Exhibit 10.1

Execution Version

PURCHASE AND SALE AGREEMENT

AMONG

LEGACY ENERGY, INC.

AS SELLER

NIMIN ENERGY CORP.

AS PARENT

AND

BREITBURN OPERATING L.P.

AS BUYER

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TABLE OF CONTENTS

 

Article I     Assets      1      Section 1.01  

Agreement to Sell and Purchase

     1      Section 1.02  

Assets

     1      Section 1.03  

Excluded Assets

     3    Article II     Purchase Price      3      Section 2.01  

Purchase Price

     3      Section 2.02  

Property Values

     4      Section 2.03  

Law

     4      Section 2.04  

Effective Time

     4    Article III     Title Matters      4      Section 3.01  

Examination Period

     4      Section 3.02  

Defensible Title and Permitted Encumbrances

     4      Section 3.03  

Title Defect

     7      Section 3.04  

Notice of Title Defects

     7      Section 3.05  

Remedies for Title Defects and Title Benefits

     8      Section 3.06  

Special Warranty of Title

     9      Section 3.07  

Preferential Rights To Purchase

     9      Section 3.08  

Consents to Assignment

     10      Section 3.09  

Remedies for Title Benefits

     11    Article IV     Environmental Matters      11      Section 4.01  

Environmental Review

     11      Section 4.02  

Environmental Definitions

     12      Section 4.03  

Notice of Environmental Defects

     13      Section 4.04  

Remedies for Environmental Defects

     14    Article V     Representations and Warranties of Seller      15     
Section 5.01  

Seller’s Existence

     15      Section 5.02  

Legal Power

     15      Section 5.03  

Authority; Enforceability

     15      Section 5.04  

Brokers

     15      Section 5.05  

Bankruptcy

     15      Section 5.06  

Suits

     16      Section 5.07  

Royalties

     16      Section 5.08  

Taxes

     16      Section 5.09  

Leases; Easements; Contracts

     16      Section 5.10  

Liens

     17      Section 5.11  

Imbalances

     17      Section 5.12  

No Conflict or Violation

     17      Section 5.13  

Consents; Preferential Rights

     17      Section 5.14  

Compliance with Laws

     17   

 

(i)

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  Section 5.15  

Permits

     17      Section 5.16  

Wells

     17      Section 5.17  

Proposed Operations or Expenditures

     18      Section 5.18  

Status of Seller

     18      Section 5.19  

Environmental

     18      Section 5.20  

Payout

     18      Section 5.21  

Suspense Funds

     18    Article VI     Representations and Warranties of Buyer      19     
Section 6.01  

Buyer’s Existence

     19      Section 6.02  

Legal Power

     19      Section 6.03  

Authority; Enforceability

     19      Section 6.04  

Brokers

     19      Section 6.05  

Bankruptcy

     19      Section 6.06  

Suits

     19      Section 6.07  

Qualifications

     20      Section 6.08  

Investment

     20      Section 6.09  

Financial Resources

     20      Section 6.10  

Due Diligence Investigation

     20      Section 6.11  

Approvals

     20    Article VII     Seller’s Conditions to Close      20      Section
7.01  

Representations

     20      Section 7.02  

Performance

     20      Section 7.03  

Pending Matters

     21      Section 7.04  

Purchase Price

     21      Section 7.05  

Execution and Delivery of the Closing Documents

     21      Section 7.06  

Securityholder Approval

     21    Article VIII     Buyer’s Conditions to Close      21      Section
8.01  

Representations

     21      Section 8.02  

Performance

     21      Section 8.03  

Pending Matters

     21      Section 8.04  

Execution and Delivery of the Closing Documents

     21      Section 8.05  

Securityholder Approval

     21    Article IX     Tax Matters      21      Section 9.01  

Transfer Taxes

     21      Section 9.02  

Asset Taxes

     22      Section 9.03  

Tax Cooperation

     22      Section 9.04  

Tax Definitions

     23    Article X     The Closing      24      Section 10.01  

Time and Place of the Closing

     24      Section 10.02  

Adjustments to Purchase Price at the Closing

     24   

 

(ii)

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  Section 10.03  

Closing Statement

     25      Section 10.04  

Actions of Seller at the Closing

     25      Section 10.05  

Actions of Buyer at the Closing

     26      Section 10.06  

Actions of Parent at the Closing

     26    Article XI     Termination      26      Section 11.01  

Right of Termination

     26      Section 11.02  

Effect of Termination

     27      Section 11.03  

Termination Damages

     27      Section 11.04  

Attorneys’ Fees, Etc

     29    Article XII     Post-Closing Obligations      29      Section 12.01  

Allocation of Expense and Revenues

     29      Section 12.02  

Final Statement

     30      Section 12.03  

Further Cooperation

     30    Article XIII     Covenants and Operation of the Assets      31     
Section 13.01  

Operations after Effective Time

     31      Section 13.02  

Limitations on the Operational Obligations and Liabilities of Seller

     32      Section 13.03  

Special Meeting; Information Circular/Proxy Statement

     32      Section 13.04  

Required Approvals

     33      Section 13.05  

Operation of the Assets After the Closing

     34      Section 13.06  

Casualty Loss

     35      Section 13.07  

Operatorship

     35      Section 13.08  

Records

     35      Section 13.09  

Administrative Duties and Other Obligations

     36      Section 13.10  

Reserved

     36      Section 13.11  

No-Shop

     36      Section 13.12  

Support Agreement

     42    Article XIV     Obligations and Indemnification      42      Section
14.01  

Retained Obligations

     42      Section 14.02  

Assumed Obligations

     43      Section 14.03  

Buyer’s Indemnification

     43      Section 14.04  

Seller’s Indemnification – Third Party Non-Environmental Claims

     44      Section 14.05  

Seller’s Indemnification – Third Party Environmental Claims

     44      Section 14.06  

Notices and Defense of Indemnified Matters

     45    Article XV     Limitations on Representations and Warranties      45
     Section 15.01  

Disclaimers of Representations and Warranties

     45      Section 15.02  

Independent Investigation

     46      Section 15.03  

Survival

     46    Article XVI     Dispute Resolution      46      Section 16.01  

General

     46   

 

(iii)

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  Section 16.02  

Senior Management

     47      Section 16.03  

Dispute by Independent Expert

     47      Section 16.04  

Limitation on Arbitration

     47    Article XVII     Miscellaneous      48      Section 17.01  

Names

     48      Section 17.02  

Expenses

     48      Section 17.03  

Document Retention

     48      Section 17.04  

Entire Agreement

     48      Section 17.05  

Waiver

     48      Section 17.06  

Publicity and Disclosure of Agreement

     48      Section 17.07  

Reasonable Commercial Efforts

     49      Section 17.08  

Construction

     49      Section 17.09  

No Third Party Beneficiaries

     49      Section 17.10  

Assignment

     49      Section 17.11  

Governing Law

     49      Section 17.12  

Notices

     49      Section 17.13  

Severability

     50      Section 17.14  

Time of the Essence

     50      Section 17.15  

Counterpart Execution

     50      Section 17.16  

Parent Liability

     50      Section 17.17  

Financial Statements

     50   

 

(iv)

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EXHIBITS AND SCHEDULES

 

Exhibit A    – Subject Interests Exhibit B    – Wells and Interests Exhibit C   
– Allocated Values Exhibit D    – Form of Assignment and Bill of Sale Exhibit
E-1    – Form of Seller’s Officer’s Certificate Exhibit E-2    – Form of
Parent’s Officer’s Certificate Exhibit F    – Form of Buyer’s Officer’s
Certificate Exhibit G    – Form of Support Agreement Schedule 1.02(e)    –
Contracts Schedule 1.03    – Excluded Assets Schedule 3.07    – Preferential
Purchase Rights Schedule 3.08    – Consents Schedule 5.06    – Existing Claims
and Litigation Schedule 5.08    – Taxes Schedule 5.11    – Imbalances Schedule
5.14    – Compliance with Laws Schedule 5.15    – Permits Schedule 5.16    – P&A
Wells Schedule 5.17    – Proposed Operations or Expenditures Schedule 5.19    –
Environmental Schedule 5.20    – Payout Schedule 5.21    – Suspense Funds
Schedule 10.02(b)(iii)    – Liens for Taxes and Assessments Schedule 13.04    –
Required Approvals Schedule 13.12    – Officers and Directors

 

(v)

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DEFINITIONS

 

TERM

  

SECTION

Acquisition Proposal    Section 13.11(a)(i) Agreement    Preamble Allocated
Values    Section 2.02 Asset Taxes    Section 9.04(a) Assets    Section 1.02
Assignment    Section 10.04(a) Assumed Obligations    Section 14.02 Audited
Special Financial Statements    Section 17.17(c) Business Days    Section 3.01
Buyer    Preamble Buyer Additional Asset Taxes    Section 9.02 Buyer’s
Environmental Consultant    Section 4.01(a) Buyer’s Environmental Review   
Section 4.01(a) Buyer Indemnitees    Section 14.04 CERCLA    Section 4.02(c)
Closing    Section 10.01 Closing Date    Section 10.01 Contracts    Section
1.02(e) Defensible Title    Section 3.02 Disputes    Section 16.01 Documents   
Section 17.03 Due Diligence Period    Section 13.11(a)(ii) Easements    Section
1.02(c) Effective Time    Section 2.04 Environmental Defect    Section 4.02(a)
Environmental Defect Value    Section 4.02(d) Environmental Permits    Section
5.19(b) Environmental Information    Section 4.01(b) Environmental Laws   
Section 4.02(c) Examination Period    Section 3.01 Exchange Act    Section
17.17(a) Excluded Assets    Section 1.03 Final Settlement Date    Section
12.02(a) Final Statement    Section 12.02(b) Governmental Authority    Section
4.02(b) Hydrocarbons    Section 1.02(d) Independent Expert    Section 16.03(a)
Information Circular    Section 13.03(b) Law    Section 2.03 Leases    Section
1.02(a) Losses    Section 14.03

 

(i)

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TERM

  

SECTION

Net Revenue Interest    Section 3.02(a) Notice of Disagreement    Section
12.02(a) Parent    Preamble Parent Securityholder Approval    Section 13.03(a)
Parent Securityholders    Section 13.03(a) Party or Parties    Preamble Permits
   Section 5.15 Permitted Encumbrances    Section 3.02(d) Person    Section
1.02(g) Personal Property    Section 1.02(d) Proposed Final Statement    Section
12.02(a) Purchase Price    Section 2.01 Purchase Price Adjustments    Section
10.02(c) Records    Section 1.02(f) Regulatory Authority    Section 13.04(a)
Representatives    Section 13.11(b) Required Approvals    Section 13.04(a)
Retained Obligations    Section 14.01 SEC    Section 17.17(a) Securities Act   
Section 17.17(a) Seller    Preamble Seller Additional Asset Taxes    Section
9.02 Seller Indemnitees    Section 14.03 Seller’s Auditor    Section 17.17(a)
Special Financial Statements    Section 17.17(a) Special Meeting    Section
13.03(b) Statement    Section 10.03 Straddle Period    Section 9.04(b) Subject
Interest(s)    Section 1.02(a) Superior Proposal    Section 13.11(a)(ii) Tax or
Taxes    Section 9.04(c) Tax Return    Section 9.04(d) Third Party    Section
1.02(g) Title Benefit    Section 3.09(a) Title Defect    Section 3.03 Title
Defect Value    Section 3.04(c) Transfer Taxes    Section 9.01 Working Interest
   Section 3.02(b)

 

(ii)

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PURCHASE AND SALE AGREEMENT

This Purchase and Sale Agreement (this “Agreement”) is made and entered into
this 24th day of April, 2012, by and among Legacy Energy, Inc., a Delaware
corporation (“Seller”), NiMin Energy Corp., an Alberta corporation, and owner of
all of the outstanding shares of common stock of Seller (“Parent”), and
BreitBurn Operating L.P., a Delaware limited partnership (“Buyer”). Buyer,
Seller and Parent are collectively referred to herein as the “Parties,” and are
sometimes referred to individually as a “Party.”

W I T N E S S E T H:

WHEREAS, Seller is willing to sell to Buyer, and Buyer is willing to purchase
from Seller, the Assets (as defined in Section 1.02), all upon the terms and
conditions hereinafter set forth;

WHEREAS, the Board of Directors of Parent and Seller (i) have determined that
the transaction is fair and in the best interest of Parent and its stockholders
and Seller and its stockholders and (ii) have approved and adopted this
Agreement and the transaction contemplated by this Agreement;

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

Article I

Assets

Section 1.01 Agreement to Sell and Purchase. Subject to and in accordance with
the terms and conditions of this Agreement, Buyer agrees to purchase the Assets
from Seller, and Seller agrees to sell the Assets to Buyer.

Section 1.02 Assets. Subject to Section 1.03, the term “Assets” shall mean all
of Seller’s right, title and interest in and to:

 

  (a) the leasehold estates in and to the oil, gas and mineral leases described
or referred to in Exhibit A (the “Leases”), the lands covered by the Leases, and
any fee interests, fee mineral interests, royalties, net profits interests and
overriding royalty interests in and to the lands covered by the Leases,
assignments and other documents of title described or referred to in Exhibit A,
all as more specifically described in Exhibit A (collectively, the “Subject
Interests,” or singularly, a “Subject Interest”);

 

  (b)

all rights incident to the Subject Interests, including, without limitation,
(i) all rights with respect to the use and occupation of the surface of and the
subsurface depths under the Subject Interests; (ii) all rights with respect to
any pooled, communitized or unitized acreage by virtue of any Subject Interest
being a part thereof, including all Hydrocarbon (as defined in Subsection (d) of
this Section 1.02) production after the Effective Time (as

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  defined in Section 2.02) attributable to the Subject Interests or any such
pool or unit allocated to any such Subject Interest;

 

  (c) to the extent assignable or transferable, all easements, rights-of-way,
surface leases, servitudes, permits, licenses, franchises and other estates or
similar rights and privileges directly related to or used in connection with the
Subject Interests (the “Easements”), including, without limitation, the
Easements described or referred to in Exhibit A;

 

  (d) to the extent assignable or transferable, all personal property,
equipment, fixtures, inventory and improvements located on or used in connection
with the Subject Interests and the Easements or with the production, treatment,
sale or disposal of oil, gas or other hydrocarbons (collectively,
“Hydrocarbons”), including, without limitation, all wells and well locations
located on the lands covered by the Subject Interests or on lands with which the
Subject Interests may have been pooled, communitized or unitized (whether
producing, shut in or abandoned, and whether for production, injection or
disposal), including, without limitation, the wells described in Exhibit B,
wellhead equipment, pumps, pumping units, flowlines, pipelines, gathering
systems, piping, tanks, buildings, treatment facilities, injection facilities,
disposal facilities, compression facilities and other materials, supplies,
equipment, facilities and machinery (collectively, “Personal Property”);

 

  (e) to the extent assignable or transferable, all contracts, agreements and
other arrangements (excluding the Leases and the Easements) that directly relate
to the Subject Interests, the Leases or the Easements, including, without
limitation, production sales contracts, farmout agreements, operating
agreements, service agreements and similar arrangements (collectively, the
“Contracts,” including, without limitation, the Contracts described in Schedule
1.02(e));

 

  (f) all books, records, files, muniments of title, reports and similar
documents and materials, including, without limitation, lease records, well
records and division order records, well files, title records (including
abstracts of title, title opinions and memoranda, and title curative documents
related to the Assets), contracts and contract files and correspondence, in each
case that relate to the foregoing interests, in the possession of, and
maintained by, Seller (collectively, the “Records”);

 

  (g)

all geological and geophysical data relating to the Subject Interests, other
than such data which cannot be transferred without the consent of (provided that
Seller shall use commercially reasonable efforts to obtain such consent) or
payment to any Third Party (unless paid by Buyer). For purposes of this
Agreement, (i) “Person” means any individual, firm, corporation, partnership,
limited liability company, joint venture, association, trust, unincorporated
organization, Governmental Authority or

 

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  any other entity; and (ii) “Third Party” means any Person or entity,
governmental or otherwise, other than Seller or Buyer, and their respective
affiliates; the term includes, but is not limited to, working interest owners,
royalty owners, lease operators, landowners, service contractors and
governmental agencies; and

 

  (h) any other assets that are located in the State of Wyoming or that are used
or useful to the Assets described in Section 1.02(a) through Section 1.02(g).

Section 1.03 Excluded Assets. Notwithstanding the foregoing, the Assets shall
not include, and there is excepted, reserved and excluded from the sale
contemplated hereby (collectively, the “Excluded Assets”): (a) to the extent
received by Seller or Buyer within 90 days after Closing, all credits and
refunds (other than those relating to Taxes, which are governed by Subsection
(b) below) and all accounts, instruments and general intangibles (as such terms
are defined in the Texas Uniform Commercial Code) attributable to the Assets
with respect to any period of time prior to the Effective Time; (b) to the
extent received by Seller or Buyer within 90 days after Closing, all claims of
Seller for refunds of or loss carry forwards with respect to (i) income or
franchise Taxes imposed on Seller, or (ii) any Taxes attributable to the other
Excluded Assets, and such other refunds, and rights thereto, for amounts paid in
connection with the Assets and attributable to the period prior to the Effective
Time, including refunds of amounts paid under any gas gathering or
transportation agreement, but excluding for the avoidance of doubt, any refunds
of Asset Taxes; (c) to the extent received by Seller or Buyer within 90 days
after Closing, all proceeds, income or revenues (and any security or other
deposits made) attributable to (i) the Assets for any period prior to the
Effective Time, or (ii) any other Excluded Assets; (d) all of Seller’s
proprietary computer software, technology, patents, trade secrets, copyrights,
names, trademarks and logos; (e) all of Seller’s rights and interests in
geological and geophysical data which cannot be transferred without the consent
of (provided that Seller shall use commercially reasonable efforts to obtain
such consent) or payment to any Third Party; (f) data and other information that
cannot be disclosed or assigned to Buyer as a result of confidentiality or
similar arrangements under agreements with Persons unaffiliated with Seller;
(g) to the extent received by Seller or Buyer within 90 days after Closing, all
audit rights arising under any of the Contracts or otherwise with respect to any
period prior to the Effective Time or to any of the other Excluded Assets;
(h) all corporate, partnership and income Tax records of Seller; (i) vehicles,
office equipment and supplies; and (j) the items described on Schedule 1.03.

Article II

Purchase Price

Section 2.01 Purchase Price. The total consideration for the purchase, sale and
conveyance of the Assets to Buyer is Buyer’s payment to Seller of the sum of
$98,050,000 (the “Purchase Price”), as adjusted in accordance with the
provisions of this Agreement. The adjusted Purchase Price shall be paid to
Seller (or its designee) at Closing (as defined in Section 10.01) by means of a
completed federal funds transfer to an account designated in writing by Seller.

 

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Section 2.02 Property Values. Buyer and Seller have agreed on the allocation of
values among the Assets as set forth in Exhibit C (the “Allocated
Values”). Seller and Buyer agree that the Allocated Values shall be used for
federal income tax purposes, for computation of any adjustments to the Purchase
Price pursuant to the provisions of Article III and Article IV, and for all
other purposes incident to this Agreement.

Section 2.03 Law. For the purposes of this Agreement, “Law” means any statute,
Law, rule, regulation, ordinance, order, code, ruling, writ, injunction, decree
or other official act of or by any Governmental Authority.

Section 2.04 Effective Time. If the transactions contemplated hereby are
consummated in accordance with the terms and provisions hereof, the ownership of
the Assets shall be transferred from Seller to Buyer on the Closing Date, and
effective as of 7:00 a.m. local time where the Assets are located on April 1,
2012 (the “Effective Time”).

Article III

Title Matters

Section 3.01 Examination Period. Following the execution date of this Agreement
until the Closing (the “Examination Period”), Seller shall permit Buyer and/or
its representatives to examine, at all reasonable times, in Seller’s offices,
all abstracts of title, title opinions, title files, ownership maps, lease
files, contract files, assignments, division orders, operating and accounting
records and agreements pertaining to the Assets insofar as same may now be in
existence and in the possession of Seller. “Business Days” means all calendar
days excluding Saturdays, Sundays and U.S. legal holidays.

Section 3.02 Defensible Title and Permitted Encumbrances. For purposes of this
Agreement, the term “Defensible Title” means, with respect to a given Asset,
such ownership by Seller in such Asset that, subject to and except for the
Permitted Encumbrances (as defined in Subsection (d) of this Section 3.02):

 

  (a) entitles Seller to receive not less than the percentage set forth in
Exhibit B as Seller’s “Net Revenue Interest” of all Hydrocarbons produced, saved
and marketed from each well or unit as set forth in Exhibit B, all without
reduction, suspension or termination of such interest throughout the productive
life of such well;

 

  (b) obligates Seller to bear not greater than the percentage set forth in
Exhibit B as Seller’s “Working Interest” of the costs and expenses relating to
the maintenance, development and operation of each well or unit as set forth in
Exhibit B, all without increase throughout the productive life of such well; and

 

  (c) is free and clear of all liens, encumbrances and defects in title.

 

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

 

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  (i) the Contracts described in Schedule 1.02(e);

 

  (ii) any (A) undetermined or inchoate liens or charges constituting or
securing the payment of expenses that were incurred incidental to the
maintenance, development, production or operation of the Assets or for the
purpose of developing, producing or processing Hydrocarbons therefrom or
therein, and (B) materialman’s, mechanics’, repairman’s, employees’,
contractors’, operators’ liens or other similar liens or charges for liquidated
amounts arising in the ordinary course of business (1) that Seller has agreed to
assume or pay pursuant to the terms hereof, or (2) for which Seller will pay or
release at the Closing;

 

  (iii) any liens for current period Taxes to the extent there has been a
reduction in the Purchase Price under this Agreement for such liens;

 

  (iv) the terms, conditions, restrictions, exceptions, reservations,
limitations and other matters contained in (including any liens or security
interests created by Law or reserved in oil and gas leases for royalty, bonus or
rental, or created to secure compliance with the terms of) the agreements,
instruments and documents that create or reserve to Seller its interest in the
Assets, provided that the net cumulative effect of such matters does not operate
to reduce the Net Revenue Interests of Seller for any well, well location or
unit below those set forth in Exhibit B or increase the Working Interests of
Seller for any well, well location or unit above those set forth in Exhibit B
for such well, well location or unit without a corresponding increase in the Net
Revenue Interests;

 

  (v) any obligations or duties affecting the Assets to any municipality or
public authority with respect to any franchise, grant, license or permit and all
applicable Laws, rules, regulations and orders of any Governmental Authority (as
defined in Section 4.02(b));

 

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

 

  (vii)

all lessors’ royalties, overriding royalties, net profits interests, carried
interests, production payments, reversionary interests and

 

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  other burdens on or deductions from the proceeds of production created or in
existence as of the Effective Time, whether recorded or unrecorded, provided
that the net cumulative effect of such matters does not operate to reduce the
Net Revenue Interests of Seller for any well, well location or unit below those
set forth in Exhibit B or increase the Working Interests of Seller for any well,
well location or unit above those set forth in Exhibit B or such well, well
location or unit without a corresponding increase in the Net Revenue Interests;

 

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

 

  (ix) required Third Party consents to assignments or similar agreements with
respect to which (A) waivers or consents are obtained from the appropriate
parties for the transaction contemplated hereby, or (B) required notices have
been given for the transaction contemplated hereby to the holders of such rights
and the appropriate period for asserting such rights has expired without an
exercise of such rights;

 

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

 

  (xi) rights reserved to or vested in any Governmental Authority to control or
regulate any of the Assets and the applicable Laws, rules and regulations of
such Governmental Authorities; and

 

  (xii)

all defects (but not liens), irregularities affecting the Assets that
individually or in the aggregate (A) do not operate to (1) reduce the Net
Revenue Interests of Seller for any well, well location or unit below those set
forth on Exhibit B, (2) increase the proportionate share of costs and expenses
of leasehold operations attributable to or to be borne by the Working Interests
of Seller for any well, well location or unit above those set forth on Exhibit
B, or (3) otherwise interfere materially with the operation, value or use of the
Assets, or (4) would be accepted by a reasonably prudent buyer in the business
of owning and operating similar oil and gas properties; or (B) operate to
increase the proportionate share of costs and expenses of leasehold operations
attributable to or to be borne by the Working Interest of Seller for any well,
well location or unit

 

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  above those set forth on Exhibit B, so long as there is a proportionate
increase in Seller’s Net Revenue Interest for such well, well location or unit.

Section 3.03 Title Defect. The term “Title Defect,” as used in this Agreement,
shall mean: (a) any encumbrance, encroachment, irregularity, defect in or
objection to Seller’s ownership of any Asset (expressly excluding Permitted
Encumbrances) that causes Seller not to have Defensible Title to such Asset; or
(b) any default by Seller under a lease, farmout agreement or other contract or
agreement that would (i) have a material adverse effect on the operation, value
or use of such Asset, (ii) prevent Seller from receiving the proceeds of
production attributable to Seller’s interest therein or (iii) result in
cancellation of Seller’s interest therein.

Section 3.04 Notice of Title Defects.

 

  (a) If Buyer discovers any Title Defect affecting any Asset, Buyer shall
notify Seller as promptly as possible but no later than the expiration of the
Examination Period of such alleged Title Defect. To be effective, such notice
must (i) be in writing, (ii) be received by Seller prior to the expiration of
the Examination Period, (iii) describe the Title Defect in sufficient, specific
detail (including any alleged variance in the Net Revenue Interest) to the
extent reasonably known, (iv) identify the specific Asset or Assets affected by
such Title Defect, and (v) include the value of such Title Defect as determined
by Buyer. Any matters that may otherwise constitute Title Defects, but of which
Seller has not been specifically notified by Buyer in accordance with the
foregoing, shall be deemed to have been waived by Buyer for all purposes, except
under the Assignment.

 

  (b) Upon the receipt of such effective notice from Buyer, subject to
Section 3.05 Seller and Buyer shall attempt to mutually agree on a resolution
including, but not limited to (i) attempt to cure such Title Defect at any time
prior to the Closing or (ii) exclude the affected Asset from the sale and reduce
the Purchase Price by the mutually agreed allocated value of such affected
Asset.

 

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

 

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

 

  (ii)

If the Title Defect asserted is that the Net Revenue Interest attributable to
any well or unit is less than that stated in Exhibit C or the Working Interest
attributable to any well or unit is greater than that stated in Exhibit C, then
the Title Defect Value shall take

 

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  into account the relative change in the interest from Exhibit C and the
appropriate Allocated Value attributed to such Asset.

 

  (iii) If the Title Defect represents an obligation, encumbrance, burden or
charge upon the affected Asset (including any increase in Working Interest for
which there is not a proportionate increase in Net Revenue Interest) of a type
not described in Subsections (i) and (ii) of Section 3.04(c) for which the
economic detriment to Buyer is unliquidated, the amount of the Title Defect
Value shall be determined by taking into account the following factors: the
Allocated Value of the affected Asset, the portion of the Asset affected by the
Title Defect, the legal effect of the Title Defect, the potential discounted
economic effect of the Title Defect over the life of the affected Asset, the
Title Defect Values placed upon the Title Defect by Buyer and Seller and such
other reasonable factors as are necessary to make a proper evaluation.

 

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

 

  (v) The Title Defect Value of a Title Defect shall be determined without
duplication of any costs or losses included in another Title Defect Value
hereunder.

 

  (vi) Notwithstanding anything herein to the contrary, in no event shall a
Title Defect Value exceed the Allocated Value of the wells, units or other
Assets affected thereby.

 

  (vii) If Buyer and Seller agree on the Title Defect Value, that amount shall
be the Title Defect Value.

 

  (viii) Such other factors as are reasonably necessary to make a proper
evaluation.

Section 3.05 Remedies for Title Defects and Title Benefits.

 

  (a) With respect to each Title Defect that is not cured on or before the
Closing, the Purchase Price shall be reduced by an amount equal to the Title
Defect Value agreed upon in writing by Buyer and Seller.

 

  (b) If any Title Defect is in the nature of an unobtained consent to
assignment or other restriction on assignability, the provisions of Section 3.08
shall apply.

 

  (c)

If on or before Closing the Parties have not agreed upon the validity of any
asserted Title Defect or have not agreed on the Title Defect Value attributable
thereto, either Party shall have the right to elect to have the

 

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  validity of such Title Defect and/or such Title Defect Value determined by an
Independent Expert pursuant to Section 16.03; provided that if the validity of
any asserted Title Defect, or the Title Defect Value attributable thereto, is
not determined before Closing, the affected Asset shall be conveyed to Buyer at
Closing and the Purchase Price paid at Closing shall be reduced such that only
the undisputed Allocated Value with respect to any affected Asset shall be paid
at Closing, and upon the final resolution of such dispute pursuant to Article
XVI, to the extent it is determined that the subject Title Defect was not valid
or that the Title Defect Amount used to reduce the Purchase Price was
overstated, Buyer shall promptly refund to Seller the amount determined pursuant
to such final resolution that was withheld by Buyer at Closing.

 

  (d) Notwithstanding anything to the contrary in this Agreement, (i) if the
value of a given individual Title Defect (or individual Title Benefit (as
defined in Section 3.09(a))) does not exceed $25,000, then no adjustment to the
Purchase Price shall be made for such Title Defect (or Title Benefit), (ii) if
the aggregate adjustment to the Purchase Price determined in accordance with
this Agreement for Title Defects (exceeding $25,000) and Environmental Defects
(exceeding $25,000), or for Title Benefits, does not exceed three percent
(3%) of the Purchase Price prior to any adjustments thereto, then no adjustment
of the Purchase Price shall be made therefor, and (iii) if the aggregate
adjustment to the Purchase Price determined in accordance with this Agreement
for Title Defects (exceeding $25,000) and Environmental Defects (exceeding
$25,000), or for Title Benefits, does exceed three percent (3%) of the Purchase
Price prior to any adjustments thereto, then the Purchase Price shall only be
adjusted by the amount of such excess.

Section 3.06 Special Warranty of Title. Seller hereby agrees to warrant and
defend title to the Assets unto Buyer against every Person whomsoever lawfully
claiming or to claim the same or any part thereof, by, through or under Seller
and its affiliates, but not otherwise; subject, however, to the Permitted
Encumbrances and the other matters set forth herein.

Section 3.07 Preferential Rights To Purchase.

 

  (a) Buyer’s good faith allocation of values as set forth in Exhibit C shall be
used to prepare an allocation of the Purchase Price to Assets that are subject
to preferential purchase rights and shall be set forth in Schedule 3.07. Seller
shall use its reasonable efforts to comply with all preferential right purchase
provisions relative to any Asset prior to Closing.

 

  (b)

If, prior to Closing, a holder of a preferential purchase right exercises its
rights with respect to an Asset to which its preferential purchase right applies
(as determined in accordance with the agreement in which the preferential
purchase right arises) and consummates the purchase, then the Asset covered by
such preferential purchase right shall be excluded from

 

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  the Assets to be conveyed to Buyer, and the Purchase Price shall be reduced by
the Allocated Value of such Asset.

 

  (c) If by Closing, either (a) the time frame for the exercise of a
preferential purchase right has not expired and Seller has not received notice
of an intent not to exercise or a waiver of the preferential purchase right, or
(b) a holder of a preferential purchase right exercises its right but fails to
consummate the purchase prior to Closing, then Seller shall retain the Assets
conveyed by such preferential purchase rights and the Purchase Price shall be
adjusted downward by an amount equal to the Allocated Value of such Assets. As
to any Assets retained by Seller hereunder, following Closing, if a preferential
purchase right is not consummated within the time frame specified in the
preferential purchase right, or if the time frame for exercise of the
preferential purchase right expires without exercise after the Closing, then,
subject to the same terms and conditions set forth in this Agreement, Seller
shall promptly convey the applicable Asset to Buyer effective as of the
Effective Time, and Buyer shall pay the Allocated Value thereof pursuant to the
terms of this Agreement up to and through the Final Settlement Date and in
connection with the payments to be made with respect to the Final Statement as
set forth in Section 12.02(b).

 

  (d) Seller shall use reasonable efforts to send out the applicable
preferential right to purchase notices within five Business Days after the date
this Agreement is executed. Buyer acknowledges and agrees that Seller shall
determine (in its good faith judgment) the extent of the preferential purchase
rights encumbering the Assets, and said determination shall be used by Seller to
provide the preferential purchase right notifications.

Section 3.08 Consents to Assignment. Seller shall use all reasonable efforts to
obtain all necessary consents from Third Parties to assign the Assets prior to
Closing (other than governmental approvals that are customarily obtained after
Closing), and Buyer shall assist Seller with such efforts. Such consents are set
forth on Schedule 3.08. If prior to Closing, Seller fails to obtain a consent to
assign that would invalidate the conveyance of the Asset affected by the consent
to assign or materially affect the value or use of the Asset, then Seller shall
retain the affected Asset and the Purchase Price shall be reduced by the
Allocated Value of the affected Asset. If such consent has been obtained as of
the Final Settlement Date, then Seller shall convey the affected Asset to Buyer
effective as of the Effective Time, subject to the same terms and conditions set
forth in this Agreement, and Buyer shall pay Seller the Allocated Value of the
affected Asset, in accordance with the terms and conditions of this Agreement.
If such consent has not been obtained as of the Final Settlement Date, the
affected Asset shall be excluded from the sale and the Purchase Price shall be
deemed to be reduced by an amount equal to the Allocated Value of the affected
Asset. Buyer shall reasonably cooperate with Seller in obtaining any required
consent including providing assurances of reasonable financial conditions, but
Buyer shall not be required to expend funds or make any other type of financial
commitments as a condition of obtaining such consent.

 

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Section 3.09 Remedies for Title Benefits.

 

  (a) If either Party discovers any Title Benefit during the Examination Period
affecting the Assets, it shall promptly notify the other Party in writing
thereof on or before the expiration of the Examination Period. Subject to
Section 3.05, Seller shall be entitled to an upward adjustment to the Purchase
Price pursuant to Section 10.02(a)(i) with respect to all Title Benefits, in an
amount mutually agreed upon by the Parties. For purposes of this Agreement, the
term “Title Benefit” shall mean Seller’s interest in any Subject Interest that
is greater than or in addition to that set forth in Exhibit B (including,
without limitation, a Net Revenue Interest that is greater than that set forth
in Exhibit B) or Seller’s Working Interest in any Subject Interest that is less
than the Working Interest set forth in Exhibit B (without a corresponding
decrease in the Net Revenue Interest). Any matters that may otherwise constitute
Title Benefits, but of which Buyer has not been specifically notified by Seller
in accordance with the foregoing, shall be deemed to have been waived by Seller
for all purposes.

 

  (b) If with respect to a Title Benefit the Parties are not deemed to have
agreed on the amount of the upward Purchase Price adjustment or have not
otherwise agreed on such amount prior to the Closing Date, Seller or Buyer shall
have the right to elect to have such Purchase Price adjustment determined by an
Independent Expert pursuant to Section 16.03. If the amount of such adjustment
is not determined pursuant to this Agreement by the Closing, the undisputed
portion of the Purchase Price with respect to the Asset affected by such Title
Benefit shall be paid by Buyer at the Closing and, subject to Section 3.05, upon
determination of the amount of such adjustment, any unpaid portion thereof shall
be paid by Buyer to Seller.

Article IV

Environmental Matters

Section 4.01 Environmental Review.

 

  (a)

Buyer shall have the right to conduct or cause a consultant (“Buyer’s
Environmental Consultant”) to conduct an environmental review of the Assets
prior to the expiration of the Examination Period (“Buyer’s Environmental
Review”). The cost and expense of Buyer’s Environmental Review, if any, shall be
borne solely by Buyer. The scope of work comprising Buyer’s Environmental Review
shall be limited to that mutually agreed by Buyer and Seller prior to
commencement thereof and shall not include any intrusive test or procedure
without the prior consent of Seller. Buyer shall (and shall cause Buyer’s
Environmental Consultant to): (i) consult with Seller before conducting any work
comprising Buyer’s Environmental Review, (ii) perform all such work in a safe
and workmanlike manner and so as to not unreasonably interfere with Seller’s

 

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  operations, and (iii) comply with all applicable Laws, rules and regulations.
Buyer shall be responsible for, provided that Seller shall provide all
reasonable assistance in, obtaining any Third Party consents that are required
in order to perform any work comprising Buyer’s Environmental Review, and Buyer
shall consult with Seller prior to requesting each such Third Party consent.
Seller shall have the right to have a representative or representatives
accompany Buyer and Buyer’s Environmental Consultant at all times during Buyer’s
Environmental Review. With respect to any samples taken in connection with
Buyer’s Environmental Review, Buyer shall take split samples, providing one of
each such sample, properly labeled and identified, to Seller. Buyer hereby
agrees to release, defend, indemnify and hold harmless Seller from and against
all claims, losses, damages, costs, expenses, causes of action and judgments of
any kind or character (INCLUDING THOSE RESULTING FROM SELLER’S SOLE, JOINT,
COMPARATIVE OR CONCURRENT NEGLIGENCE OR STRICT LIABILITY) to the extent arising
out of Buyer’s Environmental Review.

 

  (b) Unless otherwise required by applicable Law, Buyer shall (and shall cause
Buyer’s Environmental Consultant to) treat confidentially any matters revealed
by Buyer’s Environmental Review and any reports or data generated from such
review (the “Environmental Information”), and Buyer shall not (and shall cause
Buyer’s Environmental Consultant to not) disclose any Environmental Information
to any Governmental Authority or other Third Party without the prior written
consent of Seller. Unless otherwise required by Law, Buyer may use the
Environmental Information only in connection with the transactions contemplated
by this Agreement. If Buyer, Buyer’s Environmental Consultant or any Third Party
to whom Buyer has provided any Environmental Information become legally
compelled to disclose any of the Environmental Information, Buyer shall provide
Seller with prompt notice sufficiently prior to any such disclosure so as to
allow Seller to file any protective order, or seek any other remedy, as it deems
appropriate under the circumstances. If this Agreement is terminated prior to
the Closing, Buyer shall deliver the Environmental Information to Seller, which
Environmental Information shall become the sole property of Seller. Buyer shall
provide two copies of the Environmental Information to Seller without charge.

Section 4.02 Environmental Definitions.

 

  (a) Environmental Defects. For purposes of this Agreement, the term
“Environmental Defect” shall mean, with respect to any given Asset, an
individual environmental condition that constitutes a violation of, or requires
remediation under, Environmental Laws in effect as of the date of this Agreement
in the jurisdiction in which such Asset is located. Environmental Defect shall
not be deemed to include an environmental condition described on Schedule 5.19.

 

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  (b) Governmental Authority. For purposes of this Agreement, the term
“Governmental Authority” shall mean, as to any given Asset, the United States
and the state, county, parish, city and political subdivisions in which such
Asset is located and that exercises jurisdiction over such Asset, and any
agency, department, board or other instrumentality thereof that exercises
jurisdiction over such Asset.

 

  (c) Environmental Laws. For purposes of this Agreement, the term
“Environmental Laws” shall mean all Laws, statutes, ordinances, court decisions,
rules and regulations of any Governmental Authority pertaining to health or the
environment as may be interpreted by applicable court decisions or
administrative orders, including, without limitation, the Clean Air Act, as
amended, the Comprehensive Environmental Response, Compensation and Liability
Act, as amended (“CERCLA”), the Federal Water Pollution Control Act, as amended,
the Occupational Safety and Health Act, as amended, the Resources Conservation
and Recovery Act, as amended, the Safe Drinking Water Act, as amended, the Toxic
Substances Control Act, as amended, the Superfund Amendment and Reauthorization
Act of 1986, as amended, the Hazardous Materials Transportation Act, as amended,
and comparable state and local Laws.

 

  (d) Environmental Defect Value. For purposes of this Agreement, the term
“Environmental Defect Value” shall mean, with respect to any Environmental
Defect, the value, as of the Closing Date, of the estimated costs and expenses
to correct such Environmental Defect consistent with Environmental Laws.

Section 4.03 Notice of Environmental Defects.

 

  (a) If Buyer discovers any Environmental Defect affecting the Assets, Buyer
shall notify Seller prior to the expiration of the Examination Period of such
alleged Environmental Defect. To be effective, such notice must: (i) be in
writing; (ii) be received by Seller prior to the expiration of the Examination
Period; (iii) describe the Environmental Defect in sufficient, specific detail
to the extent then reasonably known; and (iv) state Buyer’s estimate of the
Environmental Defect Value to the extent then reasonably known, including the
basis for such estimate, for which Buyer would agree to adjust the Purchase
Price in order to accept such Environmental Defect if Seller elected
Section 4.04(b) as the remedy therefor.

 

  (b)

Any matters that may otherwise constitute Environmental Defects, but of which
Seller has not been notified by Buyer in accordance with the foregoing, together
with any environmental matter that does not constitute an Environmental Defect,
shall be deemed to have been waived by Buyer for all purposes, except as
provided in Section 14.05. Upon the receipt of such effective notice from Buyer,
subject to Section 4.04(a) and Section 4.04(b) Seller and Buyer shall attempt to
mutually agree on a resolution

 

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  including, but not limited to, (i) attempt to cure such Environmental Defect
at any time prior to the Closing; or (ii) exclude the affected Asset from the
sale and reduce the Purchase Price by the allocated value of such affected
Asset.

Section 4.04 Remedies for Environmental Defects.

 

  (a) If any Environmental Defect described in a notice delivered in accordance
with Section 4.03 is not cured on or before the Closing, then the Purchase Price
shall be reduced by the Environmental Defect Value of such Environmental Defect
as agreed by the Parties.

 

  (b) If Buyer and Seller have not agreed as to the validity of any asserted
Environmental Defect, or if the Parties have not agreed on the Environmental
Defect Value therefor, then on or before three Business Days prior to the
Closing Date either Party shall have the right to elect to have the validity of
the asserted Environmental Defect, and/or the Environmental Defect Value for
such Environmental Defect, determined by an Independent Expert pursuant to
Section 16.03. If the validity of any such asserted Environmental Defect or the
amount of any such Environmental Defect Value is not determined by the Closing,
the Asset affected by such disputed Environmental Defect shall be excluded from
the Closing and the Purchase Price paid at Closing shall be reduced by the
Allocated Value of such Asset. Upon resolution of such dispute, the
Environmental Defect Value, if any, found to be attributable to such
Environmental Defect shall, subject to this Section 4.04, be paid by Seller to
Buyer and the Asset conveyed to Buyer, if that is part of the mutually agreed
settlement. Notwithstanding the foregoing, Seller and Buyer shall each have the
right to exclude an Asset from the sale if the Environmental Defect Value
exceeds the Allocated Value of the Asset(s) affected thereby.

 

  (c) Notwithstanding anything to the contrary in this Agreement, (i) if the
Environmental Defect Value for a given individual Environmental Defect does not
exceed $25,000, then no adjustment to the Purchase Price shall be made for such
Environmental Defect; (ii) if the aggregate adjustment to the Purchase Price
determined in accordance with this Agreement for Environmental Defects
(exceeding $25,000) and Title Defects (exceeding $25,000) does not exceed three
percent (3%) of the Purchase Price prior to any adjustments thereto, then no
adjustment of the Purchase Price shall be made therefore; and (iii) if the
aggregate adjustment to the Purchase Price determined in accordance with this
Agreement for Environmental Defects (exceeding $25,000) and Title Defects
(exceeding $25,000) does exceed three percent (3%) of the Purchase Price prior
to any adjustments thereto, then the Purchase Price shall only be adjusted by
the amount of such excess.

 

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Article V

Representations and Warranties of Seller

Each of Seller and Parent represents and warrants to Buyer as of the date hereof
and as of the Closing that:

Section 5.01 Seller’s Existence. Seller is a corporation, duly organized,
validly existing and in good standing under the Laws of the State of Delaware
and is duly qualified to conduct business, and is in good standing, in each
jurisdiction in which the Assets make such qualification necessary. Seller has
full legal power, right and authority to carry on its business as such is now
being conducted and as contemplated to be conducted. Seller’s headquarters and
principal offices are all located in the State of California.

Section 5.02 Legal Power. Seller has the legal power and right to enter into and
perform this Agreement and the transactions contemplated hereby. The
consummation of the transactions contemplated by this Agreement will not
violate, nor be in conflict with:

 

  (a) any provision of Seller’s certificate of incorporation, by-laws or other
governing documents;

 

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

 

  (c) any judgment, order, ruling or decree applicable to Seller as a party in
interest or any Law, rule or regulation applicable to Seller.

Section 5.03 Authority; Enforceability. The execution, delivery and performance
of this Agreement by Parent and Seller and the consummation by Parent and Seller
of the transactions contemplated hereby have been duly authorized by the Board
of Directors of Parent, and by the Board of Directors and sole stockholder of
Seller and, other than Parent Securityholder Approval, no other corporate
proceedings on the part of Parent or Seller are necessary to authorize Parent’s
or Seller’s execution, delivery and performance of this Agreement and the
consummation of the transactions contemplated hereby. This Agreement constitutes
valid and legally binding obligations of Parent and Seller, enforceable against
Parent and Seller in accordance with its terms, except as the same may be
limited by bankruptcy, insolvency, reorganization, moratorium or other similar
Laws effecting generally the enforcement of creditors’ rights and by general
principles of equity.

Section 5.04 Brokers. Macquarie Tristone Capital LP has acted for or on behalf
of Seller or any affiliate of Seller in connection with this Agreement or the
transactions contemplated by this Agreement. No broker or finder is entitled to
any brokerage or finder’s fee, or to any commission, based in any way on
agreements, arrangements or understandings made by or on behalf of Seller or any
affiliate of Seller for which Buyer has or will have any liabilities or
obligations (contingent or otherwise).

Section 5.05 Bankruptcy. There are no bankruptcy, reorganization or arrangement
proceedings pending, being contemplated by or to the knowledge of Seller
threatened against Seller.

 

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Section 5.06 Suits. There is no material suit, action, claim, investigation or
inquiry by any Person or entity or by any administrative agency or Governmental
Authority and no legal, administrative or arbitration proceeding pending or, to
Seller’s knowledge, threatened against Seller or any affiliate of Seller that
relates to the Assets or the transactions contemplated by this Agreement except
as shown on Schedule 5.06.

Section 5.07 Royalties. All rentals, royalties and other payments due under the
Subject Interests described in Exhibit A have been paid in all material
respects, except those amounts in suspense.

Section 5.08 Taxes.

 

  (a) Each Tax Return required to be filed with respect to the Assets has been
timely and properly filed under applicable Laws and all Taxes due and owed with
respect to the Assets have been timely and properly paid. All such Tax Returns
are correct and complete in all material respects.

 

  (b) Except as set forth on Schedule 5.08, none of the Assets are subject to or
owned by any tax partnership requiring a partnership income Tax Return to be
filed under Subchapter K of Chapter 1 of Subtitle A of the Internal Revenue
Code. To the extent any of the Assets are deemed by agreement or Law to be held
by a partnership for federal income Tax purposes, each such partnership has or
shall have in effect for the taxable year that includes the Closing Date an
election under Section 754 of the Internal Revenue Code that will apply with
respect to such portion of the Assets.

 

  (c) The Assets are not subject to any lien for Taxes, other than Permitted
Encumbrances.

 

  (d) As of the date of this Agreement, neither Seller nor any of its affiliates
has received written notice of any pending claim with respect to the Assets from
any taxing authority for assessment of Asset Taxes, and there are no ongoing
audits, suits, proceedings, assessments, reassessments, deficiency claims or
other claims relating to any Asset Taxes with respect to the Assets by any
applicable taxing authority.

 

  (e) Neither Seller nor any of its affiliates have waived any statute of
limitations in respect of Asset Taxes, nor has Seller or any of its affiliates
agreed to any extension of time with respect to any Asset Tax assessment or
deficiency.

Section 5.09 Leases; Easements; Contracts. Exhibit A sets forth any Leases and
Easements, and Schedule 1.02(e), any material Contracts, that exist as of the
date of this Agreement. Except specified on Exhibit A or Schedule 1.02(e),
Seller is not in material breach of, or material default under, and to the
knowledge of Seller, no other Person is in material breach of, or material
default under, any Lease, Easement or material Contract, and there does not
exist under any provision thereof, to the knowledge of Seller, any event that,
with the giving

 

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of notice or the lapse of time or both, would constitute such a material breach
or material default by any Person.

Section 5.10 Liens. Except for Permitted Encumbrances, the Assets will be
conveyed free and clear of all liens, mortgages and encumbrances.

Section 5.11 Imbalances. Except as set forth on Schedule 5.11, there are no well
imbalances associated with the Assets as of the Effective Time.

Section 5.12 No Conflict or Violation. Neither the execution and delivery of
this Agreement nor the consummation of the transactions and performance of the
terms and conditions contemplated hereby by Seller will (a) conflict with or
result in any breach of any provision of the certificate of incorporation or
by-Laws or other governing documents of Seller; (b) be rendered void or
ineffective by or under the terms, conditions or provisions of any agreement,
instrument or obligation to which Seller is a party or is subject; (c) result in
a default under the terms, conditions or provisions of any Asset (or of any
agreement, instrument or obligation relating to or burdening any Asset); or
(d) violate or be rendered void or ineffective under any Law, other than, in the
case of the matters described in clauses (b), (c) and (d) of this Section 5.12,
the matters referenced in Section 5.13 and such conflicts, breaches, violations,
defaults or other events as will not have a material adverse effect.

Section 5.13 Consents; Preferential Rights. Except for (a) consents or approvals
of, or filings with, any applicable Governmental Authorities in connection with
assignments of the Assets which are not customarily obtained prior to the
assignment of the Assets, (b) preferential purchase rights set forth on Schedule
3.07 and consents set forth on Schedule 3.08 and (c) the consents, filings or
notices expressly described and set forth on Schedule 13.04, no consent,
approval, authorization or permit of, or filing with or notification to, any
Person is required for or in connection with the execution and delivery of this
Agreement by Seller or for or in connection with the consummation of the
transactions and performance of the terms and conditions contemplated hereby by
Seller. To Seller’s knowledge, all agreements containing (x) preferential
purchase rights are set forth in Schedule 3.07 and (y) consents are set forth in
Schedule 3.08.

Section 5.14 Compliance with Laws. Except with respect to (a) matters set forth
on Schedule 5.06 and Schedule 5.14, (b) compliance with Laws concerning taxes
(as to which certain representations and warranties are made pursuant to
Section 5.08) and (c) compliance with Environmental Laws, Seller has no
knowledge of any material violation by Seller of any Law applicable to the
Assets.

Section 5.15 Permits. Schedule 5.15 sets forth all permits, licenses, orders,
approvals, variances, waivers, franchise rights and other authorizations (the
“Permits”) required to be obtained from any Governmental Authority for owning or
operating the Assets and, except as set forth on Schedule 5.15, Seller possesses
and is in compliance with all of the Permits.

Section 5.16 Wells. Except as set forth on Schedule 5.16, there is no well
included in the Assets that: (i) Seller is obligated on the date of this
Agreement by Law or agreement to plug

 

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and abandon; and (ii) to the knowledge of Seller, has been plugged and abandoned
other than in compliance in all material respects with Law.

Section 5.17 Proposed Operations or Expenditures. Except as set forth on
Schedule 5.17, as of the date of this Agreement, there are no outstanding
authorities for expenditure or other commitments to conduct any operations or
expend any amount of money on or with respect to the Assets which are binding on
Seller or the Assets and will be binding on Buyer after Closing and which Seller
reasonably anticipates will require the expenditure of money in excess of
$50,000 per item (net to Seller’s interest).

Section 5.18 Status of Seller. Seller is not an “investment company” or a
company “controlled” by an “investment company” within the meaning of the
Investment Company Act of 1940, as amended.

Section 5.19 Environmental. Except as set forth on Schedule 5.19:

 

  (a) the Assets and Seller with respect to the Assets are in compliance in all
material respects with the requirements of all Environmental Laws;

 

  (b) to the knowledge of Seller, all permits, licenses, approvals, consents,
certificates and other authorizations required by Environmental Laws with
respect to the ownership or operation of the Assets (the “Environmental
Permits”) have been properly obtained and are in full force and effect, and the
Assets are in material compliance with the Environmental Permits; and

 

  (c) Seller (i) is not subject to any pending, material written claim or, to
the knowledge of Seller, threatened, material complaint or claim, related to any
material noncompliance with, or material liabilities arising under,
Environmental Laws with respect to the Assets or to the presence or release of
any hazardous substances on or from any of the Assets, and (ii) has not entered
into, and is not subject to, any pending consent order, consent decree,
compliance order or administrative order pursuant to any Environmental Laws that
relate to the current or future use of the Assets, or that require any
investigation or remediation of hazardous substances in relation to the Assets,
which would reasonably be expected to result in material liability to Seller (or
Buyer following Closing).

Section 5.20 Payout. Schedule 5.20 sets forth the status of any wells with
respect to which there is a before payout and after payout allocation of rights.

Section 5.21 Suspense Funds. Schedule 5.21 sets forth (a) all funds held in
suspense by Seller as of the date hereof that are attributable to the Assets,
(b) a description of the source of such funds and the reason they are being held
in suspense and (c) if known, the name or names of the Persons claiming such
funds or to whom such funds are owed. Seller shall transfer to Buyer at Closing
the amounts of such funds.

 

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Article VI

Representations and Warranties of Buyer

Buyer represents and warrants to Seller and Parent as of the date hereof and as
of the Closing that:

Section 6.01 Buyer’s Existence. Buyer is a limited partnership, validly existing
and in good standing under the Laws of the State of Delaware and is duly
qualified to conduct business, and is in good standing, in each jurisdiction in
which the Assets make such qualification necessary. Buyer has full legal power,
right and authority to carry on its business as such is now being conducted and
as contemplated to be conducted. Buyer’s headquarters and principal offices are
all located in the State of California.

Section 6.02 Legal Power. Buyer has the legal power and right to enter into and
perform this Agreement and the transactions contemplated hereby. The
consummation of the transactions contemplated by this Agreement will not
violate, nor be in conflict with:

 

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

 

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

 

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

Section 6.03 Authority; Enforceability. The execution, delivery and performance
of this Agreement have been duly authorized by all necessary action on the part
of Buyer. This Agreement constitutes valid and legally binding obligations of
Buyer, enforceable against Buyer in accordance with its terms, except as the
same may be limited by bankruptcy, insolvency, reorganization, moratorium or
other similar Laws effecting generally the enforcement of creditors’ rights and
by general principles of equity.

Section 6.04 Brokers. No broker or finder has acted for or on behalf of Buyer or
any affiliate of Buyer in connection with this Agreement or the transactions
contemplated by this Agreement. No broker or finder is entitled to any brokerage
or finder’s fee, or to any commission, based in any way on agreements,
arrangements or understandings made by or on behalf of Buyer or any affiliate of
Buyer for which Seller has or will have any liabilities or obligations
(contingent or otherwise).

Section 6.05 Bankruptcy. There are no bankruptcy, reorganization or arrangement
proceedings pending, being contemplated by or to the knowledge of Buyer
threatened against Buyer or any affiliate of Buyer.

Section 6.06 Suits. There is no material suit, action, claim, investigation or
inquiry by any Person or entity or by any administrative agency or Governmental
Authority and no legal, administrative or arbitration proceeding pending or, to
Buyer’s knowledge, threatened against

 

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Buyer or any affiliate of Buyer that has materially affected or will materially
affect Buyer’s ability to consummate the transactions contemplated herein.

Section 6.07 Qualifications. Buyer is now, and after the Closing shall continue
to be, qualified with all applicable Governmental Authorities to own and operate
the Assets and has, and shall maintain, all necessary bonds to own and operate
the Assets.

Section 6.08 Investment. Prior to entering into this Agreement, Buyer was
advised by and has relied solely on its own legal, tax and other professional
counsel concerning this Agreement, the Assets and the value thereof. Buyer is
acquiring the Assets for its own account and not for distribution or resale in
any manner that would violate any state or federal securities Law, rule,
regulation or order. Buyer understands and acknowledges that if any of the
Assets were held to be securities, they would be restricted securities and could
not be transferred without registration under applicable state and federal
securities Laws or the availability of an exemption from such registration.

Section 6.09 Financial Resources. Buyer currently has, and at Closing will have,
sufficient financial resources available to pay the Purchase Price in full in
cash at Closing.

Section 6.10 Due Diligence Investigation. Prior to Closing, Buyer will have
fully conducted and, except as expressly provided in this Agreement, will be
relying exclusively on its own inspection and investigation in order to satisfy
itself as to the condition and suitability of the Assets. Buyer will be fully
satisfied with its due diligence review of the Assets, subject to Article III,
Article IV and Section 8.01.

Section 6.11 Approvals. No consent, approval, waiver, authorization, notice or
filing (other than those with respect to any Governmental Authority in
connection with assignment of the Assets which are not customarily obtained
prior to the assignment of the Assets) is required to be obtained or made by
Buyer in connection with the execution, delivery and performance by Buyer of
this Agreement, except for such filings as may be required under the Exchange
Act.

Article VII

Seller’s Conditions to Close

The obligations of Seller and Parent to consummate the transaction provided for
herein are subject, at the option of Seller and Parent, to the fulfillment on or
prior to the Closing Date of each of the following conditions (except for those
conditions that by their nature are to be satisfied at the Closing):

Section 7.01 Representations. The representations and warranties of Buyer herein
contained shall be true and correct in all material respects (or in all respects
in the case of any representation or warranty containing any materiality
qualification) on the Closing Date as though made on and as of such date.

Section 7.02 Performance. Buyer shall have performed, in all material respects,
the obligations, covenants and agreements contained in this Agreement to be
performed or complied with by it at or prior to the Closing.

 

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Section 7.03 Pending Matters. No suit, action or other proceeding shall be
pending or threatened that seeks to restrain, enjoin or otherwise prohibit the
consummation of the transactions contemplated by this Agreement.

Section 7.04 Purchase Price. Buyer shall have delivered to Seller the Purchase
Price, as the same may be adjusted hereunder, in accordance with the provisions
of Article II.

Section 7.05 Execution and Delivery of the Closing Documents. Buyer shall have
executed, acknowledged and delivered, as appropriate, to Seller all closing
documents described in Section 10.05.

Section 7.06 Securityholder Approval. Parent Securityholder Approval, as defined
in Section 13.03, shall have been obtained.

Article VIII

Buyer’s Conditions to Close

The obligations of Buyer to consummate the transaction provided for herein are
subject, at the option of Buyer, to the fulfillment on or prior to the Closing
Date of each of the following conditions (except for those conditions that by
their nature are to be satisfied at the Closing):

Section 8.01 Representations. The representations and warranties of Seller and
Parent herein contained shall be true and correct in all material respects (or
in all respects in the case of any representation or warranty containing any
materiality qualification) on the Closing Date as though made on and as of such
date.

Section 8.02 Performance. Seller and Parent shall have performed, in all
material respects, the obligations, covenants and agreements contained in this
Agreement to be performed or complied with by it at or prior to the Closing.

Section 8.03 Pending Matters. No suit, action or other proceeding shall be
pending or threatened that seeks to restrain, enjoin or otherwise prohibit the
consummation of the transactions contemplated by this Agreement.

Section 8.04 Execution and Delivery of the Closing Documents. Seller shall have
executed, acknowledged and delivered, as appropriate, to Buyer all closing
documents described in Section 10.04.

Section 8.05 Securityholder Approval. Parent Securityholder Approval shall have
been obtained.

Article IX

Tax Matters

Section 9.01 Transfer Taxes. All sales, use, transfer and similar Taxes and all
recording fees incurred by or imposed with respect to the transfer of the Assets
to Buyer pursuant to this Agreement (“Transfer Taxes”) shall be the
responsibility of, and shall be paid by, Buyer. Buyer and Seller shall
reasonably cooperate in good faith to minimize, to the extent permissible

 

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under applicable Law, the amount of any such Transfer Taxes. For the avoidance
of doubt, Seller shall retain all liability for and shall pay all income Tax,
franchise Tax and similar Taxes imposed on any income or gain realized by Seller
pursuant to the transactions contemplated in this Agreement.

Section 9.02 Asset Taxes. Seller shall retain responsibility for and bear all
Asset Taxes for (a) any period ending prior to the Effective Time and (b) the
portion of any Straddle Period that ends immediately prior to the Effective
Time. All Asset Taxes with respect to the ownership or operation of the Assets
arising on or after the Effective Time shall be allocated to and borne by Buyer.
For purposes of allocation between Seller and Buyer of Asset Taxes that are
payable with respect to Straddle Periods, the portion of any such Asset Taxes
that are attributable to the portion of the Straddle Period that ends
immediately prior to the Effective Time shall (i) in the case of Asset Taxes
that are based upon or related to income or receipts or imposed on a
transactional basis such as severance or production Taxes, be deemed equal to
the amount that would be payable if the tax year or period ended immediately
prior to the Effective Time; and (ii) in the case of other Asset Taxes, be
deemed equal to the product of (A) the amount of such Asset Taxes multiplied by
(B) the quotient of the number of days in the portion of such Straddle Period
ending on the day immediately prior to the day on which the Effective Time
occurs, divided by the total number of days in such Straddle Period.
Notwithstanding anything to the contrary in this Agreement, any ad valorem,
property or similar Asset Taxes assessed on or measured by the deemed value of
an Asset that is determined, pursuant to applicable law, from the prior
production of Hydrocarbons therefrom, shall be allocated and deemed attributable
to the period in which the relevant production of Hydrocarbons occurred,
regardless of whether such Asset Tax is assessed, imposed or payable in a later
period. Such Asset Taxes described in the preceding sentence that are
attributable to production occurring in the taxable period that includes the
Effective Time shall be prorated based on the amount of production occurring in
such period prior to the Effective Time, on the one hand, and the amount of
production occurring in such period on and after the Effective Time, on the
other hand, with the amount of such Asset Taxes allocable to the portion of the
period ending immediately prior to the Effective Time being the responsibility
of Seller and the remainder being the responsibility of Buyer. To the extent the
actual amount of an Asset Tax is not determinable at Closing or at the time the
Final Statement is prepared, as applicable, Buyer and Seller shall utilize the
most recent information available in estimating the amount of such Asset Tax for
purposes of Sections 10.02(a)(ii), 10.02(b)(iii), 12.01(b)(i) and 12.01(c)(i).
If, at the time the Final Statement is prepared, the amount of such Asset Tax
paid by Seller, plus, if applicable, the amount of any adjustment to the
Purchase Price with respect to such Asset Tax made pursuant to
Section 10.02(b)(iii) minus, if applicable, the amount of any adjustment to the
Purchase Price with respect to such Asset Tax made pursuant to
Section 10.02(a)(ii) is (x) less than Seller’s share (or an estimate thereof) of
the actual amount of such Asset Tax determined pursuant to the foregoing
provisions of this Section 9.02, then Seller shall promptly pay Buyer an amount
equal to such difference pursuant Section 12.01(c)(i) (the “Seller Additional
Asset Taxes”) or (y) more than Seller’s share (or an estimate thereof) of the
actual amount of such Asset Tax, determined pursuant to the foregoing provisions
of this Section 9.02, then Buyer shall promptly pay Seller an amount equal to
such difference pursuant to Section 12.01(b)(i) (the “Buyer Additional Asset
Taxes”).

Section 9.03 Tax Cooperation. The Parties shall cooperate fully, as and to the
extent reasonably requested by the other Party, in connection with the filing of
Tax Returns and any

 

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audit, litigation or other proceeding with respect to Taxes relating to the
Assets. Such cooperation shall include the retention and (upon another Party’s
request) the provision of records and information that are relevant to any such
Tax Return or audit, litigation or other proceeding and making employees
available on a mutually convenient basis to provide additional information and
explanation of any material provided under this Agreement. Seller and the Buyer
agree to retain all books and records with respect to tax matters pertinent to
the Assets relating to any tax period beginning before the Effective Time until
the expiration of the statute of limitations of the respective tax periods and
to abide by all record retention agreements entered into with any taxing
authority.

Section 9.04 Tax Definitions.

 

  (a) “Asset Taxes” means all ad valorem, property, excise, severance,
production or similar Taxes (including any interest, fine, penalty or addition
to Tax imposed by a taxing authority in connection with such Taxes) based upon
operation or ownership of the Assets or the production of Hydrocarbons therefrom
but excluding, for the avoidance of doubt, (a) income, capital gains, franchise
and similar Taxes and (b) Transfer Taxes.

 

  (b) “Straddle Period” shall mean any tax period beginning before and ending
after the Effective Time.

 

  (c) “Tax” or “Taxes” means (i) all taxes, assessments, fees, unclaimed
property and escheat obligations, and other charges of any kind whatsoever
imposed by any taxing authority, including any federal, state, local and/or
foreign income tax, surtax, remittance tax, presumptive tax, net worth tax,
special contribution tax, production tax, value added tax, withholding tax,
gross receipts tax, windfall profits tax, profits tax, ad valorem tax, personal
property tax, real property tax, sales tax, goods and services tax, service tax,
transfer tax, use tax, excise tax, premium tax, stamp tax, motor vehicle tax,
entertainment tax, insurance tax, capital stock tax, franchise tax, occupation
tax, payroll tax, employment tax, unemployment tax, disability tax, alternative
or add-on minimum tax and estimated tax, (ii) any interest, fine, penalty or
additions to tax imposed by a taxing authority in connection with any item
described in clause (i), and (iii) any liability in respect of any item
described in clauses (i) or (ii) above, that arises by reason of a contract,
assumption, transferee or successor liability, operation of Law (including by
reason of participation in a consolidated, combined or unitary Tax Return) or
otherwise.

 

  (d) “Tax Return” shall mean any report, return, information statement,
schedule, attachment, payee statement or other information required to be
provided to any taxing authority with respect to Taxes or any amendment thereof,
including any return of an affiliated, combined or unitary group, and any and
all work papers relating to any Tax Return.

 

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Article X

The Closing

Section 10.01 Time and Place of the Closing. If the conditions referred to in
Articles VII and VIII of this Agreement have been satisfied or waived by the
appropriate Party in writing, the transactions contemplated by this Agreement
(the “Closing”) shall take place at the offices of Seller, whose address is 1160
Eugenia Place, Suite 100, Carpinteria, California, or at such place designated
by Seller on the third Business Day after the conditions contained in Article
VII and Article VIII have been satisfied, or at such other time as is mutually
agreed between the Parties (the “Closing Date”).

Section 10.02 Adjustments to Purchase Price at the Closing.

 

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

 

  (i) all upward Purchase Price adjustments for Title Benefits determined in
accordance with Article III;

 

  (ii) Asset Taxes prorated to Buyer pursuant to Section 9.02, but paid by
Seller before Closing;

 

  (iii) all upward Purchase Price adjustments for estimates determined in
accordance with Section 12.01; and

 

  (iv) any other amount provided for in this Agreement or agreed upon by Buyer
and Seller.

 

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

 

  (i) the Allocated Values of those Assets not conveyed at Closing due to the
failure to obtain a consent in accordance with Section 3.08 or in the exercise
of a preferential purchase right in accordance with Section 3.07;

 

  (ii) all downward Purchase Price adjustments for Title Defects and
Environmental Defects determined in accordance with Article III and Article IV;

 

  (iii) Asset Taxes for which Seller is responsible pursuant to Section 9.02
that are not paid by Seller prior to Closing, including the Asset Taxes set
forth on Schedule 10.02(b)(iii);

 

  (iv) any other amount provided for in this Agreement or agreed upon by Buyer
and Seller; and

 

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  (v) all downward Purchase Price adjustments for estimates determined in
accordance with Section 12.01.

 

  (c) The adjustments described in Sections 10.02(a) and (b) are hereinafter
referred to as the “Purchase Price Adjustments.”

Section 10.03 Closing Statement. Not later than three Business Days prior to the
Closing Date, Seller shall prepare and deliver to Buyer for review a statement
of the estimated Purchase Price Adjustments taking into account the foregoing
principles (the “Statement”). Prior to Closing, Buyer shall submit any
modifications to the Statement proposed by Seller, and the Parties shall agree
upon the Statement. In the event that Buyer fails to deliver such modifications
to Seller, then the Statement submitted by Seller shall be deemed to have been
mutually agreed to by the Parties. At the Closing, Buyer shall pay the Purchase
Price, as adjusted by the estimated Purchase Price Adjustments reflected on the
Statement, as agreed upon by the Parties; provided that, if the Parties do not
agree upon the estimated Purchase Price Adjustments set forth in the Statement,
then the amount of such estimated Purchase Price Adjustments shall be that
amount set forth in the version of the Statement modified by Buyer, provided
that Seller may later contest the calculation of the Purchase Price Adjustments
in connection with the Final Statement if any adjustments are not resolved in
such Final Statement by the Parties.

Section 10.04 Actions of Seller at the Closing. At the Closing, Seller shall:

 

  (a) execute, acknowledge and deliver to Buyer an assignment in the form of
Exhibit D (the “Assignment”) and such other instruments (in form and substance
mutually agreed upon by Buyer and Seller) as may be reasonably necessary to
convey the Assets to Buyer;

 

  (b) execute, acknowledge and deliver to Buyer letters in lieu of transfer or
division orders directing all purchasers of production from the Subject
Interests to make payment of proceeds attributable to such production to Buyer
from and after the Effective Time as reasonably requested by Buyer prior to the
Closing Date;

 

  (c) execute and deliver to Buyer an officer’s certificate in the form of
Exhibit E-1, dated as of the Closing Date, certifying that the conditions set
forth in Section 8.01 and Section 8.02 have been fulfilled;

 

  (d) deliver to Buyer possession of the Assets;

 

  (e) execute and deliver to Buyer a certificate of non-foreign status of Seller
meeting the requirements of Treasury Regulation Section 1.1445-2(b)(2);

 

  (f) deliver to Buyer appropriate change of operator forms on those Assets
operated by Seller;

 

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  (g) deliver to Buyer a recordable form of release of any pledge, mortgages,
financing statements, fixture filings and security agreements, if any, affecting
the Assets;

 

  (h) deliver to Buyer the Audited Special Financial Statements as of and for
the year ended December 31, 2011 and the unaudited interim Special Financial
Statements for the three months ended March 31, 2012; and

 

  (i) execute, acknowledge and deliver any other agreements provided for herein
or necessary or desirable to effectuate the transactions contemplated hereby.

Section 10.05 Actions of Buyer at the Closing. At the Closing, Buyer shall:

 

  (a) deliver to Seller the Purchase Price (as adjusted pursuant to the
provisions hereof) by wire transfer to an account designated in writing by
Seller;

 

  (b) execute and deliver to Seller an officer’s certificate in the form of
Exhibit F, dated as of the Closing Date, certifying that the conditions set
forth in Section 7.01 and Section 7.02 have been fulfilled;

 

  (c) take possession of the Assets; and

 

  (d) execute, acknowledge and deliver the Assignment and any other agreements
provided for herein or necessary or desirable to effectuate the transactions
contemplated hereby.

Section 10.06 Actions of Parent at the Closing. At the Closing, Parent shall:

 

  (a) execute and deliver to Buyer an officer’s certificate in the form of
Exhibit E-2, dated as of the Closing Date, certifying that the conditions set
forth in Section 8.01 and Section 8.02 have been fulfilled.

Article XI

Termination

Section 11.01 Right of Termination. This Agreement may be terminated at any time
at or prior to the Closing:

 

  (a) by mutual written consent of the Parties;

 

  (b) by Seller or Buyer if the Closing has not occurred on or before June 29,
2012, unless substantive comments are received by Seller from the SEC regarding
Parent’s information circular/proxy statement to be used in connection with the
proposed Special Meeting for Parent Securityholder Approval, in which event
Closing shall occur on or before 90 days from the execution of this Agreement
and in the event it has not occurred by such date may be terminated by either
Seller or Buyer;

 

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  (c) by either Party if any Governmental Authority shall have issued an order,
judgment or decree or taken any other action challenging, delaying, restraining,
enjoining, prohibiting or invalidating the consummation of any of the
transactions contemplated herein;

 

  (d) by either Party if (i) the aggregate amount of the Purchase Price
Adjustments agreed by the Parties or otherwise finally determined pursuant to
this Agreement with respect to all uncured Title Defects (net of the aggregate
amount of the Purchase Price Adjustments for all Title Benefits agreed by the
Parties) plus (ii) the aggregate amount of the Environmental Defect Values
agreed by the Parties or otherwise finally determined pursuant to this Agreement
with respect to all Environmental Defects, exceeds fifteen percent (15%) percent
of the Purchase Price, disregarding, for purposes of this Section 11.01(d), the
three percent (3%) aggregate deductible described in Section 3.05(d) and
Section 4.04(c);

 

  (e) by Buyer if Seller is unable to obtain Parent Securityholder Approval
pursuant to Section 13.03, or if Parent, Seller or the Board of Directors of
Parent, as applicable, accepts, approves, recommends or enters into an agreement
to implement an Acquisition Proposal;

 

  (f) by Seller if Parent, Seller or the Board of Directors of Parent, as
applicable, accepts, approves, recommends or enters into an agreement to
implement an Acquisition Proposal that constitutes a Superior Proposal and
concurrently therewith Seller pays to Buyer a fee of $5,000,000 in immediately
available funds, provided that Parent and Seller have complied with their
obligations under Section 13.11; or

 

  (g) as otherwise provided herein;

provided, however, that no Party shall have the right to terminate this
Agreement pursuant to clause (b) above if such Party is at such time in material
breach of any provision of this Agreement.

Section 11.02 Effect of Termination. In the event that the Closing does not
occur as a result of any Party exercising its right to terminate pursuant to
Section 11.01, then except as set forth in Section 5.04, Section 6.04,
Section 11.03, Section 17.02, Section 17.04, Section 17.06 and Section 17.11,
this Agreement shall be null and void and no Party shall have any further rights
or obligations under this Agreement.

Section 11.03 Termination Damages.

 

  (a)

If all conditions precedent to the obligations of Buyer set forth in Article
VIII (except for those conditions that by their nature are to be satisfied at
the Closing) have been met and the transactions contemplated by this Agreement
are not consummated on or before the Closing Date because of the failure of
Buyer to perform any of its material obligations hereunder or the breach of any
representation herein by Buyer, then in such event,

 

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  Seller shall have the option to terminate this Agreement pursuant to
Section 11.01(b) and, shall be entitled to exercise any and all other rights and
remedies at law or in equity.

 

  (b) If all conditions precedent to the obligations of Seller set forth in
Article VII (except for those conditions that by their nature are to be
satisfied at the Closing) have been met and the transactions contemplated by
this Agreement are not consummated on or before the Closing Date because of the
failure of Seller or Parent to perform any of its material obligations hereunder
or the breach of any representation herein by Seller or Parent, then in such
event, Buyer shall have the right to terminate this Agreement pursuant to
Section 11.01(b) or Section 11.01(e) and shall be entitled to exercise any and
all other rights and remedies at law or in equity.

 

  (c) If this Agreement is terminated by Buyer pursuant to Section 11.01(e),
then Seller shall, immediately and in any event within one Business Day after
termination, pay to Buyer a fee of $5,000,000 in immediately available funds.

 

  (d) If (i) at any time prior to termination of this Agreement an Acquisition
Proposal is made, or any Person announces any plan or intention, conditional or
otherwise, to make an Acquisition Proposal, and (ii) thereafter either the
Parent Securityholders do not approve the sale of the Assets as contemplated in
Section 13.03 or the sale of the Assets as provided herein is not submitted to
the Parent Securityholders for approval, and (iii) such Acquisition Proposal, an
amended version thereof or any other Acquisition Proposal is consummated within
12 months after the date on which the first mentioned Acquisition Proposal is
made or any such plan or intention is announced, then Seller shall, immediately
and in any event within one Business Day after the first-mentioned Acquisition
Proposal, an amended version thereof or any other Acquisition Proposal is
consummated, pay to Buyer a fee of $5,000,000 in immediately available funds.

 

  (e) For clarity, payment of the fee provided for in Section 11.01(f),
Section 11.03(c), Section 11.03(d) or Section 13.11(c)(vi)(C)(5) is not, and
shall not be construed as, Buyer’s sole and exclusive remedy for any failure of
Seller or Parent to perform any of its obligations hereunder or the breach of
any representation herein by Seller or Parent, and Buyer shall, in addition to
receiving payment under Section 11.01(f), Section 11.03(c), Section 11.03(d) or
Section 13.11(c)(vi)(C)(5), as applicable, be entitled to exercise any and all
other rights and remedies at law or in equity. For further clarity, Seller or
Parent shall not be obligated to pay more than one fee under Section 11.01(f),
Section 11.03(c), Section 11.03(d) or Section 13.11(c)(vi)(C)(5) totaling in the
aggregate the sum of $5,000,000.

 

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Section 11.04 Attorneys’ Fees, Etc. If either Party to this Agreement resorts to
legal proceedings to enforce this Agreement, the prevailing Party in such
proceedings shall be entitled to recover all costs incurred by such Party,
including reasonable attorneys’ fees, in addition to any other relief to which
such Party may be entitled. Notwithstanding anything to the contrary in this
Agreement, in no event shall either Party be entitled to receive any punitive,
indirect or consequential damages unless same are a part of a Third Party claim
for which a Party is seeking indemnification hereunder.

Article XII

Post-Closing Obligations

Section 12.01 Allocation of Expense and Revenues.

 

  (a) Appropriate adjustments shall be made to the Purchase Price between Buyer
and Seller so that (i) Buyer will receive all proceeds from sales of
Hydrocarbons that are produced and saved from and after the Effective Time and
any other revenues arising out of the ownership or operation of the Assets from
and after the Effective Time, net of all costs and expenses (other than Taxes)
that are incurred in the ownership or operation of the Assets from and after the
Effective Time, which shall be borne by Buyer, including, without limitation,
all drilling costs, all capital expenditures, all overhead charges under
applicable operating or other agreements (regardless of whether Seller or an
affiliate of Seller serves as operator prior to the Closing), and (ii) Seller
will receive all proceeds from sales of Hydrocarbons that are produced and saved
prior to the Effective Time and any other revenues arising out of the ownership
or operation of the Assets prior to the Effective Time, net of all costs and
expenses (other than Taxes) that are incurred in the ownership or operation of
the Assets prior to the Effective Time, which shall be borne by Seller.

 

  (b) In addition to the foregoing, Seller will be paid (i) the Buyer Additional
Asset Taxes, (ii) the amount as of the Effective Time of any prepaid costs,
including rentals and insurance premiums, insofar as such prepaid costs (other
than Taxes) relate to periods of time after the Effective Time, and (iii) the
value of all merchantable Hydrocarbons produced prior to the Effective Time but
in storage above the inlet connection or upstream of the applicable sales meter
on the Closing Date.

 

  (c) In addition to the foregoing, Buyer will be paid (i) the Seller Additional
Asset Taxes, and (ii) an amount equal to all cash in, or attributable to,
suspense accounts relative to the Assets for which Buyer has assumed
responsibility under Section 14.02.

 

  (d) All amounts due under this Section 12.01 will be (i) estimated and
adjustments to the Purchase Price paid at Closing will reflect such estimates
and (ii) finally settled in accordance with the Final Statement under
Section 12.02.

 

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Section 12.02 Final Statement.

 

  (a) Seller shall provide to Buyer monthly settlement statements within 15 days
after the end of each calendar month following execution of this Agreement until
Closing, setting forth as of the date of such statement a detailed calculation
of all post-Closing adjustments applicable to the period of time between the
Effective Time and Closing. On or before 90 days after the Closing Date, Seller
shall prepare and deliver to Buyer a post-Closing statement setting forth a
detailed calculation of all post-Closing adjustments applicable to the period
for time between the Effective Time and Closing (the “Proposed Final
Statement”). The Proposed Final Statement shall include any adjustment or
payment which was not finally determined as of the Closing Date and the
allocation of revenues and expenses as determined in accordance with
Section 12.01. To the extent reasonably required by Seller, Buyer shall assist
in the preparation of the Proposed Final Statement. Seller shall provide Buyer
such data and information as Buyer may reasonably request supporting the amounts
reflected on the Proposed Final Statement in order to permit Buyer to perform or
cause to be performed an audit. The Proposed Final Statement shall become final
and binding upon the parties on the 30th day following receipt thereof by Buyer
(the “Final Settlement Date”) unless Buyer gives written notice of its
disagreement (a “Notice of Disagreement”) to Seller prior to such date. Any
Notice of Disagreement shall specify in detail the dollar amount, nature and
basis of any disagreement so asserted. If a Notice of Disagreement is received
by Seller in a timely manner, then the Parties shall resolve the Dispute (as
defined in Section 16.01) evidenced by the Notice of Disagreement in accordance
with Article XVI.

 

  (b) Within five Business Days after the Final Settlement Date, Seller shall
pay to Buyer, or Buyer shall pay to Seller, in immediately available funds the
net amount due. For purposes of this Agreement, the term “Final Statement” shall
mean (i) the Proposed Final Statement becoming final pursuant to this
Section 12.02, or (ii) upon resolution of any Dispute regarding a Notice of
Disagreement, the revised Proposed Final Statement reflecting such resolutions,
which the Parties shall issue, or cause the Independent Expert or arbitrators to
issue, as applicable, following such resolution.

Section 12.03 Further Cooperation.

 

  (a) Seller shall make the Records available to be picked up by Buyer at the
offices of Seller during normal business hours within five Business Days after
the Closing to the extent the Records are in the possession of Seller and are
not subject to contractual restrictions on transferability. Seller shall have
the right to retain copies of any of the Records and the rights granted under
Section 17.03.

 

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  (b) After the Closing Date, each Party, at the request of the other and
without additional consideration, shall execute and deliver, or shall cause to
be executed and delivered, from time to time such further instruments of
conveyance and transfer and shall take such other action as the other Party may
reasonably request to convey and deliver the Assets to Buyer and to accomplish
the orderly transfer of the Assets to Buyer in the manner contemplated by this
Agreement. After the Closing, the Parties will cooperate to have all proceeds
received attributable to the Assets be paid to the proper Party hereunder and to
have all expenditures to be made with respect to the Assets be made by the
proper Party hereunder.

Article XIII

Covenants and Operation of the Assets

Section 13.01 Operations after Effective Time. Seller agrees, from and after the
date hereof until Closing, except as expressly contemplated by this Agreement,
as expressly consented to in writing by Buyer, or in situations wherein
emergency action is taken in the face of risk to life, property or the
environment, to:

 

  (a) operate the Assets in the usual, regular and ordinary manner consistent
with past practice and in compliance with law in all material respects;

 

  (b) maintain the books of account and records relating to the Assets in the
usual, regular and ordinary manner, in accordance with the usual accounting
practices of each such Person;

 

  (c) not enter into a Contract, or materially amend or change the terms of any
Contract, that would involve individual commitments of more than $50,000, or
enter into any other material Contract;

 

  (d) not plug or abandon any well located on the Assets without Buyer’s prior
written consent;

 

  (e) not transfer, sell, mortgage, pledge or dispose of any of the Assets other
than the sale and/or disposal of Hydrocarbons in the ordinary course of business
or create or allow any lien on any of the Assets, other than liens that would be
Permitted Encumbrances;

 

  (f) preserve in full force and effect all oil and gas leases, operating
agreements, easements, rights-of-way, permits, licenses and agreements that
relate to the Assets;

 

  (g) submit to Buyer for prior written approval, all requests for operating or
capital expenditures (including AFEs) relating to the Assets that involve
individual commitments of more than $50,000; and

 

  (h) obtain Buyer’s written approval prior to voting under any operating, joint
venture, partnership or similar agreement pertaining to the Assets.

 

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In order to reimburse Seller for administrative overhead expenses incurred in
order to operate the properties in accordance with this Section from the
Effective Time to the Closing Date, Buyer shall pay Seller a monthly fee of
$51,000, based upon the 51 wells operated at a charge of $1,000 per month,
prorated for any partial month.

Section 13.02 Limitations on the Operational Obligations and Liabilities of
Seller.

 

  (a) From and after the date of execution of this Agreement and until the
Closing, and subject to the provisions of applicable operating and other
agreements, Seller shall use its reasonable efforts to operate the Assets and
use its reasonable efforts to cause any other operators to operate and
administer the Assets in a manner consistent with its past practices, and shall
carry on its business with respect to the Assets in substantially the same
manner as before execution of this Agreement.

 

  (b) Buyer acknowledges that Seller owns undivided interests in some or all of
the Assets, and Buyer agrees that the acts or omissions of the other working
interest owners shall not constitute a violation of the provisions of this
Article XIII, nor shall any action required by a vote of working interest owners
constitute such a violation so long as Seller has voted its interests in a
manner that complies with the provisions of this Article XIII.

Section 13.03 Special Meeting; Information Circular/Proxy Statement.

 

  (a) The Parties acknowledge and agree that this Agreement and the transaction
contemplated hereby are conditioned on and subject to approval by the holders of
common shares of Parent (the “Parent Securityholders”) of the sale of all, or
substantially all, of the assets of its wholly owned subsidiary, Seller, by
special resolution pursuant to section 190 of the Business Corporations Act
(Alberta) (the “Parent Securityholder Approval”). The Parent Securityholder
Approval shall not include or be made conditional upon approval by the Parent
Securityholders of any other transaction or matter.

 

  (b)

As promptly as practicable following the date of this Agreement, Parent shall,
(i) establish a record date for, duly call and give notice of, convene and hold
a special meeting (the “Special Meeting”) of the Parent Securityholders for the
purpose of obtaining the Parent Securityholder Approval and (ii) prepare and
shall file with applicable Regulatory Authorities an information circular/proxy
statement with respect to the transaction for use in soliciting proxies for the
Special Meeting and containing all information required by Law to be set forth
therein (together with the related notice of the Special Meeting and form of
proxy, the “Information Circular”). The Parties shall reasonably cooperate in
connection with the preparation of the Information Circular and Buyer shall have
the right to review and comment on the Information Circular; provided, however,
that Parent shall be solely responsible for the content

 

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  of the Information Circular and ensuring its compliance with applicable Laws.

 

  (c) As promptly as practicable after the Information Circular has been
approved or otherwise cleared by each of the applicable Regulatory Authorities,
Parent shall (i) mail the Information Circular to the Parent Securityholders in
accordance with applicable Law and (ii) use all reasonable efforts to hold the
Special Meeting as soon as practicable thereafter and, in any event, not later
June 27, 2012.

 

  (d) Parent hereby confirms to Buyer that the Board of Directors of Parent has
unanimously approved this Agreement and determined that the transactions
contemplated hereby are in the best interests of Parent and the Parent
Securityholders, and resolved to recommend that the Parent Securityholders vote
in favor of the Parent Securityholder Approval. The Information Circular shall
contain notice of such approvals, determinations and resolutions.

 

  (e) Except for proxies, Seller and Parent will promptly notify Buyer of any
notices, correspondence or other communications (written or oral) received from
a Regulatory Authority in connection with the Parent Securityholder Approval,
the Special Meeting or the Information Circular, and will provide to Buyer a
true and complete copy thereof (if written or otherwise recorded in tangible or
electronic form).

 

  (f) Seller and Parent will promptly notify Buyer of any notices,
correspondence or other communications (written or oral) received from Parent
Securityholders in opposition to this Agreement, the transactions contemplated
hereby or the Parent Securityholder Approval, and will provide to Buyer a true
and complete copy thereof (if written or otherwise recorded in tangible or
electronic form).

 

  (g) Parent will allow representatives of Buyer to attend the Special Meeting.

Section 13.04 Required Approvals.

 

  (a)

Following the execution hereof, Parent and Seller shall use commercially
reasonable efforts, and Buyer shall cooperate in good faith with Sellers, to
obtain all approvals required from any Regulatory Authority, as defined below.
Schedule 13.04 sets forth a list of the Parties’ understanding, as of the date
of this Agreement, as to all consents, approvals, notices or filings that are
required to be obtained or made by Parent or Seller in connection with the
execution, delivery and performance of this Agreement and consummation of the
Transaction (the “Required Approvals”). The Parties shall update Schedule 13.04
from time to time to reflect any changes or updates to the list of Required
Approvals. For purposes of this Agreement, “Regulatory Authority” means any:
(i) multinational, federal,

 

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  provincial, state, regional, municipal, local or other government,
governmental or public department, central bank, court, tribunal, arbitral body,
commission, board, bureau or agency, domestic or foreign; (ii) any subdivision,
agency, commission, board or authority of any of the foregoing; or (iii) any
quasigovernmental or private body exercising any regulatory, expropriation or
taxing authority under or for the account of any of the foregoing, including any
stock exchange.

 

  (b) The Parties will cooperate with each other (including by furnishing
relevant information) in complying with any filing or notification formalities
required to obtain any approval or clearance of or non-objection found to be
applicable to the transaction by any competent anti-trust or competition
authority; and any other filings, submissions or approvals required from any
Governmental Authority or Regulatory Authority.

 

  (c) Each Party shall supply the others copies of all correspondence, filings
or communications (or memoranda setting forth the substance thereof) with
Governmental Authority or Regulatory Authority with respect to this Agreement
and the transactions contemplated hereby.

 

  (d) With respect to information furnished by the Parties in connection with
any application, statement or filing relating to the transactions contemplated
in this Agreement, such information at the time such information is furnished
shall be correct in all material respects and shall not omit any material fact
required to be stated therein or necessary to make the statements therein not
misleading.

Section 13.05 Operation of the Assets After the Closing. It is expressly
understood and agreed that Seller shall not be obligated to continue operating
any of the Assets following the Closing and, without modifying Buyer’s rights
under this Agreement, Buyer hereby assumes full responsibility for operating (or
causing the operation of) all Assets following the Closing. Seller shall make
its Personnel available to Buyer prior to the Closing as may be reasonably
necessary to assist in the transition if Buyer becomes the operator. Without
implying any obligation on Seller’s part to continue operating any Assets after
the Closing, if Seller elects to continue to operate any Assets following the
Closing at the request of Buyer or any Third Party working interest owner, due
to constraints of applicable joint operating agreement(s), failure of a
successor operator to take over operations or other reasonable cause, such
continued operation by Seller shall be for the account of Buyer, at the sole
risk, cost and expense of Buyer. Seller is hereby released and indemnified by
Buyer from all claims, losses, damages, costs, expenses, causes of action and
judgments of any kind or character (INCLUDING THOSE RESULTING FROM SELLER’S
SOLE, JOINT, COMPARATIVE OR CONCURRENT NEGLIGENCE OR STRICT LIABILITY) with
respect to (a) such continued operations by Seller and (b) compliance with the
terms of any applicable joint operating agreement related to the election of a
successor operator.

 

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Section 13.06 Casualty Loss.

 

  (a) Buyer shall assume all risk of loss with respect to, and any change in the
condition of, the Assets from the date of this Agreement until the Closing,
including with respect to the depletion of Hydrocarbons, the watering-out of any
well, the collapse of casing, sand infiltration of wells and the depreciation of
personal property.

 

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

 

  (c) Notwithstanding Section 13.06(a), in the event of any loss described in
Section 13.06(b), at the Closing, Seller shall pay to Buyer all sums paid to
Seller by Third Parties by reason of the destruction or taking of such Assets,
including any sums paid pursuant to any policy or agreement of insurance or
indemnity, and shall assign, transfer and set over unto Buyer all of the rights,
title and interest of Seller in and to any claims, causes of action, unpaid
proceeds or other payments from Third Parties, including any policy or agreement
of insurance or indemnity, arising out of such destruction or taking.
Notwithstanding anything to the contrary in this Section 13.06, Seller shall not
be obligated to carry or maintain, and shall have no obligation or liability to
Buyer for its failure to carry or maintain, any insurance coverage with respect
to any of the Assets. Notwithstanding anything to the contrary contained in this
Section 13.06, should the uncompensated loss as determined by Buyer without
being limited by any Allocated Values exceed ten percent of the Purchase Price,
Buyer shall have the option to terminate this Agreement.

Section 13.07 Operatorship. Within five Business Days after Closing, Seller will
send out notifications of its resignation as operator for all wells Seller
currently operates and is selling to Buyer pursuant to this Agreement. Seller
makes no representation and/or warranty to Buyer as to the transferability or
assignability of operatorship of such wells. Buyer acknowledges that the rights
and obligations associated with such wells are governed by applicable agreements
and that operatorship will be determined by the terms of those agreements.
Seller shall use commercially reasonable efforts to assist Buyer in assuming
operatorship under all applicable joint operating agreements.

Section 13.08 Records. Seller shall provide Buyer with all accounting records
and information relating to the Assets for the period from the Effective Time to
the Closing Date, including all revenue and joint interest billing information
and well master information.

 

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Section 13.09 Administrative Duties and Other Obligations. Seller shall complete
all administrative duties and other obligations pertaining to the production of
minerals from the Assets up to the Closing Date, including without limitation,
the filing of all state production and environmental reports, payment of all
production severance taxes and the filing of all severance tax reports, the
calculation and payment of all royalties due, the calculation and payment of all
third party production, and/or the calculation of payments in kind information,
if applicable, and preparation of the revenue run for the calendar month
immediately preceding the calendar month in which the Closing occurs.

Section 13.10 Reserved.

Section 13.11 No-Shop.

 

  (a) In this Agreement:

 

  (i) “Acquisition Proposal” means any proposal, inquiry or offer (written or
oral) relating to (A) any merger, consolidation, amalgamation, take-over bid,
tender offer, exchange offer, plan of arrangement, recapitalization,
liquidation, dissolution, share exchange or sale of assets (including any lease,
long-term supply agreement or other arrangement having substantially the same
economic effect as a sale of assets) involving or relating to Parent or Seller,
(B) any purchase or sale of shares or other securities of Parent or Seller
and/or any right or interests therein, (C) any voting agreement, trust,
partnership, joint venture, proxy solicitation or other arrangement involving or
relating to Parent or Seller, or (D) any transactions or arrangements similar
to, or having substantially the same effect or consequences as, any of the
foregoing, other than the transactions contemplated by this Agreement, the
consummation of which would or would reasonably be expected to impede, interfere
with, prevent or delay completion of the transactions contemplated hereby, and
where the subject matter of any such event or circumstance set forth in clause
(A) through (D) of this definition represents or involves, whether in one
transaction or a series of transactions, 20% or more of the voting power in the
capital of Parent or Seller, or 20% or more of the consolidated assets (measured
according to the fair market value thereof as of the date of any such proposal,
inquiry or offer) of Parent and Seller taken as a whole, then its consummation
will be deemed to impede, interfere with, prevent or delay completion of the
transactions contemplated by this Agreement; provided, however, that an
Acquisition Proposal shall not include any sale of assets located in California
by Parent or any of its subsidiaries (or any proposal, inquiry, offer,
transaction or arrangement relating solely to any such sale of assets located
solely in California and in no way relating to the Assets); and

 

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  (ii) “Superior Proposal” means an unsolicited bona fide written Acquisition
Proposal made after the date of this Agreement that:

 

  (A) did not result from a breach of this Agreement;

 

  (B) neither contravenes nor results from a breach of any agreement between the
person making such Acquisition Proposal and Parent or Seller;

 

  (C) complies with all applicable securities laws;

 

  (D) is not subject to a financing condition and in respect of which any
financing required to complete such Acquisition Proposal has been demonstrated
to the satisfaction of the Board of Directors of Parent, acting in good faith
and after receipt of advice from its financial advisor and outside legal
counsel, to have been obtained or are reasonably likely to be obtained (as
evidenced by a written financing commitment from one or more financial
institutions of national reputation);

 

  (E) is not subject to a due diligence and/or access condition that would allow
greater access to the books, records or personnel of Parent or Seller than was
made available to Buyer prior to the date of this Agreement, which access shall
not continue beyond the fifth calendar day after the day on which access is
first afforded to the person making the Acquisition Proposal (the “Due Diligence
Period”); and

 

  (F) the Board of Directors of Parent and any relevant committee thereof has
determined in good faith, after receipt of advice from its:

 

  (1) financial advisor and outside legal counsel, is reasonably likely to be
completed without undue delay and in any event on the terms proposed, taking
into account all legal, financial, regulatory and other aspects of the
Acquisition Proposal and the person making the Acquisition Proposal;

 

  (2)

financial advisor, and without assuming away any risk of non-completion, would,
if the Acquisition Proposal was consummated according to its terms, be expected
to result in a transaction more favorable, from a financial point of view, to
Parent and Seller (taken as a whole) or the Parent Securityholders, as
applicable, than the transactions contemplated by this Agreement, including any

 

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  adjustment to the terms and conditions of this Agreement proposed pursuant to
Section 13.11(e) hereof; and

 

  (3) outside legal counsel, is such that failure to pursue the Acquisition
Proposal would be inconsistent with the exercise by the directors of Parent of
their fiduciary duties under applicable laws.

 

  (b) Parent and Seller shall, and shall cause their respective directors,
officers, employees, agents, financial advisors or other representatives
(collectively, “Representatives”) to, immediately terminate any existing
solicitations, discussions or negotiations with any person (other than Buyer and
its affiliates) with respect to an actual or potential Acquisition Proposal, and
shall discontinue and cause to be discontinued any further access to
confidential information concerning the Assets or any data room, virtual or
otherwise, containing the same.

 

  (c) Parent and Seller shall not, directly or indirectly, and shall not permit
any of its Representatives to:

 

  (i) solicit, assist, initiate, facilitate or encourage, or take any action to
solicit, assist, initiate, facilitate or encourage (including by way of
furnishing information or permitting any visit to any facilities or entering
into any agreement) any Acquisition Proposal or the initiation of any
communications regarding an Acquisition Proposal;

 

  (ii) enter into or participate in any discussions or negotiations with any
person regarding an Acquisition Proposal;

 

  (iii) furnish or provide access to any information concerning Parent, Seller
or the Assets to any person in connection with, or that could reasonably be
expected to lead to, an Acquisition Proposal or the initiation of communications
regarding an Acquisition Proposal;

 

  (iv) withdraw, amend or qualify, or propose publicly to withdraw, amend or
qualify, in a manner adverse to Buyer, the approval or recommendation of the
Board of Directors of Parent or any committee thereof of this Agreement or the
transactions contemplated hereby;

 

  (v) release, waive or otherwise forbear in the enforcement of any provisions
of, or terminate, any confidentiality or “standstill” agreement between Parent
or Seller and any person relating to an actual or potential Acquisition
Proposal, or amend any such agreement or consent to the making of an Acquisition
Proposal in accordance with the terms of such agreement; or

 

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  (vi) accept, approve, recommend or enter into an agreement to implement any
Acquisition Proposal, other than a confidentiality agreement as contemplated in
this Section 13.11(c), or authorize or propose publicly to do any of the
foregoing;

provided, however, that notwithstanding any other provision hereof Parent and
Seller and their respective Representatives may:

 

  (A) enter into and participate in discussions or negotiations regarding an
Acquisition Proposal with a person who, without any solicitation, assistance,
initiation, facilitation or encouragement, directly or indirectly, by Parent or
Seller or any of their respective Representatives, seeks to initiate such
discussions or negotiations and, subject to such person entering into a
confidentiality agreement with Parent and Seller on substantially the same terms
as the Confidentiality Agreement dated January 19, 2012 between BreitBurn
Management Company LLC and Pacific Coast Energy Company LP and Parent (provided
that such confidentiality agreement shall provide for the disclosure thereof,
along with the information provided thereunder, to Buyer) may furnish such
person with or otherwise provide them with access to information concerning
Parent, Seller or the Assets, if and only to the extent that:

 

  (1) Parent or Seller has received an Acquisition Proposal from such person
that, based on the information then available to the Board of Directors of
Parent, constitutes a Superior Proposal, and the Board of Directors of Parent
has determined in good faith, after receipt of advice from outside legal
counsel, that failure to take such action would be inconsistent with the
exercise by the directors of Parent of their fiduciary duties under applicable
laws;

 

  (2) prior to entering into or participating in any such discussions or
negotiations or furnishing or providing access to any such information, Parent
or Seller shall have complied with their obligations under Section 13.11(d), as
applicable, and notified Buyer of its intended action; and

 

  (3)

prior to furnishing or providing access to any such information, Parent or
Seller shall have provided to Buyer a copy of the confidentiality agreement
entered into with such person, a list of information

 

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  to be provided to such person, and copies of any such information not
previously provided to Buyer;

 

  (B) in the event of a take-over bid for securities of Parent, comply with
applicable securities laws relating to the provision of directors’ circulars and
make appropriate disclosure to its securityholders with respect to thereto; and

 

  (C) accept, approve, recommend or enter into an agreement to implement an
Acquisition Proposal that constitutes a Superior Proposal, and in connection
therewith withdraw, amend or qualify, in a manner adverse to Buyer, the approval
or recommendation of the Board of Directors of Parent or any committee thereof
of this Agreement or the transactions contemplated hereby, if

 

  (1) Parent and Seller shall have complied with their obligations under this
Section 13.11;

 

  (2) any Due Diligence Period contemplated under the Superior Proposal shall
have expired;

 

  (3) the Board of Directors of Parent determines in good faith, after
considering all proposals to adjust the terms of this Agreement as contemplated
by Section 13.11(e) and after receipt of advice from outside legal counsel, that
failure to take such action would be inconsistent with the exercise by the
directors of Parent of their fiduciary duties under applicable laws;

 

  (4) at least five Business Days have elapsed from the later of the date on
which Buyer received notice pursuant to Section 13.11(e) of the Superior
Proposal and, if Buyer proposes to adjust the terms of this Agreement as
contemplated by Section 13.11(e), the date on which Buyer received notice of the
determination of the Board of Directors of Parent whether the Acquisition
Proposal still constitutes a Superior Proposal after giving effect to the
adjusted transaction terms under Buyer’s proposal; and

 

  (5) Seller terminates this Agreement in accordance with Section 11.01 and
concurrently therewith pays to Buyer a fee of $5,000,000 in immediately
available funds;

 

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  (d) Parent and Seller shall promptly (and in any event within 24 hours of
receipt) notify Buyer, at first orally and thereafter in writing, of any
Acquisition Proposal (or amendment thereto), any communication relating to an
Acquisition Proposal (including any request for discussions or negotiations),
any request for non-public information concerning the Assets or any
communication from a person that has made an Acquisition Proposal or informs
Parent or Seller or any of their respective Representatives that it is
considering making an Acquisition Proposal, received after the date hereof by
Parent or Seller (directly or through any of their respective Representatives),
and provide to Buyer a true and complete copy thereof and of any response
thereto made by or on behalf of Parent or Buyer or, if the Acquisition Proposal
(or amendment thereto), request, communication or response is not written or
otherwise recorded in tangible or electronic form, a description of the material
terms thereof, the identity of the person who made it and such other particulars
relating thereto as Buyer may reasonably request. Parent and Seller shall keep
Buyer fully informed of the status of and any change to the material terms of
any such Acquisition Proposal (or amendment thereto), request, communication or
response.

 

  (e)

If Parent or Seller (directly or through any of their respective
Representatives) receive a Superior Proposal, Parent or Seller shall, in
addition to their obligations under Section 13.11(d), give Buyer, orally and in
writing, not less than five Business Days’ advance notice of any decision by the
Board of Directors of Parent to accept, approve, recommend or to authorize an
agreement to implement the Superior Proposal, which notice shall confirm that
the Board of Directors of Parent has determined that the Acquisition Proposal in
question constitutes a Superior Proposal, shall confirm the identity of the
person making the Superior Proposal, and shall be accompanied by a true and
complete copy of the Superior Proposal, any amendments thereto and any material
correspondence relating thereto. During such five Business Day period, Buyer
shall have the opportunity, but not the obligation, to propose to amend the
terms of this Agreement and the transactions contemplated hereby, and in that
event Parent and Seller shall, and shall cause their respective Representatives
to, negotiate in good faith with Buyer to make such adjustments in the terms of
this Agreement and the transactions contemplated hereby as are acceptable to
Buyer and would enable completion of the transactions contemplated by this
Agreement (as amended) on such adjusted terms instead of the Superior Proposal.
The Board of Directors of Parent shall diligently and promptly review any such
proposal by Buyer and determine in good faith whether the Acquisition Proposal
still constitutes a Superior Proposal after giving effect to the adjusted
transaction terms under Buyer’s proposal, and Parent or Buyer shall give Buyer,
orally and in writing, prompt notice of such determination. If Buyer proposes to
adjust the terms of this Agreement and the transactions contemplated hereby in a
manner that would result in

 

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  a transaction more favorable, from a financial point of view, to Parent and
Seller (taken as a whole) or the Parent Securityholders, as applicable, than the
transaction contemplated by the Acquisition Proposal and so advises the Board of
Directors of Parent within five Business Days of receiving written notice of the
Superior Proposal, Parent and Seller shall not accept, approve, recommend or
enter into any agreement to implement such Superior Proposal or release the
person making the Superior Proposal from any confidentiality or “standstill”
obligations, and shall not withdraw, amend or qualify in any manner the approval
or recommendation of the Board of Directors of Parent or any committee thereof
of this Agreement or the transactions contemplated hereby in a manner adverse to
Buyer.

 

  (f) Each of Parent and Seller acknowledges and agrees that each successive
modification of any Acquisition Proposal shall constitute a new Acquisition
Proposal for purposes of this Section 13.11.

 

  (g) The Board of Directors of Parent shall promptly reaffirm its approval and
recommendation of this Agreement and the transactions contemplated hereby by
news release in the event that any Acquisition Proposal is publicly announced
and either (i) the Board of Directors of Parent determines that the Acquisition
Proposal is not a Superior Proposal, or (ii) the Board of Directors of Parent
determines that a proposal by Buyer to adjust the terms of this Agreement and
the transactions contemplated hereby, as contemplated by Section 13.11(e), would
result in the Acquisition Proposal not being a Superior Proposal, and Buyer has
agreed to such adjustments. Buyer shall be given a reasonable opportunity to
review and comment on any such news release.

 

  (h) Parent and Seller shall ensure that their Representatives are aware of the
provisions of this Section 13.11, and shall be jointly and severally responsible
for any breach of this Section 13.11 by any such Representative.

Section 13.12 Support Agreement. Concurrently with the signing of this
Agreement, Seller shall deliver to Buyer an executed support agreement in the
form of the agreement attached as Exhibit G from each of the officers and
directors of Seller listed on Schedule 13.12.

Article XIV

Obligations and Indemnification

Section 14.01 Retained Obligations. Provided that the Closing occurs, Seller
shall retain all obligations and liabilities for, under, relating to or arising
from (a) the payment or improper payment of royalties, rentals and other similar
payments under the Leases relating to the Subject Interests accruing prior to
the Effective Time; (b) under the Contracts for (i) overhead charges related to
periods prior to the Effective Time, (ii) costs and expenses incurred prior to
the Effective Time for goods and services provided prior to the Effective Time,
and (iii) other

 

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payment obligations that accrue and become due prior to the Effective Time;
(c) any claim for personal injury or death relating to the Assets and occurring
prior to the Closing Date to the extent arising out of or attributable to the
period prior to the Closing Date; (d) (i) any and all income Taxes, franchise
Taxes and similar Taxes imposed by any applicable Law on Seller or Parent or any
of their affiliates, or any combined, unitary or consolidated group of which any
of the foregoing is or was a member, (ii) Asset Taxes allocable to Seller
pursuant to Section 9.02 taking into account, and without duplication of, such
Asset Taxes effectively born by Seller pursuant to Section 10.02(b)(iii) or
Section 12.01(c)(i)), (iii) any Taxes imposed on or with respect to the
ownership or operation of the Excluded Assets and (iv) and any all other Taxes
imposed on or with respect to the ownership or operation of the Assets for any
tax period (or portion thereof) ending before the Effective Time; (e) the
litigation matters set forth on Schedule 5.06; (f) any offsite disposal of
hazardous materials by Seller, prior to the Effective Time; (g) Seller’s
employment relationship with its employees and Seller’s employee benefit plans;
(h) any breach by Seller of any of Seller’s representations and warranties
contained in Article V (or the corresponding representation and warranty made by
Seller in the certificate delivered pursuant to Section 10.04(c) or its
covenants hereunder); (i) any act or omission by Seller involving or relating to
the Excluded Assets or any other assets excluded from the Assets pursuant to the
terms hereof; (j) the matters set forth on Schedule 5.06; (k) taxes of Seller
and (l) liens, security interests and similar charges against the Assets
relating to amounts that are being disputed in good faith by Seller as of the
date hereof or the Closing Date, as applicable (collectively, the “Retained
Obligations”).

Section 14.02 Assumed Obligations. Provided that the Closing occurs, Buyer
hereby assumes all duties, obligations and liabilities of every kind and
character with respect to the Assets or the ownership or operation thereof
(other than the Retained Obligations), whether attributable to periods before or
after the Effective Time, including, without limitation, those arising out of
(a) the terms of the Easements, Contracts, Leases, Personal Property or Subject
Interests comprising part of the Assets, (b) imbalances, (c) suspense accounts,
(d) Asset Taxes allocable to Buyer pursuant to Section 9.02 taking into account,
and without duplication of, such Asset Taxes effectively born by Buyer under
Section 10.02(a)(ii) and Section 12.01(b)(i), (e) the condition of the Subject
Interests, regardless of whether such condition arose before or after the
Effective Time, (f) obligations to properly plug and abandon or re-plug or
re-abandon or remove wells, flowlines, gathering lines or other facilities,
equipment or other personal property or fixtures comprising part of the Assets
and (g) obligations to restore the surface of the Subject Interests and
obligations to remediate or bring the Subject Interests into compliance with
applicable Environmental Laws (including conducting any remediation activities
that may be required on or otherwise in connection with activities on the
Subject Interests), regardless of whether such obligations or conditions or
events giving rise to such obligations, arose, occurred or accrued before or
after the Effective Time.

Section 14.03 Buyer’s Indemnification. Provided that the Closing occurs, except
to the extent Seller has indemnification obligations under Section 14.04 or
Section 14.05 Buyer shall release, defend, indemnify and hold harmless Seller,
its partners, and their respective officers, directors, employees, agents,
partners, representatives, members, shareholders, affiliates, subsidiaries,
successors and assigns (collectively, the “Seller Indemnitees”) from and
against: (a) any and all claims, damages, liabilities, losses, causes of action,
costs and expenses (including, without limitation, those involving theories of
negligence or strict liability and including court

 

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costs and attorneys’ fees) (collectively, the “Losses”) to the extent resulting
from, arising out of, or related to the Assumed Obligations, and (b) any breach
by Buyer of any of Buyer’s representations and warranties contained in Article
VI (or the corresponding representation and warranty made by Buyer in the
certificate delivered pursuant to Section 10.05(b)), REGARDLESS OF WHETHER
CAUSED OR CONTRIBUTED TO BY THE SOLE, JOINT, COMPARATIVE OR CONCURRENT
NEGLIGENCE OR STRICT LIABILITY OF ANY OF THE SELLER INDEMNITEES.

Section 14.04 Seller’s Indemnification – Third Party Non-Environmental Claims.
Provided that the Closing occurs, Seller shall release, defend, indemnify and
hold harmless Buyer, its members and affiliates, and their respective officers,
directors, employees, agents, representatives, members, shareholders,
affiliates, subsidiaries, successors and assigns (collectively, the “Buyer
Indemnitees”) from and against: (a) any and all Third Party non-environmental
claims relating to Seller’s ownership or operation of the Assets prior to the
Effective Time or as a result of, arising out of, or related to the Retained
Obligations, (b) any breach by Seller of any of Seller’s representations and
warranties contained in Article V (or the corresponding representation and
warranty made by Seller in the certificate delivered pursuant to
Section 10.04(c) or its covenants hereunder), (c) any act or omission by Seller
involving or relating to the Excluded Assets or any other assets excluded from
the Assets pursuant to the terms hereof, (d) the matters set forth on Schedule
5.06, (e) any claim for personal injury or death relating to the Assets and
occurring prior to the Closing Date to the extent arising out of or attributable
to the period prior to the Closing Date, and (f) taxes of Seller, in each case,
REGARDLESS OF WHETHER CAUSED OR CONTRIBUTED TO BY THE SOLE, JOINT, COMPARATIVE
OR CONCURRENT NEGLIGENCE OR STRICT LIABILITY OF ANY OF THE BUYER INDEMNITEES;
provided, however, notwithstanding anything to the contrary contained herein,
Seller’s indemnification obligation under this Section 14.04 shall only apply if
(a) Buyer has provided Seller with written notice claiming indemnification
within 90 days after Closing, and (b) Buyer shall bear sole responsibility for
the aggregate costs associated with all Third Party non-environmental claims and
all Third Party environmental claims described in Section 14.05 relating to time
periods prior to the Effective Time up to a deductible percentage of three
percent (3%) of the Purchase Price. By the prior sentence, it is the intent that
Seller only be obligated to the extent of the excess of the claims above the
deductible percentage of three percent (3%).

Section 14.05 Seller’s Indemnification – Third Party Environmental Claims.
Provided that the Closing occurs, Seller shall release, defend, indemnify and
hold harmless Buyer, its partners, and their respective officers, directors,
employees, agents, representatives, members, shareholders, affiliates and
subsidiaries (collectively, Buyer Indemnitees) from and against any and all
Third Party environmental claims relating to Seller’s ownership or operation of
the Assets prior to the Effective Time or as a result of, arising out of, or
related to the Retained Obligations REGARDLESS OF WHETHER CAUSED OR CONTRIBUTED
TO BY THE SOLE, JOINT, COMPARATIVE OR CONCURRENT NEGLIGENCE OR STRICT LIABILITY
OF ANY OF BUYER INDEMNITEES; provided, however, notwithstanding anything to the
contrary contained herein, Seller’s indemnification obligation under this
Section 14.05 shall only apply if (i) Buyer has provided Seller with written
notice claiming indemnification within 90 days after the Closing, and (ii) Buyer
shall bear sole responsibility for the aggregate costs associated with all Third
Party environmental claims all Third Party non-environmental claims

 

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described in Section 14.04 relating to time periods prior to the Effective Time
up to a threshold percentage of three percent (3%) of the Purchase Price. By the
prior sentence, it is the intent that Seller only be obligated to the extent of
the excess of the claims above the deductible percentage of three percent (3%).

Section 14.06 Notices and Defense of Indemnified Matters. Each Party shall
promptly notify the other Party of any matter of which it becomes aware and for
which it is entitled to indemnification from the other Party under this
Agreement; provided, that any failure by the indemnified Party to notify the
indemnifying Party shall not affect the indemnified Party’s rights to
indemnification except the extent that the indemnifying Party is actually
prejudiced by the delay. The indemnifying Party shall be obligated to defend, at
the indemnifying Party’s sole expense, any litigation or other administrative or
adversarial proceeding against the indemnified Party relating to any matter for
which the indemnifying Party has agreed to indemnify and hold the indemnified
Party harmless under this Agreement. However, the indemnified Party shall have
the right to participate with the indemnifying Party in the defense of any such
matter at its own expense.

Article XV

Limitations on Representations and Warranties

Section 15.01 Disclaimers of Representations and Warranties. The express
representations and warranties of Seller and/or Parent contained in this
Agreement are exclusive and are in lieu of all other representations and
warranties, express, implied or statutory. EXCEPT FOR THE EXPRESS
REPRESENTATIONS OF SELLER AND/OR PARENT IN THIS AGREEMENT AND THE SPECIAL
WARRANTY IN THE ASSIGNMENT, BUYER ACKNOWLEDGES THAT SELLER AND/OR PARENT HAS NOT
MADE, AND SELLER AND/OR PARENT HEREBY EXPRESSLY DISCLAIMS AND NEGATES, AND BUYER
HEREBY EXPRESSLY WAIVES, ANY REPRESENTATION OR WARRANTY, EXPRESS, IMPLIED, AT
COMMON LAW, BY STATUTE OR OTHERWISE RELATING TO (a) PRODUCTION RATES,
RECOMPLETION OPPORTUNITIES, DECLINE RATES, GAS BALANCING INFORMATION OR THE
QUALITY, QUANTITY OR VOLUME OF THE RESERVES OF HYDROCARBONS, IF ANY,
ATTRIBUTABLE TO THE ASSETS, (b) THE ACCURACY, COMPLETENESS OR MATERIALITY OF ANY
INFORMATION, DATA OR OTHER MATERIALS (WRITTEN OR ORAL) NOW, HERETOFORE OR
HEREAFTER FURNISHED TO BUYER BY OR ON BEHALF OF SELLER AND/OR PARENT, AND
(c) THE ENVIRONMENTAL CONDITION OF THE ASSETS. EXCEPT FOR THE EXPRESS
REPRESENTATIONS OF SELLER AND/OR PARENT IN THIS AGREEMENT AND THE SPECIAL
WARRANTY IN THE ASSIGNMENT, SELLER AND/OR PARENT EXPRESSLY DISCLAIMS AND
NEGATES, AND BUYER HEREBY WAIVES, AS TO PERSONAL PROPERTY, EQUIPMENT, INVENTORY,
MACHINERY AND FIXTURES CONSTITUTING A PART OF THE ASSETS (i) ANY IMPLIED OR
EXPRESS WARRANTY OF MERCHANTABILITY, (ii) ANY IMPLIED OR EXPRESS WARRANTY OF
FITNESS FOR A PARTICULAR PURPOSE, (iii) ANY IMPLIED OR EXPRESS WARRANTY OF
CONFORMITY TO MODELS OR SAMPLES OF MATERIALS, (iv) ANY RIGHTS OF PURCHASERS
UNDER APPROPRIATE STATUTES TO CLAIM DIMINUTION OF CONSIDERATION OR RETURN OF THE

 

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PURCHASE PRICE, (v) ANY IMPLIED OR EXPRESS WARRANTY OF FREEDOM FROM DEFECTS,
WHETHER KNOWN OR UNKNOWN, (vi) ANY AND ALL IMPLIED WARRANTIES EXISTING UNDER
APPLICABLE LAW, AND (vii) ANY IMPLIED OR EXPRESS WARRANTY REGARDING
ENVIRONMENTAL LAWS, THE RELEASE OF MATERIALS INTO THE ENVIRONMENT, OR PROTECTION
OF THE ENVIRONMENT OR HEALTH, IT BEING THE EXPRESS INTENTION OF BUYER AND SELLER
AND/OR PARENT THAT THE PERSONAL PROPERTY, EQUIPMENT, INVENTORY, MACHINERY AND
FIXTURES INCLUDED IN THE ASSETS SHALL BE CONVEYED TO BUYER, AND BUYER SHALL
ACCEPT SAME, AS IS, WHERE IS, WITH ALL FAULTS AND IN THEIR PRESENT CONDITION AND
STATE OF REPAIR AND BUYER REPRESENTS TO SELLER AND/OR PARENT THAT BUYER WILL
MAKE OR CAUSE TO BE MADE SUCH INSPECTIONS WITH RESPECT TO SUCH PERSONAL
PROPERTY, EQUIPMENT, INVENTORY, MACHINERY AND FIXTURES AS BUYER DEEMS
APPROPRIATE. SELLER AND/OR PARENT AND BUYER AGREE THAT, TO THE EXTENT REQUIRED
BY APPLICABLE LAW TO BE EFFECTIVE, THE DISCLAIMERS OF CERTAIN WARRANTIES
CONTAINED IN THIS SECTION ARE “CONSPICUOUS” DISCLAIMERS FOR THE PURPOSES OF ANY
APPLICABLE LAW, RULE OR ORDER.

Section 15.02 Independent Investigation. Buyer represents and acknowledges that
it is knowledgeable of the oil and gas business and of the usual and customary
practices of producers such as Seller and/or Parent and that it has had (or will
have prior to the Closing) access to the Assets, the officers and employees of
Seller and/or Parent, and the books, records and files of Seller and/or Parent
relating to the Assets, and in making the decision to enter into this Agreement
and consummate the transactions contemplated hereby, Buyer has relied solely on
the basis of its own independent due diligence investigation of the Assets and
upon the representations and warranties made in Article V and the special
warranty in the Assignment, and not on any other representations or warranties
of Seller and/or Parent or any other Person or entity.

Section 15.03 Survival. Notwithstanding anything contained in this Agreement to
the contrary, the representations, warranties, covenants and obligations of
Seller under this Agreement shall not survive the Closing. The representations,
warranties, covenants and obligations of Parent pursuant to Section 17.16, or
otherwise, shall survive the Closing for 90 days only. Notwithstanding the
termination of any representation or warranty pursuant to this Section 15.03,
any claim for breach of representation or warranty properly raised prior to the
expiration of such representation or warranty shall survive until such claim and
the payment and the indemnity with respect thereto are resolved.

Article XVI

Dispute Resolution

Section 16.01 General. Any and all claims, Disputes, controversies or other
matters in question arising out of or relating to title issues, environmental
issues or calculation of the Statement or revisions thereto (all of which are
referred to herein as “Disputes” which term shall not include any other disputes
claims, disputes, controversies or other matters in question arising under this
Agreement) shall be resolved in the manner prescribed by this Article XVI.

 

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Section 16.02 Senior Management. If a Dispute occurs that the senior
representatives of the Parties responsible for the transaction contemplated by
this Agreement have been unable to settle or agree upon within a period of
fifteen (15) days after such Dispute arose, Seller shall nominate and commit one
of its senior officers, and Buyer shall nominate and commit one of its senior
officers, to meet at a mutually agreed time and place not later than thirty
(30) days after the Dispute has arisen to attempt to resolve same. If such
senior management have been unable to resolve such Dispute within a period of
fifteen (15) days after such meeting, or if such meeting has not occurred within
forty-five (45) days following such Dispute arising, then either Party shall
have the right, by written notice to the other, to resolve the Dispute through
the relevant Independent Expert pursuant to Section 16.03.

Section 16.03 Dispute by Independent Expert.

 

  (a) Each Party shall have the right to submit Disputes regarding title issues,
environmental issues or calculation of the Statement or revisions thereto, to an
independent expert appointed in accordance with this Section 16.03 (each, an
“Independent Expert”), who shall serve as sole arbitrator. The Independent
Expert shall be appointed by mutual agreement of the Parties from among
candidates with experience and expertise in the area that is the subject of such
Dispute, and failing such agreement, such Independent Expert for such Dispute
shall be selected in accordance with the Rules (as defined in Subsection (b) of
this Section 16.03).

 

  (b) Disputes to be resolved by an Independent Expert shall be resolved in
accordance with mutually agreed procedures and rules and failing such agreement,
in accordance with the rules and procedures of the Texas Arbitration Act and the
Rules of the American Arbitration Association to the extent such Rules do not
conflict with such Texas Arbitration Act or the provisions of this Agreement.
The Independent Expert shall be instructed by the Parties to resolve such
Dispute as soon as reasonably practicable in light of the circumstances. The
decision and award of the Independent Expert shall be binding upon the Parties
as an award under the Federal Arbitration Act and final and nonappealable to the
maximum extent permitted by Law, and judgment thereon may be entered in a court
of competent jurisdiction and enforced by any Party as a final judgment of such
court.

 

  (c) The charges and expenses of the arbitrator shall be shared equally by
Seller and Buyer.

 

  (d) Any arbitration hearing held pursuant to Section 3.05 or Section 16.03
shall be held in Los Angeles, California.

Section 16.04 Limitation on Arbitration. ALL OTHER DISAGREEMENTS, DIFFERENCES,
OR DISPUTES ARISING BETWEEN SELLER AND BUYER UNDER THE TERMS OF THIS AGREEMENT
(AND NOT COVERED BY SECTIONS 3.05 OR 16.03) SHALL NOT BE SUBJECT TO ARBITRATION
AND SHALL BE DETERMINED BY A

 

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COURT OF COMPETENT JURISDICTION, UNLESS THE PARTIES OTHERWISE MUTUALLY AGREE.

Article XVII

Miscellaneous

Section 17.01 Names. As soon as reasonably possible after the Closing, but in no
event later than 60 days after the Closing, Buyer shall remove the names of
Seller and its affiliates, and all variations thereof, from all of the Assets
and make the requisite filings with, and provide the requisite notices to, the
appropriate federal, state or local agencies to place the title or other indicia
of ownership, including operation of the Assets, in a name other than the name
of the Seller or any of its affiliates, or any variations thereof.

Section 17.02 Expenses. Except as otherwise expressly set forth in this
Agreement, including due diligence expenses, incurred by it in connection with
this transaction, and neither Party shall be entitled to any reimbursement for
such expenses from the other Party.

Section 17.03 Document Retention. As used in this Section 17.03, the term
“Documents” shall mean all files, documents, books, records and other data
delivered to Buyer by Seller pursuant to the provisions of this Agreement,
including, but not limited to: financial and tax accounting records; land, title
and division of interest files; contracts; engineering and well files; and books
and records related to the operation of the Assets prior to the Closing Date.

Section 17.04 Entire Agreement. This Agreement, the documents to be executed
hereunder, and the exhibits attached hereto constitute the entire agreement
between the Parties pertaining to the subject matter hereof and supersede all
prior agreements, understandings, negotiations and discussions, whether oral or
written, of the Parties pertaining to the subject matter hereof. No supplement,
amendment, alteration, modification or waiver of this Agreement shall be binding
unless executed in writing by the Parties and specifically referencing this
Agreement.

Section 17.05 Waiver. No waiver of any of the provisions of this Agreement shall
be deemed or shall constitute a waiver of any other provisions hereof (whether
or not similar), nor shall such waiver constitute a continuing waiver unless
otherwise expressly provided.

Section 17.06 Publicity and Disclosure of Agreement. Unless required by Law,
neither Seller nor Buyer shall issue any public announcement or press release
concerning the transactions contemplated herein without the written consent of
the other Party. The Parties agree to consult with each other prior to issuing
any press release or otherwise making any public statement with respect to this
Agreement or the transactions contemplated herein or making any filing with any
Regulatory Authority with respect thereto, except as may be required by
applicable Law or by obligations pursuant to any listing agreement with a stock
exchange and only after using its reasonable commercial efforts to consult the
other Party, taking into account the time constraints to which it is subject as
a result of such Law or obligation. Each of the Parties shall use its
commercially reasonable efforts to enable the other of them to review and
comment on all such press releases and filings prior to the release thereof. The
Parties acknowledge and agree that this Agreement shall be filed as required
with any applicable

 

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Governmental Authority or Regulatory Authority and included, in whole or in
part, in the Information Circular or as otherwise required to be disclosed in
accordance with applicable Law.

Section 17.07 Reasonable Commercial Efforts. Each Party shall use its respective
reasonable commercial efforts to take, or cause to be taken, all actions, and to
do, or cause to be done, and to assist and cooperate with the other Parties in
doing, all things necessary, proper or advisable to consummate and make
effective, in the most expeditious manner practicable, the transactions
contemplated herein, including the execution and delivery of such additional or
further consents, documents and other instruments and shall take all such
further actions as the other Parties may reasonably request for the purpose of
effectively carrying out the transactions contemplated by this Agreement and the
other related agreements.

Section 17.08 Construction. The captions in this Agreement are for convenience
only and shall not be considered a part of or affect the construction or
interpretation of any provision of this Agreement. The Parties acknowledge that
they have participated jointly in the negotiation and drafting of this Agreement
and as such the Parties agree that if an ambiguity or question of intent or
interpretation arises hereunder, this Agreement shall not be construed more
strictly against one Party than another on the grounds of authorship.

Section 17.09 No Third Party Beneficiaries. Except as provided in Sections 14.04
and 14.05, nothing in this Agreement shall provide any benefit to any Third
Party or entitle any Third Party to any claim, cause of action, remedy or right
of any kind, it being the intent of the Parties that this Agreement shall
otherwise not be construed as a Third Party beneficiary contract.

Section 17.10 Assignment. Neither Party may assign or delegate any of its rights
or duties hereunder without the prior written consent of the other Party and any
assignment made without such consent shall be void. Except as otherwise provided
herein, this Agreement shall be binding upon and inure to the benefit of the
Parties hereto and their respective permitted successors, assigns and legal
representatives.

Section 17.11 Governing Law. This Agreement, other documents delivered pursuant
hereto and the legal relations between the Parties shall be governed and
construed in accordance with the Laws of the State of Wyoming, without giving
effect to principles of conflicts of Laws that would result in the application
of the Laws of another jurisdiction. The Parties agree to venue in Park County,
Wyoming.

Section 17.12 Notices. Any notice, communication, request, instruction or other
document required or permitted hereunder shall be given in writing and delivered
in Person or sent by U.S. Mail postage prepaid, return receipt requested,
overnight courier or facsimile to the addresses of Seller and Buyer set forth
below. Any such notice shall be effective only upon receipt.

 

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Parent and Seller:

  

Clarence Cottman

c/o Legacy Energy, Inc.

1160 Eugenia Place, Ste. 100

Carpinteria, CA 93013

Fax: 805-566-2917

OR

  

Scott Dobson

c/o Legacy Energy, Inc.

1160 Eugenia Place, Ste. 100

Carpinteria, CA 93013

Fax: 805-566-2917

Buyer:

  

Greg Brown

c/o BreitBurn Management Company, LLC

515 S. Flower Street, Ste. 4800

Los Angeles, CA 90071

Fax: (213) 225-5916

Either Party may, by written notice so delivered to the other Party, change its
address for notice purposes hereunder.

Section 17.13 Severability. If any term or other provision of this Agreement is
invalid, illegal or incapable of being enforced by any rule of Law or public
policy, all other conditions and provisions of this Agreement shall nevertheless
remain in full force and effect and the Parties shall negotiate in good faith to
modify this Agreement so as to effect their original intent as closely as
possible in an acceptable manner to the end that the transactions contemplated
hereby are fulfilled to the extent possible.

Section 17.14 Time of the Essence. Time shall be of the essence with respect to
all time periods and notice periods set forth in this Agreement.

Section 17.15 Counterpart Execution. This Agreement may be executed in any
number of counterparts, and each counterpart hereof shall be effective as to
each Party that executes the same whether or not all of such Parties execute the
same counterpart. If counterparts of this Agreement are executed, the signature
pages from various counterparts may be combined into one composite instrument
for all purposes. All counterparts together shall constitute only one Agreement,
but each counterpart shall be considered an original.

Section 17.16 Parent Liability. Parent agrees that it is and shall be jointly
and severally liable for all of Seller’s obligations under this Agreement and
under any document to be entered into by Seller at Closing.

Section 17.17 Financial Statements.

 

  (a)

Seller shall prepare, at the sole cost and expense of Buyer, the financial
statements and all notes thereto related to the Assets (the “Special Financial
Statements”) that will be required of Buyer by the Securities and

 

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  Exchange Commission (“SEC”) in connection with any reports, registration
statements or other filings to be made by Buyer or any of its affiliates related
to the transactions contemplated by this Agreement with the SEC pursuant to the
Securities Act of 1933, as amended (the “Securities Act”), or the Securities
Exchange Act of 1934, as amended (the “Exchange Act”), in such form that such
statements and notes thereto can be audited by the Seller’s external audit firm
(“Seller’s Auditor”). Seller shall cooperate with and permit Buyer to reasonably
participate in the preparation of the Special Financial Statements and shall
provide Buyer and its representatives with reasonable access to Seller’s
personnel who engage in the preparation of the Special Financial Statements.

 

  (b) Seller shall execute and deliver, or cause to be executed and delivered,
to Seller’s Auditor such representation letters, in form and substance customary
for representation letters provided to external audit firms by Seller (if the
financial statements are subject of an audit or are the subject of a review
pursuant to Statement of Accounting Standards 100 (Interim Financial
Information)), as may be reasonably requested by Seller’s Auditor, with respect
to the Special Financial Statements. Buyer agrees that (i) Buyer shall indemnify
and hold harmless Seller and provide a defense for Seller (excluding, in each
case, the negligence of Seller) with regard to the execution, delivery or any
other action related to the provision of (A) any representation letter delivered
by Seller to Seller’s Auditor, (B) the Special Financial Statements and (C) the
Audited Special Financial Statements, (ii) Buyer shall provide a customary
representation letter to Seller’s Auditor, if reasonably requested, and
(iii) Buyer’s existing outside auditors shall provide a customary representation
letter to Seller’s Auditor, if reasonably requested.

 

  (c)

Seller will engage Seller’s Auditor to perform an audit of the Special Financial
Statements and shall use commercially reasonable efforts to cause Seller’s
Auditor to issue unqualified opinions with respect to the Special Financial
Statements (the Special Financial Statements and related audit opinions being
hereinafter referred to as the “Audited Special Financial Statements”), and
provide its written consent for the use of Seller’s audit reports with respect
to Special Financial Statements in reports, registration statements, or other
documents filed by the Buyer or any of its affiliates under the Securities Act
or the Exchange Act, as needed. Buyer shall reimburse Seller for all fees
charged by Seller’s Auditor with respect to the preparation and delivery by
Seller’s Auditor to Buyer of the Audited Special Financial Statements and any
other fees charged by Seller’s Auditor to facilitate Buyer’s ongoing compliance
with SEC rules and regulations. Seller shall take all reasonable action as may
be necessary to facilitate the completion of such audit and delivery of the
Audited Special Financial Statements to Buyer or any of its affiliates as soon
as reasonably practicable. Buyer shall reimburse Seller for all other

 

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  reasonable costs and expenses incurred in complying with this Section 17.17.

 

  (d) At the Closing, Seller shall deliver to Buyer the Audited Special
Financial Statements as of and for the year ended December 31, 2011 and the
unaudited interim Special Financial Statements for the three months ended
March 31, 2012 pursuant to Section 10.04(h). If the Closing occurs on or after
June 30, 2012, Seller shall deliver to Buyer the unaudited interim Special
Financial Statements for the three months ended June 30, 2012 on or before
August 1, 2012.

Signature page follows

 

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

 

SELLER: LEGACY ENERGY, INC. By:   /s/ Clarence Cottman Name: Clarence Cottman
Title: Chief Executive Officer PARENT: NIMIN ENERGY, CORP. By:   /s/ Clarence
Cottman Name: Clarence Cottman Title: Chief Executive Officer BUYER: BREITBURN
OPERATING L.P. BY: BREITBURN OPERATING GP, LLC, its general partner By:   /s/
Randall H. Breitenbach Name: Randall H. Breitenbach Title: President

Signature Page to Purchase and Sale Agreement

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EXHIBIT A

THE LEASES

FERGUSON RANCH FIELD

PARK COUNTY, WY

FERGUSON RANCH UNIT

 

LEASE NO.:    WY029-0004 LESSOR:    State of Wyoming #0-19128-A LESSEE:    Bruce
Anderson DATE:    May 16, 1955 RECORDED:    Book 346, Page 291 DESCRIPTION:   
T50N-R102W, 6th P. M.    Section 23: Lots 2, 3; SW/4 SW/4    Section 26: NW/4
NW/4 LEASE NO.:    WY029-0001-01 LESSOR:    Hunt Oil Company LESSEE:    Terra
Resources, Inc. DATE:    August 19, 1971 RECORDED:    Book 357, Page 351
DESCRIPTION:    INSOFAR AND ONLY INSOFAR AS THE LEASE COVERS THE FOLLOWING
DESCRIBED LANDS:    T50N-R102W, 6th P. M.    Section 14: Lot 7, surface to 3947’
   Section 23: NW/4 NW/4, surface to 3893’

LESS AND EXCEPT unto Seller, its successors and assigns, all royalty proceeds
accruing to the subject lease attributable to production from the Ferguson Ranch
Unit for so long as said Unit Agreement remains in effect.

 

LEASE NO.:    WY029-0002 LESSOR:    Hunt Oil Company LESSEE:    Terra Resources,
Inc. DATE:    August 1, 1979 RECORDED:    Book 43, Page 794 DESCRIPTION:   
INSOFAR AND ONLY INSOFAR AS THE LEASE COVERS THE FOLLOWING DESCRIBED LANDS:   
T50N-R102W, 6th P. M.   

 

Section 23: 5.165 acres out of Lot 51B, being more particularly described as
those lands in Lot 51B subject to that certain Pooling Agreement and Designation
of Ferguson Ranch #8 Unit, by and between the Commissioner of Public Lands of
the State of Wyoming

 

Exhibit A   Page 1 of 8

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   and Terra Resources, Inc., et al dated July 1, 1979 and recorded in the
records of the Park County Clerk in Book 45, Page 508.

LESS AND EXCEPT unto Seller, its successors and assigns, all royalty proceeds
accruing to the subject lease attributable to production from the Ferguson Ranch
Unit for so long as said Unit Agreement remains in effect.

 

LEASE NO.:

LESSOR:

LESSEE:

DATE:

RECORDED:

DESCRIPTION:

  

WY029-0001-02

Hunt Oil Company

Faulconer Resources 1999 Limited Partnership

May 18, 2001

DOC #2001 3560

T50N-R102W, 6th P. M.

 

Section 14: 53.51 acres, being all of Lot 7, identified as part of Tract No. 3
of the unitized area formed pursuant to that certain Unit Agreement for the
Ferguson Ranch Unit dated as of September 28, 1995 and recorded in Park County
as Document 1996 3404, as to all rights below the subsurface depth of 3947 feet.

 

Section 23: 40.00 acres, being the NW/4 NW/4 (part of Lot 55), identified as
part of Tract No. 3 of the unitized area formed pursuant to that certain Unit
Agreement for the Ferguson Ranch Unit dated as of September 28, 1995 and
recorded in Park County as Document 1996 3404, as to all rights below the
subsurface depth of 3893 feet.

 

Containing 93.51 acres, more or less.

LESS AND EXCEPT unto Seller, its successors and assigns, all royalty proceeds
accruing to the subject lease attributable to the hydrocarbons produced from any
wells located in the Ferguson Ranch Unit, unless and to the extent any such
wells are used to produce hydrocarbons from new completions below the base of
the deepest unitized formation in the Ferguson Ranch Unit.

 

LEASE NO.:

LESSOR:

LESSEE:

DATE:

RECORDED:

DESCRIPTION:

  

WY029-0003

Hunt Oil Company

Faulconer Resources 1999 Limited Partnership

December 21, 2000, effective June 1, 2000

DOC #2000 3961

T50N-R102W, 6th P. M. (as amended)

 

Section 23: 26.924 acres being all of Lot 1 and part of Lots (Tracts) 51A and
51B, identified as Tract No. 5 of the unitized area formed pursuant to that
certain Unit Agreement for Ferguson Ranch Unit dated as of September 28, 1995
and recorded in the Park County Clerk records of June 10, 1996 as document 1996
3404 (the “Ferguson Ranch Unit”).

 

Section 23: 13.995 acres being that part of Lot 4 identified as Tract 6 of the
Ferguson Ranch Unit.

 

Exhibit A   Page 2 of 8

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Section 26: SW/4 NW/4, being Tract 4 of the Ferguson Ranch Unit.

 

Section 26: 28.345 acres, being part of the E/2 NW/4 identified as Tract No. 7
of the Ferguson Ranch Unit.

 

Containing 109.264 acres, more or less.

LESS AND EXCEPT unto Seller, its successors and assigns, all royalty proceeds
accruing to the subject lease attributable to the hydrocarbons produced from any
wells located in the Ferguson Ranch Unit, unless and to the extent any such
wells are used to produce hydrocarbons from new completions below the base of
the deepest unitized formation in the Ferguson Ranch Unit.

AMENDMENT TO OIL AND GAS LEASE

 

LEASE NO.:

LESSOR:

LESSEE:

DATE:

RECORDED:

  

WY029-0003

Hunt Oil Company

Faulconer Resources 1999 Limited Partnership

December 21, 2000, effective June 1, 2000

Doc. #2000 7719

PIPELINE EASEMENT

 

LEASE NO.:

LESSOR:

LESSEE:

DATE:

RECORDED:

DESCRIPTION:

  

Not available

Hunt Oil Company

Amax Petroleum Corporation

March 16, 1967

Not recorded

T50N-R102W, 6th P. M.

 

Section 2: W/2

 

T51N-R102W, 6th P. M.

 

Section 26: W/2

 

Section 35: W/2

(Pipeline Easement for flowline from Ferguson Ranch Unit)

SHEEP POINT FIELD

PARK COUNTY, WY

 

LEASE NO.:

LESSOR:

LESSEE:

DATE:

RECORDED:

DESCRIPTION:

  

WY029-0020

State of Wyoming #66-17899

W. D. Tolan

December 2, 1966

Book 381, Page 184

T47N-R102W, 6th P. M.

 

Section 16: W/2; NE/4; S/2 SE/4; NE/4 SE/4

 

Exhibit A   Page 3 of 8

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LEASE NO.:

LESSOR:

LESSEE:

DATE:

RECORDED:

DESCRIPTION:

  

WY029-0021

State of Wyoming #66-17899A

W. D. Tolan

December 2, 1966

Book 381, Page 184

T47N-R102W, 6th P. M.

 

Section 16: NW/4 SE/4

LESS AND EXCEPT unto Seller, its successors and assigns, all right, title and
interest in and to any existing royalty and/or overriding royalty interests
owned or held by Seller (or affiliate of Seller) in or to the leases and lands.

WILLOW DRAW FIELD

PARK COUNTY, WY

 

LEASE NO.:

LESSOR:

LESSEE:

DATE:

DESCRIPTION:

  

WY10-00242

State of Wyoming

Legacy Energy, Inc.

June 2, 2010

T48N R104W

 

Section 36: Part of Tract 50 (formerly NENE Sec. 36)

Resurvey Township: 48 North

Range: 104 West of the 6th P.M.

 

Containing 40 acres, more or less.

 

LEASE NO.:

LESSOR:

LESSEE:

DATE:

DESCRIPTION:

  

WY10-00239

State of Wyoming

Legacy Energy, Inc.

June 2, 2010

T48N R103W

 

Section 30: NE/4

 

Containing 160 acres, more or less.

 

LEASE NO.:

LESSOR:

LESSEE:

DATE:

DESCRIPTION:

  

WY10-00240

State of Wyoming

Legacy Energy, Inc.

June 2, 2010

T48N R103W

 

Section 31: N/2NE/4, SE/4NE/4, NE/4NW/4, Lot 1, E/2 SE/4

 

Containing 273.85 acres, more or less.

 

LEASE NO.:

LESSOR:

  

WY10-00241

State of Wyoming

 

Exhibit A   Page 4 of 8

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LESSEE:

DATE:

DESCRIPTION:

  

Legacy Energy, Inc.

June 2, 2010

T48N R103W

 

Section 32: W/2 NW/4, NW/4 SW/4

 

Containing 120 acres, more or less.

 

LEASE NO.:

LESSOR:

LESSEE:

DATE:

RECORDED:

DESCRIPTION:

  

WY029-0022

State of Wyoming #64-5619B

Etta Mandel

May 2, 1964

Book 373, Page 370

T48N-R104W, 6th P. M.

 

Section 25: Resurvey Tract 49, Part Resurvey Tract 48, (Orig. E/2 of Section 25)

 

LEASE NO.:

LESSOR:

LESSEE:

DATE:

RECORDED:

DESCRIPTION:

  

WY029-0024

State of Wyoming #68-15697

Lucille L. Calvin

February 2, 1968

Book 374, Page 145

T48N-R103W, 6th P. M.

 

Section 19: SW/4 NE/4; SE/4

 

LEASE NO.:

LESSOR:

LESSEE:

DATE:

RECORDED:

DESCRIPTION:

  

WY029-0023

State of Wyoming #70-1284

Raymond N. Joeckel

January 2, 1970

Book 368, Page 99

T48N-R103W, 6th P. M.

 

Section 19: Lot 4; SE/4 SW/4

 

Section 30: SE/4; E/2 W/2; Lots 1, 2, 3, 4

HUNT FIELD

PARK COUNTY, WY

HUNT STATE 11-1

 

LEASE NO.:

LESSOR:

LESSEE:

DATE:

RECORDED:

DESCRIPTION:

  

WY029-0007

State of Wyoming #62-10518

E. Earl Wennergren

May 2, 1962

Book 306, Page 181

T50N-R102W, 6th P. M.

 

Section 11: SE/4 NW/4

 

Exhibit A   Page 5 of 8

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LESS AND EXCEPT unto Seller, its successors and assigns, all right, title and
interest in and to any existing royalty and/or overriding royalty interests
owned or held by Seller (or affiliate of Seller) in or to the leases and lands.

HUNT FEE # 2-1 AND HUNT FEE #2-11

 

DESCRIPTION:    T50N-R102W, 6th P. M.   

 

Section 2: SW/4 SW/4

  

 

Section 11: Lot 2 and the West 12.16 acres of NE/4 NW/4

INCLUDING:    Working interest and rights in production attributable to those
interests under that certain Operating Agreement dated October 5, 1965 between
Amax Petroleum Corporation and Hunt Oil Company. LESSOR:    Hunt Oil Company
LESSEE:    Amax Petroleum DATE:    October 5, 1965 RECORDED:    See Below
DESCRIPTION:    T50N-R102W, 6th P. M.:   

 

Section 2: SW/4 SW/4

  

 

Section 11: Lot 2 and West 12.16 acres of NE/4 NW/4

(Lease is derived from the Exhibit “B” attached to that certain Operating
Agreement dated October 5, 1965, between Hunt Oil Company and Amax Petroleum
Corporation, recorded in Book 148, Page 317 of the records of the County Clerk
and Recorder, Park County, Wyoming.)

LESS AND EXCEPT unto Seller, its successors and assigns, all right, title and
interest in and to any existing royalty and/or overriding royalty interests
owned or held by Seller (or affiliate of Seller) in or to the leases and lands.

 

LEASE NO.:    WY10-00238 LESSOR:    State of Wyoming LESSEE:    Legacy Energy,
Inc. DATE:    June 2, 2010 DESCRIPTION:    T50N R102W   

 

Section 2: NW/4 SW/4

  

 

Section 3: SE/4 NE/4, Lots 2, 3 and 6

   Containing 187.71 acres, more or less. LEASE NO.:   

 

WYW179184

LESSOR:    Bureau of Land Management LESSEE:    Legacy Energy, Inc. DATE:   
Effective May 1, 2011 DESCRIPTION:    T50N R102W

 

Exhibit A   Page 6 of 8

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

  

 

Section 3: E/2 SE/4 Sec: 3

  

 

Section 10: E/2 of Lot 1

   Containing 80.12 acres, more or less. LEASE NO.:   

 

WYW179183

LESSOR:    Bureau of Land Management LESSEE:    Legacy Energy, Inc. DATE:   
Effective May 1, 2011 DESCRIPTION:    T50N R102W   

 

Section 2: Lots 3 and 4 S/2 NW/4, E/2 SW/4, W/2 SE/4

   Containing 318.68 acres, more or less.

LESS AND EXCEPT unto Seller, its successors and assigns, all right, title and
interest in and to any existing royalty and/or overriding royalty interests
owned or held by Seller (or affiliate of Seller) in or to the leases and lands.

MISCELLANEOUS RIGHTS

 

LEASE NO.:    WY029-0006 LESSOR:    USA #CHEY-068322 LESSEE:    Hettie Lee St.
John DATE:    April 1, 1945 RECORDED:    None available DESCRIPTION:   
T54N-R102W, 6th P. M.   

 

Section 5: SW/4 NW/4; W/2 SW/4

  

 

Section 6: SE/4 NE/4; NE/4 SE/4

  

 

Section 7: E/2 NE/4

  

 

Section 8: NW/4 NW/4

LEASE NO.:    WY029-0005 LESSOR:    USA #CHEY-066525 LESSEE:    E W Krampert
DATE:    September 1, 1942 RECORDED:    Book 113, Page 209 DESCRIPTION:   
T51N-R100W, 6th P. M.   

 

Section 7: SE/4 SE/4

LEASE NO.:    WY029-0008 LESSOR:    USA #W-0211 LESSEE:    Fred M. Manning, et
al DATE:    April 1, 1950 RECORDED:    None available DESCRIPTION:   
T54N-R102W, 6th P. M.   

 

Section 5: SE/4 NW/4; E/2 SW/4; NW/4 SE/4

 

Exhibit A   Page 7 of 8

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

 

  

 

Section 8: S/2 NE4; E/2 NW/4

  

 

Section 9: Lots 5 & 6; N/2 SW/4; SW/4 SE/4

  

 

Section 16: Lots 1, 2, 3 & 4; W/2 E/2; E/2 SE/4

  

 

Section 17: Lots 1, 2, 3 & 4

OTHER COUNTIES

None.

END OF EXHIBIT A

 

Exhibit A   Page 8 of 8

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EXHIBIT B

WELLS AND INTERESTS

THE WELLS

 

WELL NAME    API NUMBER      WORKING
INTEREST      NET  REVENUE
INTEREST  

FERGUSON RANCH STATE 1

     4902905326         1.00000000         0.77144240   

FERGUSON RANCH STATE 2

     4902905329         1.00000000         0.77144240   

FERGUSON RANCH STATE 3

     4902905331         1.00000000         0.77144240   

FERGUSON RANCH STATE 4

     4902920292         1.00000000         0.77144240   

FERGUSON RANCH STATE 5

     4902920693         1.00000000         0.77144240   

FERGUSON RANCH STATE 6

     4902920690         1.00000000         0.77144240   

FERGUSON RANCH STATE 7

     4902920880         1.00000000         0.77144240   

FERGUSON RANCH STATE #8 (INJ)

     4902920881         1.00000000         0.77144240   

FERGUSON RANCH STATE 9

     4902921349         1.00000000         0.77144240   

FERGUSON RANCH STATE #10 (INJ)

     4902921727         1.00000000         0.77144240   

FERGUSON RANCH STATE 11

     4902931262         1.00000000         0.77144240   

FERGUSON RANCH STATE 12

     4902931276         1.00000000         0.77144240   

FERGUSON RANCH STATE 13

     4902931263         1.00000000         0.77144240   

FERGUSON RANCH STATE 14

     4902931377         1.00000000         0.77144240   

FERGUSON RANCH STATE 15

     4902931278         1.00000000         0.77144240   

FERGUSON RANCH STATE 16

     4902931279         1.00000000         0.77144240   

(FR) HUNT 14-1

     4902920296         1.00000000         0.77144240   

(FR) HUNT 23-1

     4902920282         1.00000000         0.77144240   

HUNT FEE 2-11

     4902921161         0.93333340         0.81653340   

HUNT FEE 2-1

     4902906847         0.86666670         0.75806660   

HUNT STATE 11-1

     4902920312         0.73333330         0.63380000   

HUNT 2-3

     4902931290         0.86666670         0.75807000   

HUNT 11-3

     4902931292         0.93333340         0.81653340   

HUNT 11-5

     4902931312         0.86666670         0.74913320   

 

Exhibit B   Page 1 of 5

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

SHEEP POINT STATE 1

     4902920175         0.54984830         0.44437133   

State #16-2 APO

     4902905075         0.90703990         0.72013127   

SHEEP POINT STATE 3

     4902920191         0.54984830         0.44437131   

SHEEP POINT STATE 7

     4902931301         0.63465960         0.51291334   

SHEEP POINT STATE 8

     4902931302         1.00000000         0.79433000   

SHEEP POINT STATE 9

     4902931303         1.00000000         0.79433000   

WILLOW DRAW STATE 25-3

     4902920415         1.00000000         0.84000000   

STATE 68-15697 19 #1

     4902920430         1.00000000         0.80500000   

WILLOW DRAW STATE 1

     4902920335         1.00000000         0.82500000   

WILLOW DRAW STATE 2

     4902920354         1.00000000         0.82500000   

WILLOW DRAW STATE 3

     4902920361         1.00000000         0.82500000   

WILLOW DRAW STATE 4

     4902920359         1.00000000         0.82500000   

WILLOW DRAW STATE 5

     4902920368         1.00000000         0.82500000   

WILLOW DRAW STATE 6

     4902920369         1.00000000         0.82500000   

WILLOW DRAW STATE 7

     4902920373         1.00000000         0.82500000   

WILLOW DRAW STATE 8

     4902920393         1.00000000         0.82500000   

WILLOW DRAW STATE 9

     4902920398         1.00000000         0.82500000   

WILLOW DRAW STATE 10

     4902920411         1.00000000         0.82500000   

State 70-1284 30 #11 SWD

     4902920416         1.00000000         1.00000000   

State 70-1284 30 #12

     4902920426         1.00000000         0.82500000   

State 70-1284 30 #13

     4902920432         1.00000000         0.82500000   

WILLOW DRAW STATE 15

     4902920506         1.00000000         0.82500000   

WILLOW DRAW STATE 16

     4902921287         1.00000000         0.82500000   

WILLOW DRAW STATE 17

     4902931288         1.00000000         0.82500000   

WILLOW DRAW STATE 18

     4902931287         1.00000000         0.82500000   

WILLOW DRAW STATE 19

     4902931289         1.00000000         0.82500000   

WILLOW DRAW STATE 20

     4902931296         1.00000000         0.82500000   

WILLOW DRAW STATE 22

     4902931295         1.00000000         0.82500000   

FOURBEAR PIPELINE

        0.08688900         n/a   

 

Exhibit B   Page 2 of 5

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

DRILLING LOCATIONS

 

FERGUSON RANCH INFILL 1

   State Lease 0-19128-A     1.00000000         0.77144240   

FERGUSON RANCH INFILL 2

   State Lease 0-19128-A     1.00000000         0.77144240   

FERGUSON RANCH INFILL 3

   State Lease 0-19128-A     1.00000000         0.77144240   

FERGUSON RANCH INFILL 4

   State Lease 0-19128-A     1.00000000         0.77144240   

FERGUSON RANCH INFILL 5

   State Lease 0-19128-A     1.00000000         0.77144240   

FERGUSON RANCH INFILL 6

   State Lease 0-19128-A     1.00000000         0.77144240   

FERGUSON RANCH INFILL 7

   State Lease 0-19128-A     1.00000000         0.77144240   

FERGUSON RANCH INFILL 8

   Ferguson Fee Lease     1.00000000         0.77144240   

FERGUSON RANCH INFILL 9

   State Lease 0-19128-A     1.00000000         0.77144240   

FERGUSON RANCH INFILL 10

   Ferguson Fee Lease     1.00000000         0.77144240   

FERGUSON RANCH INFILL 11

   Ferguson Fee Lease     1.00000000         0.77144240   

FERGUSON RANCH INFILL 12

   Ferguson Fee Lease     1.00000000         0.77144240   

FERGUSON RANCH INFILL 13

   Ferguson Fee Lease     1.00000000         0.77144240   

FERGUSON RANCH INFILL 14

   Ferguson Fee Lease     1.00000000         0.77144240   

FERGUSON RANCH INFILL 15

   Ferguson Fee Lease     1.00000000         0.77144240   

FERGUSON RANCH INFILL 16

   Ferguson Fee Lease     1.00000000         0.77144240   

FERGUSON RANCH INFILL 17

   Ferguson Fee Lease     1.00000000         0.77144240   

HUNT INFILL 1

   State Lease 62-10518     0.73333000         0.63380000   

HUNT INFILL 2

   State Lease 62-10518     0.73333000         0.63380000   

HUNT INFILL 3

   State Lease 62-10518     0.73333000         0.63380000   

HUNT INFILL 4

   State Lease 62-10518     0.73333000         0.63380000   

HUNT INFILL 5

   Hunt Fee Lease*     0.86667000         0.75807000   

HUNT INFILL 6

   Hunt Fee Lease*     0.86667000         0.75807000   

HUNT INFILL 7

   Federal WYW179183     1.00000000         0.87500000   

HUNT INFILL 8

   Federal WYW179183     1.00000000         0.87500000   

HUNT INFILL 9

   Federal WYW179183     1.00000000         0.87500000   

SHEEP POINT INFILL 1

   State Lease 66-17899     0.90704000         0.72049000   

 

Exhibit B   Page 3 of 5

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

SHEEP POINT INFILL 2

   State Lease 66-17899      0.84495000         0.68361000   

SHEEP POINT INFILL 3

   State Lease 66-17899      0.90704000         0.72049000   

SHEEP POINT INFILL 4

   State Lease 66-17899      0.90704000         0.72049000   

SHEEP POINT INFILL 5

   State Lease 66-17899      0.90704000         0.72049000   

SHEEP POINT INFILL 6

   State Lease 66-17899      0.90704000         0.72049000   

SHEEP POINT INFILL 7

   State Lease 66-17899      0.90704000         0.72049000   

SHEEP POINT INFILL 8

   State Lease 66-17899      0.54985000         0.44485000   

SHEEP POINT INFILL 9

   State Lease 66-17899      0.84495000         0.68361000   

WILLOW DRAW INFILL 1

   State Lease 70-1284      1.00000000         0.82500000   

WILLOW DRAW INFILL 2

   State Lease 10-00241      1.00000000         0.83333000   

WILLOW DRAW INFILL 3

   State Lease 10-00241      1.00000000         0.83333000   

WILLOW DRAW INFILL 4

   State Lease 10-00239      1.00000000         0.83333000   

WILLOW DRAW INFILL 5

   State Lease 70-1284      1.00000000         0.82500000   

WILLOW DRAW INFILL 6

   State Lease 70-1284      1.00000000         0.82500000   

WILLOW DRAW INFILL 7

   State Lease 70-1284      1.00000000         0.82500000   

WILLOW DRAW INFILL 8

   State Lease 70-1284      1.00000000         0.82500000   

WILLOW DRAW INFILL 9

   State Lease 70-1284      1.00000000         0.82500000   

WILLOW DRAW INFILL 10

   State Lease 70-1284      1.00000000         0.82500000   

WILLOW DRAW INFILL 11

   State Lease 10-00239      1.00000000         0.83333000   

WILLOW DRAW INFILL 12

   State Lease 10-00239      1.00000000         0.83333000   

WILLOW DRAW INFILL 13

   State Lease 70-1284      1.00000000         0.82500000   

WILLOW DRAW INFILL 14

   State Lease 70-1284      1.00000000         0.82500000   

WILLOW DRAW INFILL 15

   State Lease 10-00239      1.00000000         0.83333000   

WILLOW DRAW INFILL 16

   State Lease 70-1284      1.00000000         0.82500000   

WILLOW DRAW INFILL 17

   State Lease 70-1284      1.00000000         0.82500000   

WILLOW DRAW INFILL 18

   State Lease 10-00239      1.00000000         0.83333000   

WILLOW DRAW INFILL 19

   State Lease 70-1284      1.00000000         0.82500000   

WILLOW DRAW INFILL 20

   State Lease 70-1284      1.00000000         0.82500000   

WILLOW DRAW INFILL 21

   State Lease 70-1284      1.00000000         0.82500000   

 

Exhibit B   Page 4 of 5

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

WILLOW DRAW INFILL 22

   State Lease 70-1284      1.00000000         0.82500000   

WILLOW DRAW INFILL 23

   State Lease 70-1284      1.00000000         0.82500000   

WILLOW DRAW INFILL 24

   State Lease 70-1284      1.00000000         0.82500000   

WILLOW DRAW INFILL 25

   State Lease 10-00241      1.00000000         0.83333000   

WILLOW DRAW INFILL 26

   State Lease 70-1284      1.00000000         0.82500000   

WILLOW DRAW INFILL 27

   State Lease 10-00239      1.00000000         0.83333000   

WILLOW DRAW INFILL 28

   State Lease 70-1284      1.00000000         0.82500000   

WILLOW DRAW INFILL 29

   State Lease 70-1284      1.00000000         0.82500000   

WILLOW DRAW INFILL 30

   State Lease 10-00239      1.00000000         0.83333000   

WILLOW DRAW INFILL 31

   State Lease 10-00239      1.00000000         0.83333000   

WILLOW DRAW INFILL 32

   State Lease 10-00239      1.00000000         0.83333000   

WILLOW DRAW INFILL 33

   State Lease 70-1284      1.00000000         0.82500000   

WILLOW DRAW INFILL 34

   State Lease 10-00239      1.00000000         0.83333000   

WILLOW DRAW INFILL 35

   State Lease 10-00239      1.00000000         0.83333000   

WILLOW DRAW INFILL 36

   State Lease 10-00239      1.00000000         0.82500000   

WILLOW DRAW INFILL 37

   State Lease 70-1284      1.00000000         0.83333000   

END OF EXHIBIT B

 

Exhibit B   Page 5 of 5

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EXHIBIT C

ALLOCATED VALUES

 

0000000000 0000000000 0000000000

Property name

   Allocated Value              

FOURBEAR Pipeline

     0.431                  0.431            

 

 

    

Ferguson Ranch State #14

     4.949         

Hunt 11-3

     3.755         

Ferguson Ranch State #1

     2.650         

Ferguson Ranch State #2

     2.606         

Ferguson Ranch State #15

     2.544         

State 30-22

     2.481         

Ferguson Ranch State #5

     2.335         

Ferguson Ranch State #3

     2.317         

State 70-1284 30 #7

     2.222         

State 70-1284 30 #4

     2.032         

State 70-1284 30 #15

     1.875         

Hunt 14-1

     1.462         

Ferguson Ranch State #6

     1.418         

State 70-1284 30 #1

     1.336         

Hunt 23-1

     1.297         

Hunt Fee #2-1

     1.227         

State 16-8

     1.162         

Ferguson Ranch State #4

     1.131         

Ferguson Ranch State #7

     1.088         

Ferguson Ranch State #11

     1.075         

Ferguson Ranch State #16

     0.990         

State 70-1284 30 #6

     0.923         

State 70-1284 30 #16

     0.901         

State #16-2 APO

     0.830         

State 70-1284 30 #8

     0.802         

State 70-1284 30 #2

     0.742         

State 30-18

     0.661         

State 16-9

     0.403         

Ferguson Ranch State #13

     0.334         

State 16-7

     0.294         

State #16-1

     0.234         

 

Exhibit C   Page 1 of 4

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

0000000000 0000000000 0000000000

Ferguson Ranch State #12

     0.066         

State 30-17

     0.054         

Ferguson Ranch State #9

     —           

Hunt State #11-1

     —           

State 30-20

     —                    48.195            

 

 

    

WILLOW DRAW STATE

     1.848         

1 (R&P)

        

State 30-19

     1.473         

Hunt 11-5

     1.248         

Hunt 2-3

     1.213         

State 70-1284 30 #3

     0.879         

State 70-1284 30 #5

     0.847         

State 70-1284 30 #10

     0.749         

State 70-1284 30 #9

     0.724         

Hunt Fee #2-11

     0.594         

WILLOW DRAW STATE

     0.592         

17 (POLYMER)

        

WILLOW DRAW STATE

     0.417         

16 (R&P)

        

WILLOW DRAW STATE

     0.239         

2 (R&P)

        

WILLOW DRAW STATE

     0.203         

4 (R&P)

        

WILLOW DRAW STATE

     0.139         

6 (R&P)

        

State #16-3

     0.128         

WILLOW DRAW STATE

     —           

20 (POLYMER)

        

State 64-5619 25 #3

     —                    11.291            

 

 

    

FRU WATERFLOOD

     6.888         

(PROVED)

        

Sheep Point Infill #01

     0.658         

Willow Draw Infill #15

     0.548         

Willow Draw Infill #01

     0.543         

Willow Draw Infill #02

     0.537         

Willow Draw Infill #03

     0.516         

Willow Draw Infill #04

     0.511         

Willow Draw Infill #14

     0.505         

Willow Draw Infill #05

     0.500         

Willow Draw Infill #06

     0.495         

Willow Draw Infill #07

     0.489         

 

Exhibit C   Page 2 of 4

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

0000000000 0000000000 0000000000

Willow Draw Infill #08

     0.484         

Willow Draw Infill #09

     0.479         

Willow Draw Infill #10

     0.473         

Willow Draw Infill #11

     0.468         

Willow Draw Infill #12

     0.462         

Willow Draw Infill #13

     0.456         

Hunt Infill #05

     0.431         

Hunt Infill #01

     0.387         

Hunt Infill #02

     0.382         

Hunt Infill #03

     0.358         

Hunt Infill #04

     0.356         

Hunt Infill #06

     0.352         

Hunt Infill #07

     0.350         

Hunt Infill #08

     0.347         

Ferguson Ranch Infill #01

     0.258         

Ferguson Ranch Infill #02

     0.256         

Ferguson Ranch Infill #03

     0.254         

Ferguson Ranch Infill #04

     0.253         

Ferguson Ranch Infill #05

     0.251         

Willow Draw Infill #16

     0.188         

Willow Draw Infill #17

     0.172         

Willow Draw Infill #18

     0.171         

Willow Draw Infill #19

     0.170         

Willow Draw Infill #20

     0.160         

Willow Draw Infill #21

     0.159         

Willow Draw Infill #22

     0.158         

Willow Draw Infill #23

     0.157         

Sheep Point Infill #02

     0.091         

Sheep Point Infill #03

     0.090         

Ferguson Ranch Infill #06

     0.038         

Ferguson Ranch Infill #07

     0.038         

Ferguson Ranch Infill #08

     0.038         

Ferguson Ranch Infill #09

     0.034         

Ferguson Ranch Infill #10

     0.034         

Ferguson Ranch Infill #11

     0.034         

Ferguson Ranch Infill #12

     0.034         

Ferguson Ranch Infill #13

     0.034         

Ferguson Ranch Infill #14

     0.034         

Ferguson Ranch Infill #15

     0.034         

Ferguson Ranch Infill #16

     0.033         

 

Exhibit C   Page 3 of 4

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

Ferguson Ranch Infill #17

     0.033                  21.178            

 

 

    

FRU WATERFLOOD

     12.375         

(PROB)

        

HUNT WATERFLOOD

     3.917         

SHEEP POINT

     2.067         

WATERFLOOD

        

Willow Draw Infill #25

     0.085         

Willow Draw Infill #24

     0.081         

Willow Draw Infill #26

     0.080         

Willow Draw Infill #27

     0.080         

Willow Draw Infill #30

     0.079         

Willow Draw Infill #31

     0.079         

Willow Draw Infill #32

     0.079         

Willow Draw Infill #34

     0.078         

Willow Draw Infill #35

     0.078         

Willow Draw Infill #37

     0.077         

Willow Draw Infill #28

     0.076         

Willow Draw Infill #29

     0.075         

Willow Draw Infill #33

     0.074         

Willow Draw Infill #36

     0.073                  19.455            

 

 

             100.550            

 

 

    

Ferguson Ranch State #8

     0.000         

(Inj)

        

Ferguson Ranch State #10

     0.000         

(Inj)

        

State 68-15697 19 #1

     0.000         

State 70-1284 30 #11 SWD

     0.000         

State 70-1284 30 #12

     0.000         

State 70-1284 30 #13

     0.000         

Hunt Infill #9

     0.000         

Sheep Point Infill #4

     0.000         

Sheep Point Infill #5

     0.000         

Sheep Point Infill #6

     0.000         

Sheep Point Infill #7

     0.000         

Sheep Point Infill #8

     0.000         

Sheep Point Infill #9

     0.000                  

 

         00.000

END OF EXHIBIT C

 

Exhibit C   Page 4 of 4

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

EXHIBIT D

ASSIGNMENT AND BILL OF SALE

THIS ASSIGNMENT AND BILL OF SALE (this “Assignment”), effective as of 7:00 a.m.
local time where the Assets (as defined below) are located on April 1, 2012 (the
“Effective Time”), is made by Legacy Energy, Inc., a Delaware corporation
(“Assignor”), whose address is 1160 Eugenia Place, Ste. 100, Carpinteria, CA
93013, to BreitBurn Operating L.P., a Delaware limited liability company
(“Assignee”), whose address is 515 S. Flower Street, Ste. 4800, Los Angeles, CA
90071. Any capitalized term used but not defined herein shall have the meaning
given it in that certain Purchase and Sale Agreement dated April 24, 2012 by and
among Assignor, NiMin Energy Corp., an Alberta corporation, and owner of all of
the outstanding shares of common stock of Assignor, and Assignee (the
“Agreement”).

ARTICLE I

Granting and Habendum

For Ten Dollars ($10.00) and other good and valuable consideration, the receipt,
and sufficiency of which are hereby acknowledged, Assignor does hereby grant,
bargain, sell, transfer, convey, set over, assign and deliver unto Assignee, its
successors and assigns, effective for all purposes as of the Effective Time and
subject to the matters set forth herein, the Assets. The term “Assets” shall
mean all of Assignor’s right, title and interest in and to the following:

(a) the leasehold estates in and to the oil, gas and mineral leases described or
referred to in Exhibit A (the “Leases”), the lands covered by the Leases, and
any fee interests, fee mineral interests, royalties, net profits interests and
overriding royalty interests in and to the lands covered by the Leases,
assignments and other documents of title described or referred to in Exhibit A,
all as more specifically described in Exhibit A (collectively, the “Subject
Interests,” or singularly, a “Subject Interest”);

(b) all rights incident to the Subject Interests, including, without limitation,
(i) all rights with respect to the use and occupation of the surface of and the
subsurface depths under the Subject Interests; (ii) all rights with respect to
any pooled, communitized or unitized acreage by virtue of any Subject Interest
being a part thereof, including all Hydrocarbon (as defined below) production
after the Effective Time attributable to the Subject Interests or any such pool
or unit allocated to any such Subject Interest;

(c) to the extent assignable or transferable, all easements, rights-of-way,
surface leases, servitudes, permits, licenses, franchises and other estates or
similar rights and privileges directly related to or used in connection with the
Subject Interests (the “Easements”), including, without limitation, the
Easements described or referred to in Exhibit A;

(d) to the extent assignable or transferable, all personal property, equipment,
fixtures, inventory and improvements located on or used in connection with the
Subject Interests and the Easements or with the production, treatment, sale or
disposal of oil, gas or other hydrocarbons (collectively, “Hydrocarbons”),
including, without limitation, all

 

1

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

wells and well locations located on the lands covered by the Subject Interests
or on lands with which the Subject Interests may have been pooled, communitized
or unitized (whether producing, shut in or abandoned, and whether for
production, injection or disposal), including, without limitation, the wells
described in Exhibit B, wellhead equipment, pumps, pumping units, flowlines,
pipelines, gathering systems, piping, tanks, buildings, treatment facilities,
injection facilities, disposal facilities, compression facilities and other
materials, supplies, equipment, facilities and machinery (collectively,
“Personal Property”);

(e) to the extent assignable or transferable, all contracts, agreements and
other arrangements (excluding the Leases and the Easements) that directly relate
to the Subject Interests, the Leases or the Easements, including, without
limitation, production sales contracts, farmout agreements, operating
agreements, service agreements and similar arrangements (collectively, the
“Contracts,” including, without limitation, the Contracts described in Schedule
1.02(e));

(f) all books, records, files, muniments of title, reports and similar documents
and materials, including, without limitation, lease records, well records and
division order records, well files, title records (including abstracts of title,
title opinions and memoranda, and title curative documents related to the
Assets), contracts and contract files and correspondence, in each case that
relate to the foregoing interests, in the possession of, and maintained by,
Seller (collectively, the “Records”);

(g) all geological and geophysical data relating to the Subject Interests, other
than such data which cannot be transferred without the consent of (provided that
Seller shall use commercially reasonable efforts to obtain such consent) or
payment to any Third Party (unless paid by Buyer). For purposes of this
Agreement, (i) “Person” means any individual, firm, corporation, partnership,
limited liability company, joint venture, association, trust, unincorporated
organization, Governmental Authority or any other entity; and (ii) “Third Party”
means any Person or entity, governmental or otherwise, other than Seller or
Buyer, and their respective affiliates; the term includes, but is not limited
to, working interest owners, royalty owners, lease operators, landowners,
service contractors and governmental agencies; and

(h) any other assets that are located in the State of Wyoming or that are used
or useful to the Assets described above in paragraph (a) through paragraph (g);

(i) NOTWITHSTANDING THE FOREGOING, the Assets shall not include, and there is
excepted, reserved and excluded from the assignment contemplated hereby
(collectively, the “Excluded Assets”): (i) to the extent received by Seller or
Buyer within 90 days after Closing, all credits and refunds (other than those
relating to Taxes, which are governed by Subsection (ii) below) and all
accounts, instruments and general intangibles (as such terms are defined in the
Texas Uniform Commercial Code) attributable to the Assets with respect to any
period of time prior to the Effective Time; (ii) to the extent received by
Seller or Buyer within 90 days after Closing, all claims of Seller for refunds
of or loss carry forwards with respect to (A) income or franchise Taxes imposed
on Seller, or (B) any Taxes attributable to the other Excluded Assets, and such

 

2

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

other refunds, and rights thereto, for amounts paid in connection with the
Assets and attributable to the period prior to the Effective Time, including
refunds of amounts paid under any gas gathering or transportation agreement, but
excluding for the avoidance of doubt, any refunds of Asset Taxes; (iii) to the
extent received by Seller or Buyer within 90 days after Closing, all proceeds,
income or revenues (and any security or other deposits made) attributable to
(A) the Assets for any period prior to the Effective Time, or (B) any other
Excluded Assets; (iv) all of Seller’s proprietary computer software, technology,
patents, trade secrets, copyrights, names, trademarks and logos; (v) all of
Seller’s rights and interests in geological and geophysical data which cannot be
transferred without the consent of (provided that Seller shall use commercially
reasonable efforts to obtain such consent) or payment to any Third Party;
(vi) data and other information that cannot be disclosed or assigned to Buyer as
a result of confidentiality or similar arrangements under agreements with
Persons unaffiliated with Seller; (vii) to the extent received by Seller or
Buyer within 90 days after Closing, all audit rights arising under any of the
Contracts or otherwise with respect to any period prior to the Effective Time or
to any of the other Excluded Assets; (viii) all corporate, partnership and
income Tax records of Seller; (ix) vehicles, office equipment and supplies; and
(x) the items described on Schedule 1.03.

TO HAVE AND TO HOLD the Assets, together with all and singular the rights,
privileges, contracts and appurtenances, in any way appertaining or belonging
thereto, unto Assignee, its successors and assigns, forever, subject to the
matters set forth herein.

ARTICLE II

Special Warranty of Title and Disclaimers

Section 2.01 Special Warranty of Title. Assignor hereby agrees to warrant and
defend title to the Assets solely unto Assignee against every Person whomsoever
lawfully claiming or to claim the same or any part thereof, by, through or under
Assignor and its affiliates, but not otherwise; subject, however, to the
Permitted Encumbrances (as such term is defined in the Purchase Agreement
described below) and the other matters set forth herein. In no event shall the
foregoing warranty extend to or be enforceable by any party other than Assignee,
specifically excluding Assignee’s successors and assigns in all or part of the
Assets.

Section 2.02 Disclaimer. The express representations and warranties of Assignor
contained in this Assignment are exclusive and are in lieu of all other
representations and warranties, express, implied or statutory. EXCEPT FOR THE
EXPRESS REPRESENTATIONS OF ASSIGNOR IN THE AGREEMENT AND THE SPECIAL WARRANTY IN
THIS ASSIGNMENT, ASSIGNEE ACKNOWLEDGES THAT ASSIGNOR HAS NOT MADE, AND ASSIGNOR
HEREBY EXPRESSLY DISCLAIMS AND NEGATES, AND ASSIGNEE HEREBY EXPRESSLY WAIVES,
ANY REPRESENTATION OR WARRANTY, EXPRESS, IMPLIED, AT COMMON LAW, BY STATUTE OR
OTHERWISE RELATING TO (a) PRODUCTION RATES, RECOMPLETION OPPORTUNITIES, DECLINE
RATES, GAS BALANCING INFORMATION OR THE QUALITY, QUANTITY OR VOLUME OF THE
RESERVES OF HYDROCARBONS, IF ANY, ATTRIBUTABLE TO THE ASSETS, (b) THE ACCURACY,
COMPLETENESS OR MATERIALITY OF ANY INFORMATION, DATA OR OTHER MATERIALS (WRITTEN

 

3

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

OR ORAL) NOW, HERETOFORE OR HEREAFTER FURNISHED TO ASSIGNEE BY OR ON BEHALF OF
ASSIGNOR, AND (c) THE ENVIRONMENTAL CONDITION OF THE ASSETS. EXCEPT FOR THE
EXPRESS REPRESENTATIONS OF ASSIGNOR IN THE AGREEMENT AND THE SPECIAL WARRANTY IN
THIS ASSIGNMENT, ASSIGNOR EXPRESSLY DISCLAIMS AND NEGATES, AND ASSIGNEE HEREBY
WAIVES, AS TO PERSONAL PROPERTY, EQUIPMENT, INVENTORY, MACHINERY AND FIXTURES
CONSTITUTING A PART OF THE ASSETS (i) ANY IMPLIED OR EXPRESS WARRANTY OF
MERCHANTABILITY, (ii) ANY IMPLIED OR EXPRESS WARRANTY OF FITNESS FOR A
PARTICULAR PURPOSE, (iii) ANY IMPLIED OR EXPRESS WARRANTY OF CONFORMITY TO
MODELS OR SAMPLES OF MATERIALS, (iv) ANY RIGHTS OF PURCHASERS UNDER APPROPRIATE
STATUTES TO CLAIM DIMINUTION OF CONSIDERATION OR RETURN OF THE PURCHASE PRICE,
(v) ANY IMPLIED OR EXPRESS WARRANTY OF FREEDOM FROM DEFECTS, WHETHER KNOWN OR
UNKNOWN, (vi) ANY AND ALL IMPLIED WARRANTIES EXISTING UNDER APPLICABLE LAW, AND
(vii) ANY IMPLIED OR EXPRESS WARRANTY REGARDING ENVIRONMENTAL LAWS, THE RELEASE
OF MATERIALS INTO THE ENVIRONMENT, OR PROTECTION OF THE ENVIRONMENT OR HEALTH,
IT BEING THE EXPRESS INTENTION OF ASSIGNEE AND ASSIGNOR THAT THE PERSONAL
PROPERTY, EQUIPMENT, INVENTORY, MACHINERY AND FIXTURES INCLUDED IN THE ASSETS
SHALL BE CONVEYED TO ASSIGNEE, AND ASSIGNEE SHALL ACCEPT SAME, AS IS, WHERE IS,
WITH ALL FAULTS AND IN THEIR PRESENT CONDITION AND STATE OF REPAIR AND ASSIGNEE
REPRESENTS TO ASSIGNOR THAT ASSIGNEE WILL MAKE OR CAUSE TO BE MADE SUCH
INSPECTIONS WITH RESPECT TO SUCH PERSONAL PROPERTY, EQUIPMENT, INVENTORY,
MACHINERY AND FIXTURES AS ASSIGNEE DEEMS APPROPRIATE. ASSIGNOR AND ASSIGNEE
AGREE THAT, TO THE EXTENT REQUIRED BY APPLICABLE LAW TO BE EFFECTIVE, THE
DISCLAIMERS OF CERTAIN WARRANTIES CONTAINED IN THIS SECTION ARE “CONSPICUOUS”
DISCLAIMERS FOR THE PURPOSES OF ANY APPLICABLE LAW, RULE OR ORDER.

ARTICLE III

Miscellaneous

Section 3.01 Construction. The captions in this Assignment are for convenience
only and shall not be considered a part of or affect the construction or
interpretation of any provision of this Assignment. The Parties acknowledge that
they have participated jointly in the negotiation and drafting of this
Assignment and as such the Parties agree that if an ambiguity or question of
intent or interpretation arises hereunder, this Assignment shall not be
construed more strictly against one Party than another on the grounds of
authorship.

Section 3.02 No Third Party Beneficiaries. Nothing in this Assignment shall
provide any benefit to any Third Party or entitle any Third Party to any claim,
cause of action, remedy or right of any kind, it being the intent of the parties
hereto that this Assignment shall otherwise not be construed as a Third Party
beneficiary contract.

Section 3.03 Assignment. Neither Party may assign or delegate any of its rights
or duties hereunder without the prior written consent of the other Party and any
assignment made without such consent shall be void. Except as otherwise provided
herein, this Assignment shall

 

4

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

be binding upon and inure to the benefit of the Parties hereto and their
respective permitted successors, assigns and legal representatives.

Section 3.04 Governing Law. This Assignment, other documents delivered pursuant
hereto and the legal relations between the Parties shall be governed and
construed in accordance with the Laws of the State of Wyoming, without giving
effect to principles of conflicts of Laws that would result in the application
of the Laws of another jurisdiction. The Parties agree to venue in Park County,
Wyoming.

Section 3.05 Counterpart Execution. This Assignment may be executed in any
number of counterparts, and each counterpart hereof shall be effective as to
each Party that executes the same whether or not all of such Parties execute the
same counterpart. If counterparts of this Assignment are executed, the signature
pages from various counterparts may be combined into one composite instrument
for all purposes. All counterparts together shall constitute only one
Assignment, but each counterpart shall be considered an original.

Section 3.06 Recording. To facilitate the recording or filing of this
Assignment, the counterpart to be recorded in a given county may contain only
that portion of the exhibits that describes Assets located in that county. In
addition to filing this Assignment, the parties hereto shall execute and file
with the appropriate authorities, whether federal, state or local, all forms or
instruments required by applicable law to effectuate the conveyance contemplated
hereby. Said instruments shall be deemed to contain all of the exceptions,
reservations, rights, titles and privileges set forth herein as fully as though
the same were set forth in each such instrument. The interests conveyed by such
separate assignments are the same, and not in addition to the Assets conveyed
herein.

Section 3.07 Purchase Agreement. This Assignment is subject to all of the terms
and conditions of the Agreement.

Signature Page Follows

 

5

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

IN WITNESS WHEREOF, this Assignment is executed by the parties on the date of
their respective acknowledgments below, but shall be effective for all purposes
as of the Effective Time.

 

ASSIGNOR: LEGACY ENERGY, INC. By:     Name:     Title:     ASSIGNEE: BREITBURN
OPERATING L.P. By:     Name:   Randall H. Breitenbach Title:   President

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

ACKNOWLEDGMENT

 

STATE OF    §    § COUNTY OF    §

The foregoing instrument was acknowledged before me by                     as
                    of Legacy Energy, Inc., a Delaware corporation, on behalf of
said corporation.

GIVEN UNDER MY HAND AND SEAL OF OFFICE this                     day of
                    , 2012.

NOTARIAL SEAL:

 

 

Notary Public My commission expires:                      
                                                   

 

STATE OF    §    § COUNTY OF    §

The foregoing instrument was acknowledged before me by Randall H. Breitenbach as
President of BreitBurn Operating L.P., a Delaware limited partnership, on behalf
of said limited partnership.

GIVEN UNDER MY HAND AND SEAL OF OFFICE this             day of             ,
2012.

NOTARIAL SEAL:

 

 

Notary Public My commission expires:                      
                                                       

Acknowledgement Page to Assignment

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

EXHIBIT A

ATTACHED TO AND MADE PART OF

ASSIGNMENT AND BILL OF SALE

THE LEASES

FERGUSON RANCH FIELD

PARK COUNTY, WY

FERGUSON RANCH UNIT

 

LEASE NO.:

   WY029-0004

LESSOR:

   State of Wyoming #0-19128-A

LESSEE:

   Bruce Anderson

DATE:

   May 16, 1955

RECORDED:

   Book 346, Page 291

DESCRIPTION:

   T50N-R102W, 6th P. M.    Section 23: Lots 2, 3; SW/4 SW/4    Section 26: NW/4
NW/4

LEASE NO.:

   WY029-0001-01

LESSOR:

   Hunt Oil Company

LESSEE:

   Terra Resources, Inc.

DATE:

   August 19, 1971

RECORDED:

   Book 357, Page 351

DESCRIPTION:

   INSOFAR AND ONLY INSOFAR AS THE LEASE COVERS THE FOLLOWING DESCRIBED LANDS:
   T50N-R102W,6th P. M.    Section 14: Lot 7, surface to 3947’    Section 23:
NW/4 NW/4, surface to 3893’ LESS AND EXCEPT unto Seller, its successors and
assigns, all royalty proceeds accruing to the subject lease attributable to
production from the Ferguson Ranch Unit for so long as said Unit Agreement
remains in effect.

LEASE NO.:

   WY029-0002

LESSOR:

   Hunt Oil Company

LESSEE:

   Terra Resources, Inc.

DATE:

   August 1, 1979

RECORDED:

   Book 43, Page 794

DESCRIPTION:

   INSOFAR AND ONLY INSOFAR AS THE LEASE COVERS THE FOLLOWING DESCRIBED LANDS:
   T50N-R102W, 6th P. M.    Section 23: 5.165 acres out of Lot 51B, being more
particularly described as those lands in Lot 51B subject to that certain Pooling

 

Exhibit A (4/9/12)   Page 1 of 8

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

   Agreement and Designation of Ferguson Ranch #8 Unit, by and between the
Commissioner of Public Lands of the State of Wyoming and Terra Resources, Inc.,
et al dated July 1, 1979 and recorded in the records of the Park County Clerk in
Book 45, Page 508. LESS AND EXCEPT unto Seller, its successors and assigns, all
royalty proceeds accruing to the subject lease attributable to production from
the Ferguson Ranch Unit for so long as said Unit Agreement remains in effect.

LEASE NO.:

   WY029-0001-02

LESSOR:

   Hunt Oil Company

LESSEE:

   Faulconer Resources 1999 Limited Partnership

DATE:

   May 18, 2001

RECORDED:

   DOC #2001 3560

DESCRIPTION:

   T50N-R102W, 6th P. M.    Section 14: 53.51 acres, being all of Lot 7,
identified as part of Tract No. 3 of the unitized area formed pursuant to that
certain Unit Agreement for the Ferguson Ranch Unit dated as of September 28,
1995 and recorded in Park County as Document 1996 3404, as to all rights below
the subsurface depth of 3947 feet.    Section 23: 40.00 acres, being the NW/4
NW/4 (part of Lot 55), identified as part of Tract No. 3 of the unitized area
formed pursuant to that certain Unit Agreement for the Ferguson Ranch Unit dated
as of September 28, 1995 and recorded in Park County as Document 1996 3404, as
to all rights below the subsurface depth of 3893 feet.    Containing 93.51
acres, more or less. LESS AND EXCEPT unto Seller, its successors and assigns,
all royalty proceeds accruing to the subject lease attributable to the
hydrocarbons produced from any wells located in the Ferguson Ranch Unit, unless
and to the extent any such wells are used to produce hydrocarbons from new
completions below the base of the deepest unitized formation in the Ferguson
Ranch Unit.

LEASE NO.:

   WY029-0003

LESSOR:

   Hunt Oil Company

LESSEE:

   Faulconer Resources 1999 Limited Partnership

DATE:

   December 21, 2000, effective June 1, 2000

RECORDED:

   DOC #2000 3961

DESCRIPTION:

   T50N-R102W, 6th P. M. (as amended)    Section 23: 26.924 acres being all of
Lot 1 and part of Lots (Tracts) 51A and 51B, identified as Tract No. 5 of the
unitized area formed pursuant to that certain Unit Agreement for Ferguson Ranch
Unit dated as of September 28, 1995 and recorded in the Park County Clerk
records of June 10, 1996 as document 1996 3404 (the “Ferguson Ranch Unit”).

 

 

Exhibit A (4/9/12)   Page 2 of 8

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

   Section 23: 13.995 acres being that part of Lot 4 identified as Tract 6 of
the Ferguson Ranch Unit.    Section 26: SW/4 NW/4, being Tract 4 of the Ferguson
Ranch Unit.    Section 26: 28.345 acres, being part of the E/2 NW/4 identified
as Tract No. 7 of the Ferguson Ranch Unit.    Containing 109.264 acres, more or
less. LESS AND EXCEPT unto Seller, its successors and assigns, all royalty
proceeds accruing to the subject lease attributable to the hydrocarbons produced
from any wells located in the Ferguson Ranch Unit, unless and to the extent any
such wells are used to produce hydrocarbons from new completions below the base
of the deepest unitized formation in the Ferguson Ranch Unit. AMENDMENT TO OIL
AND GAS LEASE

LEASE NO.:

   WY029-0003

LESSOR:

   Hunt Oil Company

LESSEE:

   Faulconer Resources 1999 Limited Partnership

DATE:

   December 21, 2000, effective June 1, 2000

RECORDED:

   Doc. #2000 7719

PIPELINE EASEMENT

LEASE NO.:

   Not available

LESSOR:

   Hunt Oil Company

LESSEE:

   Amax Petroleum Corporation

DATE:

   March 16, 1967

RECORDED:

   On December 18, 2009 as Doc. #2009-9894

DESCRIPTION:

   T50N-R102W, 6th P. M.    Section 2: W/2    T51N-R102W, 6th P. M.    Section
26: W/2    Section 35: W/2    (Pipeline Easement for flowline from Ferguson
Ranch Unit)

SHEEP POINT FIELD

PARK COUNTY, WY

LEASE NO.:

   WY029-0020

LESSOR:

   State of Wyoming #66-17899

LESSEE:

   W. D. Tolan

DATE:

   December 2, 1966

RECORDED:

   Book 381, Page 184

DESCRIPTION:

   T47N-R102W, 6th P. M.

 

Exhibit A (4/9/12)   Page 3 of 8

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

   Section 16: W/2; NE/4; S/2 SE/4; NE/4 SE/4

LEASE NO.:

   WY029-0021

LESSOR:

   State of Wyoming #66-17899A

LESSEE:

   W. D. Tolan

DATE:

   December 2, 1966

RECORDED:

   Book 381, Page 184

DESCRIPTION:

   T47N-R102W, 6th P. M.    Section 16: NW/4 SE/4 LESS AND EXCEPT unto Seller,
its successors and assigns, all right, title and interest in and to any existing
royalty and/or overriding royalty interests owned or held by Seller (or
affiliate of Seller) in or to the leases and lands.

WILLOW DRAW FIELD

PARK COUNTY, WY

LEASE NO.:

   WY10-00242

LESSOR:

   State of Wyoming

LESSEE:

   Legacy Energy, Inc.

DATE:

   June 2, 2010

DESCRIPTION:

   T48N R104W    Section 36: Part of Tract 50 (formerly NENE Sec. 36)   
Resurvey Township: 48 North    Range: 104 West of the 6th P.M.    Containing 40
acres, more or less.

LEASE NO.:

   WY10-00239

LESSOR:

   State of Wyoming

LESSEE:

   Legacy Energy, Inc.

DATE:

   June 2, 2010

DESCRIPTION:

   T48N R103W   

Section 30: NE/4

   Containing 160 acres, more or less.

LEASE NO.:

   WY10-00240

LESSOR:

   State of Wyoming

LESSEE:

   Legacy Energy, Inc.

DATE:

   June 2, 2010

DESCRIPTION:

   T48N R103W    Section 31: N/2NE/4, SE/4NE/4, NE/4NW/4, Lot 1, E/2 SE/4   
Containing 273.85 acres, more or less.

 

 

Exhibit A (4/9/12)   Page 4 of 8

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

LEASE NO.:

   WY10-00241

LESSOR:

   State of Wyoming

LESSEE:

   Legacy Energy, Inc.

DATE:

   June 2, 2010

DESCRIPTION:

   T48N R103W    Section 32: W/2 NW/4, NW/4 SW/4    Containing 120 acres, more
or less.

LEASE NO.:

   WY029-0022

LESSOR:

   State of Wyoming #64-5619B

LESSEE:

   Etta Mandel

DATE:

   May 2, 1964

RECORDED:

   Book 373, Page 370

DESCRIPTION:

   T48N-R104W, 6th P. M.    Section 25: Resurvey Tract 49, Part Resurvey Tract
48, (Orig. E/2 of Section 25)

LEASE NO.:

   WY029-0024

LESSOR:

   State of Wyoming #68-15697

LESSEE:

   Lucille L. Calvin

DATE:

   February 2, 1968

RECORDED:

   Book 374, Page 145

DESCRIPTION:

   T48N-R103W, 6th P. M.    Section 19: SW/4 NE/4; SE/4

LESE NO.:

   WY029-0023

LESSOR:

   State of Wyoming #70-1284

LESSEE:

   Raymond N. Joeckel

DATE:

   January 2, 1970

RECORDED:

   Book 368, Page 99

DESCRIPTION:

   T48N-R103W, 6th P. M.    Section 19: Lot 4; SE/4 SW/4    Section 30: SE/4;
E/2 W/2; Lots 1, 2, 3, 4

 

HUNT FIELD

PARK COUNTY, WY

HUNT STATE 11-1

LEASE NO.:

   WY029-0007

lessor:

   State of Wyoming #62-10518

LESSEE:

   E. Earl Wennergren

DATE:

   May 2, 1962

RECORDED:

   Book 306, Page 181

DESCRIPTION:

   T50N-R102W, 6th P. M.

 

Exhibit A (4/9/12)   Page 5 of 8

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

   Section 11: SE/4 NW/4 LESS AND EXCEPT unto Seller, its successors and
assigns, all right, title and interest in and to any existing royalty and/or
overriding royalty interests owned or held by Seller (or affiliate of Seller) in
or to the leases and lands. HUNT FEE # 2-1 AND HUNT FEE #2-11

DESCRIPTION:

   T50N-R102W, 6th P. M.    Section 2: SW/4 SW/4    Section 11: Lot 2 and the
West 12.16 acres of NE/4 NW/4

INCLUDING:

   Working interest and rights in production attributable to those interests
under that certain Operating Agreement dated October 5, 1965 between Amax
Petroleum Corporation and Hunt Oil Company.

LESSOR:

   Hunt Oil Company

LESSEE:

   Amax Petroleum

DATE:

   October 5, 1965

RECORDED:

   See Below

DESCRIPTION:

   T50N-R102W, 6th P. M.:   

Section 2: SW/4 SW/4

   Section 11: Lot 2 and West 12.16 acres of NE/4 NW/4    (Lease is derived from
the Exhibit “B” attached to that certain Operating Agreement dated October 5,
1965, between Hunt Oil Company and Amax Petroleum Corporation, recorded in Book
148, Page 317 of the records of the County Clerk and Recorder, Park County,
Wyoming.) LESS AND EXCEPT unto Seller, its successors and assigns, all right,
title and interest in and to any existing royalty and/or overriding royalty
interests owned or held by Seller (or affiliate of Seller) in or to the leases
and lands.

LEASE NO.:

   WY10-00238

LESSOR:

   State of Wyoming

LESSEE:

   Legacy Energy, Inc.

DATE:

   June 2, 2010

DESCRIPTION:

   T50N R102W    Section 2: NW/4 SW/4    Section 3: SE/4 NE/4, Lots 2, 3 and 6
   Containing 187.71 acres, more or less. LEASE NO.:   

WYW179184

LESSOR:

   Bureau of Land Management

LESSEE:

   Legacy Energy, Inc.

 

Exhibit A (4/9/12)   Page 6 of 8

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

DATE:

   Effective May 1, 2011

DESCRIPTION:

   T50N R102W   

Section 3: E/2 SE/4 Sec: 3

   Section 10: E/2 of Lot 1    Containing 80.12 acres, more or less.    LEASE
NO.:   

WYW179183

LESSOR:

   Bureau of Land Management

LESSEE:

   Legacy Energy, Inc.

DATE:

   Effective May 1, 2011

DESCRIPTION:

   T50N R102W    Section 2: Lots 3 and 4 S/2 NW/4, E/2 SW/4, W/2 SE/4   
Containing 318.68 acres, more or less. LESS AND EXCEPT unto Seller, its
successors and assigns, all right, title and interest in and to any existing
royalty and/or overriding royalty interests owned or held by Seller (or
affiliate of Seller) in or to the leases and lands. MISCELLANEOUS RIGHTS

LEASE NO.:

   WY029-0006

LESSOR:

   USA #CHEY-068322

LESSEE:

   Hettie Lee St. John

DATE:

   April 1, 1945

RECORDED:

   None available

DESCRIPTION:

   T54N-R102W, 6th P. M.    Section 5: SW/4 NW/4; W/2 SW/4    Section 6: SE/4
NE/4; NE/4 SE/4    Section 7: E/2 NE/4    Section 8: NW/4 NW/4

LEASE NO.:

   WY029-0005

LESSOR:

   USA #CHEY-066525

LESSEE:

   E W Krampert

DATE:

   September 1, 1942

RECORDED:

   Book 113, Page 209

DESCRIPTION:

   T51N-R100W, 6th P. M.    Section 7: SE/4 SE/4

LEASE NO.:

   WY029-0008

LESSOR:

   USA #W-0211

LESSEE:

   Fred M. Manning, et al

DATE:

   April 1, 1950

RECORDED:

   None available

 

Exhibit A (4/9/12)   Page 7 of 8

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

DESCRIPTION:

   T54N-R102W, 6th P. M.    Section 5: SE/4 NW/4; E/2 SW/4; NW/4 SE/4    Section
8: S/2 NE4; E/2 NW/4    Section 9: Lots 5 & 6; N/2 SW/4; SW/4 SE/4    Section
16: Lots 1, 2, 3 & 4; W/2 E/2; E/2 SE/4    Section 17: Lots 1, 2, 3 & 4

END OF EXHIBIT A

 

Exhibit A (4/9/12)   Page 8 of 8

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

EXHIBIT B

ATTACHED TO AND MADE PART OF

ASSIGNMENT AND BILL OF SALE

THE WELLS

 

WELL NAME

   API
NUMBER     

FIELD

  

PROPERTY
DESCRIPTION

   WORKING
INTEREST      NET
REVENUE
INTEREST  

Ferguson Ranch State #1

     4902905326       Ferguson Ranch    Section 23, T50N-R102W      1.00000000
        0.77144240   

Ferguson Ranch State #2

     4902905329       Ferguson Ranch    Section 23, T50N-R102W      1.00000000
        0.77144240   

Ferguson Ranch State #3

     4902905331       Ferguson Ranch    Section 23, T50N-R102W      1.00000000
        0.77144240   

Ferguson Ranch State #4

     4902920292       Ferguson Ranch    Section 26, T50N-R102W      1.00000000
        0.77144240   

Ferguson Ranch State #5

     4902920693       Ferguson Ranch    Section 23, T50N-R102W      1.00000000
        0.77144240   

Ferguson Ranch State #6

     4902920690       Ferguson Ranch    Section 26, T50N-R102W      1.00000000
        0.77144240   

Ferguson Ranch State #7

     4902920880       Ferguson Ranch    Section 23, T50N-R102W      1.00000000
        0.77144240   

Ferguson Ranch State #8 (INJ)

     4902920881       Ferguson Ranch    Section 23, T50N-R102W      1.00000000
        0.77144240   

Ferguson Ranch State #9

     4902921349       Ferguson Ranch    Section 26, T50N-R102W      1.00000000
        0.77144240   

Ferguson Ranch State #10 (INJ)

     4902921727       Ferguson Ranch    Section 23, T50N-R102W      1.00000000
        0.77144240   

Ferguson Ranch State #11

     4902931262       Ferguson Ranch    Section 23, T50N-R102W      1.00000000
        0.77144240   

Ferguson Ranch State #12

     4902931276       Ferguson Ranch    Section 23, T50N-R102W      1.00000000
        0.77144240   

Ferguson Ranch State #13

     4902931263       Ferguson Ranch    Section 23, T50N-R102W      1.00000000
        0.77144240   

Ferguson Ranch State #14

     4902921377       Ferguson Ranch    Section 23, T50N-R102W      1.00000000
        0.77144240   

Ferguson Ranch State #15

     4902931278       Ferguson Ranch    Section 26, T50N-R102W      1.00000000
        0.77144240   

Ferguson Ranch State #16

     4902931279       Ferguson Ranch    Section 26, T50N-R102W      1.00000000
        0.77144240   

Hunt 14-1

     4902920296       Ferguson Ranch    Section 14, T50N-R102W      1.00000000
        0.77144240   

Hunt 23-1

     4902920282       Ferguson Ranch    Section 23, T50N-R102W      1.00000000
        0.77144240   

Hunt Fee #2-11

     4902921161       Hunt    Section 11, T50N-R102W      0.93333340        
0.81653340   

Hunt Fee #2-1

     4902906847       Hunt    Section 02, T50N-R102W      0.86666670        
0.75806660   

Hunt State #11-1

     4902920312       Hunt    Section 11, T50N-R102W      0.73333330        
0.63380000   

Hunt 2-3

     4902931290       Hunt    Section 02, T50N-R102W      0.86666670        
0.75807000   

Hunt 11-3

     4902931292       Hunt    Section 11, T50N-R102W      0.93333340        
0.81653340   

Hunt 11-5

     4902931312       Hunt    Section 11, T50N-R102W      0.86666670        
0.74913320   

State #16-1

     4902920175       Sheep Point    Section 16, T47N-R102W      0.54984830   
     0.44437133   

 

Exhibit B   Page 1 of 4

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

WELL NAME

   API
NUMBER     

FIELD

  

PROPERTY
DESCRIPTION

   WORKING
INTEREST      NET
REVENUE
INTEREST  

State #16-2 BPO

     4902905075       Sheep Point    Section 16, T47N-R102W      1.00000000   
     0.79433594   

State #16-2 APO

      Sheep Point    Section 16, T47N-R102W      0.90703990         0.72013127
  

State #16-3

     4902920191       Sheep Point    Section 16, T47N-R102W      0.54984830   
     0.44437131   

State 16-7

     4902931301       Sheep Point    Section 16, T47N-R102W      0.63465960   
     0.51291334   

State 16-8

     4902931302       Sheep Point    Section 16, T47N-R102W      1.00000000   
     0.79433000   

State 16-9

     4902931303       Sheep Point    Section 16, T47N-R102W      1.00000000   
     0.79433000   

State 64-5619 25 #3

     4902920415       Willow Draw    Section 25, T48N-R104W      1.00000000   
     0.84000000   

State 68-15697 19 #1

     4902920430       Willow Draw    Section 19, T48N-R103W      1.00000000   
     0.80500000   

State 70-1284 30 #1

     4902920335       Willow Draw    Section 30, T48N-R103W      1.00000000   
     0.82500000   

State 70-1284 30 #2

     4902920354       Willow Draw    Section 30, T48N-R103W      1.00000000   
     0.82500000   

State 70-1284 30 #3

     4902920361       Willow Draw    Section 30, T48N-R103W      1.00000000   
     0.82500000   

State 70-1284 30 #4

     4902920359       Willow Draw    Section 30, T48N-R103W      1.00000000   
     0.82500000   

State 70-1284 30 #5

     4902920368       Willow Draw    Section 30, T48N-R103W      1.00000000   
     0.82500000   

State 70-1284 30 #6

     4902920369       Willow Draw    Section 30, T48N-R103W      1.00000000   
     0.82500000   

State 70-1284 30 #7

     4902920373       Willow Draw    Section 30, T48N-R103W      1.00000000   
     0.82500000   

State 70-1284 30 #8

     4902920393       Willow Draw    Section 30, T48N-R103W      1.00000000   
     0.82500000   

State 70-1284 30 #9

     4902920398       Willow Draw    Section 30, T48N-R103W      1.00000000   
     0.82500000   

State 70-1284 30 #10

     4902920411       Willow Draw    Section 30, T48N-R103W      1.00000000   
     0.82500000   

State 70-1284 30 #11 SWD

     4902920416       Willow Draw    Section 30, T48N-R103W      1.00000000   
     1.00000000   

State 70-1284 30 #12

     4902920426       Willow Draw    Section 19, T48N-R103W      1.00000000   
     0.82500000   

State 70-1284 30 #13

     4902920432       Willow Draw    Section 19, T48N-R103W      1.00000000   
     0.82500000   

State 70-1284 30 #15

     4902920506       Willow Draw    Section 30, T48N-R103W      1.00000000   
     0.82500000   

State 70-1284 30 #16

     4902921287       Willow Draw    Section 30, T48N-R103W      1.00000000   
     0.82500000   

State 30-17

     4902931288       Willow Draw    Section 30, T48N-R103W      1.00000000   
     0.82500000   

State 30-18

     4902931287       Willow Draw    Section 30, T48N-R103W      1.00000000   
     0.82500000   

State 30-19

     4902931289       Willow Draw    Section 30, T48N-R103W      1.00000000   
     0.82500000   

State 30-20

     4902931296       Willow Draw    Section 30, T48N-R103W      1.00000000   
     0.82500000   

State 30-22

     4902931295       Willow Draw    Section 30, T48N-R103W      1.00000000   
     0.82500000   

Fourbear Pipeline

              0.08688900         n/a   

 

Exhibit B   Page 2 of 4

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

PUD DRILLING LOCATIONS

 

Location Name

    

            Field             

  

Working Interest

  

Net Revenue Interest

Ferguson Ranch Infill #01

     Ferguson Ranch    1.00000000    0.77144240

Ferguson Ranch Infill #02

     Ferguson Ranch    1.00000000    0.77144240

Ferguson Ranch Infill #03

     Ferguson Ranch    1.00000000    0.77144240

Ferguson Ranch Infill #04

     Ferguson Ranch    1.00000000    0.77144240

Ferguson Ranch Infill #05

     Ferguson Ranch    1.00000000    0.77144240

Ferguson Ranch Infill #06

     Ferguson Ranch    1.00000000    0.77144240

Ferguson Ranch Infill #07

     Ferguson Ranch    1.00000000    0.77144240

Ferguson Ranch Infill #08

     Ferguson Ranch    1.00000000    0.77144240

Ferguson Ranch Infill #09

     Ferguson Ranch    1.00000000    0.77144240

Ferguson Ranch Infill #10

     Ferguson Ranch    1.00000000    0.77144240

Ferguson Ranch Infill #11

     Ferguson Ranch    1.00000000    0.77144240

Ferguson Ranch Infill #12

     Ferguson Ranch    1.00000000    0.77144240

Ferguson Ranch Infill #13

     Ferguson Ranch    1.00000000    0.77144240

Ferguson Ranch Infill #14

     Ferguson Ranch    1.00000000    0.77144240

Ferguson Ranch Infill #15

     Ferguson Ranch    1.00000000    0.77144240

Ferguson Ranch Infill #16

     Ferguson Ranch    1.00000000    0.77144240

Ferguson Ranch Infill #17

     Ferguson Ranch    1.00000000    0.77144240

Hunt Infill #01

     Hunt    0.73333000    0.63380000

Hunt Infill #02

     Hunt    0.73333000    0.63380000

Hunt Infill #03

     Hunt    0.73333000    0.63380000

Hunt Infill #04

     Hunt    0.73333000    0.63380000

Hunt Infill #05

     Hunt    0.86667000    0.75807000

Hunt Infill #06

     Hunt    0.86667000    0.75807000

Hunt Infill #07

     Hunt    1.00000000    0.87500000

Hunt Infill #08

     Hunt    1.00000000    0.87500000

Hunt Infill #09

     Hunt    1.00000000    0.87500000

Sheep Point Infill #01

     Sheep Point    0.90704000    0.72049000

Sheep Point Infill #02

     Sheep Point    0.84495000    0.68361000

Sheep Point Infill #03

     Sheep Point    0.90704000    0.72049000

Sheep Point Infill #04

     Sheep Point    0.90704000    0.72049000

Sheep Point Infill #05

     Sheep Point    0.90704000    0.72049000

Sheep Point Infill #06

     Sheep Point    0.90704000    0.72049000

Sheep Point Infill #07

     Sheep Point    0.90704000    0.72049000

Sheep Point Infill #08

     Sheep Point    0.54985000    0.44485000

Sheep Point Infill #09

     Sheep Point    0.84495000    0.68361000

Willow Draw Infill #01

     Willow Draw    1.00000000    0.82500000

Willow Draw Infill #02

     Willow Draw    1.00000000    0.83333000

Willow Draw Infill #03

     Willow Draw    1.00000000    0.83333000

Willow Draw Infill #04

     Willow Draw    1.00000000    0.83333000

Willow Draw Infill #05

     Willow Draw    1.00000000    0.82500000

Willow Draw Infill #06

     Willow Draw    1.00000000    0.82500000

Willow Draw Infill #07

     Willow Draw    1.00000000    0.82500000

Willow Draw Infill #08

     Willow Draw    1.00000000    0.82500000

Willow Draw Infill #09

     Willow Draw    1.00000000    0.82500000

Willow Draw Infill #10

     Willow Draw    1.00000000    0.82500000

Willow Draw Infill #11

     Willow Draw    1.00000000    0.83333000

Willow Draw Infill #12

     Willow Draw    1.00000000    0.83333000

Willow Draw Infill #13

     Willow Draw    1.00000000    0.82500000

 

Exhibit B   Page 3 of 4

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

Location Name

  

            Field             

  

Working Interest

  

Net Revenue Interest

Willow Draw Infill #14

   Willow Draw    1.00000000    0.82500000

Willow Draw Infill #15

   Willow Draw    1.00000000    0.83333000

Willow Draw Infill #16

   Willow Draw    1.00000000    0.82500000

Willow Draw Infill #17

   Willow Draw    1.00000000    0.82500000

Willow Draw Infill #18

   Willow Draw    1.00000000    0.83333000

Willow Draw Infill #19

   Willow Draw    1.00000000    0.82500000

Willow Draw Infill #20

   Willow Draw    1.00000000    0.82500000

Willow Draw Infill #21

   Willow Draw    1.00000000    0.82500000

Willow Draw Infill #22

   Willow Draw    1.00000000    0.82500000

Willow Draw Infill #23

   Willow Draw    1.00000000    0.82500000

Willow Draw Infill #24

   Willow Draw    1.00000000    0.82500000

Willow Draw Infill #25

   Willow Draw    1.00000000    0.83333000

Willow Draw Infill #26

   Willow Draw    1.00000000    0.82500000

Willow Draw Infill #28

   Willow Draw    1.00000000    0.82500000

END OF EXHIBIT B

 

Exhibit B   Page 4 of 4

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

EXHIBIT C

ATTACHED TO AND MADE PART

OF ASSIGNMENT AND BILL OF SALE

CONTRACTS – WYOMING

GENERAL

 

  1. Road Use Agreement

Grantor: Hunt Oil Company dba Hoodoo Ranch

Grantee: Legacy Energy, Inc.

Date: March 28, 2011

 

  2. Flowage Easement Agreement

Grantor: Hunt Oil Company dba Hoodoo Ranch

Grantee: Legacy Energy, Inc.

Date: March 28, 2011

 

  3. Surface Use and Damage Agreement

Grantor: Hunt Oil Company dba Hoodoo Ranch

Grantee: Legacy Energy, Inc.

Date: March 28, 2011

 

  4. Crude Oil Purchase Contract – Outright oil purchase contract dated
October 15, 2010 by and between Legacy Energy, Inc., as Seller and Marathon Oil
Company, as Purchaser.

 

  5. Engineering Services Agreement between Rocky Mountain Power and Legacy
Energy, Inc. dated June 13, 2011 and First Amendment thereto dated January 19,
2012.

FERGUSON RANCH FIELD

PARK COUNTY, WY

FERGUSON RANCH UNIT SUBJECT TO:

 

  1. Unit Agreement for Ferguson Ranch Unit Area dated effective December 1,
1995, recorded at DOC #1996 3404, Park County, Wyoming, as approved by that
certain Unit Operator Certificate of Effectiveness for Ferguson Ranch Unit Area
recorded at DOC #1996 5018, Park County, Wyoming, and all amendments thereto

 

Schedule 1.02 (e) (4/9/12)   Page 1 of 3

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

  2. Electric Service Contract #330560869 for Ferguson Ranch Tank Battery dated
October 8, 2007, by and between Rocky Mountain Power, a division of PacifiCorp,
the Company, and Vernon E. Faulconer, Inc., the Customer

 

  3. State of Wyoming Water Discharge Permit WY-0001490

 

  4. State of Wyoming Storm Water Discharge Permit WYR-000103

SHEEP POINT FIELD

PARK COUNTY, WY

SUBJECT TO:

 

  1. Joint Operating Agreement, including all amendments thereto, dated
April 23, 1971, by and between J-W Operating Company, as Operator, and Bel Oil
Corporation, et al, as Non-Operators

 

  2. Unrecorded Annual Road Maintenance Plan Greybull River Road – by and
between Nance Petroleum Corporation, a wholly owned subsidiary of St. Mary Land
and Exploration, and Vernon E. Faulconer, Inc., et al

 

  3. State of Wyoming Water Discharge Permit WY-0020265

WILLOW DRAW FIELD

PARK COUNTY, WY

WILLOW DRAW FIELD SUBJECT TO:

 

  1. Master Electric Service and Facilities Improvements Agreement dated May 18,
2007, by and between PacifiCorp, an Oregon corporation doing business in Wyoming
as Rocky Mountain Power, “Rocky Mountain Power”, and Vernon E. Faulconer, Inc.,
the Customer

 

  2. Annual Road Maintenance Plan Greybull River Road – by and between Nance
Petroleum Corporation, a wholly owned subsidiary of St. Mary Land and
Exploration, and Vernon E. Faulconer, Inc., et al

 

  3. State of Wyoming Water Discharge Permit WY-0227731

FOURBEAR PIPELINE SYSTEM SUBJECT TO:

 

  1. Fourbear Pipeline Construction and Operating Agreement dated June 15, 1959,
including any amendments thereto, by and between Honolulu Oil Corporation, Hunt
Oil Company, Husky Oil Company, Sinclair Oil & Gas Company, Texaco Fourbear
Inc., and Mule Creek Oil Company

 

Schedule 1.02 (e) (4/9/12)   Page 2 of 3

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

HUNT FIELD

PARK COUNTY, WY

HUNT FIELD SUBJECT TO:

 

  1. State of Wyoming Water Discharge Permit WY-0001520

HUNT STATE 11-1 SUBJECT TO:

 

  1. Joint Operating Agreement dated July 1, 1987 between Goldmark Engineering,
Inc., Operator, and Stephen Smith, et al, recorded in Book 199, Page 145 of the
records of the County Clerk and Recorder, Park County, Wyoming, as amended by
Letter Agreements dated September 14, 1987 and September 15, 1987

 

  2. Joint Operating Agreement dated July 1, 1987 between Goldmark Engineering
Inc., Operator, and Stephen Smith, et al, recorded in Book 199, Page 96 of the
records of the County Clerk and Recorder, Park County, Wyoming, as amended by
Letter Agreements dated September 14, 1987 and September 15, 1987

HUNT FEE # 2-1 AND HUNT FEE #2-11 SUBJECT TO:

 

  1. Joint Operating Agreement dated July 1, 1987 between Goldmark Engineering,
Inc., Operator, and Stephen Smith, et al, recorded in Book 199, Page 145 of the
records of the County Clerk and Recorder, Park County, Wyoming, as amended by
Letter Agreements dated September 14, 1987 and September 15, 1987

 

  2. Joint Operating Agreement dated July 1, 1987 between Goldmark Engineering,
Inc., Operator, and Stephen Smith, et al, recorded in Book 199, Page 96 of the
records of the County Clerk and Recorder, Park County, Wyoming, as amended by
Letter Agreements dated September 14, 1987 and September 15, 1987

 

  3. Joint Operating Agreement dated October 5, 1965 between Amax Petroleum
Corporation, Operator, and Hunt Oil Company, recorded in Book 148, Page 316 of
the records of the County Clerk and Recorder, Park County, Wyoming, as amended

INCLUDING, WITHOUT LIMITATION, ANY AGREEMENTS NOT LISTED IN THIS EXHIBIT C
PERTAINING TO THE LEASES, LANDS, AND WELLS.

END OF SCHEDULE 1.02 (e)

 

Schedule 1.02 (e) (4/9/12)   Page 3 of 3

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EXHIBIT E-1

LEGACY ENERGY, INC.

CERTIFICATE OF OFFICER

I, the undersigned officer of Legacy Energy, Inc., a Delaware corporation (the
“Company”) do hereby certify pursuant to Section 10.04(c) of that certain
Purchase and Sale Agreement dated April 24, 2012, effective as of April 1, 2012
(the “Agreement”) by and among the Company, NiMin Energy Corp. and BreitBurn
Operating L.P. that:

 

  1. The representations and warranties of the Company therein contained are
true and correct in all material respects (or in all respects in the case of any
representation or warranty containing any materiality qualification) on the
Closing Date (as such term is defined in the Agreement) as though made on and as
of such date.

 

  2. The Company has performed, in all material respects, the obligations,
covenants and agreements contained in the Agreement to be performed or complied
with by it at or prior to the Closing (as such term is defined in the
Agreement).

IN WITNESS WHEREOF, I hereunto set my hand as of                         , 2012.

 

LEGACY ENERGY, INC. By:     Name:   Title:  

 

Exhibit E-1   Page 1 of 1

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EXHIBIT E-2

NIMIN ENERGY CORP.

CERTIFICATE OF OFFICER

I, the undersigned officer of NiMin Energy Corp, an Alberta corporation (the
“Company”) do hereby certify pursuant to Section 10.06(a) of that certain
Purchase and Sale Agreement dated April 24, 2012, effective as of April 1, 2012
(the “Agreement”) by and among the Company, Legacy Energy, Inc. and BreitBurn
Operating L.P. that:

 

  1. The representations and warranties of the Company therein contained are
true and correct in all material respects (or in all respects in the case of any
representation or warranty containing any materiality qualification) on the
Closing Date (as such term is defined in the Agreement) as though made on and as
of such date.

 

  2. The Company has performed, in all material respects, the obligations,
covenants and agreements contained in the Agreement to be performed or complied
with by it at or prior to the Closing (as such term is defined in the
Agreement).

IN WITNESS WHEREOF, I hereunto set my hand as of                     , 2012.

 

NIMIN ENERGY CORP. By:     Name:   Title:  

 

Exhibit E-2   Page 1 of 1

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

EXHIBIT F

BREITBURN OPERATING L.P

CERTIFICATE OF OFFICER

I, the undersigned officer of BreitBurn Operating L.P., a Delaware limited
partnership (the “Company”) do hereby certify pursuant to Section 10.05(b) of
that certain Purchase and Sale Agreement dated April 24, 2012, effective as of
April 1, 2012 (the “Agreement”) by and among the Company, Legacy Energy, Inc.
and NiMin Energy Corp. that:

 

  1. The representations and warranties of the Company therein contained are
true and correct in all material respects (or in all respects in the case of any
representation or warranty containing any materiality qualification) on the
Closing Date (as such term is defined in the Agreement) as though made on and as
of such date.

 

  2. The Company has performed, in all material respects, the obligations,
covenants and agreements contained in the Agreement to be performed or complied
with by it at or prior to the Closing (as such term is defined in the
Agreement).

IN WITNESS WHEREOF, I hereunto set my hand as of                     , 2012.

 

BreitBurn Operating L.P By:     Name:   Randall H. Breitenbach Title:  
President

 

Exhibit F   Page 1 of 1

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

EXHIBIT G

FORM OF SUPPORT AGREEMENT

April 24, 2012

TO THE UNDERSIGNED SHAREHOLDER OF NIMIN ENERGY CORP.

Dear Sir/Madam:

Re: NiMin Energy Corp.—Sale of Assets to BreitBurn Operating L.P.

Reference is made to the Purchase and Sale Agreement dated as of the date hereof
between NiMin Energy Corp. (“Parent”), Legacy Energy, Inc. (“Seller”) and
BreitBurn Operating L.P. (“Buyer”) (the “Purchase Agreement”) concerning the
proposed purchase by Buyer from Seller, a wholly-owned subsidiary of Parent, of
substantially all of Parent’s assets for a cash purchase price of
US$100,550,000, subject to adjustment in accordance with the Purchase Agreement
(the “Sale Transaction”).

Completion of the Sale Transaction is subject to, among other conditions,
approval thereof by special resolution (the “Approval Resolution”) of the
holders of common shares of Parent (“Shareholders”) at a special meeting to be
called and held for such purpose (the “Special Meeting”).

We understand that, as of the date hereof, you (the “Securityholder”)
beneficially own, directly or indirectly, or exercise control or direction over,
the number of common shares of Parent (“Shares”) and the number and class of
securities that are convertible into Shares as set forth in your acceptance
below.

The purpose of this agreement (“Support Agreement”) is to confirm your personal
commitment, as a Shareholder, to vote or cause to be voted at the Special
Meeting all Shares beneficially owned by you, directly or indirectly, or over
which you exercise control or direction, including any Shares acquired by you or
over which you obtain control or direction after the date hereof (collectively,
“Subject Securities”), in favour of the Approval Resolution and to otherwise
support the Sale Transaction in accordance with the terms and conditions hereof.

In consideration and as an inducement for Buyer to enter into the Purchase
Agreement with Parent and Seller and agree to the Sale Transaction on and
subject to the terms and conditions thereof, and for other good and valuable
consideration, the undersigned Securityholder hereby agrees with Buyer as
follows.

1. Covenants of Securityholder

The Securityholder hereby irrevocably covenants and agrees, and acknowledges
that Buyer is relying upon such covenants in connection with entering into the
Purchase Agreement, that, until termination of this Support Agreement in
accordance with section 3 below, the Securityholder shall:

 

  (a) vote or cause to be voted all Subject Securities beneficially owned by the
Securityholder, directly or indirectly, or over which the Securityholder
exercises control or direction:

 

  (i) in favour of the Approval Resolution and any ancillary resolutions
approving the Sale Transaction (if any) to be considered by the Shareholders at
the Special Meeting; and

 

Exhibit G   Page 1 of 6

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

  (ii) against or otherwise in opposition to any resolution to be considered by
the Shareholders or any other proposed action by any person or group of persons
in respect of any matter involving Parent or Seller that, if approved, initiated
or completed or for any other reason could impede, prevent, hinder, delay or
challenge the Sale Transaction or reduce the likelihood of the Approval
Resolution being approved by the Shareholders;

and in connection with the foregoing, shall deliver a duly executed and
irrevocable (except upon termination of this Support Agreement in accordance
with its terms) proxy in respect of any such matter not less than five (5) days
prior to the date of the Special Meeting or other meeting or event at which
Shares will be voted;

 

  (b) not exercise any rights available to the Securityholder, whether arising
under statute, at common law or otherwise, to impede, prevent, hinder, delay or
challenge the Sale Transaction;

 

  (c) not exercise any dissent rights or any similar rights to which the
Securityholder may be entitled in respect of the Sale Transaction or the
Approval Resolution; and

 

  (d) not sell or otherwise transfer or dispose of any Subject Securities or
transfer any voting rights attached thereto, other than a grant of proxy
instructing the proxy holder to vote Shares as provided in paragraph l(a) above;

 

  (e) not solicit, assist, initiate, facilitate or encourage, or take any action
to solicit, assist, initiate, facilitate or encourage (including by way of
furnishing information) any Acquisition Proposal (as that term is defined in the
Purchase Agreement) or the initiation of any communications regarding an
Acquisition Proposal, enter into or participate in any discussions or
negotiations with any person regarding an Acquisition Proposal, furnish or
provide access to any information concerning Parent, Seller or the assets
proposed to be purchased under the Sale Transaction to any person in connection
with, or that could reasonably be expected to lead to, an Acquisition Proposal
or the initiation of communications regarding an Acquisition Proposal, or
otherwise cooperate in any way with any effort or attempt to make an Acquisition
Proposal; and

 

  (f) not take or cause to be taken any action that would impede, prevent,
hinder, delay or challenge the Sale Transaction or otherwise reduce the
likelihood of its successful completion.

Buyer acknowledges that the Securityholder’s covenants under paragraph l(e) and
paragraph l(f) above relate to the Securityholder acting in its capacity as a
holder of Shares and not as a director or senior officer of Parent or Seller and
shall not prevent or restrict the Securityholder from exercising (in his
capacity as a director or senior officer) his fiduciary duty to Parent under
applicable law and in accordance with the Purchase Agreement.

2. Representations and Warranties of Securityholder

The Securityholder hereby represents and warrants to Buyer, and acknowledges
that Buyer is relying upon such representations and warranties in connection
with entering into the Purchase Agreement, that at the date hereof:

 

  (a)

as of the date hereof, the Securityholder beneficially owns, directly or
indirectly, or exercises control or direction over the number of Shares, and the
number and class of

 

Exhibit G   Page 2 of 6

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

  securities that are convertible into Shares, set forth under the
Securityholder’s signature below;

 

  (b) the Securityholder has good and sufficient power, authority and right to
enter into this Support Agreement, to perform its obligations hereunder and to
complete the transactions contemplated hereby;

 

  (c) this Support Agreement has been duly executed and delivered by the
Securityholder and constitutes a valid and binding obligation of the
Securityholder enforceable against it in accordance with its terms;

 

  (d) neither the entering into of this Support Agreement nor the performance by
the Securityholder of its obligations hereunder or completion of the
transactions contemplated hereby will violate or constitute a breach of or
default under any agreement, commitment, arrangement, understanding or
restriction of any kind to which the Securityholder is a party or by which the
Securityholder or any of its assets (including the Subject Securities) are
bound;

 

  (e) no person has any agreement or option, or any right or privilege (whether
by law, pre-emptive or contractual) capable of becoming an agreement or option,
for the purchase, acquisition or transfer of any of the Subject Securities or
any interest therein or right thereto (other than this Support Agreement);

 

  (f) none of the Subject Securities are, or will at the time of the Special
Meeting be, subject to any voting trust or voting agreement (other than this
Support Agreement), and there will not be any proxy in existence with respect to
any of the Shares of the Securityholder except for any proxy given by the
Securityholder for the purpose of fulfilling the Securityholder’s obligations
hereunder; and

 

  (g) there are and, at all times up to and including the date of the Special
Meeting, will be no restrictions on the Subject Securities that would prevent
the Securityholder from voting or causing to be voted in favour of the Approval
Resolution any of the Subject Securities entitled to vote at the Special
Meeting.

3. Termination

This Support Agreement and the parties’ rights and obligations hereunder shall
terminate and become void and of no further force or effect, without any further
action by the Securityholder or Buyer, on the earliest of (i) the date on which
the Sale Transaction is completed, (ii) the date on which the Purchase Agreement
is terminated in accordance with its terms, and (iii) the date, if any, on which
the Approval Resolution is put to a vote of Shareholders and is not approved.

4. Assignment

No party hereto may assign any of its rights or obligations hereunder without
the prior written consent of the other party; provided, however, that Buyer may
assign any of its rights or obligations hereunder to a direct or indirect
wholly-owned subsidiary of Buyer without the Securityholder’s consent. Subject
to the foregoing, this Support Agreement shall be binding upon and shall enure
to the benefit of and be enforceable by the Securityholder, Buyer and their
respective heirs, executors, administrators, personal representatives,
successors at law and permitted assigns, as applicable.

 

Exhibit G   Page 3 of 6

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

5. Amendments

This Support Agreement constitutes the entire agreement between the parties
hereto with respect to the subject matter hereof and may be amended or
supplemented only by written agreement signed by the parties. All references
herein to the Purchase Agreement shall be to the Purchase Agreement as amended
or amended and restated from time to time, provided that any such amendment does
not materially change the nature of the Sale Transaction or materially reduce
the purchase consideration payable to Seller thereunder.

6. Expenses

Each party hereto shall pay and be responsible for its own expenses incurred in
connection with this Support Agreement and the matters contemplated hereby.

7. Disclosure

Prior to the first public disclosure of the existence and terms of this Support
Agreement, neither party hereto shall disclose the existence or terms hereof to
any third person other than Parent, Seller or the respective directors, officers
and professional advisors of Parent, Seller, Buyer or the Securityholder,
without the prior written consent of the other party, except as required by law.
The existence and terms of this Support Agreement may be disclosed in any news
release announcing the Sale Transaction and in the disclosure materials to be
prepared by Parent in respect of the Special Meeting.

8. Governing Law

This Support Agreement and the rights and obligations of the parties hereto
shall be governed by and construed in accordance with the laws of Alberta and
the federal laws of Canada applicable therein, and the parties irrevocably
attorn to the jurisdiction of the courts of Alberta with respect to any claims
arising hereunder.

9. Remedies

The Securityholder agrees that in the event of a breach or threatened breach by
the Securityholder of this Support Agreement monetary damages may be an
inadequate remedy, and without limiting any other remedies available to Buyer,
whether at law, in equity or otherwise, Buyer shall be entitled to injunctive or
similar relief to restrain the breach (actual or threatened) or any continuation
thereof, and to require specific performance of the provisions hereof.

10. Time of the Essence

Time shall be of the essence of this agreement.

11. Further Assurances

The Securityholder shall from time to time and at all times hereafter at the
request of Buyer, acting reasonably, but without further consideration, perform
such further acts and sign and deliver such further documents and give such
further assurances as may be reasonably required for the purpose of giving
effect to this Support Agreement.

 

Exhibit G   Page 4 of 6

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

12. Counterpart Execution

This Support Agreement may be signed in counterparts that together shall be
deemed to constitute one and the same instrument, and delivery of such
counterparts may be affected by means of facsimile or other electronic
transmission.

If you are in agreement with the foregoing, please indicate your acceptance
thereof by signing and returning this letter to Buyer.

 

Yours truly, BREITBURN OPERATING L.P. By:      

Name: Randall H. Breitenbach

Office/Title: President

[remainder of page intentionally left blank—signatures follow]

 

Exhibit G   Page 5 of 6

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

ACCEPTANCE

For good and valuable consideration, the receipt and sufficiency of which are
hereby acknowledged, the undersigned Securityholder hereby irrevocably accepts
and agrees to the foregoing terms and conditions of this Support Agreement with
BreitBurn Operating L.P. as of the             day of             , 2012.

 

 

Witness Name (please print)

   

 

Securityholder Name (please print)

 

Signature of Witness

   

 

Signature of Securityholder

 

 

Number of Common Shares Owned, Controlled or Directed

 

 

Particulars of Convertible Securities Owned, Controlled or Directed

(number and class of securities)

 

 

Address of Securityholder (please print)

 

 

Address of Securityholder (continued)

 

 

Securityholder’s Facsimile Number

   

 

Securityholder’s Email Address

 

Exhibit G   Page 6 of 6

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

SCHEDULE 1.02 (e)

CONTRACTS

GENERAL

 

  1. Road Use Agreement

Grantor: Hunt Oil Company dba Hoodoo Ranch

Grantee: Legacy Energy, Inc.

Date: March 28, 2011

 

  2. Flowage Easement Agreement

Grantor: Hunt Oil Company dba Hoodoo Ranch

Grantee: Legacy Energy, Inc.

Date: March 28, 2011

 

  3. Surface Use and Damage Agreement

Grantor: Hunt Oil Company dba Hoodoo Ranch

Grantee: Legacy Energy, Inc.

Date: March 28, 2011

 

  4. Crude Oil Purchase Contract – Outright oil purchase contract dated
October 15, 2010 by and between Legacy Energy, Inc., as Seller and Marathon Oil
Company, as Purchaser.

 

  5. Engineering Services Agreement between Rocky Mountain Power and Legacy
Energy, Inc. dated June 13, 2011 and First Amendment thereto dated January 19,
2012.

FERGUSON RANCH FIELD

PARK COUNTY, WY

FERGUSON RANCH UNIT SUBJECT TO:

 

  1. Unit Agreement for Ferguson Ranch Unit Area dated effective December 1,
1995, recorded at DOC #1996 3404, Park County, Wyoming, as approved by that
certain Unit Operator Certificate of Effectiveness for Ferguson Ranch Unit Area
recorded at DOC #1996 5018, Park County, Wyoming, and all amendments thereto

 

  2. Electric Service Contract #330560869 for Ferguson Ranch Tank Battery dated
October 8, 2007, by and between Rocky Mountain Power, a division of PacifiCorp,
the Company, and Vernon E. Faulconer, Inc., the Customer

 

Schedule 1.02 (e)   Page 1 of 3

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

  3. State of Wyoming Water Discharge Permit WY-0001490

 

  4. State of Wyoming Storm Water Discharge Permit WYR-000103

SHEEP POINT FIELD

PARK COUNTY, WY

SUBJECT TO:

 

  1. Joint Operating Agreement, including all amendments thereto, dated
April 23, 1971, by and between J-W Operating Company, as Operator, and Bel Oil
Corporation, et al, as Non-Operators

 

  2. Unrecorded Annual Road Maintenance Plan Greybull River Road – by and
between Nance Petroleum Corporation, a wholly owned subsidiary of St. Mary Land
and Exploration, and Vernon E. Faulconer, Inc., et al

 

  3. State of Wyoming Water Discharge Permit WY-0020265

WILLOW DRAW FIELD

PARK COUNTY, WY

WILLOW DRAW FIELD SUBJECT TO:

 

  1. Master Electric Service and Facilities Improvements Agreement dated May 18,
2007, by and between PacifiCorp, an Oregon corporation doing business in Wyoming
as Rocky Mountain Power, “Rocky Mountain Power”, and Vernon E. Faulconer, Inc.,
the Customer

 

  2. Annual Road Maintenance Plan Greybull River Road – by and between Nance
Petroleum Corporation, a wholly owned subsidiary of St. Mary Land and
Exploration, and Vernon E. Faulconer, Inc., et al

 

  3. State of Wyoming Water Discharge Permit WY-0227731

FOURBEAR PIPELINE SYSTEM SUBJECT TO:

 

  1. Fourbear Pipeline Construction and Operating Agreement dated June 15, 1959,
including any amendments thereto, by and between Honolulu Oil Corporation, Hunt
Oil Company, Husky Oil Company, Sinclair Oil & Gas Company, Texaco Fourbear
Inc., and Mule Creek Oil Company

 

Schedule 1.02 (e)   Page 2 of 3

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

HUNT FIELD

PARK COUNTY, WY

HUNT FIELD SUBJECT TO:

 

  1. State of Wyoming Water Discharge Permit WY-0001520

HUNT STATE 11-1 SUBJECT TO:

 

  1. Joint Operating Agreement dated July 1, 1987 between Goldmark Engineering,
Inc., Operator, and Stephen Smith, et al, recorded in Book 199, Page 145 of the
records of the County Clerk and Recorder, Park County, Wyoming, as amended by
Letter Agreements dated September 14, 1987 and September 15, 1987

 

  2. Joint Operating Agreement dated July 1, 1987 between Goldmark Engineering
Inc., Operator, and Stephen Smith, et al, recorded in Book 199, Page 96 of the
records of the County Clerk and Recorder, Park County, Wyoming, as amended by
Letter Agreements dated September 14, 1987 and September 15, 1987

HUNT FEE # 2-1 AND HUNT FEE #2-11 SUBJECT TO:

 

  1. Joint Operating Agreement dated July 1, 1987 between Goldmark Engineering,
Inc., Operator, and Stephen Smith, et al, recorded in Book 199, Page 145 of the
records of the County Clerk and Recorder, Park County, Wyoming, as amended by
Letter Agreements dated September 14, 1987 and September 15, 1987

 

  2. Joint Operating Agreement dated July 1, 1987 between Goldmark Engineering,
Inc., Operator, and Stephen Smith, et al, recorded in Book 199, Page 96 of the
records of the County Clerk and Recorder, Park County, Wyoming, as amended by
Letter Agreements dated September 14, 1987 and September 15, 1987

 

  3. Joint Operating Agreement dated October 5, 1965 between Amax Petroleum
Corporation, Operator, and Hunt Oil Company, recorded in Book 148, Page 316 of
the records of the County Clerk and Recorder, Park County, Wyoming, as amended

OTHER CONTRACTS

None.

END OF SCHEDULE 1.02 (e)

 

Schedule 1.02 (e)   Page 3 of 3

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SCHEDULE 1.03

EXCLUDED ASSETS

CODY, WY FIELD OFFICE

Contents of office located at 504 Date Street, Cody, Wyoming

2010 Toyota Tundra (VIN 5TFUW5F17AX128452) including contents

2010 Toyota Tundra (VIN 5TFUW5F18AX124376) including contents

2010 Toyota Tundra (VIN 5TFUW5F15AX130443) including contents

2011 Toyota Tundra (VIN 5TFUY5F10BX182817) including contents

2011 Toyota Tundra (VIN 5TFUY5F11BX168067) including contents

FERGUSON RANCH FIELD

PARK COUNTY, WY

Contents of Ferguson Ranch Field Office

10-3/4” casing – (1) joint, (1) pup joint

8-5/8” casing – (6) joints, (3) pup joints

7” casing – (3) joints, (3) pup joints

5-1/2” casing – (9) joints, (1) pup joints

2-7/8”tubing – (68) joints

1” rods – (6)

6” SCH40 steel pipe – (11) joints

3” SCH 40 steel pipe – (4) joints

100 KVA Transformers – (6)

50 KVA FACT Transformer – (1)

37.5 KVA FACT Transformer – (3)

37.5 KVA Transformer – (3)

Lufkin 456 DC Air Balance Pumping Unit – (1)

Lufkin 640 DE Conventional Pumping Unit – (2)

WILLOW DRAW FIELD

PARK COUNTY, WY

Contents of Willow Draw Field Office

8 slot / 3 branch skid mounted header assembly – (2)

7” casing – (8) full joints

8-5/8” casing – (2) full joints

9-5/8” casing – (3) joints

3-1/2” tubing – (24) joints

2-7/8” tubing – (166) joints

2-3/8” tubing – (8) joints

1” rods – (160)

7/8” rods – (150)

2” Line Pipe – (5) joints

3” Line Pipe – (26) joints

 

Schedule 1.03   Page 1 of 2

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

4” Line Pipe – (3) joints

2 1/2” x 2” x 16’ RWBC plunger units – (6)

100 KVA Transformers – (4)

15 KVA Transformers – (6)

10 KVA Transformers – (9)

Skid Mounted 1” Centrifugal Pump & 15 HP Motor – (1)

Skid Mounted 3/4” Gear Pump & 3 HP Motor – (1)

60 HP Motors – (1)

40 HP Motors – (3)

30 HP Motors – (2)

20 HP Motors – (2)

Weatherford Switchboard – (2)

Weatherford PC Controller – (1)

Weatherford PC Drive Head – (1)

OTHER EXCLUDED ASSETS:

None.

END OF SCHEDULE 1.03

 

Schedule 1.03   Page 2 of 2

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SCHEDULE 3.07

PREFERENTIAL PURCHASE RIGHTS

FERGUSON RANCH FIELD

PARK COUNTY, WY

There are no Preferential Rights.

SHEEP POINT FIELD

PARK COUNTY, WY

There are no Preferential Rights.

WILLOW DRAW FIELD

PARK COUNTY, WY

There are no Preferential Rights.

HUNT FIELD

PARK COUNTY, WY

There are no Preferential Rights.

OTHER VALUES

None.

END OF SCHEDULE 3.07

 

Schedule 3.07   Page 1 of 1

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SCHEDULE 3.08

CONSENTS

FERGUSON RANCH FIELD

PARK COUNTY, WY

None.

SHEEP POINT FIELD

PARK COUNTY, WY

None.

WILLOW DRAW FIELD

PARK COUNTY, WY

Annual Road Maintenance Plan Greybull River Road – by and between Nance
Petroleum Corporation, a wholly owned subsidiary of St. Mary Land and
Exploration, and Vernon E. Faulconer, Inc., et al

HUNT FIELD

PARK COUNTY, WY

None.

OTHER CONSENTS

None.

END OF SCHEDULE 3.08

 

Schedule 3.08   Page 1 of 1

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SCHEDULE 5.06

EXISTING CLAIMS AND LITIGATION

FERGUSON RANCH FIELD

PARK COUNTY, WY

There are no Existing Claims and Litigation.

SHEEP POINT FIELD

PARK COUNTY, WY

There are no Existing Claims and Litigation.

WILLOW DRAW FIELD

PARK COUNTY, WY

There are no Existing Claims and Litigation.

HUNT FIELD

PARK COUNTY, WY

There are no Existing Claims and Litigation.

OTHER CLAIMS

None.

END OF SCHEDULE 5.06

 

Schedule 5.06   Page 1 of 1

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SCHEDULE 5.08

TAXES

FERGUSON RANCH FIELD

PARK COUNTY, WY

None of the Assets are subject to or owned by any tax partnership requiring a
partnership income Tax Return to be filed under Subchapter K of Chapter 1 of
Subtitle A of the Internal Revenue Code.

SHEEP POINT FIELD

PARK COUNTY, WY

None of the Assets are subject to or owned by any tax partnership requiring a
partnership income Tax Return to be filed under Subchapter K of Chapter 1 of
Subtitle A of the Internal Revenue Code.

WILLOW DRAW FIELD

PARK COUNTY, WY

None of the Assets are subject to or owned by any tax partnership requiring a
partnership income Tax Return to be filed under Subchapter K of Chapter 1 of
Subtitle A of the Internal Revenue Code.

HUNT FIELD

PARK COUNTY, WY

None of the Assets are subject to or owned by any tax partnership requiring a
partnership income Tax Return to be filed under Subchapter K of Chapter 1 of
Subtitle A of the Internal Revenue Code.

OTHER

None.

END OF SCHEDULE 5.08

 

Schedule 5.08   Page 1 of 1

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SCHEDULE 5.11

IMBALANCES

FERGUSON RANCH FIELD

PARK COUNTY, WY

There are no imbalances.

SHEEP POINT FIELD

PARK COUNTY, WY

There are no imbalances.

WILLOW DRAW FIELD

PARK COUNTY, WY

There are no imbalances.

HUNT FIELD

PARK COUNTY, WY

There are no imbalances.

OTHER IMBALANCES

None.

END OF SCHEDULE 5.11

 

Schedule 5.11   Page 1 of 1

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SCHEDULE 5.14

COMPLIANCE WITH LAWS

None.

END OF SCHEDULE 5.14

 

Schedule 5.14   Page 1 of 1

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SCHEDULE 5.15

PERMITS

None.

END OF SCHEDULE 5.15

 

Schedule 5.15   Page 1 of 1

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SCHEDULE 5.16

P&A WELLS

FERGUSON RANCH FIELD

PARK COUNTY, WY

None.

SHEEP POINT FIELD

PARK COUNTY, WY

None.

WILLOW DRAW FIELD

PARK COUNTY, WY

ST 68-15697 1 (Willow Draw 19-1), API No. 4902920430, SW/SW/SE Section 19,
Township 48N, Range 103W

HUNT FIELD

PARK COUNTY, WY

None.

OTHER

None.

END OF SCHEDULE 5.16

 

Schedule 5.16   Page 1 of 1

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SCHEDULE 5.17

PROPOSED OPERATIONS OR EXPENDITURES

GENERAL

PARK COUNTY, WY

Rocky Mountain Power—First Engineering, Materials and Procurement Agreement
Amending Engineering Services Agreement dated June 13, 2011.

Budget – $250,000

Expenditure to Date – $100,000

Remaining Expenditure – $150,000

FERGUSON RANCH FIELD

PARK COUNTY, WY

None.

SHEEP POINT FIELD

PARK COUNTY, WY

None.

WILLOW DRAW FIELD

PARK COUNTY, WY

Authority for Expenditure 2100.4, Willow Draw Phase 3 Facility Expansion

Budget – $910,305

Expenditure to Date – $648,042

Remaining Expenditure – $248,953

HUNT FIELD

PARK COUNTY, WY

None.

OTHER

None.

END OF SCHEDULE 5.17

 

Schedule 5.17   Page 1 of 1

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SCHEDULE 5.19

ENVIRONMENTAL

FERGUSON RANCH FIELD

PARK COUNTY, WY

There are no Environmental Notices.

SHEEP POINT FIELD

PARK COUNTY, WY

There are no Environmental Notices.

WILLOW DRAW FIELD

PARK COUNTY, WY

There are no Environmental Notices.

HUNT FIELD

PARK COUNTY, WY

There are no Environmental Notices.

OTHER

None.

END OF SCHEDULE 5.19

 

Schedule 5.19   Page 1 of 1

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SCHEDULE 5.20

PAYOUT

FERGUSON RANCH FIELD

PARK COUNTY, WY

None.

SHEEP POINT FIELD

PARK COUNTY, WY

None.

WILLOW DRAW FIELD

PARK COUNTY, WY

None.

HUNT FIELD

PARK COUNTY, WY

None.

OTHER

None.

END OF SCHEDULE 5.20

 

Schedule 5.20   Page 1 of 1

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SCHEDULE 5.21

SUSPENSE FUNDS

FERGUSON RANCH FIELD

PARK COUNTY, WY

None.

SHEEP POINT FIELD

PARK COUNTY, WY

 

John M & Bobbie N Tooke

   Sheep Point 16-1    $ 2,855.67   

John M & Bobbie N Tooke

   Sheep Point 16-2    $ 4,693.44   

John M & Bobbie N Tooke

   Sheep Point 16-3    $ 1,426.38   

John M & Bobbie N Tooke

   Sheep Point 16-7    $ 2,385.04   

John M & Bobbie N Tooke

   Sheep Point 16-8    $ 5,826.48   

John M & Bobbie N Tooke

   Sheep Point 16-9    $ 1,241.35         

 

 

 

Total

   Sheep Point Field    $ 18,428.36         

 

 

 

WILLOW DRAW FIELD

PARK COUNTY, WY

None.

HUNT FIELD

PARK COUNTY, WY

None.

OTHER

None.

END OF SCHEDULE 5.21

 

Schedule 5.21   Page 1 of 1

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SCHEDULE 10.02 (b) (iii)

LIENS FOR TAXES AND ASSESSMENTS

PAYMENTS DUE STATE OF WYOMING

 

YEAR*

  

AMOUNT

   DUE DATE

2010

   $319,735.38    May 10, 2012

2011

  

$668,484.74

$668,484.74

   November 10, 2012

May 10, 2013

2012

   Approx. $390,000.00    November 10, 2013

 

* Based on value of production in the listed year.

END OF SCHEDULE 10.02 (b) (iii)

 

Schedule 10.02 (b) (iii)   Page 1 of 1

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SCHEDULE 13.04

REQUIRED APPROVALS

This Agreement and the transaction contemplated hereby are conditioned on and
subject to approval by the holders of common shares of Parent of the sale of the
Assets as provided herein by special resolution pursuant to section 190 of the
Business Corporations Act (Alberta).

END OF SCHEDULE 13.04

 

Schedule 13.04   Page 1 of 1

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SCHEDULE 13.12

OFFICERS AND DIRECTORS

Clarence Cottman III

Chairman and Chief Executive Officer

Jonathan S. Wimbish

Chief Financial Officer

Daniel Scott Dobson

Chief Operating Officer

Brian Bayley

Director

W. Alf Peneycad

Director

William Gumma

Director

Robert Redfearn

Director

END OF SCHEDULE 13.12

 

Schedule 13.12   Page 1 of 1