Exhibit 10.1

 

Execution Version

 

COMPANY STOCK PURCHASE AGREEMENT

 

THIS COMPANY STOCK PURCHASE AGREEMENT (this “Agreement”) is made as of June 3,
2008, by and between CREDO PETROLEUM CORPORATION, a Colorado corporation
(NASDAQ: CRED) (the “Company”), and RCH ENERGY OPPORTUNITY FUND II, LP, each a
limited partnership organized under the laws of the State of Delaware
(“Purchaser,” and collectively with the Company, the “Parties”).

 

WHEREAS, the Board of Directors of the Company (the “Board”) has deemed it
advisable and in the best interests of the Company to issue and sell to
Purchaser, and Purchaser desires to purchase from the Company, 1,150,000 shares
of newly-issued common stock, par value $0.10 per share, of the Company
(“Stock”) at a price of $14.50 per share;

 

WHEREAS, concurrently with and as a condition to the Closing (as hereinafter
defined), Purchaser is purchasing 687,000 shares of Stock from certain directors
of the Company (the “Tranche Two Stock Purchase”); and

 

WHEREAS, as an inducement and condition to the Parties entering into this
Agreement, Purchaser and the Company desire to agree to a standstill provision
with respect to the Stock and to certain additional rights for Purchaser with
respect Board positions as further set forth herein;

 

NOW, THEREFORE, in consideration of the foregoing and the respective
representations, warranties, covenants, agreements and conditions hereinafter
set forth, and intending to be legally bound hereby, the Parties hereto agree as
follows:

 

ARTICLE I
PURCHASE AND SALE OF PURCHASED STOCK

 

1.1                                 Sale of Stock. Upon the terms and subject to
the conditions contained herein, upon (a) execution and delivery of this
Agreement by all the Parties hereto, (b) the execution and delivery by Purchaser
and the other parties thereto of the Stock Purchase Agreement, dated as of the
date hereof, among Purchaser and James T. Huffman, Richard B. Stevens and
William F. Skewes (the “Tranche Two Stock Purchase Agreement”) and (c) payment
of the Purchase Price Amount (as hereinafter defined) in accordance with
Section 1.2 hereof, the Company shall sell and transfer to Purchaser, and
Purchaser shall purchase and accept from the Company, 1,150,000 shares of Stock
(the “Purchased Stock”).

 

1.2                                 Payment by Purchaser. Upon the terms and
subject to the conditions contained herein and in payment for the aforesaid sale
and transfer of the Purchased Stock by the Company to Purchaser, Purchaser shall
deliver or cause to be delivered at the Closing to the Company, by wire transfer
or other means reasonably acceptable to the Company, an aggregate sum in cash
equal to $14.50 per share, or $16,675,000 (the “Purchase Price Amount”).

 

1.3                                 Closing. Upon the terms and subject to the
conditions set forth herein, the closing of the purchase and sale of the
Purchased Stock (the “Closing”) shall be held at 10:00 a.m. Mountain Daylight
Time on the second business day following the satisfaction (or, to the extent
permitted, the waiver by the Parties entitled to the benefits thereof) of the
conditions set forth in Article V (other than any of such conditions that by
their nature are to be fulfilled at Closing, but

 

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subject to the fulfillment or waiver of such conditions), or such other time and
date as may be mutually agreed by the Parties hereto (the “Closing Date”), at
the offices of Davis Graham & Stubbs LLP, 1550 17th Street, Denver, CO 80202, or
such other location as may be mutually agreed to by the Parties hereto.

 

1.4                                 Stock Certificates. At the Closing, the
Company shall deliver one or more certificates representing the Purchased Stock,
each such certificate to be duly and validly issued in favor of Purchaser and
otherwise sufficient to vest in Purchaser good title to the Purchased Stock.

 

1.5                                 Other Documents Delivered at Closing. The
Parties shall each take all such other actions required hereby to be performed,
and deliver all other documents, certificates and other items required to be
delivered by it, prior to or on the Closing Date, including, without limitation,
satisfying the conditions set forth in Article V.  All such documents and
instruments delivered to any Party pursuant hereto shall be in form and
substance, and shall be executed in a manner, reasonably satisfactory to such
Party and its counsel.

 

ARTICLE II
REPRESENTATIONS AND WARRANTIES OF THE COMPANY

 

The Company represents and warrants to Purchaser as follows:

 

2.1                                 Organization. The Company is a corporation,
duly organized, validly existing and in good standing under the laws of the
State of Colorado.  The Company has the requisite corporate power and authority
to own, lease and operate its assets and properties and to carry on its business
as it is now being conducted.  The Company is qualified to transact business and
is in good standing in each jurisdiction in which the properties owned, leased
or operated by it or the nature of the business conducted by it makes such
qualification necessary, except where the failure to be so qualified and in good
standing has not had and would not reasonably be expected to have a Company
Material Adverse Effect.  For purposes of this Agreement, “Company Material
Adverse Effect” means any result, occurrence, condition, fact, change,
violation, event or effect that, individually or in the aggregate with any such
other results, occurrences, conditions, facts, changes, violations, events or
effects, is, or is reasonably likely to be, materially adverse to the condition
(financial or otherwise), business, assets, or results of operations of the
Company and its subsidiaries taken as a whole; provided, however, that a Company
Material Adverse Effect shall not be deemed to include effects to the extent
resulting from (i) changes after the date of this Agreement in GAAP or
regulatory accounting requirements applicable generally to the Company,
(ii) actions or omissions by the Company taken with the specific prior written
and informed consent of Purchaser, (iii) changes in the prices of crude oil,
natural gas or natural gas products which do not have a materially
disproportionate effect on the Company relative to other industry participants,
(iv) changes in global or national political conditions or general economic or
market conditions which do not have a materially disproportionate effect on the
Company, (v) any loss of employees resulting from the public disclosure of this
Agreement or any related transaction or (vi) any change, in and of itself (as
opposed to the facts underlying such change), in the trading price or volume of
the Company’s capital stock.

 

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2.2                                 Authorization. The Company has full
corporate power and authority to execute and deliver this Agreement and to
consummate the transactions contemplated hereby.  The execution, delivery and
performance by the Company of this Agreement and the consummation of the
transactions contemplated hereby have been duly authorized by the Board, and no
other corporate action on the part of the Company or its shareholders is
necessary to authorize the execution and delivery by the Company of this
Agreement or the consummation of the purchase and sale of the Purchased Stock.

 

2.3                                 Execution; Validity of Agreement. This
Agreement has been duly executed and delivered by the Company, and assuming due
and valid authorization, execution and delivery hereof by Purchaser, constitutes
a valid and binding obligation of the Company, enforceable against the Company
in accordance with its terms, except as such enforceability may be limited by
(i) applicable bankruptcy, insolvency, reorganization, moratorium and other laws
of general application affecting enforcement of creditors’ rights generally, and
(ii) laws relating to the availability of specific performance, injunctive
relief or other equitable remedies.

 

2.4                                 Non-Contravention; Consents; Filings. The
execution, delivery and performance of this Agreement and the consummation of
the transactions contemplated hereby and compliance by the Company with any of
the provisions hereof do not and will not (a) conflict with or result in any
breach of any provision of the certificate of incorporation or by-laws of the
Company, (b) require any filing by the Company with, or the issuance or grant to
the Company of any permit, authorization, consent or approval of, (i) any court,
arbitrator or arbitral tribunal, administrative agency or commission or other
governmental or regulatory authority or agency (a “Governmental Entity”) or
(ii) any other natural person, partnership, corporation, limited liability
company, business trust, joint stock company, trust, unincorporated association,
joint venture, or other entity or organization (a “Person”), (c) conflict with
or violate any order, writ, injunction, decree, statute, rule or regulation
applicable to, binding upon or enforceable against the Company or any of its
properties or assets, (d) result in a violation or breach of, constitute (with
or without due notice or lapse of time or both) a default under, or give rise to
any right of termination, amendment, cancellation or acceleration under, any
note, bond, mortgage, indenture, lease, license, contract, agreement or other
instrument or obligation to which the Company is a party or by which the Company
or any of its property or assets are bound or (e) result in the creation or
imposition of any lien, charge, encumbrance, security interest, claim or right
of others of whatever nature (each, a “Lien”) upon any property or assets of the
Company under any note, bond, mortgage, indenture, lease, license, contract,
agreement or other instrument or obligation to which the Company is a party or
by which the Company or any of its property or assets is bound, except for
(x) any filings, permits, authorizations, consents and approvals as may be
required under, and other applicable requirements of, the Securities Act of
1933, as amended (the “Securities Act”), the Securities Exchange Act of 1934, as
amended (the “Exchange Act”), and state securities or blue sky laws and (y) in
the case of clauses (b), (c), (d) or (e), as would not reasonably be expected to
have a Company Material Adverse Effect.

 

2.5                                 Good Title Conveyed. At the time of
issuance, the Purchased Stock will be duly authorized, validly issued, fully
paid and nonassessable and not subject to any preemptive rights.  The stock
certificates and other instruments to be executed and delivered by the Company
to Purchaser at the Closing will be valid and binding obligations of the
Company, enforceable in accordance with their respective terms, and will
effectively vest in Purchaser good title to all the

 

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Purchased Stock, free and clear of all Liens whatsoever, except restrictions on
transfer arising under the Securities Act or any applicable state securities
laws.

 

2.6                                 Capitalization of the Company. As of May 31,
2008, the authorized capital stock of the Company consisted of 20,000,000 shares
of Stock, of which 9,330,536 shares were issued and outstanding and 185,610
shares were held in the treasury of the Company.  The only shares of Stock
reserved for issuance as of such date consisted of 1,234,110 shares that were
reserved or held for issuance pursuant to the Company’s equity compensation
plans.  Except as referred to in the foregoing sentence, there are no
outstanding subscriptions, options, warrants, rights (including “phantom” stock
rights), preemptive rights or other contracts, commitments, understandings or
arrangements, including any right of conversion or exchange under any
outstanding security, instrument or agreement (together, “Options”), obligating
the Company or any of its Subsidiaries to issue or sell any capital stock of the
Company or to grant, extend or enter into any Option with respect thereto.

 

2.7                                 Subsidiaries. The only material subsidiaries
of the Company are SECO Energy Corporation, a Nevada corporation, and United Oil
Corporation, an Oklahoma corporation (each a “Subsidiary” and together, the
“Subsidiaries”).  All of the outstanding capital shares of each of the
Subsidiaries are owned, beneficially and of record, by the Company or a
Subsidiary wholly owned, directly or indirectly, by the Company, free and clear
of all Liens, except as would not reasonably be expected to have a Company
Material Adverse Effect.

 

2.8                                 Redemption or Repurchase of Stock. As of the
date hereof, there are no outstanding contractual obligations of the Company or
either Subsidiary to repurchase, redeem or otherwise acquire any Stock or any
capital shares of either Subsidiary, or, except as would not reasonably be
expected to have a Company Material Adverse Effect, to provide funds to, or make
any investment (in the form of a loan, capital contribution or otherwise) in,
any Subsidiary or any other Person.

 

2.9           SEC Reports and Financial Statements.

 

(A)                                  SINCE JANUARY 1, 2005, THE COMPANY HAS
FILED WITH THE SECURITIES AND EXCHANGE COMMISSION (THE “SEC”) ALL MATERIAL
FORMS, REPORTS, SCHEDULES, REGISTRATION STATEMENTS, AND OTHER DOCUMENTS
(TOGETHER WITH ALL AMENDMENTS THEREOF AND SUPPLEMENTS THERETO) (AS SUCH
DOCUMENTS HAVE SINCE THE TIME OF THEIR FILING BEEN AMENDED OR SUPPLEMENTED, THE
“COMPANY SEC REPORTS”) REQUIRED TO BE FILED BY THE COMPANY WITH THE SEC.  AS OF
THEIR RESPECTIVE DATES AND GIVING EFFECT TO ANY AMENDMENTS OR SUPPLEMENTS
THERETO FILED PRIOR TO THE DATE OF THIS AGREEMENT, THE COMPANY SEC REPORTS
(I) COMPLIED AS TO FORM IN ALL MATERIAL RESPECTS WITH THE REQUIREMENTS OF THE
SECURITIES ACT, THE RULES AND REGULATIONS THEREUNDER, THE EXCHANGE ACT AND THE
RULES AND REGULATIONS THEREUNDER, AS THE CASE MAY BE, AND (II) DID NOT CONTAIN
ANY UNTRUE STATEMENT OF A MATERIAL FACT OR OMIT TO STATE A MATERIAL FACT
REQUIRED TO BE STATED THEREIN OR NECESSARY IN ORDER TO MAKE THE STATEMENTS
THEREIN, IN LIGHT OF THE CIRCUMSTANCES UNDER WHICH THEY WERE MADE, NOT
MISLEADING.

 

(B)                                 THE AUDITED CONSOLIDATED FINANCIAL
STATEMENTS AND UNAUDITED INTERIM CONSOLIDATED FINANCIAL STATEMENTS (INCLUDING,
IN EACH CASE, THE NOTES, IF ANY, THERETO) INCLUDED IN THE COMPANY SEC REPORTS
(THE “COMPANY FINANCIAL STATEMENTS”) COMPLIED AS TO FORM IN ALL

 

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MATERIAL RESPECTS WITH THE PUBLISHED RULES AND REGULATIONS OF THE SEC WITH
RESPECT THERETO AND WERE PREPARED IN ACCORDANCE WITH UNITED STATES GENERALLY
ACCEPTED ACCOUNTING PRINCIPLES IN ALL MATERIAL RESPECTS.

 

2.10                           Absence of Certain Changes or Events. Except as
disclosed in the Company SEC Reports filed prior to the date of this Agreement,
since October 31, 2006, there has not been any change, event or development that
had, or would be reasonably expected to have, individually or when aggregated
with any other change(s), event(s) or development(s), a Company Material Adverse
Effect.

 

2.11                           Undisclosed Liabilities. Except (a) as reflected
or otherwise reserved against on the balance sheet dated contained in the
Company’s Form 10-Q for the quarter ended January 31, 2008, (b) for liabilities
incurred since January 31, 2008 in the ordinary course of business consistent
with past practice, (c) for liabilities incurred in the ordinary course under
existing contracts (and not relating to any breach or violation thereof),
(d) for liabilities for investment banking, accounting and legal fees incurred
in connection with the negotiation, execution and delivery of this Agreement,
the Tranche Two Stock Purchase Agreement and other negotiations involving
Purchaser, (e) for liabilities which have been discharged or paid in full, and
(f) for liabilities that have not had, and are not reasonably likely to have,
individually or in the aggregate, a Company Material Adverse Effect, the Company
has not incurred any liabilities (whether accrued, absolute, contingent or
otherwise) of any nature that would be required by generally accepted accounting
principles to be reflected on a consolidated balance sheet of the Company and
its consolidated subsidiaries (including the notes thereto) since January 31,
2008.

 

2.12                           Hedging. Except pursuant to a hedge agreement
covering 80 MMbtus at NYMEX basis prices, ranging from $10.35 to $10.60 for the
production months of December 2008 through March 2009 and except as disclosed in
the Company SEC Reports filed prior to the date of this Agreement or as would
not reasonably be expected to have a Company Material Adverse Effect, (a) the
Company and its Subsidiaries have no obligations as of the date of this
Agreement for the delivery of hydrocarbons attributable to any of the Company’s
or either of its Subsidiary’s properties in the future on account of prepayment,
advance payment, take-or-pay or similar obligations without then or thereafter
being entitled to receive full value for the delivery of such hydrocarbons, and
(b) neither the Company nor either of its Subsidiaries is bound by futures,
hedge, swap, collar, put, call, floor, cap, option or other contracts which are
intended to benefit from or reduce or eliminate the risk of fluctuations in the
price of commodities.

 

2.13                           Legal Proceedings. Except as disclosed in the
Company SEC Reports filed prior to the date of this Agreement, (a) there are no
pending or, to the knowledge of the Company, threatened actions, suits,
arbitrations or proceedings relating to or affecting the Company, either of its
Subsidiaries or any of their respective assets and properties that, individually
or in the aggregate, have had or would reasonably be expected to have a Company
Material Adverse Effect, (b) there are no pending or, to the knowledge of the
Company, threatened Governmental Entity investigations or audits relating to or
affecting the Company, either of its Subsidiaries or any of their respective
assets and properties that, individually or in the aggregate, have had or would
reasonably be expected to have a Company Material Adverse Effect, and
(c) neither the Company nor either of its Subsidiaries is subject to any orders
of any Governmental Entity that

 

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are specific to the Company and that, individually or in the aggregate, have had
or would reasonably be expected to have a Company Material Adverse Effect.

 

2.14                           Permits and Licenses. The Company and each of its
Subsidiaries possess all licenses, certificates, permits and other
authorizations issued by the appropriate federal, state or foreign regulatory
authorities necessary to conduct their respective businesses, except for any
such failures to possess the same as would not have a Company Material Adverse
Effect.  Neither the Company nor either of its Subsidiaries has received any
notice of proceedings relating to the revocation or modification of any such
license, certificate, authorization or permit that, individually or in the
aggregate, if the subject of an unfavorable decision, ruling or finding, would
have a Company Material Adverse Effect.

 

2.15                           Taxes. Except as disclosed in the Company SEC
Reports filed prior to the date of this Agreement, (a) the Company and its
Subsidiaries have filed all foreign, federal, state and local tax returns that
are required to be filed (or have requested extensions thereof), except for any
failures to file that, individually or in the aggregate, have not had and would
not reasonably be expected to have a Company Material Adverse Effect and (b) the
Company and its Subsidiaries have paid all taxes required to be paid by them and
any other assessments, fines or penalties levied against them, to the extent
that any of the foregoing is or was due and payable, except for any assessments,
fines or penalties that are currently being contested in good faith, and except
in the case of (a) or (b), matters that, individually or in the aggregate, have
not had and would not reasonably be expected to have a Company Material Adverse
Effect.

 

2.16                           Compliance with ERISA. Except as disclosed in the
Company SEC Reports filed prior to the date of this Agreement or as would not
reasonably be expected to have a Company Material Adverse Effect, (a) each of
the Company and its Subsidiaries has fulfilled its obligations, if any, under
the minimum funding standards of Section 302 of the United States Employee
Retirement Income Security Act of 1974 (“ERISA”) and the regulations and
published interpretations thereunder with respect to each “plan” (as defined in
Section 3(3) of ERISA and such regulations and published interpretations) in
which its employees are eligible to participate and each such plan (excluding
any multiemployer plan, as defined in Section 3(37) of ERISA, that is not
sponsored or maintained by the Company or its Subsidiaries) is in compliance
with the presently applicable provisions of ERISA and such regulations and
published interpretations and (b) the Company and its Subsidiaries have not
incurred any unpaid liability to the Pension Benefit Guaranty Corporation (other
than for the payment of premiums in the ordinary course) or to any such plan
under Title IV of ERISA.

 

2.17                           Absence of Violations and Defaults.  None of the
Company and its Subsidiaries is in violation or default of (a) any provision of
its formation or governing documents in any material respect, (b) the terms of
any indenture, contract, lease, mortgage, deed of trust, note agreement, loan
agreement or other agreement, obligation, condition, covenant or instrument to
which it is a party, by which it is bound or to which its property is subject,
or (c) any statute, law, rule, regulation, judgment, order or decree of any
court, regulatory body, administrative agency, governmental body, arbitrator or
other authority having jurisdiction over it or any of its properties or assets,
as applicable, except, in the case of clauses (b) or (c), for any violations or
defaults that have not had and would not reasonably be expected to have a
Company Material Adverse Effect.

 

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2.18                           Labor Matters. No labor problem or dispute with
the employees of the Company or its Subsidiaries exists or, to the knowledge of
the Company, is threatened or imminent, and the Company is not aware of any
existing or imminent labor disturbance by the employees of any of its or its
Subsidiaries’ principal suppliers, contractors or customers, that in any such
case has had or would reasonably be expected have a Company Material Adverse
Effect.

 

2.19                           Environmental Matters. Except as disclosed in the
Company SEC Reports filed prior to the date of this Agreement or as would not
reasonably be expected to have a Company Material Adverse Effect, each of the
Company and its Subsidiaries (a) is in compliance with any and all applicable
foreign, federal, state and local laws and regulations relating to the
protection of human health and safety, the environment or hazardous or toxic
substances or wastes, pollutants or contaminants (“Environmental Laws”), (b) has
received all permits, licenses or other approvals required of it under
applicable Environmental Laws to conduct its respective business and (c) is in
compliance with all terms and conditions of any such permit, license or
approval.  In the ordinary course of its business, the Company periodically
reviews the effect of Environmental Laws on the business, operations and
properties of the Company and its Subsidiaries, in the course of which it
identifies and evaluates associated costs and liabilities (including, without
limitation, any capital or operating expenditures required for clean up, closure
of properties or compliance with Environmental Laws or any permit, license or
approval, any related constraints on operating activities and any potential
liabilities to third parties).  On the basis of such review, the Company has
reasonably concluded that such associated costs and liabilities would not,
individually or in the aggregate, have a Company Material Adverse Effect, other
than as disclosed in the Company SEC Reports.

 

2.20                           Insurance. Except as disclosed in the Company SEC
Reports filed prior to the date of this Agreement or as would not reasonably be
expected to have a Company Material Adverse Effect, (a) each of the Company and
its Subsidiaries is insured by insurers of recognized financial responsibility
against such losses and risks and in such amounts as are prudent and customary
in the businesses in which they are engaged; all policies of insurance insuring
the Company, its Subsidiaries or any of their respective businesses, assets and
employees are in full force and effect; the Company and its Subsidiaries are in
compliance with the terms of such policies and instruments; there are no claims
by the Company or either of its Subsidiaries under any such policy or instrument
as to which any insurance company is denying liability or defending under a
reservation of rights clause; neither the Company nor either Subsidiary has been
refused any insurance coverage sought or applied for; and the Company has no
reason to believe that it will not be able to renew its and the Subsidiaries’
existing insurance coverage as and when such coverage expires, or to obtain
similar coverage from similar insurers as may be necessary to continue its and
their business, in either case at a cost that would not have a Material Adverse
Effect.

 

2.21                           Intellectual Property. Except as disclosed in the
Company SEC Reports filed prior to the date of this Agreement, the Company and
its Subsidiaries own, possess, license or have other rights to use, on
reasonable terms, all material patents, patent applications, trade and service
marks, trade and service mark registrations, trade names, copyrights, licenses,
inventions, trade secrets, technology, know-how and other intellectual property
necessary for the conduct of its or their business as currently conducted.

 

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2.22                           Adequacy of Controls. The principal executive
officer and principal financial officer of the Company have made all
certifications required by the Sarbanes-Oxley Act of 2002 (the “Sarbanes-Oxley
Act”) and any related rules and regulations promulgated by the SEC, and the
statements contained in each such certification were complete and correct as of
their respective dates; and, except as would not reasonably be expected to have
a Company Material Adverse Effect, the Company’s directors and officers are each
in compliance with all applicable effective provisions of the Sarbanes-Oxley Act
and the rules and regulations of the SEC and the NASDAQ Stock Market promulgated
thereunder.

 

2.23                           Material Weaknesses.  Except as described in the
Company SEC Reports, the Company is not aware of any circumstances that in its
judgment constitute material weaknesses in its internal control over financial
reporting, and the Company has not received any written notice from its auditors
indicating that they believe a material weakness in the Company’s internal
controls exists, other than as disclosed in the Company SEC Reports.

 

2.24                           Brokers’ and Finders’ Fees. Other than fees
payable to Merrill Lynch for its services as financial advisor, the Company has
not entered into any agreement or arrangement entitling any agent, broker,
investment banker, financial advisor or other firm or person to any broker’s or
finder’s fee or any other commission or similar fee in connection with any of
the transactions contemplated by this Agreement.

 

2.25                           Valid Private Placement.  Assuming the accuracy
of the representations and warranties of the Purchaser contained in this
Agreement, the sale and issuance of the Purchased Stock pursuant to this
Agreement is exempt from the registration requirements of the Securities Act,
and neither the Company, nor to the knowledge of the Company, any authorized
representative acting on its behalf has taken or will take any action hereafter
that will cause the loss of such exemption.

 

2.26                           Takeover Matters.

 

(A)                                  EXCEPT FOR THE RIGHTS AGREEMENT, DATED
APRIL 11, 1989, AS AMENDED FEBRUARY 24, 1999, BETWEEN THE COMPANY AND AMERICAN
SECURITIES TRANSFER, INCORPORATED, AS THE ORIGINAL RIGHTS AGENT, (THE “RIGHTS
AGREEMENT”) (A CORRECT AND COMPLETE COPY OF WHICH, TOGETHER WITH ALL AMENDMENTS
THERETO, AS IN EFFECT ON THE DATE HEREOF, HAS BEEN FILED BY THE COMPANY WITH THE
SEC) NEITHER THE COMPANY NOR ANY SUBSIDIARY OF THE COMPANY (AS DEFINED IN THE
RIGHTS AGREEMENT) HAS IN EFFECT ANY SHAREHOLDER RIGHTS PLAN, COMMONLY OR
COLLOQUIALLY KNOWN AS A “POISON PILL” OR “ANTI-TAKEOVER” PLAN, OR ANY SIMILAR
PLAN, DEVICE OR ARRANGEMENT, AND THE BOARD OF DIRECTORS OF THE COMPANY HAS NOT
ADOPTED OR AUTHORIZED THE ADOPTION OF SUCH A PLAN, DEVICE OR ARRANGEMENT.

 

(B)                                 THE BOARD OF DIRECTORS OF THE COMPANY HAS
TAKEN ALL NECESSARY ACTION UNDER THE RIGHTS AGREEMENT (INCLUDING HAVING AMENDED
SUCH AGREEMENT BUT WITHOUT REDEEMING THE RIGHTS (AS DEFINED THEREIN)) SO THAT
NONE OF THE EXECUTION, DELIVERY AND PERFORMANCE OF THIS AGREEMENT (INCLUDING THE
PURCHASE AND SALE OF THE PURCHASED STOCK PURSUANT TO THIS AGREEMENT) OR ANY
OTHER TRANSACTION CONTEMPLATED HEREBY WILL CAUSE (I) THE RIGHTS TO BECOME
EXERCISABLE UNDER THE RIGHTS AGREEMENT OR TO SEPARATE FROM THE STOCK
CERTIFICATES TO WHICH THEY ARE ATTACHED,

 

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(II) A SHARES ACQUISITION DATE (AS DEFINED IN THE RIGHTS AGREEMENT) TO OCCUR, OR
(III) PURCHASER TO BE DEEMED AN ACQUIRING PERSON (AS DEFINED IN THE RIGHTS
AGREEMENT).

 

ARTICLE III
REPRESENTATIONS, WARRANTIES AND COVENANTS OF PURCHASER

 

The Purchaser hereby represents and warrants to and covenants with the Company
as follows:

 

3.1                                 Organization; Authorization; Validity of
Agreement. Purchaser is a limited partnership duly organized, validly existing
and in good standing under the laws of the State of Delaware, and has full power
and authority to execute and deliver this Agreement and to consummate the
transactions contemplated hereby.  All action on the part of Purchaser for the
authorization, execution and delivery of this Agreement and the performance of
its obligations hereunder have been taken.  This Agreement has been duly
executed and delivered by Purchaser, and assuming due and valid authorization,
execution and delivery hereof by the Company, constitutes a valid and binding
obligation of Purchaser, enforceable against Purchaser in accordance with its
terms, except as such enforceability may be limited by (a) applicable
bankruptcy, insolvency, reorganization, moratorium and other laws of general
application affecting enforcement of creditors’ rights generally, and (b) laws
relating to the availability of specific performance, injunctive relief or other
equitable remedies.

 

3.2                                 Non-Contravention; Consents; Filings. The
execution, delivery or performance of this Agreement by Purchaser, the
consummation by Purchaser of the purchase of the Purchased Stock and compliance
by Purchaser with any of the provisions hereof and thereof do not and will not
(a) conflict with or result in any breach of any provision of the partnership
agreement or certificate of formation of Purchaser, (b) require any filing by
Purchaser with, or the issuance or grant to Purchaser of any permit,
authorization, consent or approval of, any Governmental Entity, (c) conflict
with or violate any order, writ, injunction, decree, statute, rule or regulation
applicable to, binding upon or enforceable against Purchaser or any of its
properties or assets, or (d) result in a violation or breach of, constitute
(with or without lapse of time or both) a default under, give rise to any right
of termination, amendment, cancellation or acceleration under, or result in the
creation or imposition of any Lien upon any property or assets of Purchaser
under, any note, bond, mortgage, indenture, lease, license, contract, agreement
or other instrument or obligation to which Purchaser is a party or by which
Purchaser or its property or assets are bound, except for (i) any failures to
make any such filing or obtain any such permit, authorization, consent or
approval, (ii) in the case of clauses (c) and (d) only, any conflicts,
violations, breaches or defaults, and (iii) any Liens that have not had, and, as
would not reasonably be expected to have, a Purchaser Material Adverse Effect.
For purposes of this Agreement, “Purchaser Material Adverse Effect” means any
result, occurrence, condition, fact, change, violation, event or effect that,
individually or in the aggregate with any such other results, occurrences,
conditions, facts, changes, violations, events or effects, is, or is reasonably
likely to be, materially adverse to the condition (financial or otherwise),
business, assets, or results of operations of the Purchaser and its affiliates
taken as a whole; provided, however, that a Purchaser Material Adverse Effect
shall not be deemed to include effects to the extent resulting

 

9

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from (i) changes after the date of this Agreement in GAAP or regulatory
accounting requirements applicable generally to the Purchaser, (ii) actions or
omissions by the Purchaser taken with the specific prior written and informed
consent of Company, (iii) changes in the prices of crude oil, natural gas or
natural gas products which do not have a materially disproportionate effect on
the Purchaser relative to other industry participants, or (iv) changes in global
or national political conditions or general economic or market conditions which
do not have a materially disproportionate effect on the Purchaser.

 

3.3           Investment Experience/Accredited Investor/Restricted Securities.
Purchaser is an “accredited investor” as defined in Regulation D under the
Securities Act and able to bear the economic risk of holding the Purchased Stock
for an indefinite period, and has knowledge and experience in financial and
business matters such that it is capable of evaluating the risks of the
investment in the Purchased Stock.  Purchaser understands that shares of the
Purchased Stock are characterized as “restricted securities” under the federal
securities laws and that under such laws and applicable regulations, such
securities may be resold without registration under the Securities Act only in
certain limited circumstances.  In the absence of an effective registration
statement covering the Purchased Stock or an available exemption from
registration under the Securities Act, the Purchased Stock must be held
indefinitely.  In this connection, Purchaser represents that it is familiar with
SEC Rule 144, as presently in effect, and understands the resale limitations
imposed thereby and by the Securities Act.  Purchaser is acquiring the Purchased
Stock for investment for its own account, not as a nominee or agent, and not
with a view to, or for resale in connection with, any distribution thereof.

 

3.4           Brokers’ and Finders’ Fees. Except as previously disclosed in
writing to the Company, Purchaser has not entered into any agreement or
arrangement entitling any agent, broker, investment banker, financial advisor or
other firm or person to any broker’s or finder’s fee or any other commission or
similar fee in connection with any of the transactions contemplated by this
Agreement.

 

3.5           Ownership of Stock. As of the date hereof, Purchaser is not the
beneficial owner (as defined in Rule 13d-3 under the Exchange Act) of any Stock.

 

3.6           Standstill Provision. Except for the Tranche Two Stock Purchase
and the Purchased Stock, and without in any way limiting the representations set
forth above, Purchaser further agrees that, for a period of twenty-four (24)
months from the Closing, without the prior written consent of the Company, it
shall not, nor shall any of its affiliates (a) acquire, offer to acquire or
agree to acquire (including in the public markets) from any Person, directly or
indirectly, by purchase or merger, through the acquisition of control of another
Person, by joining a partnership, limited partnership or other “group” (within
the meaning of Section 13(d)(3) of the Exchange Act) or otherwise, beneficial
ownership of any Stock of the Company, or direct or indirect rights (including
convertible securities) or options to acquire such beneficial ownership (or
otherwise act in concert with respect to any such securities, rights or options
with any Person that so acquires, offers to acquire or agrees to acquire);
provided, however, that no such additional ownership shall be deemed to have
occurred solely due to (i) a stock split, reverse stock split, reclassification,
reorganization or other transaction by the Company affecting any class of the
outstanding capital stock of the Company generally, (ii) a stock dividend or
other pro rata distribution by the Company to holders of its outstanding capital
stock, (iii) any increase

 

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in the percentage ownership by Purchaser of outstanding shares of Stock of the
Company resulting from any action taken by the Company, including the repurchase
of shares of Stock of the Company pursuant to any share repurchase or similar
program, or (b) initiate, propose or participate in a solicitation any proxies
or consents with respect to the Company except in conformity with the
recommendations of the Board.

 

ARTICLE IV
BOARD OF DIRECTORS

 

4.1                                 Expansion of Board. Effective at the
Closing, the Board shall cause the Board to be increased by one (1) additional
Class II member, so that the Board shall consist of a total of seven
(7) directors.

 

4.2                                 Purchaser’s Entitlement to Board Nominees.
Effective at the Closing, Purchaser shall be entitled to designate two
(2) members of the Board: one, John A. Rigas, to fill the existing vacancy in
Class III on the Board, and the other, W. Mark Meyer, to fill the newly-created
Board seat in Class II, as set forth in Section 4.1 (the “Initial Purchaser
Designees”).  Thereafter, (a) for so long as Purchaser beneficially owns at
least fifteen percent (15%) of the outstanding Stock, Purchaser shall have the
right to designate one (1) nominee in Class II and one (1) nominee in Class III
for election to the Board;  and (b) for so long as Purchaser beneficially own at
least ten percent (10%) but less than fifteen percent (15%) of the outstanding
Stock, Purchaser shall be entitled to designate one (1) nominee in Class III for
election to serve on the Board (each individual nominated by Purchaser pursuant
to the procedures set forth in Section 4.3 being a “Nominee” and collectively,
the “Nominees”).  Each Nominee must be an individual who may reasonably be
determined by the Board to be independent as defined under both the NASDAQ
rules and the Company’s organizational documents, it being understood that only
the Board may make a definitive determination regarding the independence of any
director, and the Company shall be entitled to request any reasonable
information regarding the Nominee that would bear on the independence of the
Nominee, including information regarding any affiliated transactions or
relationships.  In order to designate a Nominee, Purchaser shall provide written
notice to the Board, which notice shall contain the names of the Nominee, the
information required by Regulation 14A for each such Nominee and the
committee(s), if any, on which such Nominee is nominated to serve (the
“Nomination Notice”).

 

4.3                                 Procedures for Selection and Election of
Nominees. By written notice to the Company, Purchaser may designate the Initial
Purchaser Designees to be nominated for re-election to the Board at any Board
meeting during which director nominees of their respective classes are
approved.  In the event Purchaser wishes to designate a new Nominee for election
in the place of one or both of the Initial Purchaser Designees or any subsequent
Nominees pursuant to the provisions set forth in Section 4.2, Purchaser shall
provide a Nomination Notice to the Board in accordance with the procedures
described in the proxy statement for the Company’s most recent annual meeting of
shareholders, identifying each Nominee.  Upon receiving a Nomination Notice, the
Board shall take all actions reasonably necessary to include such Nominee(s) in
the Company’s next election of members of the Board by the shareholders and
shall also recommend that the shareholders of the Company elect such
Nominee(s) to the Board, providing such written recommendation in any proxy
materials presented to the shareholders of the Company for such election.

 

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ARTICLE V
CLOSING CONDITIONS

 

5.1           Conditions to the Obligation of Each Party. The respective
obligations of each Party to effect the transactions contemplated by this
Agreement shall be subject to the fulfillment or waiver, at or prior to the
Closing Date, of the following conditions:

 

(A)           NO ACTION, SUIT OR PROCEEDING INSTITUTED BY ANY GOVERNMENTAL
ENTITY SHALL BE PENDING, AND NO STATUTE, RULE, ORDER, DECREE, REGULATION,
INJUNCTION OR JUDGMENT OF ANY COURT OR GOVERNMENTAL ENTITY MAY BE IN EFFECT, IN
EACH CASE, THAT WOULD PROHIBIT, RESTRAIN, ENJOIN OR RESTRICT THE CONSUMMATION OF
THE TRANSACTIONS CONTEMPLATED HEREBY.

 

(B)           ANY NECESSARY APPROVAL OF OR NOTIFICATION TO NASDAQ, IF REQUIRED,
SHALL HAVE BEEN OBTAINED OR PROVIDED.

 

(C)           THE CLOSING OF THE TRANCHE TWO STOCK PURCHASE SHALL HAVE OCCURRED
(IT BEING UNDERSTOOD AND AGREED THAT SUCH CLOSING SHALL OCCUR SIMULTANEOUSLY
WITH THE CLOSING HEREUNDER).

 

5.2           Conditions to the Obligations of Purchaser. The obligation of the
Purchaser to effect the transactions contemplated by this Agreement is subject
to the satisfaction (or waiver by the Purchaser), at or prior to the Closing
Date, of the following conditions:

 

(A)           THE REPRESENTATIONS AND WARRANTIES OF THE COMPANY SET FORTH IN
ARTICLE II OF THIS AGREEMENT SHALL BE TRUE AND CORRECT IN ALL MATERIAL RESPECTS
AS OF THE DATE OF THIS AGREEMENT AND AS OF THE CLOSING DATE AS THOUGH MADE ON
AND AS OF THE CLOSING DATE (EXCEPT TO THE EXTENT THAT SUCH REPRESENTATIONS AND
WARRANTIES SPEAK AS OF ANOTHER DATE, IN WHICH CASE SUCH REPRESENTATIONS AND
WARRANTIES SHALL BE TRUE AND CORRECT IN ALL MATERIAL RESPECTS AS OF SUCH DATE).

 

(B)           THE COMPANY SHALL HAVE PERFORMED AND COMPLIED WITH ALL AGREEMENTS,
OBLIGATIONS AND CONDITIONS CONTAINED IN THIS AGREEMENT THAT ARE REQUIRED TO BE
PERFORMED OR COMPLIED WITH BY IT ON OR BEFORE THE CLOSING IN ALL MATERIAL
RESPECTS.

 

(C)           THE COMPANY SHALL HAVE DELIVERED STOCK CERTIFICATES REPRESENTING
THE PURCHASED STOCK AS DESCRIBED HEREIN.

 

(D)           THE COMPANY SHALL HAVE DELIVERED A DULY EXECUTED COUNTERPART OF
THE REGISTRATION RIGHTS AGREEMENT, IN A CUSTOMARY FORM TO BE AGREED UPON BY THE
PARTIES PRIOR TO CLOSING (THE “REGISTRATION RIGHTS AGREEMENT”).

 

(E)           PURCHASER SHALL HAVE RECEIVED AN OPINION FROM LEGAL COUNSEL TO THE
COMPANY IN CUSTOMARY FORM, DATED THE CLOSING DATE, AS TO THE EXISTENCE AND GOOD
STANDING OF THE COMPANY, THE VALID ISSUANCE OF THE STOCK, DUE AUTHORITY TO ENTER
INTO THIS AGREEMENT AND ENFORCEABILITY OF THIS AGREEMENT.

 

5.3           Conditions to the Obligation of the Company. The obligation of the
Company to effect the transactions contemplated by this Agreement is subject to
the satisfaction (or waiver by the Company), at or prior to the Closing Date, of
the following conditions:

 

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(A)           THE REPRESENTATIONS AND WARRANTIES OF THE PURCHASER SET FORTH IN
ARTICLE III OF THIS AGREEMENT SHALL BE TRUE AND CORRECT IN ALL MATERIAL RESPECTS
AS OF THE DATE OF THIS AGREEMENT AND AS OF THE CLOSING DATE AS THOUGH MADE ON
AND AS OF THE CLOSING DATE (EXCEPT TO THE EXTENT THAT SUCH REPRESENTATIONS AND
WARRANTIES SPEAK AS OF ANOTHER DATE, IN WHICH CASE SUCH REPRESENTATIONS AND
WARRANTIES SHALL BE TRUE AND CORRECT IN ALL MATERIAL RESPECTS AS OF SUCH DATE).

 

(B)           THE PURCHASER SHALL HAVE PERFORMED AND COMPLIED WITH ALL
AGREEMENTS, OBLIGATIONS AND CONDITIONS CONTAINED IN THIS AGREEMENT THAT ARE
REQUIRED TO BE PERFORMED OR COMPLIED WITH BY EACH OF THEM ON OR BEFORE THE
CLOSING IN ALL MATERIAL RESPECTS.

 

(C)           PURCHASER SHALL HAVE PAID THE PURCHASE PRICE AMOUNT.

 

(D)           PURCHASER SHALL HAVE DELIVERED A DULY EXECUTED COUNTERPART OF THE
REGISTRATION RIGHTS AGREEMENT BETWEEN THE PARTIES.

 

ARTICLE VI

INDEMNIFICATION

 

6.1           Survival.  Subject to the limitations and other provisions of this
Agreement, the representations and warranties of the parties hereto shall
survive the Closing until the first anniversary of the Closing Date, except that
the representations and warranties in Section 2.1, Section 2.2, Section 2.5,
Section 2.6 and Section 3.3 shall survive indefinitely.  Notwithstanding the
foregoing, the representations and warranties of a party will not expire with
respect to any written claims delivered to the other party prior to the
applicable expiration period of any such representations, warranties or
covenants as provided above.

 

6.2           Indemnification.  Each party (the “Indemnifying Party”) shall
indemnify, save and hold the other party and its affiliates, directors,
officers, employees, and their respective agents (each, an “Indemnified Party”),
harmless from and against any and all costs, losses, charges, liabilities,
obligations, damages, punitive damages (but only to the extent that they are
actually awarded in Third-Party Claims), lawsuits, actions, judgments,
deficiencies, demands, fees, claims, settlements and reasonable expenses
(whether arising out of Third-Party Claims or otherwise), including, without
limitation, interest, penalties, costs of litigation, reasonable attorneys’ fees
and expenses, all amounts paid in the investigation, defense or settlement of
any of the foregoing, and including consequential damages (but only to the
extent that they are actually awarded in Third-Party Claims) (collectively,
“Losses”) incurred in connection with, arising out of, resulting from or
relating or incident to any inaccuracy or incorrectness of, or any other breach
of, any representation or warranty of or by the Indemnifying Party in or
pursuant to this Agreement.  The claims for indemnity by any Indemnified Person
pursuant to this Section 6.2 are referred to as “Claims.”  The indemnification
obligations of the Indemnifying Party pursuant to this Section 6.2 shall be
limited to Claims for Losses as to which written notice is delivered to the
Indemnifying Party prior to the last date of survival of the applicable
representation and warranty as provided in Section 6.1.

 

6.3           Exclusive Remedy.  The indemnification provided for in this
Section 6 shall constitute the Indemnified Parties’ sole monetary remedy against
the Indemnifying Party in respect of any breach of any representation or
warranty of the Indemnifying Party set forth

 

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herein; provided, however, that the foregoing shall not apply to claims of fraud
by the Indemnifying Party in connection with the transactions contemplated
hereby.

 

6.4           Third-Party Claims.  The Indemnified Party shall give written
notice to the Indemnifying Party promptly, but not later than fifteen (15) days,
after such Indemnified Party receives written notice of any claim, action, suit,
proceeding or demand asserted by any person who is not a party (or a successor
to a party) to this Agreement (a “Third-Party Claim”) that is or may give rise
to an indemnification claim, or otherwise becomes aware of the basis for such a
claim; provided, however, that the failure of the Indemnified Party to give
notice as provided in this Section 6.4 shall not relieve any Indemnifying Party
of its obligations under Section 6.2, except to the extent that such failure
actually and materially prejudices the rights of the Indemnifying Party.  The
Indemnifying Party may elect to assume the defense of any Third-Party Claim or
any litigation resulting therefrom; provided, however, that counsel for the
Indemnifying Party, who shall in such case conduct the defense of such claim,
shall be approved by the Indemnified Party (whose approval shall not
unreasonably be withheld), and the Indemnified Party may participate in such
defense at its own expense, and may retain counsel of its choice at its own
expense; provided further that the Indemnified Party shall have the right to
employ, at the Indemnifying Party’s expense, one firm of counsel of its choice,
and local counsel in each applicable jurisdiction (if more than one jurisdiction
is involved), to represent the Indemnified Party if, in the Indemnified Party’s
reasonable judgment, there exists a conflict of interest between the Indemnified
Party and the Indemnifying Party, or if the Indemnifying Party (a) elects not to
defend, compromise or settle a Third-Party Claim or (b) having timely elected to
defend a Third-Party Claim, fails adequately to prosecute or pursue such
defense, then in each case the Indemnified Party may defend such Third-Party
Claim on behalf of and for the account and risk of the Indemnifying Party.  The
Indemnifying Party, in the defense of any such litigation or proceeding, shall
not, except with the prior written approval of the Indemnified Party, consent to
entry of any judgment or entry into any settlement that does not include as an
unconditional term thereof the giving by the claimant or plaintiff to the
Indemnified Party of a release from all liability with respect to such
litigation or proceeding.  The Indemnified Party shall not settle or compromise
any such claim without the prior written approval of the Indemnifying Party,
which approval shall not be unreasonably withheld or delayed.

 

ARTICLE VII
GENERAL PROVISIONS

 

7.1           Further Assurances. Subject to the terms and conditions of this
Agreement, Purchaser and the Company shall use all reasonable efforts to take or
cause to be taken all actions, and to do or cause to be done all things,
necessary, proper or advisable to consummate and make effective the transactions
contemplated by this Agreement.

 

7.2           FIRPTA. If requested by Purchaser, the Company shall provide to
Purchaser, at the Closing, an affidavit in form and substance reasonably
satisfactory to Purchaser, duly executed and acknowledged, certifying facts that
would exempt from any withholding requirements under Section 1445 of the
Internal Revenue Code of 1986, as amended, any payments for any United States
real property interest being transferred pursuant to this Agreement.

 

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7.3           Entire Agreement; Amendment and Waiver. Except at provided in this
Section 7.3, this Agreement, including the exhibits hereto, the Tranche Two
Stock Purchase Agreement, the Letter Agreement dated March 26, 2008, and the
other documents delivered pursuant to this Agreement, constitute the full and
entire understanding and agreement among the Parties with regard to the subjects
hereof and thereof, and no Party shall be liable or bound to any other Party in
any manner by any warranties, representations or covenants except as
specifically set forth herein or therein.  RCH Energy Opportunity Fund II, LP
and the Company agree that the Master Agreement dated January 28, 2008, between
RCH Energy Opportunity Fund II, LP, Credo Petroleum Corporation and Hal D. McVey
shall automatically terminate upon Closing, except that the “Calliope Gas
Recovery System Confidential Disclosure Agreement” attached as Exhibit “D” to
said Master Agreement shall survive the termination of the Master Agreement.  In
the event of a conflict between the terms of the Letter Agreement dated
March 26, 2008, and the Calliope Gas Recovery System Confidential Disclosure
Agreement, the terms of the Calliope Gas Recovery System Confidential Disclosure
Agreement shall prevail.  No amendment of any provision of this Agreement shall
in any event be effective unless the same shall be in writing and signed by all
of the Parties.  Any failure of a Party to comply with any obligation, agreement
or condition hereunder may only be waived in writing by the other Parties, but
such waiver shall not operate as a waiver of, or estoppel with respect to, any
subsequent or other failure.

 

7.4           Notices. Any notices and other communications required or
permitted in this Agreement shall be effective if in writing and (a) delivered
personally or (b) sent (i) by Federal Express, DHL or UPS or (ii) by registered
or certified mail, postage prepaid, in each case, addressed as follows:

 

If to the Company:

 

CREDO Petroleum Corporation
1801 Broadway, Suite 900
Denver, Colorado  80202
Attention:  James T. Huffman

 

with a copy to:

 

Davis Graham & Stubbs LLP
1550 17th Street, Suite 500
Denver, CO  80202-1500
Attention:  John Elofson

 

If to Purchaser:

 

RCH Energy Opportunity Fund II, LP
21 Waterway, Suite 200
The Woodlands, TX  77380

 

Attn: John A. Rigas

 

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With a copy to:

 

Andrews Kurth LLP
600 Travis, Suite 4200
Houston, Texas  77002
Attention:  Gislar Donnenberg

 

Each of the Parties hereto shall be entitled to specify a different address by
giving notice as aforesaid to each of the other Parties hereto

 

7.5           Fees and Expenses. All fees and expenses incurred by the Parties
in connection with the transactions contemplated hereby shall be borne by the
Party incurring such fees and expenses.

 

7.6           Governing Law; Jurisdiction. This Agreement shall be governed by
and be construed in accordance with the laws of the State of Colorado, without
giving effect to the principles of conflicts of laws thereof.  Each party to
this Agreement submits to the exclusive jurisdiction of any state or federal
court sitting in the State of Colorado in any dispute or action arising out of
or relating to this Agreement and agrees that all claims in respect of such
dispute or action will be heard and determined in any such court.  Each party
also agrees not to bring any dispute or action arising out of or relating to
this Agreement in any other court.  Each party agrees that a final judgment in
any dispute or action so brought will be conclusive and may be enforced by
dispute or action on the judgment or in any other manner provided at law
(common, statutory or other) or in equity.  Each party waives any defense of
inconvenient forum to the maintenance of any dispute or action so brought and
waives any bond, surety, or other security that might be required of any other
party with respect thereto.  Each Party shall be entitled to seek to enforce
specifically the terms and provisions of this Agreement against the other Party
under any remedy to which they are entitled at law or in equity, including
specific performance.

 

7.7           Counterparts; Facsimile Signatures. This Agreement may be executed
in multiple counterparts, each of which shall be deemed an original, but all of
which taken together shall constitute one instrument.  Facsimile signatures
shall have the same binding effect as original signatures.

 

7.8           Severability. In the event that any provision hereof would, under
applicable law, be invalid or unenforceable in any respect, such provision shall
be construed by modifying or limiting it so as to be valid and enforceable to
the maximum extent compatible with, and possible under, applicable law.  The
provisions hereof are severable, and in the event any provision hereof should be
held invalid or unenforceable in any respect, it shall not invalidate, render
unenforceable or otherwise affect any other provision hereof.

 

7.9           Titles and Subtitles. The titles and subtitles used in this
Agreement are used for convenience only and are not to be considered in
construing or interpreting this Agreement.

 

7.10         Successors and Assigns. Except as otherwise provided herein, the
terms and conditions of this Agreement shall inure to the benefit of and be
binding upon the respective successors and assigns of the Parties.  Nothing in
this Agreement, express or implied, is intended

 

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to confer upon any party other than the Parties hereto or their respective
successors and assigns any rights, remedies, obligations, or liabilities under
or by reason of this Agreement, except as expressly provided in this Agreement.

 

[Signature page follows]

 

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IN WITNESS WHEREOF, the Parties hereto have executed this Agreement or caused
this Agreement to be executed by their respective officers thereunto duly
authorized as of the date first written above.

 

 

PURCHASER

 

 

 

RCH ENERGY OPPORTUNITY FUND II, LP

 

By: RCH Energy Opportunity Fund II GP, LP;

 

its general partner

 

By: RR Advisors, LLC; its general partner

 

 

 

 

 

By:

 /s/ W. Mark Meyer

 

 

 W. Mark Meyer

 

 

 President

 

 

 

 

 

COMPANY

 

 

 

CREDO PETROLEUM CORPORATION

 

 

 

 

 

By:

 /s/ James T. Huffman

 

 

 James T. Huffman

 

 

 President, Chief Executive Officer and

 

 

 Chairman of the Board of Directors

 

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