required by law,
rule or stock exchange requirement to make a prompt public comment, statement or
communication or any other disclosure with respect to this Agreement or any
other disclosure with respect to this Agreement, it will use reasonable best
efforts to provide written notice as soon as reasonably practicable to
ExxonMobil specifying the content of the proposed disclosure, the reason that
such disclosure is required, and the time and place that the disclosure will be
made prior to its proposed disclosure date and provide ExxonMobil with
reasonable opportunity to comment on same.

 

27.09.     Audit Clause. If ExxonMobil will own an interest after Closing in any
Interest or Property (including overriding royalties, deep rights, and
facilities, equipment, or pipelines) or continue to own interests for which
ExxonMobil requires access across the Interests or Property in order to exercise
its rights, then, ExxonMobil will reserve concurrent interests in the applicable
easements, rights-of-way, contracts and other rights relating to the retained or
reserved interests. ExxonMobil reserves the right to perform an audit as stated
below.

 

If the immediately preceding sentence is applicable, ExxonMobil, upon notice in
writing to Buyer, shall have the right to access the buyer’s offices,
facilities, work sites, warehouses, books, records, correspondence,
instructions, plans, drawings, receipts, vouchers, financial accounts, data
stored in computer files or microfiche and personnel to audit Buyer’s accounts
and records relating to the retained royalty interest, including any hedge
agreements, facilities used for the measurement of production from the
properties, for any calendar year within the twenty-four (24) month period
following the end of such calendar year. The same audit rights are to extend to
subcontractors. Buyer shall maintain supporting data and accounting records
consistent with generally accepted accounting principles, and the employees and
agents of ExxonMobil shall have the right to reproduce and retain for the
purpose of audit, any of these documents. ExxonMobil shall not be liable for any
of Buyer’s Contractor’s or Subcontractor’s costs resulting from an audit
hereunder.

 

27.10.     Headings and Titles. The headings and titles in this Agreement are
for guidance and convenience of reference only and do not limit or otherwise
affect or interpret the terms or provisions of this Agreement.

 

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27.11.     Exhibits. All exhibits referenced in and attached to this Agreement
are incorporated into it.

 

27.12.     Includes. The word “includes” and its syntactical variants mean
“includes, but is not limited to” and corresponding syntactical variants. The
rule ejusdem generis may not be invoked to restrict or limit the scope of the
general term or phrase followed or preceded by an enumeration of particular
examples.

 

27.13.     Severability. If a court of competent jurisdiction finds any part of
this Agreement to be void, invalid, or otherwise unenforceable, then ExxonMobil
may decide whether to enforce this Agreement without the void, invalid, or
unenforceable parts or to terminate this Agreement.

 

27.14.     Counterparts. This Agreement may be executed in multiple
counterparts, all of which together will be considered one instrument.

 

27.15.     Conflicts. If the text of this Agreement conflicts with the terms of
any exhibit to this Agreement, then the text of this Agreement will control.

 

27.16.     Not to Be Construed against the Drafter. Buyer acknowledges that it
has read this Agreement, has had opportunity to review it with an attorney of
its choice, and has agreed to all of its terms. Under these circumstances, the
Parties agree that the rule of construction that a contract be construed against
the drafter may not be applied in interpreting this Agreement.

 

27.17.     No Waiver. No waiver by either Party of any part of this Agreement
will be deemed to be a waiver of any other part of this Agreement or a waiver of
strict performance of the waived part in the future.

 

27.18.     Conspicuousness. BUYER ACKNOWLEDGES THAT THE PROVISIONS OF THIS
AGREEMENT THAT ARE PRINTED IN THE SAME MANNER AS THIS SECTION ARE CONSPICUOUS.

 

27.19.    Execution by the Parties. Neither the submission of this instrument or
any information concerning the Interests for Buyer’s examination, nor
discussions or negotiations between the Parties constitutes an offer to sell, a
reservation of, or an option for the Interests or Property, and this instrument
and the underlying transaction will become enforceable and binding between the
Parties only upon execution and delivery of this instrument by both ExxonMobil
and Buyer.

 

49

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The Parties have executed this Agreement on the date below their signatures, to
be enforceable and binding as of the Execution Date.

 

W&T OFFSHORE, INC.

 

EXXON MOBIL CORPORATION

           

By:

/s/ Tracy W. Krohn

 

By:

/s/ Mickey D. Johnson

         

Name:

Tracy W. Krohn

 

Name:

Mickey D. Johnson

         

Title:

Chief Executive Officer

 

Title:

Agent and Attorney-in-Fact

         

Date:

6-26-19

 

Date:

6-26-19

 

 

MOBIL OIL EXPLORATION &

PRODUCING SOUTHEAST INC.

 

XH, LLC

           

By:

/s/ Mickey D. Johnson

 

By:

/s/ Mickey D. Johnson

         

Name:

Mickey D. Johnson

 

Name:

Mickey D. Johnson

         

Title:

Agent and Attorney-in-Fact

 

Title:

Agent and Attorney-in-Fact

         

Date:

6-26-19

 

Date:

6-26-19

 

 

EXXON MOBILE BAY LIMITED

PARTNERSHIP

 

EXXONMOBIL U.S.

PROPERTIES INC.

     

Exxon Mobil Corporation, General Partner, on behalf of Exxon Mobile Bay Limited
Partnership

         

By:

/s/ Jarod M. Rolland

 

By:

/s/ Mickey D. Johnson

         

Name:

Jarod M. Rolland

 

Name:

Mickey D. Johnson

         

Title:

Agent and Attorney-in-Fact

 

Title:

Agent and Attorney-in-Fact

         

Date:

June 26, 2019

 

Date:

6-26-19

 

50