**Exhibit 2.2**

 

**LIMITED PARTNERSHIP ASSET PURCHASE AND SALE AGREEMENT**

**Appalachia Region**

 

**between**

 

**Linn Energy Holdings, LLC**

**Marathon 85-II Limited Partnership and**

**Marathon 85-III Limited Partnershipas “LP Sellers”**

 

**And**

 

**XTO Energy Inc.**

**as “Buyer”**

 

 

**Dated as of April 13, 2008**

 

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**TABLE OF CONTENTS**

 
| ** **        | **Page**                                                    |
|-------------------|-------------------------------------------------------------|
|              |                                                        |   |
| ARTICLE I         | LP PROPERTIES                                               | 1 |
|              |                                                        |   |
| Section 1.1. |                                                        | Assets Included | 1 |
| Section 1.2. |                                                        | Assets Excluded | 2 |
|              |                                                        |   |   |
| ARTICLE II        | PURCHASE PRICE                                              | 4 |
|              |                                                        |   |
| Section 2.1. |                                                        | Purchase Price | 4 |
| Section 2.2. |                                                        | Accounting Adjustments | 4 |
| Section 2.3. |                                                        | LP Closing and Post-LP Closing Accounting  Settlements | 5 |
| Section 2.4. |                                                        | Payment of Adjusted Purchase Price | 6 |
| Section 2.5. |                                                        | Allocation of Purchase Price | 6 |
|              |                                                        |   |   |
| ARTICLE III       | THE LP CLOSING                                              | 7 |
|              |                                                        |   |
| ARTICLE IV        | DISCLAIMER OF  REPRESENTATIONS AND WARRANTIES BY LP SELLERS | 7 |
|              |                                                        |   |
| Section 4.1. |                                                        | No Conveyances | 7 |
| Section 4.2. |                                                        | Disclaimer of Representations and  Warranties | 7 |
| Section 4.3. |                                                        | LP Sellers’ Disclosure Schedule | 8 |
|              |                                                        |   |   |
| ARTICLE V         | REPRESENTATIONS AND  WARRANTIES OF BUYER                    | 8 |
|              |                                                        |   |
| Section 5.1. |                                                        | Organization and Existence | 8 |
| Section 5.2. |                                                        | Power and Authority | 8 |
| Section 5.3. |                                                        | Valid and Binding Agreement | 8 |
| Section 5.4. |                                                        | Non-Contravention | 9 |
| Section 5.5. |                                                        | Approvals | 9 |
| Section 5.6. |                                                        | Pending Litigation | 9 |
| Section 5.7. |                                                        | Knowledgeable Purchaser | 9 |
| Section 5.8. |                                                        | Funds | 10 |
| Section 5.9. |                                                        | Fees and Commissions | 10 |
|              |                                                        |   |   |
| ARTICLE VI        | CERTAIN COVENANTS OF LP  SELLERS PENDING LP CLOSING         | 10 |
|              |                                                        |   |
| Section 6.1. |                                                        | Access to Files | 10 |
| Section 6.2. |                                                        | Conduct of Operations | 10 |
| Section 6.3. |                                                        | Restrictions on Certain Actions | 10 |
|                   |                                                             |  |  |  |  |  |

 

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| Section 6.4.  |                                                                      | Payment of Expenses                                                        | 11     |
|--------------------|---------------------------------------------------------------------------|----------------------------------------------------------------------------|--------|
| Section 6.5.  |                                                                      | Preferential Rights and Third Party  Consents                              | 11     |
|               |                                                                      |                                                                       |   |
| ARTICLE VII        | ADDITIONAL PRE-LP  CLOSING AND POST-LP CLOSING AGREEMENTS OF BOTH PARTIES | 12                                                                         |
|               |                                                                      |                                                                       |
| Section 7.1.  |                                                                      | Reasonable Best Efforts                                                    | 12     |
| Section 7.2.  |                                                                      | Notice of Litigation                                                       | 12     |
| Section 7.3.  |                                                                      | Notification of Certain Matters                                            | 12     |
| Section 7.4.  |                                                                      | Fees and Expenses                                                          | 12     |
| Section 7.5.  |                                                                      | Public Announcements                                                       | 13     |
| Section 7.6.  |                                                                      | Casualty Loss Prior to LP Closing                                          | 13     |
| Section 7.7.  |                                                                      | Governmental Bonds                                                         | 13     |
| Section 7.8.  |                                                                      | Assumed Obligations                                                        | 13     |
| Section 7.9.  |                                                                      | Operational Transition                                                     | 13     |
| Section 7.10. |                                                                      | Books and Records                                                          | 14     |
| Section 7.11. |                                                                      | Suspended Funds                                                            | 14     |
| Section 7.12. |                                                                      | Letters-in-Lieu                                                            | 14     |
| Section 7.13. |                                                                      | Logos and Names                                                            | 14     |
| Section 7.14. |                                                                      | Further Assurances                                                         | 14     |
|               |                                                                      |                                                                       |   |
| ARTICLE VIII       | DUE DILIGENCE  EXAMINATION                                                | 15                                                                         |
|               |                                                                      |                                                                       |
| Section 8.1.  |                                                                      | Title Due Diligence Examination                                            | 15     |
| Section 8.2.  |                                                                      | Environmental Due Diligence Examination                                    | 15     |
| Section 8.3.  |                                                                      | Disputes Regarding Environmental Defects                                   | 17     |
| Section 8.4.  |                                                                      | Adjustments to Purchase Price for Title  Matters and Environmental Defects | 17     |
| Section 8.5.  |                                                                      | Buyer Indemnification                                                      | 18     |
|               |                                                                      |                                                                       |   |
| ARTICLE IX         | CONDITIONS PRECEDENT TO  THE OBLIGATIONS OF THE PARTIES                   | 19                                                                         |
|               |                                                                      |                                                                       |
| Section 9.1.  |                                                                      | Conditions Precedent to the Obligations of  Buyer                          | 19     |
| Section 9.2.  |                                                                      | Conditions Precedent to the Obligations of  LP Sellers                     | 20     |
|               |                                                                      |                                                                       |   |
| ARTICLE X          | TERMINATION, AMENDMENT  AND WAIVER                                        | 20                                                                         |
|               |                                                                      |                                                                       |
| Section 10.1. |                                                                      | Termination                                                                | 20     |
| Section 10.2. |                                                                      | Effect of Termination                                                      | 21     |
| Section 10.3. |                                                                      | Amendment                                                                  | 21     |
|                    |                                                                           |                                                                            |        |  |  |  |  |

 

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| Section 10.4.  |                                                                    | Waiver                                               | 21     |
|---------------------|-------------------------------------------------------------------------|------------------------------------------------------|--------|
|                |                                                                    |                                                 |   |
| ARTICLE XI          | SURVIVAL OF  REPRESENTATIONS, WARRANTIES AND COVENANTS; INDEMNIFICATION | 22                                                   |
|                |                                                                    |                                                 |
| Section 11.1.  |                                                                    | Survival                                             | 22     |
| Section 11.2.  |                                                                    | LP Sellers’ Indemnification Obligations         | 22     |
| Section 11.3.  |                                                                    | Buyer’s Indemnification Obligations             | 23     |
| Section 11.4.  |                                                                    | Net Amounts                                          | 23     |
| Section 11.5.  |                                                                    | Indemnification Proceedings                          | 23     |
| Section 11.6.  |                                                                    | Indemnification Exclusive Remedy                     | 24     |
| Section 11.7.  |                                                                    | Limited to Actual Damages                            | 24     |
| Section 11.8.  |                                                                    | Indemnification Despite Negligence                   | 24     |
| Section 11.9.  |                                                                    | Tax Treatment of Indemnification Amounts             | 24     |
| Section 11.10. |                                                                    | LP Sellers Aggregate Indemnity Limits                | 24     |
|                |                                                                    |                                                 |   |
| ARTICLE XII         | MISCELLANEOUS MATTERS                                                   | 25                                                   |
|                |                                                                    |                                                 |
| Section 12.1.  |                                                                    | Notices                                              | 25     |
| Section 12.2.  |                                                                    | Prorations, Deposits and Taxes                       | 25     |
| Section 12.3.  |                                                                    | Entire Agreement                                     | 26     |
| Section 12.4.  |                                                                    | Injunctive Relief                                    | 26     |
| Section 12.5.  |                                                                    | Binding Effect; Assignment; No Third Party  Benefit  | 27     |
| Section 12.6.  |                                                                    | Severability                                         | 27     |
| Section 12.7.  |                                                                    | GOVERNING LAW                                        | 27     |
| Section 12.8.  |                                                                    | Counterparts                                         | 27     |
| Section 12.9.  |                                                                    | WAIVER OF CONSUMER RIGHTS                            | 27     |
| Section 12.10. |                                                                    | Replacement Bonds, Letters of Credit and  Guarantees | 27     |
|                |                                                                    |                                                 |   |
| ARTICLE XIII        | DEFINITIONS AND  REFERENCES                                             | 28                                                   |
|                |                                                                    |                                                 |
| Section 13.1.  |                                                                    | Certain Defined Terms                                | 28     |
| Section 13.2.  |                                                                    | Certain Additional Defined Terms                     | 31     |
| Section 13.3.  |                                                                    | References, Titles and Construction                  | 32     |
|                     |                                                                         |                                                      |        |  |  |  |

 

**Exhibits**

 

**A****            ****Leases**

**B****            ****Excluded LPAssets**

**C****            ****Allocationof Purchase Price**

**D****            ****Form ofAssignment**

 

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**Schedules**

 

**2.5****         ****Purchase Price TaxAllocations**

**4****             ****LP SellersDisclosure Schedule**

**12.10****     ****LP SellersBonds**

 

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**LIMITED PARTNERSHIP ASSET PURCHASE AND SALE AGREEMENT**

 

**THIS LIMITED PARTNERSHIP ASSET PURCHASE AND SALE AGREEMENT** dated April 13,2008, is made by and between Linn Energy Holdings, LLC, a Delaware limitedliability company (“**LEH**”), Marathon85-II Limited Partnership, a West Virginia limited partnership, and Marathon85-III Limited Partnership, a West Virginia limited partnership (collectively “**LP Sellers**”), and XTO Energy Inc., a Delaware corporation (“**Buyer**”).

 

**RECITALS:**

 

**A.****           **LP Sellersdesire to sell and assign to Buyer, and Buyer desires to accept from LPSellers, certain oil and gas properties and related assets located in theAppalachia Region.

 

**B.****           **LP Sellers andBuyer deem it in their mutual best interests to execute and deliver thisAgreement.

 

**NOW, THEREFORE,** in consideration of theforegoing Recitals and the mutual covenants and agreements contained herein, LPSellers and Buyer do hereby agree as follows:

 

**AGREEMENT:**

 

**ARTICLEILP Properties**

 

**Section 1.1.****          ****Assets Included**. Subject to Section 1.2, LP Sellers agree to sell and Buyeragrees to accept, for the consideration hereinafter set forth, and subject tothe terms and provisions herein contained, all of LP Sellers’ rights, titlesand interests in and to the following:

 

(a)           All right, title and interest of LPSellers in and to the Leases described on Exhibit A attached heretoand made a part hereof for all purposes (and any ratifications and/oramendments to such Leases, whether or not such ratifications or amendments aredescribed on such Exhibit A);

 

(b)           Without limitation of the foregoing butsubject to Section 1.2, all other right, title and interest (ofwhatever kind or character, whether legal or equitable, and whether vested orcontingent) of LP Sellers in and to the oil, gas, and other minerals in andunder or that may be produced from the lands described in Exhibit Aor described in any of the Leases described on such Exhibit A(including interests in Leases, overriding royalties, production payments andnet profits interests in such lands or such Leases, and fee mineral interests,fee royalty interests, and other interests in so far as they cover such lands),even though LP Sellers’ interest therein may be incorrectly described in, oromitted from, such Exhibit A;

 

(c)           All rights, titles and interests of LPSellers in and to, or otherwise derived from, all presently existing and validoil, gas, or mineral unitization, pooling, or communitization agreements,declarations, and/or orders and in and to the properties covered and the unitscreated thereby (including all units formed under orders, rules, regulations,or other official acts of any federal, state, or other authority havingjurisdiction, voluntary unitization agreements,

 

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designations and/or declarations) relating tothe properties described in paragraphs (a) and (b) above;

 

(d)           All rights, titles, and interests of LPSellers in and to the Material Contracts and all presently existing and validproduction sales (and sales related) contracts, operating agreements, and otheragreements and contracts which relate to any of the properties described in paragraphs (a),(b) and (c) above, or which relate to the exploration,development, operation, or maintenance thereof or the treatment, storage,transportation or marketing of production therefrom (or allocated thereto);

 

(e)           All rights, titles, and interests of LPSellers in and to all materials, supplies, machinery, equipment, improvementsand other personal property and fixtures (including all wells, wellheadequipment, pumping units, flowlines, tanks, buildings, injection facilities,saltwater disposal facilities, compression facilities, gathering systems, andother equipment), and all easements, rights-of-way, surface leases and othersurface rights, all Permits and licenses, and all other appurtenances beingused or held for use in connection with, or otherwise related to, theexploration, development, operation or maintenance of any of the propertiesdescribed in paragraphs (a), (b) and (c) above,or the treatment, storage, transportation, or marketing of production therefrom(or allocated thereto); and

 

(f)            Subject to any third party rights, all ofLP Sellers’ rights, titles and interests in and to lease files, title opinions,production records, well files, accounting records (but not including generalfinancial and accounting records attributable to LP Sellers or LP Sellers’business), seismic records and surveys, gravity maps, electric logs, geologicalor geophysical data and records, and other files, documents and records ofevery kind and description which relate to the properties described above (the “**Records**”); provided, however that LP Sellers may retaincopies of any or all of the Records.

 

As used herein:  (i) “**LP Oil andGas Properties**” means the properties and interests described in paragraphs (a),(b) and (c) above, save and except for any suchproperties or assets that are LP Excluded Assets; and (ii) “**LP Properties**” means the LP Oil and Gas Properties plus theproperties and interests described in paragraphs (d), (e),and (f) above, save and except for any such properties or assetsthat are LP Excluded Assets.

 

**Section 1.2.****          ****Assets Excluded**. Notwithstanding anything herein contained to the contrary, the LPProperties do not include, and there is hereby excepted and reserved unto LPSellers all other assets, properties, and business of LP Sellers, including thefollowing:

 

(a)           Any accounts receivable or accountspayable accruing before the Effective Date;

 

(b)           All of LP Sellers’ right, title, andinterest in any oil, gas, or mineral Leases, overriding royalties, productionpayments, net profits interests, fee mineral interests, fee royalty interestsand other interests in oil, gas, and other minerals not expressly included inthe definition of LP Oil and Gas Properties and all oil, gas or otherhydrocarbon production from or attributable to the LP Properties with respectto all periods prior to the Effective Date, all proceeds attributable thereto,and all Hydrocarbons that, at the Effective Date, are owned by LP Sellers andare in storage or within processing plants;

 

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(c)           Any rebate or refund of costs, Taxes, orexpenses borne by LP Sellers or LP Sellers’ predecessors in title attributableto periods prior to the Effective Date;

 

(d)           Any and all proceeds from the settlementsof contract disputes with purchasers of Hydrocarbons from the LP Properties,including settlement of take-or-pay disputes, insofar as said proceeds areattributable to periods of time prior to the Effective Date;

 

(e)           Any and all proceeds from settlementswith regard to reclassification of oil or gas produced from the LP Properties,insofar as said proceeds are attributable to periods of time prior to the EffectiveDate;

 

(f)            All contracts of insurance or indemnity;

 

(g)           All claims (including insurance claims)and causes of action of LP Sellers against one or more third parties arisingfrom acts, omission, or events occurring prior to the Effective Date and all claimsunder any joint interest audit attributable to any period prior to theEffective Date;

 

(h)           All limited partnership, financial, tax,and legal (other than title) books and records of LP Sellers;

 

(i)            Any geological, geophysical or seismicdata, materials, or information, including maps, interpretations, records, orother technical information related to or based upon any such data, materialsor information, and any other asset, data, materials, or information, thetransfer of which is restricted or prohibited under the terms of any thirdparty license, confidentiality agreement, or other agreement or the transfer ofwhich would require the payment of a fee or other consideration to any thirdparty; provided, however, that if any such data, materials, or information istransferable upon payment of a fee or other consideration, and if Buyer haspaid such fee or other consideration prior to the LP Closing Date, then suchdata, materials, or information shall be transferred to Buyer;

 

(j)            All share drive and accounting serversrelated to the LP Properties regardless of where such servers are located;

 

(k)           All of LP Sellers’ accounting or otheradministrative systems, computer software, patents, trade secrets, copyrights,names, trademarks, logos, and other intellectual property;

 

(l)            All documents and instruments of LPSellers that may be protected by an attorney-client privilege (exclusive oftitle opinions in respect of the LP Oil and Gas Properties and all documentsand instruments related to any matters in LP Sellers Disclosure Schedule);

 

(m)          All of the other properties, interestsand assets described on Exhibit B, together with any rights,liabilities, or obligations associated with such assets;

 

(n)           The Existing Hedges and all hedgingtransactions and any gains or losses attributable to any hedging activities,whether occurring before or after the Effective Date;

 

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(o)           Any other right or interest in and to theLP Properties to the extent attributable to the period prior to the EffectiveDate;

 

(p)           All bonds, letters of credit andguarantees if any, posted by LP Sellers or any Affiliate with any GovernmentalAuthority or third person and relating to the LP Properties;

 

(q)           All (i) correspondence or other documentsor instruments of LP Sellers relating to the transactions contemplated hereby, (ii) listsof other prospective purchasers of LP Sellers or the LP Properties compiled byLP Sellers, (iii) bids submitted to LP Sellers by other prospectivepurchasers of LP Sellers or the LP Properties, (iv) analyses by LP Sellersor any Affiliates thereof submitted by other prospective purchasers of LPSellers or the LP Properties, and (v) correspondence between or among LPSellers or their Affiliates or their respective representatives with respectto, or with, any other prospective purchasers of LP Sellers or the LPProperties; and

 

(r)            All assets associated with LP Sellers’Affiliate, Mid Atlantic Well Service, Inc., and its operations.

 

Theproperties and interests specified in the foregoing paragraphs (a) through(r) of this Section 1.2 are herein collectively calledthe “**LP ExcludedAssets**”.  It is understoodthat certain of the LP Excluded Assets may not be embraced by the term “LPProperties”.  The fact that certainassets have been expressly excluded is not intended to suggest that had theynot been excluded they would have constituted LP Properties and may not be usedto interpret the meaning of any word or phrase used in describing the LPProperties.

 

**ARTICLEIIPurchase Price**

 

**Section 2.1.****          ****Purchase Price**. In consideration of the sale of the LP Properties by LP Sellers toBuyer, Buyer shall pay to LP Sellers cash in the amount of THREE HUNDREDTHOUSAND AND NO/100 DOLLARS ($300,000.00) (the “**PurchasePrice**”). The Purchase Price, as adjusted pursuant to this Article IIand the other applicable provisions hereof, is herein called the “**AdjustedPurchase Price**”.

 

**Section 2.2.****          ****Accounting Adjustments**.

 

(a)           Subject to Section 2.2(b),and in addition to other adjustments to the Purchase Price provided for in thisAgreement, appropriate adjustments shall be made between Buyer and LP Sellersso that:

 

(i)            all expenses (including all drillingcosts, all capital expenditures, and all overhead administrative charges underapplicable operating agreements, and all other operating costs actually chargedby third parties) for work done in the operation of the LP Properties on orafter the Effective Date will be borne by Buyer, and all proceeds (net ofapplicable gathering, transportation charges as well as production, severance,and similar Taxes) from the sale of oil, gas or other minerals produced fromthe LP Oil and Gas LP Properties on or after the Effective Date will bereceived by Buyer, and

 

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(ii)           all expenses for work done in theoperation of the LP Properties before the Effective Date will be borne by LPSellers and all proceeds (net of applicable production, severance, and similarTaxes) from the sale of oil, gas, or other minerals produced therefrom beforethe Effective Date will be received by LP Sellers.

 

(b)           It is agreed that, in making theadjustments contemplated by Section 2.2(a):

 

(i)            Oil which was produced from the LP Oiland Gas Properties and which was, on the Effective Date, stored in tanks, butwithout taking into account tank bottom sediment and water,  located on the LP Oil and Gas Properties (orlocated elsewhere but used to store oil produced from the LP Oil and Gas Propertiesprior to delivery to oil purchasers) and above pipeline connections shall bedeemed to have been produced before the Effective Date (it is recognized thatsuch tanks were not gauged on the Effective Date for the purposes of thisAgreement and that determination of the volume of such oil in storage will bebased on the best available data, which may include estimates),

 

(ii)           ad valorem Taxes assessed with respect toa period which begins before and ends on or after the Effective Date shall beprorated based on the number of days in such period which fall on each side ofthe Effective Date (with the day on which the Effective Date falls beingcounted in the period after the Effective Date), and

 

(iii)          no consideration shall be given to thelocal, state, or federal income tax liabilities of any party.

 

**Section 2.3.****          ****LP Closing and Post-LP ClosingAccounting Settlements**.

 

(a)           No later than three (3) businessdays prior to the LP Closing Date, the parties shall determine, based upon thebest information reasonably available to them, the amount of the adjustmentsprovided for in Section 2.2.** **If the amount of adjustments sodetermined which would result in a credit to Buyer exceed the amount ofadjustments so determined which would result in a credit to LP Sellers, Buyershall receive a credit, for the amount of such excess, against the PurchasePrice to be paid at LP Closing, and, if the converse is true, Buyer shall payto LP Sellers, at LP Closing (in addition to amounts otherwise then owed), theamount of such excess.

 

(b)           On or before 120 days after LP Closing,Buyer and LP Sellers shall review any additional information which may then beavailable pertaining to the adjustments provided for in Section 2.2,shall determine if any additional adjustments (whether the same be made toaccount for expenses or revenues not considered in making the adjustments madeat LP Closing, or to correct errors made in such adjustments) should be madebeyond those made at LP Closing, and shall make any such adjustments byappropriate payments from LP Sellers to Buyer or from Buyer to LP Sellers.** **Following suchadditional adjustments, no further adjustments to the Purchase Price shall bemade under this Section 2.3.

 

(c)           If a dispute arises under Section 2.3(b) withrespect to any additional adjustments (an “**Accounting Dispute**”)that the parties have been unable to resolve prior to the end of the 120 dayperiod in Section 2.3(b) above, then, at the written requestof either LP Sellers or Buyer

 

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(the “**Request Date**”),each of LP Sellers and Buyer shall nominate and commit one of their seniorofficers to meet at a mutually agreed time and place not later than ten daysafter the Request Date to attempt to resolve same.  If such senior officers have been unable toresolve such Accounting Dispute within a period of 30 days after the RequestDate, any party shall have the right, by written notice to the other specifyingin reasonable detail the basis for the Accounting Dispute, to resolve theAccounting Dispute by submission thereof to a independent public accountingfirm mutually agreeable to the Parties, which firm shall serve as solearbitrator (the “**Accounting Referee**”).  The scope of the Accounting Referee’sengagement shall be limited to the resolution of the items described in thenotice of the Accounting Dispute given in accordance with the foregoing and thecorresponding calculation of the adjustments pursuant to Section 2.2.  The Accounting Referee shall be instructed bythe parties to resolve the Accounting Dispute as soon as reasonably practicablein light of the circumstances but in no event in excess of 15 days followingthe submission of the Accounting Dispute to the Accounting Referee.  The decision and award of the AccountingReferee shall be binding upon the parties as an award under the FederalArbitration Act and final and nonappealable to the maximum extent permitted bylaw, and judgment thereon may be entered in a court of competent jurisdictionand enforced by any party as a final judgment of such court.  The fees and expenses of the AccountingReferee shall be borne equally by LP Sellers and Buyer.

 

**Section 2.4.****          ****Payment of Adjusted PurchasePrice**.  The Adjusted Purchase Price shall be paid toLP Sellers as follows:

 

(a)           At the LP Closing, Buyer shall pay to LPSellers cash equal to the Adjusted Purchase Price;

 

(b)           All cash payments by Buyer pursuant tothis Section 2.4 shall be made in immediately available funds byconfirmed wire transfer to a bank account or accounts designated by LP Sellers,as applicable.

 

**Section 2.5.****          ****Allocation of Purchase Price**.  (a) Onor before the fifth business day following execution and delivery of thisAgreement by LP Sellers and Buyer, Buyer, using its reasonable businessjudgment, shall allocate the Purchase Price among the LP Oil and Gas Propertieson Exhibit C and shall furnish the completed Exhibit C to LP Sellers,whereupon both parties shall attach the completed Exhibit C to thisAgreement with the same effect as if the completed Exhibit C was attachedto and made part of this Agreement at signing. (b) On or before the LP Closing Date, the Buyer and LP Sellersshall agree in writing as to the allocation of the Adjusted Purchase Priceamong the LP Properties under the methodology required by Section 1060 ofthe Code.  Such agreed allocation shallbe set forth on Schedule 2.5 attached hereto. The Buyer and LP Sellers shall report the transactions contemplatedhereby on all Tax Returns, including, but not limited to Form 8594, in amanner consistent with such allocation. If, contrary to the intent of the parties hereto as expressed in this Section 2.5,any taxing authority makes or proposes an allocation different from theallocation determined under this Section 2.5, Buyer and LP Sellersshall cooperate with each other in good faith to contest such taxing authority’sallocation (or proposed allocation), provided, however, that, afterconsultation with the party adversely affected by such allocation (or proposedallocation), the other party hereto may file such protective claims or TaxReturns as may be reasonably required to protect its interests.

 

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** **

**ARTICLE IIIThe LP Closing**

 

Theclosing of the transactions contemplated hereby (the “**LP Closing**”)shall take place (i) at the offices of LP Sellers at 600 Travis Street, Suite 5100,Houston, Texas 77002, at 10:00 a.m. (local Houston, Texas time) on **July 1, 2008**, or (ii) at such other time or placeor on such other date as the parties hereto shall agree.  The date on which the LP Closing is requiredto take place is herein referred to as the “**LP ClosingDate**”.  All LP Closingtransactions shall be deemed to have occurred simultaneously.

 

**ARTICLE IVDisclaimer of Representations and Warranties by LP Sellers**

 

**Section 4.1.****          ****No Conveyances.** Except as set out in Section 4.1 of LP Sellers’ DisclosureSchedule, LP Sellers have not voluntarily sold or conveyed any of the LPProperties or any interest therein to any person or entity other than to theother partners in the LP Sellers prior to the date of this Agreement.

 

**Section 4.2****.           Disclaimer ofRepresentations and Warranties.**  LP Sellers hereby expressly disclaim any andall representations or warranties with respect to the LP Properties or thetransactions contemplated hereby.  Buyeragrees that the LP Properties are being sold by each LP Seller “where is” and “asis”, with all faults.  Specifically as apart of (but not in limitation of) the foregoing, Buyer acknowledges that LPSellers have not made, and LP Sellers hereby expressly disclaim, anyrepresentation or warranty (express, implied, under common law, by statute orotherwise) as to the title or condition of the LP Properties **(INCLUDING ANY IMPLIED OR EXPRESS WARRANTY OF MERCHANTABILITY, FITNESSFOR A PARTICULAR PURPOSE, OR CONFORMITY TO MODELS OR SAMPLES OF MATERIALS)**.  **LP SELLERS MAKE NOREPRESENTATION OR WARRANTY AS TO (I) THE AMOUNT, VALUE, QUALITY, QUANTITY,VOLUME, OR DELIVERABILITY OF ANY OIL, GAS, OR OTHER MINERALS OR RESERVES (IFANY) IN, UNDER, OR ATTRIBUTABLE TO THE LP PROPERTIES, (II) THE PHYSICAL,OPERATING, REGULATORY COMPLIANCE, SAFETY, OR ENVIRONMENTAL CONDITION OF THEPROPERTIES, BOTH SURFACE AND SUBSURFACE, INCLUDING MATTERS RELATED TO THEPRESENCE, RELEASE OR DISPOSAL OF HAZARDOUS MATERIALS, SOLID WASTES, ASBESTOS ORNATURALLY OCCURRING RADIOACTIVE MATERIALS (**“**NORM**”**), OR (III) THE GEOLOGICAL OR ENGINEERING CONDITION OF THE LPPROPERTIES OR ANY VALUE THEREOF.  LPSELLERS MAKE NO WARRANTY OR REPRESENTATION, EXPRESS, STATUTORY, OR IMPLIED, ASTO (A) THE ACCURACY, COMPLETENESS, OR MATERIALITY OF ANY DATA,INFORMATION, OR RECORDS FURNISHED TO BUYER IN CONNECTION WITH THE LP PROPERTIESOR OTHERWISE CONSTITUTING A PORTION OF THE LP PROPERTIES; (B) THEPRESENCE, QUALITY, AND QUANTITY OF HYDROCARBON RESERVES (IF ANY) ATTRIBUTABLETO THE LP PROPERTIES; (C) THE ABILITY OF THE LP PROPERTIES TO PRODUCEHYDROCARBONS, INCLUDING PRODUCTION**

 

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**RATES, DECLINE RATES, AND RECOMPLETIONOPPORTUNITIES; (D) IMBALANCE OR PAYOUT ACCOUNT INFORMATION, ALLOWABLES, OROTHER REGULATORY MATTERS, (E) THE PRESENT OR FUTURE VALUE OF THEANTICIPATED INCOME, COSTS, OR PROFITS, IF ANY, TO BE DERIVED FROM THE LPPROPERTIES, (F) THE ENVIRONMENTAL CONDITION OF THE LP PROPERTIES, (G) ANYPROJECTIONS AS TO EVENTS THAT COULD OR COULD NOT OCCUR, (H) ANY OTHERMATTERS CONTAINED IN OR OMITTED FROM ANY INFORMATION OR MATERIAL FURNISHED TOBUYER BY LP SELLERS OR OTHERWISE CONSTITUTING A PORTION OF THE LP PROPERTIES,OR (I) ANY PORTION OF THE LP PROPERTIES. ANY DATA, INFORMATION, OR OTHER RECORDS FURNISHED BY LP SELLERS AREPROVIDED TO BUYER AS A CONVENIENCE AND BUYER’S RELIANCE ON OR USE OF THE SAMEIS AT BUYER’S SOLE RISK.**

 

**Section 4.3.****          ****LP Sellers’ Disclosure Schedule.**  The matters set forth on the LP SellersDisclosure Schedule are not necessarily matters that LP Sellers are required todisclose or matter that would constitute a breach of any representation orwarranty had such matters not been disclosed.

 

**ARTICLE VRepresentations and Warranties of Buyer**

 

**Section 5.1.****          ****Organization and Existence**.  Buyer is a corporation, duly organized,legally existing and in good standing under the laws of the State of Delaware,and is qualified to do business and in good standing in each of the states inwhich LP Oil and Gas Properties are located where the laws of such state wouldrequire a corporation owning the LP Oil and Gas Properties located in such stateto so qualify.  Buyer is also qualifiedto own and operate oil and gas properties with all applicable governmentalagencies having jurisdiction over the LP Properties, to the extent suchqualification is necessary or appropriate or will be necessary or appropriateupon consummation of the transactions contemplated hereby.

 

**Section 5.2.****          ****Power and Authority**. Buyer has full corporate power and authority to execute, deliver, andperform this Agreement and each other agreement, instrument, or document executedor to be executed by Buyer in connection with the transactions contemplatedhereby to which it is a party and to consummate the transactions contemplatedhereby and thereby.  The execution,delivery, and performance by Buyer of this Agreement and each other agreement,instrument, or document executed or to be executed by Buyer in connection withthe transactions contemplated hereby to which it is a party, and theconsummation by it of the transactions contemplated hereby and thereby, havebeen duly authorized by all necessary corporate action of Buyer.

 

**Section 5.3.****          ****Valid and Binding Agreement**.  This Agreement has been duly executed anddelivered by Buyer and constitutes, and each other agreement, instrument, ordocument executed or to be executed by Buyer in connection with thetransactions contemplated hereby to which it is a party has been, or whenexecuted will be, duly executed and delivered by Buyer and constitutes, or whenexecuted and delivered will constitute, a valid and legally binding obligationof Buyer, enforceable against it in accordance with their respective terms,except that such

 

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enforceability may be limited by (a) applicablebankruptcy, insolvency, reorganization, moratorium, and similar laws affectingcreditors’ rights generally, and (b) equitable principles which may limitthe availability of certain equitable remedies (such as specific performance)in certain instances.

 

**Section 5.4.****          ****Non-Contravention**. Neither the execution, delivery, and performance by Buyer of thisAgreement and each other agreement, instrument, or document executed or toBuyer’s Knowledge to be executed by Buyer in connection with the transactionscontemplated hereby to which it is a party and the consummation by it of thetransactions contemplated hereby and thereby do not and will not (i) conflictwith or result in a violation of Buyer’s Governing Documents, (ii) conflictwith or result in a violation of any provision of, or constitute (with orwithout the giving of notice or the passage of time or both) a default under,or give rise (with or without the giving of notice or the passage of time orboth) to any right of termination, cancellation, or acceleration under, anybond, debenture, note, mortgage, indenture, or any material lease, contract,agreement, or other instrument or obligation to which Buyer is a party or bywhich Buyer or any of its properties may be bound, (iii) result in thecreation or imposition of any lien or other encumbrance upon the properties ofBuyer, or (iv) violate any Applicable Law binding upon Buyer, except, inthe instance of clauses (ii) and (iii) above, for which any suchconflicts, violations, defaults, terminations, cancellations or accelerationswhich would not, individually or in the aggregate, have a Material AdverseEffect.

 

**Section 5.5.****          ****Approvals**. Other than requirements (if any) that there be obtained consents toassignment (or waivers of preferential rights to purchase) from third parties,no consent, approval, order, or authorization of, or declaration, filing, orregistration with, any court or governmental agency or of any third party isrequired to be obtained or made by Buyer in connection with the execution,delivery, or performance by Buyer of this Agreement and each other agreement,instrument, or document executed or to be executed by Buyer in connection withthe transactions contemplated hereby to which it is a party or the consummationby it of the transactions contemplated hereby and thereby, except, for such consents,approvals, orders, authorizations, declarations, filings, or registrationswhich, if not obtained or made (as applicable), would not, individually or inthe aggregate, have a Material Adverse Effect.

 

**Section 5.6.****          ****Pending Litigation**. There are no Proceedings pending or, to Buyer’s Knowledge, threatenedagainst or affecting the execution and delivery of this Agreement by Buyer orthe consummation of the transactions contemplated hereby by Buyer.

 

**Section 5.7.****          ****Knowledgeable Purchaser**.  Buyer is a knowledgeable purchaser, owner andoperator of oil and gas properties, has the ability to evaluate (and in facthas evaluated) the LP Properties for purchase. Buyer is an “accredited investor,” as defined in Regulation Dpromulgated pursuant to the Securities Act, and is acquiring the LP Propertiesfor its own account and not with the intent to make a distribution within themeaning of the Securities Act  (and the rules andregulations pertaining thereto) or a distribution thereof in violation of anyother applicable securities laws.  At LPClosing, Buyer will have had access to the LP Properties, the officers andconsultants of LP Sellers, and the books, records, and files of LP Sellersrelating to the LP Properties.  In makingthe decision to enter into this Agreement and to consummate the transactionscontemplated hereby, Buyer has relied on its own independent due diligenceinvestigation of the LP Properties and has been advised by and has reliedsolely on its own

 

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expertise and legal, land, tax, reservoirengineering, and other professional counsel concerning this transaction, the LPProperties and the value thereof.

 

**Section 5.8.****          ****Funds**. Buyer has, and at the LP Closing will have, sufficient cash and other sourcesof immediately available funds, as are necessary in order to pay the AdjustedPurchase Price to LP Sellers at the LP Closing and otherwise consummate thetransactions contemplated hereby.

 

**Section 5.9.****          ****Fees and Commissions**. No broker, investment banker, financial advisor or other Person isentitled to any broker’s, finder’s, financial advisor’s or other similar fee orcommission in connection with the transactions contemplated by this Agreementbased upon arrangements made by or on behalf of Buyer.

 

**ARTICLE VICertain Covenants of LP Sellers Pending LP Closing**

 

**Section 6.1.****          ****Access to Files**. Subject to the terms of the Confidentiality Agreement and Article IX,from the date hereof until the LP Closing Date, LP Sellers will give Buyer, andits attorneys and other authorized representatives, access at all reasonabletimes and in a manner so as to not interfere with the normal businessoperations of the LP Sellers to the LP Properties and to any contract files,lease or other title files, production files, well files, and other files of LPSellers pertaining to the ownership or operation of the LP Properties, and LPSellers will use their Reasonable Best Efforts to arrange for Buyer, and itsattorneys and other representatives, to have access to any such files in theoffice of LP Sellers.

 

**Section 6.2.****          ****Conduct of Operations**.  From the date hereof until the LP ClosingDate, LP Sellers will (i) continue the routine operation of the LPProperties in the ordinary course of business as previously conducted prior tothe date of this Agreement, including without limitation, the continuation ofthe drilling of new wells in accordance with the 2008 Appalachia Drilling Plan,a copy of which has been previously furnished to Buyer by LP Sellers; and (ii) operatethe LP Properties in material compliance with all Applicable Laws andEnvironmental Laws and Material Agreements. Without expanding any obligations that LP Sellers may have to Buyer, itis expressly agreed that LP Sellers shall never have any liability to Buyerwhich respect to operation of an LP Property greater than that which it mighthave as the operator to a non-operator under the applicable operating agreement(or, in the absence of such an agreement, under the AAPL 610 (1989 Revision)form Operating Agreement).

 

**Section 6.3.****          ****Restrictions on Certain Actions**.  Fromthe date hereof until the LP Closing Date, LP Sellers will not, withoutBuyer’s prior consent in connection with the LP Properties:

 

(a)           expend anyfunds, or make any commitments to expend funds (including entering into newagreements which would obligate LP Sellers to expend funds), or otherwise incurany other obligations or liabilities, other than to pay expenses or to incurliabilities in the ordinary course of business as previously conducted prior tothe date of this Agreement in connection with operation of the LP Propertiesafter the Effective Date and as set out in the 2008 Appalachia Drilling Plan, acopy of which has been previously furnished to Buyer by LP Sellers, and except

 

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in the event of an emergency requiringimmediate action to protect life or preserve the LP Properties;

 

(b)           except wherenecessary to prevent the termination of a Lease or other material agreementgoverning LP Sellers’ interest in the LP Properties, propose the drilling ofany additional wells, or propose the deepening, plugging back or reworking ofany existing wells, or propose the conducting of any other operations whichrequire consent under the applicable operating agreement, or propose theconducting of any other operations other than the normal operation of theexisting wells on the LP Oil and Gas Properties, or propose the abandonment ofany wells on the LP Oil and Gas Properties (and LP Sellers agree that they willadvise Buyer of any such proposals made by third parties and will respond toeach such proposal made by a third party in the manner requested by Buyer);

 

(c)           sell,transfer, or abandon any portion of the LP Properties other than items ofmaterials, supplies, machinery, equipment, improvements, or other personalproperty or fixtures forming a part of the LP Properties (and then only if thesame is replaced with an item of substantially equal suitability, free of liensand security interests, which replacement item will then, for the purposes ofthis Agreement, become part of the LP Properties); or

 

(d)           release (orpermit to terminate), or modify or reduce its rights under, any oil, gas, ormineral lease forming a part of the LP Oil and Gas Properties, or any MaterialAgreement, or modify any existing production sales contracts or enter into anynew production sales contracts, except contracts terminable by LP Sellers withnotice of 60 days or less.

 

**Section 6.4.****          ****Payment of Expenses**. LP Sellers will cause all expenses (including all bills for labor,materials, and supplies used or furnished for use in connection with the LPProperties and all severance, production, and similar Taxes) relating to theownership or operation of the LP Properties prior to the LP Closing Date to bepromptly paid and discharged, except for expenses disputed in good faith.

 

**Section 6.5.****          ****Preferential Rights and Third Party Consents**.  LP Sellers will use Reasonable Best Effortsto request, from the appropriate parties (and in accordance with the documentscreating such rights and/or requirements), waivers of the preferential rightsto purchase, or requirements that consent to assignment be obtained, which areidentified in Section 6.6 of the LP Sellers Disclosure Schedule.  LP Sellers shall have no obligation to assurethat such waivers are obtained, and if all such waivers (or any other waiversof preferential rights to purchase or requirements that consent be obtained toassignment, even if the same are not listed on such Section 6.6) are notobtained, Buyer may not refuse to close the transaction contemplated by thisAgreement; provided, however, that if the unobtained waiver is a waiver of apreferential right to purchase, and if both Buyer and LP Sellers agree to thistreatment of such matter (and agree upon an appropriate allocation of thePurchase Price), LP Sellers will tender (at the agreed allocated portion of thePurchase Price) the required interest in the LP Property affected by suchunwaived preferential right to purchase to the holder, or holders, of suchright who have elected not to waive such preferential right to purchase, andif, and to the extent that, such preferential right to purchase is exercised bysuch party or parties, such interest in such LP Property will be excluded fromthe transaction contemplated hereby and the Purchase Price will

 

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be reduced by the amount paid, or to be paid,by the party exercising such preferential right to purchase (and LP Sellersshall collect such amount from such purchaser).

 

**ARTICLE VIIAdditional Pre-LP Closing and Post-LP Closing Agreements of Both Parties**

** **

**Section 7.1.****          ****Reasonable Best Efforts**.  Each party hereto agrees that it will notvoluntarily undertake any course of action inconsistent with the provisions orintent of this Agreement and will use its Reasonable Best Efforts to take, orcause to be taken, all action and to do, or cause to be done, all thingsreasonably necessary, proper, or advisable under Applicable Laws to consummatethe transactions contemplated by this Agreement, including (i) cooperationin determining whether any consents, approvals, orders, authorizations,waivers, declarations, filings, or registrations of or with any GovernmentalEntity or third party are required in connection with the consummation of thetransactions contemplated hereby; (ii) Reasonable Best Efforts to obtainany such consents approvals, orders, authorizations, and waivers and to effectany such declarations, filings, and registrations; (iii) Reasonable BestEfforts to cause to be lifted or rescinded any injunction or restraining orderor other order adversely affecting the ability of the parties to consummate thetransactions contemplated hereby; (iv) Reasonable Best Efforts to defend,and cooperation in defending, all Proceedings challenging this Agreement or theconsummation of the transactions contemplated hereby; and (v) theexecution of any additional instruments necessary to consummate thetransactions contemplated hereby.

 

**Section 7.2.****          ****Notice of Litigation**. Until the LP Closing, (i) Buyer, upon learning of the same, shallpromptly notify LP Sellers of any Proceeding which is commenced or threatenedagainst Buyer and which affects this Agreement or the transactions contemplatedhereby, and (ii)  LP Sellers, upon learning of the same, shall promptlynotify Buyer of any Proceeding which is commenced or threatened against LPSellers which affects this Agreement or the transactions contemplated hereby.

 

**Section 7.3.****          ****Notification of Certain Matters**.  Until the LP Closing, LP Sellers shall giveprompt notice to Buyer of any failure of LP Sellers to comply with or satisfyany covenant, condition, or agreement to be complied with or satisfied by LPSellers hereunder prior to LP Closing. Until the LP Closing, Buyer shall give prompt notice to LP Sellersof:  (i) the occurrence ornonoccurrence of any event the occurrence or nonoccurrence of which, to Buyer’sKnowledge, would be likely to cause any representation or warranty contained inArticle V to be untrue or inaccurate at or prior to the LP Closing,and (ii) any failure of Buyer to comply with or satisfy any covenant,condition, or agreement to be complied with or satisfied by Buyer hereunderprior to LP Closing.  The delivery of anynotice pursuant to this Section 7.3 shall not be deemed to (x) modifythe representations or warranties hereunder of Buyer , (y) modify theconditions set forth in Article IX, or (z) limit or otherwiseaffect the remedies available hereunder to the party receiving such notice.

 

**Section 7.4.****          ****Fees and Expenses**.

 

(a)           Except asotherwise provided herein, (i) all fees and expenses incurred inconnection with this Agreement by LP Sellers will be borne by and paid by LPSellers, and 

 

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(ii) all fees and expenses incurred inconnection with this Agreement by Buyer will be borne by and paid by Buyer.

 

(b)           All requireddocumentary, filing and recording fees and expenses in connection with thefiling and recording of the Assignment and other instruments required to conveytitle to the LP Properties to Buyer shall be borne by Buyer.  Buyer shall assume responsibility for, andshall bear and pay, any applicable state sales and use Taxes (including anyapplicable interest or penalties) incurred or imposed with respect to thetransactions contemplated by this Agreement.

 

**Section 7.5.****          ****Public Announcements**. Except as may be required by Applicable Law, neither Buyer nor LPSellers shall issue any press release or otherwise make any statement to thepublic generally with respect to this Agreement or the transactionscontemplated hereby without the prior consent of the other party (which consentshall not be unreasonably withheld and which consent, if given verbally, shallbe confirmed in writing within one Business Day thereafter).  Any such press release or statement requiredby Applicable Law shall only be made after reasonable notice to the otherparties.

 

**Section 7.6.****          ****Casualty Loss Prior to LP Closing**.  In the event of damage by fire or othercasualty to any of the LP Properties after the Effective Date and prior to theLP Closing, then this Agreement shall remain in full force and effect, and(unless Buyer and LP Sellers shall otherwise agree) in such event:

 

(a)           as to each suchLP Property so damaged which is an LP Oil and Gas Property, then, at LP Sellers’election, either (i) such LP Property shall be treated as if it had anasserted Environmental Defect associated with it and the procedure provided forin Article VIII shall be applicable thereto, or (ii) thePurchase Price will not be adjusted, and if LP Sellers should be entitled tomake any claims under any insurance policy with respect to such damage, LPSellers shall, at LP Sellers’ election, either collect (and when collected payover to Buyer), or assign to Buyer, such claims, and

 

(b)           as to eachsuch LP Property which is other than an LP Oil and Gas Property, LP Sellersshall, at LP Sellers’ election, either collect (and when collected pay over toBuyer), or assign to Buyer, any and all insurance claims relating to such loss,and Buyer shall take title to the LP Property affected by such loss withoutreduction of the Purchase Price.

 

**Section 7.7.****          ****Governmental Bonds**. At or prior to LP Closing, Buyer shall deliver to LP Sellers evidencethat Buyer has completed all action necessary to permit Buyer to post bonds orother security immediately following the LP Closing with all applicableGovernmental Entities meeting the requirements of such Governmental Entities toown, and where appropriate, operate, the LP Properties.

 

**Section 7.8.****          ****Assumed Obligations**. At LP Closing, Buyer shall assume and agree to pay, perform anddischarge the Assumed Obligations.

 

**Section 7.9.****          ****Operational Transition**. IT IS RECOGNIZED THAT THERE IS NO ASSURANCE GIVEN BY LP SELLERS THATBUYER SHALL SUCCEED LP SELLERS AS OPERATOR OF ANY LP PROPERTY WHERE OTHERPARTIES OWN INTERESTS IN THE WELLS LOCATED THEREON, but LP Sellers shallcooperate with Buyer to see that

 

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Buyer shall succeed LP Sellers as operator ofall the LP Sellers operated properties, by: (a) delivering at LP Closingsigned counterparts of letters addressed to non-operating working interestowners of the LP Sellers operated LP Properties advising them of the sale ofthose LP Properties by LP Sellers to Buyer; and seeking such owners’consideration of Buyer’s selection as successor to LP Seller as operator, and (b) executingapplicable change of operator forms for filing with the applicable GovernmentalAgencies.

 

**Section 7.10.****       ****Books and Records**. At or promptly after LP Closing, but in no event later than 30 daysafter the LP Closing, LP Sellers will deliver to Buyer all related books andrecords that are a part of the LP Properties to a location designated byBuyer.  Buyer will promptly reimburse LPSellers for all reasonable costs of shipping or transporting such books andrecords including any costs incurred to provide such data in an electronic format.  LP Sellers (or its Affiliates) shall have theright to have reasonable access during Buyer’s reasonable and customarybusiness hours to inspect and copy (at LP Sellers’ or such Affiliate’s expense)the books and records so delivered under this Section 7.10 for thesix-year period commencing on the LP Closing Date.

 

**Section 7.11.****       ****Suspended Funds**. As soon as practicable after the LP Closing Date, but no later than 90days thereafter, LP Sellers shall provide to Buyer a listing in Excelspreadsheet format, showing all proceeds from production attributable to thewells which are currently held in suspense by LP Sellers and the reason forsuspending such proceeds, shall transfer to Buyer all those suspended proceeds(the “**Suspended Proceeds**”).  Thereafter, Buyer shall be responsible forproper distribution of the Suspended Proceeds to the parties lawfully entitledto them to the extent and only to the extend of Suspended Proceeds, except LPSellers shall remain liable for interest and penalties, if any, associated withthe Suspended Proceeds for failure, prior to the LP Closing Date, to escheatsuch Suspended Proceeds to the applicable Governmental Entities in accordancewith Applicable Law.

 

**Section 7.12.****       ****Letters-in-Lieu**. At the LP Closing, LP Sellers shall execute and deliver letters in lieuof transfer orders (or similar documentation) in form reasonably acceptable toBuyer and LP Sellers.

 

**Section 7.13.****       ****Logos and Names**. As soon as practicable after the LP Closing, Buyer will remove or causeto be removed the names and marks used by LP Sellers and all variations andderivatives thereof and logos relating thereto from the LP Properties.

 

**Section 7.14.****       ****Further Assurances**. At the LP Closing, and from time to time following the LP Closing, atthe request of any party hereto and without further consideration, the otherparty or parties hereto shall execute and deliver to such requesting party suchinstruments and documents and take such other action (but without incurring anymaterial financial obligation) as such requesting party may reasonably requestin order to consummate more fully and effectively the transactions contemplatedhereby.

 

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**ARTICLE VIIIDue Diligence Examination**

** **

**Section 8.1.****          ****Title Due Diligence Examination**.

 

Fromthe date of this Agreement until 5:00 p.m. (local time in Houston, Texas)seven Business Days prior to the LP Closing Date (the “**Examination Period**”), LP Sellers shallafford to Buyer and its authorized representatives reasonable access duringnormal business hours and in a manner so as to not unduly interfere with thenormal business operations of the LP Sellers to the office, personnel and booksand records of LP Sellers in order for Buyer to conduct a title examination asit may in its sole discretion choose to conduct with respect to the LP Oil andGas Properties.  Such books and recordsshall include all title opinions, title files, ownership maps, lease files,assignments, division orders, operating records and agreements, well files,financial and accounting records, geological, geophysical and engineeringrecords, in each case insofar as same may now be in existence and in thepossession of LP Sellers, excluding, however, any information that LP Sellersare prohibited from disclosing by bona fide, third party confidentialityrestrictions; provided, that if requested by Buyer, LP Sellers shall use theirReasonable Best Efforts to obtain a waiver of any such restrictions in favor ofBuyer.  The cost and expense of buyer’stitle review, if any, shall be borne solely by Buyer.

 

**Section 8.2.****          ****Environmental Due Diligence Examination**.

 

(a)           During theExamination Period, Buyer shall have the right, or the right to cause anenvironmental consultant reasonably acceptable to LP Sellers (“**Buyer’s Environmental Consultant**”), to conduct a Phase Ienvironmental assessment of the LP Properties and to conduct any further PhaseI or other non-invasive environmental assessment of the LP Properties it deemsappropriate, to the extent LP Sellers have the authority to grant such right toBuyer. (“**Buyer’s Environmental Review**”).  No less than three Business Days prior to theproposed commencement date of Buyer’s Environmental Review, Buyer shall furnishLP Sellers with an outline of the proposed scope of such review, including thelocations of such activities.  The costand expense of Buyer’s Environmental Review, if any, shall be borne solely byBuyer.  No Person, other than Buyer’sEnvironmental Consultant and Buyer’s employees may conduct Buyer’sEnvironmental Review.  LP Sellers shallhave the right to have representatives thereof present to observe Buyer’sEnvironmental Review conducted in LP Sellers’ offices or on LP Sellers’properties.  Buyer agrees to conductBuyer’s Environmental Review in a manner so as not to unduly interfere with thebusiness operations of LP Sellers and in compliance with all Applicable Laws,and Buyer shall exercise due care with respect to LP Sellers’ properties andtheir condition.

 

(b)           Prior to theLP Closing, unless otherwise required by Applicable Law, Buyer shall (and shallcause Buyer’s Environmental Consultant, if applicable, to) treat confidentiallyany matters revealed by Buyer’s Environmental Review and any reports or datagenerated from such review (the “**Environmental Information**”),and Buyer shall not (and shall cause Buyer’s Environmental Consultant, ifapplicable, to not) disclose any Environmental Information to any GovernmentalEntity or other third party without the prior written consent of LP Sellers(unless so required under Applicable Law). Prior to the LP Closing, unless otherwise required by Applicable Law,Buyer may use the Environmental Information only in connection with thetransactions contemplated by this Agreement. If Buyer, Buyer’s Environmental Consultant, if applicable, or any thirdparty to whom Buyer has provided any Environmental Information become legallycompelled to disclose any of the Environmental Information, Buyer shall provideLP Sellers with prompt notice and LP Sellers, at LP Sellers’ expense, may fileany protective order, or seek any other remedy, as it deems appropriate underthe circumstances.  If this

 

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Agreement is terminated prior to the LP Closing,Buyer shall deliver the Environmental Information to LP Sellers, whichEnvironmental Information shall become the sole property of LP Sellers.  Upon LP Sellers’ written request to Buyer,Buyer shall provide copies of the Environmental Information to LP Sellerswithout charge.

 

(c)           If Buyer or Buyer’s EnvironmentalConsultant, if applicable, discovers any Environmental Defect (as hereindefined), Buyer shall notify LP Sellers prior to the expiration of the ExaminationPeriod of such alleged Environmental Defect. To be effective, such notice (an “**Environmental DefectNotice**”) must (i) be in writing; (ii) be received by LPSellers prior to the expiration of the Examination Period; (iii) describethe Environmental Defect in reasonable detail, including (A) the specificLP Properties affected by or associated with such Environmental Defect, (B) ifapplicable, a site plan showing the location of all field notes and the fieldconditions observed, (C) the written conclusion of Buyer’s EnvironmentalConsultant, if applicable, that an Environmental Defect is believed to exist,which conclusion shall be reasonably substantiated by the factual data gatheredin Buyer’s Environmental Review, and (D) if feasible and applicable, aseparate, reasonably specific citation of the provisions of the EnvironmentalLaws alleged to be violated and the related facts that substantiate suchviolation; (iv) describe the procedures recommended to correct, eliminateor pay the Environmental Defect, together with any related recommendations fromBuyer’s Environmental Consultant, if applicable; and (v) set forth Buyer’sgood faith estimate of the Environmental Defect Value, including the basis forsuch estimate.  Any matters that mayotherwise constitute Environmental Defects, but of which LP Sellers have notbeen specifically notified by Buyer in accordance with the foregoing, togetherwith any environmental matter that does not constitute an Environmental Defect,shall be deemed to have been waived by Buyer for purposes of this Section 8.2.  Upon the receipt of such effective noticefrom Buyer, LP Sellers shall have the option, in addition to the remedy setforth in Section 8.4(c), but not the obligation, to attempt to curesuch Environmental Defect at any time prior to the LP Closing, at the sole costand expense of LP Sellers.  If LP Sellersand Buyer are unable to reach an agreement as to whether an EnvironmentalDefect exists or, if it does exist, the amount of the Environmental DefectValue attributable thereto, the provisions of Section 8.3 shall beapplicable.

 

(d)           If any Environmental Defect described ina notice delivered in accordance with Section 8.2 is not cured onor before the LP Closing, then the Purchase Price shall be reduced, subject to Section 8.4,by the Environmental Defect Value of such Environmental Defect.

 

(e)           As used in this Section 8.2:

 

(i)            “**Environmental Defect**”shall mean, with respect to any given LP Property, a violation ofEnvironmental Laws in effect as of the Effective Date in the jurisdiction inwhich such LP Property is located, an obligation under Environmental Laws tocomplete immediately or promptly after the LP Closing any corrective action atthe LP Property, or any Environmental Liability arising from or attributable toany condition, event, circumstance, activity, practice, incident, action, oromission existing or occurring prior to the LP Closing Date, or the use,release, storage, treatment, transportation, or disposal of Hazardous Materialsprior to the LP Closing Date, (A) regarding which an Environmental DefectNotice has been timely and otherwise 

 

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validlydelivered, and (B) is not otherwise disclosed in LP Sellers DisclosureSchedule 8.2.

 

(ii)           “**Environmental Defect Value**”shall mean the amount (A) the net present value of the reasonablyestimated costs and expenses to correct such Environmental Defect in the mostcost effective manner reasonably available, consistent with Environmental Laws,or (B) the net present value of the amount of Environmental Liabilitiesreasonably believed will be incurred or required to be paid by LP Sellers withrespect thereto. The parties recognize that the calculation of an EnvironmentalDefect Value may require the use of assumptions and extrapolations; however, itis acknowledged and agreed that any such assumptions and extrapolations will beconsistent with the known factual information and reasonable in nature.

 

**Section 8.3.****          ****Disputes Regarding EnvironmentalDefects**.  If LP Sellers and Buyer are unable to reachan agreement as to whether an Environmental Defect exists, or if it does existor disputes relating to Post-LP Closing Defects pursuant to Section 8.4(c)(a “**Defect Dispute**”), each party shall havethe right to submit a Defect Dispute to an independent expert (the “**Independent Expert**”), who shall serve as solearbitrator.  The Independent Expert shallbe appointed by mutual agreement of LP Sellers and Buyer from among candidates(including lawyers) with experience and expertise in the area that is thesubject of such Defect Dispute, and failing such agreement, such IndependentExpert for such Defect Dispute shall be selected in accordance with theCommercial Arbitration Rules of the AAA (the “**Rules**”).  Defect Disputes to be resolved by anIndependent Expert shall be resolved in accordance with mutually agreedprocedures and rules and failing such agreement, in accordance with theRules.  The Independent Expert shall beinstructed by the parties to resolve such Defect Dispute as soon as reasonablypracticable in light of the circumstances. The decision and award of the Independent Expert shall be binding uponthe parties as an award under the Federal Arbitration Act and final andnonappealable to the maximum extent permitted by law, and judgment thereon maybe entered in a court of competent jurisdiction and enforced by any party as afinal judgment of such court.

 

**Section 8.4.****          ****Adjustments to Purchase Price forTitle Matters and Environmental Defects**.

 

(a)           Notwithstanding anything to the contrarycontained in this Agreement, no adjustment of the Purchase Price shall be madefor any defects in, or encumbrances upon, LP Sellers’ title to any of the LPProperties.

 

(b)           Notwithstanding anything to the contrarycontained in this Agreement, no adjustment of the Purchase Price shall be madefor Environmental Defects unless the aggregate of the Environmental DefectValues, as determined in accordance with this Agreement, equals or exceeds twopercent of the Purchase Price, in which event the Purchase Price shall beadjusted downward by the amount such Environmental Defect Values exceed twopercent of the Purchase Price in the aggregate.

 

(c)           Notwithstanding anything herein to thecontrary, if LP Sellers are unable to cure an Environmental Defect (a “**Post-LP Closing Defect**”) on or prior to LP Closing, LPSellers shall have the option, by notice in writing to Buyer on or before LPClosing, to attempt to cure 

 

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such Post-LP Closing Defect within the 90-dayperiod commencing with the LP Closing Date (the “**Cure Period**”).  In such event, the transactions contemplatedhereby will close as provided herein, but an amount equal to the EnvironmentalDefect Value to which the Post-LP Closing Defect pertains shall be deductedfrom the Adjusted Purchase Price otherwise payable at the LP Closing and paidinto an escrow account (the “**Defects Escrow**”)established with a federally insured savings or banking institution mutuallyacceptable to Buyer and LP Sellers (the “**Defects Escrow Agent**”)pursuant to the terms of an escrow agreement in a form acceptable to theDefects Escrow Agent and reasonably acceptable to Buyer and LP Sellers (the “**Defects Escrow Agreement**”). The amount deposited into the Defects Escrow with respect to a Post-LPClosing Defect will remain therein until released as provided in Section 8.4(d).

 

(d)           Buyer will act in good faith andreasonably cooperate with the LP Sellers after the LP Closing to cure a Post-LPClosing Defect provided that Buyer shall not be required to expend any moniesin connection therewith and LP Sellers shall conduct their activities so as tonot unreasonably interfere with Buyer’s operations.  If LP Sellers and Buyer mutually agree that aPost-LP Closing Defect has been cured, then within two Business Days after suchdetermination, the amount withheld in the Defects Escrow with respect thereto(together with any interest earned thereon) shall be released to LP Sellers inaccordance with the terms of the Defects Escrow Agreement.  If LP Sellers and Buyer mutually agree that aPost-LP Closing Defect has been partially cured, then LP Sellers and Buyershall mutually determine the portion of the amount retained in the DefectsEscrow with respect thereto (together with any interest earned thereon) thatshould be paid to Buyer to compensate it for the uncured portion thereof(together with interest earned thereon), and the remaining portion of suchamount shall be released to LP Sellers (together with any interest earnedthereon) in accordance with the terms of the Defects Escrow Agreement.  If LP Sellers and Buyer mutually agree that aPost-LP Closing Defect has not been cured, then within two Business Days aftersuch determination, the amount withheld in the Defects Escrow with respectthereto (together with any interest earned thereon) shall be released to Buyerin accordance with the terms of the Defects Escrow Agreement.  If, at the end of the Cure Period, LP Sellershave been unable to cure a Post-LP Closing Defect (and there is no dispute asto whether or not it has been cured), the amount withheld in the Defects Escrowwith respect thereto (together with any interest earned thereon) shall bereleased to Buyer in accordance with the terms of the Defects Escrow Agreement.If, at the end of the Cure Period, LP Sellers and Buyer are unable to agreewhether there has been a satisfactory resolution of a Post-LP Closing Defect,then such disagreement shall be resolved as provided in Section 8.3.

 

**Section 8.5.****          ****Buyer Indemnification**. BUYER HEREBY INDEMNIFIES AND SHALL DEFEND AND HOLD LP SELLERS,AFFILIATES THEREOF, AND ITS AND THEIR RESPECTIVE OWNERS, OFFICERS, DIRECTORS,EMPLOYEES, AGENTS, REPRESENTATIVES, CONTRACTORS, SUCCESSORS, AND ASSIGNSHARMLESS FROM AND AGAINST ANY AND ALL OF THE FOLLOWING CLAIMS ARISING FROMBUYER’S INSPECTING AND OBSERVING THE LP PROPERTIES:  (I) CLAIMS FOR PERSONAL INJURIES TO ORDEATH OF EMPLOYEES OF BUYER, ITS CONTRACTORS, AGENTS, CONSULTANTS, ANDREPRESENTATIVES, AND DAMAGE TO THE PROPERTY OF BUYER OR OTHERS ACTING ON BEHALFOF BUYER, EXCEPT FOR INJURIES OR DEATH CAUSED BY THE GROSS NEGLIGENCE ORWILLFUL MISCONDUCT OF LP SELLERS, AFFILIATES THEREOF OR ITS OR THEIR RESPECTIVEEMPLOYEES, CONTRACTORS, AGENTS, CONSULTANTS, OR 

 

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REPRESENTATIVES; AND (II) CLAIMS FORPERSONAL INJURIES TO OR DEATH OF EMPLOYEES OF LP SELLERS OR THIRD PARTIES, ANDDAMAGE TO THE PROPERTY OF LP SELLERS OR THIRD PARTIES, TO THE EXTENT CAUSED BYTHE NEGLIGENCE, GROSS NEGLIGENCE, OR WILLFUL MISCONDUCT OF BUYER.  TO THE EXTENT PROVIDED ABOVE, THE FOREGOINGINDEMNITY INCLUDES, AND THE PARTIES INTEND IT TO INCLUDE, AN INDEMNIFICATION OFTHE INDEMNIFIED PARTIES FROM AND AGAINST CLAIMS ARISING OUT OF OR RESULTING, INWHOLE OR PART, FROM THE CONDITION OF THE PROPERTY OR THE SOLE, JOINT,COMPARATIVE, OR CONCURRENT NEGLIGENCE OR STRICT LIABILITY OF ANY OF THEINDEMNIFIED PARTIES.  THE PARTIES HERETOAGREE THAT THE FOREGOING COMPLIES WITH THE EXPRESS NEGLIGENCE RULE AND ISCONSPICUOUS.

 

**ARTICLEIXConditions Precedent to the Obligations of the Parties**

 

**Section 9.1.****          ****Conditions Precedent to theObligations of Buyer**.  The obligations of Buyer under this Agreementare subject to each of the following conditions being met:

 

(a)           LP Sellers shall have performed andcomplied in all material respects with (or compliance therewith shall have beenwaived by Buyer) each and every covenant, agreement and condition required bythis Agreement to be performed or complied with by LP Sellers prior to or atthe LP Closing.

 

(b)           LP Sellers shall have delivered acertificate executed by an executive officer of LP Sellers dated as of the LPClosing Date, representing and certifying in such detail as Buyer mayreasonably request that the conditions set forth in subsection (a) abovehave been fulfilled.

 

(c)           No Proceeding (excluding any Proceedinginitiated by Buyer or any of its Affiliates) shall, on the LP Closing Date, bepending or threatened before any Governmental Entity seeking to restrain,prohibit, or obtain damages or other relief in connection with the consummationof the transactions contemplated by this Agreement.

 

(d)           Buyer shall have received a release ofLiens with respect to the LP Properties, executed in recordable form by theLender, and in form and substance agreeable to Buyer.

 

(e)           Buyer shall have received an assignmentof the LP Properties executed and delivered by LP Sellers, which assignmentshall be substantially in the form of the instrument attached hereto as Exhibit Din all material respects (the “**Assignment**”).

 

(f)            Buyer shall have received a certificatethat each of the LP Sellers is not a “foreign person”, executed and deliveredby LP Sellers that complies with Section 1445 of the Code and the UnitedStates Department of Treasury regulations promulgated thereunder.

 

(g)           Buyer shall have received all otheragreements, instruments and documents which are required by other terms of thisAgreement to be executed or delivered by LP Sellers or any other party to Buyerprior to or in connection with the LP Closing.

 

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(h)           Evidence of replacement bonds guaranteesand letters of credit, pursuant to Section 12.10.

 

(i)            Closing shall have occurred betweenBuyer, LEH and others pursuant to Asset Purchase and Sale Agreement dated as ofApril 13, 2008.

 

**Section 9.2.****          ****Conditions Precedent to theObligations of LP Sellers**.  Theobligations of LP Sellers under this Agreement are subject to each of thefollowing conditions being met:

 

(a)           Each of the representations andwarranties of Buyer contained in Article V shall be true andcorrect in all material respects as of the date made and (having been deemed tohave been made again on and as of the LP Closing Date in the same language)shall be true and correct in all material respects on and as of the LP ClosingDate, except as affected by transactions permitted by this Agreement and exceptto the extent that any such representation or warranty is made as of aspecified date, in which case such representation or warranty shall have beentrue and correct in all material respects as of such specified date.

 

(b)           Buyer shall have performed and compliedin all material respects with (or compliance therewith shall have been waivedby LP Sellers) each and every covenant, agreement and condition required bythis Agreement to be performed or complied with by Buyer prior to or at the LPClosing.

 

(c)           Buyer shall have delivered a certificateexecuted by an executive officer of Buyer dated as of the LP Closing Date, representingand certifying in such detail as LP Sellers may reasonably request that theconditions set forth in subsections (a) and (b) abovehave been fulfilled.

 

(d)           No Proceeding (excluding any Proceedinginitiated by LP Sellers or any of their Affiliates) shall, on the LP ClosingDate, be pending or threatened before any Governmental Entity seeking torestrain, prohibit, or obtain damages or other relief in connection with theconsummation of the transactions contemplated by this Agreement.

 

(e)           LP Sellers shall have received all otheragreements, instruments and documents which are required by other terms of thisAgreement to be executed or delivered by Buyer or any other party to LP Sellersprior to or in connection with the LP Closing.

 

(f)            LP Sellers shall have received aninstrument evidencing the assumption by Buyer of the Assumed Obligations, inform and substance reasonably agreeable to LP Sellers.

 

(g)           Closing shall have occurred betweenBuyer, LEH and others pursuant to Asset Purchase and Sale Agreement dated as ofApril 13, 2008.

 

**ARTICLEXTermination, Amendment and Waiver**

 

**Section 10.1.****       ****Termination**. This Agreement may be terminated and the transactions contemplatedhereby abandoned at any time prior to the LP Closing in the following manner:

 

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(a)           by mutual written consent of LP Sellersand Buyer; or

 

(b)           by either LP Sellers or Buyer, if:

 

(i)            the LP Closing shall not have occurred onor before 5:00 p.m., local Houston, Texas time, on September 1, 2008,unless such failure to close shall be due to a breach of this Agreement by theparty seeking to terminate this Agreement pursuant to this clause (i);or

 

(ii)           there shall be any statute, rule, orregulation that makes consummation of the transactions contemplated herebyillegal or otherwise prohibited or a Governmental Entity shall have issued anorder, decree, or ruling or taken any other action permanently restraining,enjoining, or otherwise prohibiting the consummation of the transactions contemplatedhereby, and such order, decree, ruling, or other action shall have become finaland nonappealable; or

 

(c)           by Buyer or LP Sellers, if the aggregateamount of the Environmental Defect Values exceeds fifteen percent of thePurchase Price; or

 

(d)           by LP Sellers, if (i) there shall bea material breach of any representation and warranty of Buyer contained in Article V,or (ii) there shall be a material breach by Buyer of any of its covenantsand agreements contained in this Agreement, which breach, in the case of clause (i) orclause (ii), is not capable of being cured or, if it is capable of beingcured, has not been cured by the 10th Business Day following writtennotice to Buyer from the LP Sellers of such breach; or

 

(e)           by Buyer, if there shall be a materialbreach by LP Sellers of any of their covenants and agreements contained in thisAgreement, which breach  is not capableof being cured or, if it is capable of being cured, has not been cured by the10th Business Day following written notice to LP Sellers from Buyerof such breach.

 

**Section 10.2.****    ****Effect of Termination**. In the event of the termination of this Agreement pursuant to Section 10.1by LP Sellers, on the one hand, or Buyer, on the other, written notice thereofshall forthwith be given to the other party or parties specifying the provisionhereof pursuant to which such termination is made, and this Agreement shallbecome void and have no effect, except that the agreements contained in this Article X,in Sections 7.4, 7.5 and 8.5 and in Articles XIIand XIII****shall survive the terminationhereof.  Nothing contained in this Section 10.2shall relieve any party from liability for damages actually incurred as aresult of any breach of this Agreement.

 

**Section 10.3.****    ****Amendment**. This Agreement may not be amended except by an instrument in writingsigned by or on behalf of all the parties hereto.

 

**Section 10.4.****    ****Waiver**. LP Sellers, on the one hand, or Buyer, on the other, may:  (i) waive any inaccuracies in therepresentations and warranties of the other contained herein or in anydocument, certificate, or writing delivered pursuant hereto, or (ii) waivecompliance by the other with any of the other’s agreements or fulfillment ofany conditions to its own obligations contained herein.  Any agreement on the part of a party heretoto any such waiver 

 

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shall be valid only if set forth in aninstrument in writing signed by or on behalf of such party.  No failure or delay by a party hereto in exercisingany right, power, or privilege hereunder shall operate as a waiver thereof norshall any single or partial exercise thereof preclude any other or furtherexercise thereof or the exercise of any other right, power, or privilege.

 

**ARTICLEXISurvival of Representations, Warranties and Covenants; Indemnification**

 

**Section 11.1.****       ****Survival**.

 

(a)           The representations and warranties of theparties hereto contained in this Agreement shall terminate at LP Closing exceptthat the representations and warranties made by Buyer shall survive the LPClosing and shall remain in effect thereafter for the period that anIndemnified Party is entitled to indemnification based on a breach of suchrepresentation or warranty contained in this Article XI.

 

(b)           No party hereto shall have anyindemnification obligation pursuant to this Article XI or otherwisein respect of any representation, warranty or covenant unless (i) it shallhave received from the party seeking indemnification written notice of theexistence of the claim for or in respect of which indemnification in respect ofsuch representation, warranty or covenant is being sought and (ii) suchnotice is received on or before the Survival Date.  Such notice shall set forth with reasonablespecificity (i) the basis under this Agreement, and the facts thatotherwise form the basis of such claim, (ii) the estimate of the amount ofsuch claim (which estimate shall not be conclusive of the final amount of suchclaim) and an explanation of the calculation of such estimate, including astatement of any significant assumptions employed therein, and (iii) thedate on and manner in which the party delivering such notice became aware ofthe existence of such claim.

 

**Section 11.2.****       ****LP Sellers’ IndemnificationObligations**.  LP Sellers shall, on the LP Closing Date,agree (and, upon delivery to Buyer of the Assignment, shall be deemed to haveagreed), subject to the limitations and procedures contained in this Article XI,following the LP Closing, to indemnify and hold Buyer, its Affiliates and itsand their respective successors and permitted assigns and all of theirrespective stockholders, partners, members, managers, directors, officer,employees, agents and representatives harmless from and against any and allclaims, obligations, actions, liabilities, damages or expenses (collectively, “**Buyer’s Losses**”):

 

(a)           resulting from any a breach of anycertificate delivered at LP Closing; or

 

(b)           relating to the Retained Obligations;

 

provided,however, that LP Sellers’ indemnification obligations for Buyer’s Losses underthis Section 11.2 shall expire on the one-year anniversary of theLP Closing Date (the “**Survival Date**”),except for Buyer’s Losses for which a notice is received by LP Sellers asprovided in this Agreement prior to such date; and further provided that LPSellers’ indemnification for Buyer’s Losses under Section 11.2(b) shallnot expire but shall remain in effect until such Retained Obligations are fullysatisfied.

 

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**Section 11.3.****       ****Buyer’s IndemnificationObligations**.  Buyer shall, on the LP Closing Date, agree(and, upon delivery to Buyer of the Assignment, shall be deemed to haveagreed), subject to the limitations and procedures contained in this Article XI,following the LP Closing, to indemnify and hold LP Sellers, their Affiliatesand their respective successors and permitted assigns and all of theirrespective stockholders, partners, members, managers, directors, officer,employees, agents and representatives harmless from and against any and allclaims, obligations, actions, liabilities, damages, costs or expenses,(collectively, “**LP Sellers’ Losses**”):

 

(a)           resulting from any misrepresentation orbreach of any warranty, covenant or agreement of Buyer contained in this Agreementor any certificate delivered by Buyer at the LP Closing; or

 

(b)           relating to the Assumed Obligations;

 

provided,however, that Buyer’s indemnification obligations for LP Sellers’ Losses under Section 11.3(a) shallexpire on the Survival Date, except for LP Sellers’ Losses for which a noticeis received by Buyer as provided in this Agreement prior to such date; andfurther provided, however, provided, that Buyer’s indemnification obligationsfor LP Sellers’ Losses under Section 11.3(b) shall not expirebut shall remain in effect until such Assumed Obligations are fully satisfied.

 

**Section 11.4.****       ****Net Amounts**. Any amounts recoverable by any party pursuant to this Article XIwith respect to any Buyer’s Losses or LP Sellers’ Losses, as the case may be,shall be decreased by any insurance proceeds or other amounts relating to suchBuyer’s Losses or LP Sellers’ Losses, as the case may be, paid to suchIndemnified Party by any Person (other than any Affiliate of such IndemnifiedParty) not a party to this Agreement.

 

**Section 11.5.****       ****Indemnification Proceedings**. In the event that any claim or demand for which a party (an “**Indemnifying Party**”), would be liable to the another partyunder Section 11.2 or Section 11.3 (an “**Indemnified Party**”) is asserted against or sought to becollected from an Indemnified Party by a third party, the Indemnified Partyshall with reasonable promptness notify the Indemnifying Party of such claim ordemand, but the failure so to notify the Indemnifying Party shall not relievethe Indemnifying Party of its obligations under this Article XI,except to the extent the Indemnifying Party demonstrates that the defense ofsuch claim or demand is materially prejudiced thereby.  The Indemnifying Party shall have 30 daysfrom receipt of the above notice from the Indemnified Party (in this Section 11.5,the “**Notice Period**”) to notify theIndemnified Party whether or not the Indemnifying Party desires, at theIndemnifying Party’s sole cost and expense, to defend the Indemnified Partyagainst such claim or demand; provided, that the Indemnified Party is herebyauthorized prior to and during the Notice Period to file any motion, answer orother pleading that it shall deem necessary or appropriate to protect itsinterests or those of the Indemnifying Party and not prejudicial to theIndemnifying Party.  If the IndemnifyingParty elects to assume the defense of any such claim or demand, the IndemnifiedParty shall have the right to employ separate counsel at its own expense and toparticipate in the defense thereof.  Ifthe Indemnifying Party elects not to assume the defense of such claim or demand(or fails to give notice to the Indemnified Party during the Notice Period),the Indemnified Party shall be entitled to assume the defense of such claim ordemand with counsel of its own choice, at the expense of the IndemnifyingParty.  If the claim or 

 

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demand is asserted against both the IndemnifyingParty and the Indemnified Party and based on the advice of counsel reasonablysatisfactory to the Indemnifying Party it is determined that there is aconflict of interest which renders it inappropriate for the same counsel torepresent both the Indemnifying Party and the Indemnified Party, theIndemnifying Party shall be responsible for paying separate counsel for theIndemnified Party; provided, however, that the Indemnifying Party shall not beresponsible for paying for more than one separate firm of attorneys torepresent all of the Indemnified Parties, regardless of the number ofIndemnified Parties.  If the IndemnifyingParty elects to assume the defense of such claim or demand, (i) nocompromise or settlement thereof may be effected by the Indemnifying Partywithout the Indemnified Party’s written consent (which shall not beunreasonably withheld) unless the sole relief provided is monetary damages thatare paid in full by the Indemnifying Party and (ii) the Indemnifying Partyshall have no liability with respect to any compromise or settlement thereofeffected without its written consent (which shall not be unreasonablywithheld).

 

**Section 11.6.****       ****Indemnification Exclusive Remedy**. Indemnification pursuant to the provisions of this Article XIshall be the exclusive remedy of the parties hereto for any misrepresentationor breach of any warranty, covenant or agreement contained in this Agreement orin any closing document executed and delivered pursuant to the provisionshereof or thereof, or any other claim arising out of the transactionscontemplated by this Agreement.

 

**Section 11.7.****       ****Limited to Actual Damages**. The indemnification obligations of the parties pursuant to this Article XIshall be limited to actual Buyer’s Losses or LP Sellers’ Losses, as the casemay be, and shall not include incidental, consequential, indirect, punitive, orexemplary damages, provided that any incidental, consequential, indirect,punitive, or exemplary damages recovered by a third party (including aGovernmental Entity, but excluding any Affiliate of any party) against a partyentitled to indemnity pursuant to this Article XI shall be includedin the damages recoverable under such indemnity.

 

**Section 11.8.****       ****Indemnification DespiteNegligence**.  It is the express intention of the partieshereto that each party to be indemnified pursuant to this Article XI shallbe indemnified and held harmless from and against all Buyer’s Losses or LPSellers’ Losses, as the case may be, as to which indemnity is provided forunder this Article XI, notwithstanding that any such damages arise out ofor result from the ordinary, strict, sole, or contributory negligence of suchparty and regardless of whether any other party (including the other parties tothis Agreement) is or is not also negligent; provided, however, nothing hereinis intended or shall be construed to as an indemnification by one party for thegross negligence or willful misconduct of the other party.  The parties hereto acknowledge that theforegoing complies with the express negligence rule and is conspicuous.

 

**Section 11.9.****       ****Tax Treatment of IndemnificationAmounts**.  LP Sellers and Buyer agree that any amountsrecoverable by any party pursuant to this Article XI with respectto any Buyer’s Losses or LP Sellers’ Losses shall be treated as adjustments tothe Purchase Price for all Tax purposes.

 

**Section 11.10.****     ****LP Sellers Aggregate IndemnityLimits**.  Notwithstanding anything to the contrarycontained elsewhere in the Agreement, LP Sellers shall not be required toindemnify Buyer under this Article XI for aggregate Buyer’s Lossesin excess of the Purchase Price.

 

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**ARTICLEXIIMiscellaneous Matters**

 

**Section 12.1.****    ****Notices**. All notices, requests, demands, and other communications required orpermitted to be given or made hereunder by any party hereto shall be in writingand shall be deemed to have been duly given or made if (i) deliveredpersonally, (ii) transmitted by first class registered or certified mail,postage prepaid, return receipt requested, (iii) sent by a recognizedprepaid overnight courier service (which provides a receipt), or (iv) sentby email, facsimile transmission, with receipt acknowledged, to the parties atthe following addresses (or at such other addresses as shall be specified bythe parties by like notice):

 

If to LP Sellers:

Linn Energy Holdings, LLC

600 Travis Street, Suite 5100

Houston, Texas 77002

Attention: Charlene A. Ripley, Senior VicePresident, General Counsel and 

Corporate Secretary

Fax No.: (281) 840-4001, Email: cripley@linnenergy.com

 

If to Buyer:

 

Mr. Vaughn O. Vennerberg, II

Senior Executive Vice President & Chief of Staff

XTO Energy Inc.

810 Houston Street

Fort Worth, TX  76102

Fax No.: (817) 870-0379. E-mail: Vaughn_Vennerberg@xtoenergy.com

 

Such notices, requests, demands, and othercommunications shall be effective upon receipt.

 

**Section 12.2.****    ****Prorations, Deposits and Taxes**. Taxes and other charges with respect to the transactions contemplated bythis Agreement shall be paid or prorated by the parties as follows:

 

(a)           Prior to LP Closing, Buyer shall provideLP Sellers with an appropriate exemption certificate to establish the right toany exemption from state and local sales and use Taxes and for any exemptionsfrom any other applicable state Tax. Buyer shall thereafter provide LP Sellers with any additional exemptioncertificates and other documentation as may be required by the GovernmentalEntities for such purpose.  LP Sellersshall reasonably cooperate with Buyer, including providing Buyer with such dataas Buyer may reasonably request in order to support all applicable sales Taxexemptions, subject to the Confidentiality Agreement.

 

(b)           LP Sellers and Buyer agree that all stateand local sales and use Taxes or other similar Taxes relating to the sale andconveyance of the LP Properties shall be the liability of Buyer, and shall beborne by Buyer.  At LP Closing, LPSellers shall collect from Buyer any state and local sales and use Taxes to theextent any such Taxes are due and owing after taking

 

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into account any exemption certificates providedby Buyer to LP Sellers as set forth in Section 12.2(a).  LP Sellers shall remit such Taxes directly tothe appropriate Governmental Entities.

 

(c)           If any state and local sales and useTaxes or other similar Taxes relating to the sale and conveyance of the LPProperties, are subsequently imposed or assessed by any Governmental Entities,and as a result of such subsequent imposition or assessment LP Sellers, ortheir assignees, are assessed additional Taxes, then Buyer shall reimburse LPSellers, or their assignees, for such imposed or assessed Taxes, includingwithout limitation interest and penalties assessed thereon.

 

(d)           All real or personal property transferTaxes or other similar Taxes (including without limitation documentary transfertaxes, realty transfer taxes and charges or fees with respect to the transferof real property or to the recordation of the documents necessary for thetransfer of real property that may be required for the transfer of the LPProperties from LP Sellers to Buyer) shall be borne by and paid directly to theGovernmental Entities by Buyer.

 

(e)           After the LP Closing, the party receivingeach property Tax or other such bill or notice applicable to the LP Propertiesfor the period before or after the LP Closing Date occurred shall promptlynotify the other party and shall pay each such bill prior to the last day thesame may be paid without penalty or interest. The party responsible or liable under this Agreement with respect to suchamount shall promptly on receipt of a written request (accompanied byappropriate supporting documentation) reimburse the responsible party’s shareof such amount so paid as provided under this Agreement.  LP Sellers and Buyer shall reasonablycooperate with each other after LP Closing with respect to any property Taxassessment or valuation (or protest in connection therewith) by anyGovernmental Entity with respect to the Tax periods in which the LP ClosingDate occurs.  If either party receives arefund of any property Taxes for which the other is liable or responsible underthis Agreement, the party receiving such refund, whether received in cash, oras a credit against another state and/or local Tax, shall, within thirty(30) days after the receipt of such refund, remit it to the party who isliable.

 

Forthe avoidance of doubt, and notwithstanding any provision in this Agreement tothe contrary, the parties hereto acknowledge that their respective obligationsunder this Section 12.2 will survive LP Closing.

 

**Section 12.3.****   ****Entire Agreement**. This Agreement, the LP Sellers Disclosure Schedule, together with theExhibits and other writings referred to herein or delivered pursuant hereto,constitute the entire agreement between the parties hereto with respect to thesubject matter hereof and supersede all prior agreements and understandings,both written and oral, between the parties with respect to the subject matterhereof; provided that any Confidentiality Agreement executed by Buyer and LPSellers, in connection with the transaction contemplated hereby remains in fullforce and effect and is not superseded or modified by this Agreement.

 

**Section 12.4.****   ****Injunctive Relief**. The parties hereto acknowledge and agree that irreparable damage wouldoccur in the event any of the provisions of this Agreement were not performedin accordance with their specific terms or were otherwise breached.  It is accordingly agreed that the partiesshall be entitled to an injunction or injunctions to prevent breaches of theprovisions of this Agreement, and shall be entitled to enforce specifically theprovisions of this 

 

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Agreement, in any court of the United States orany state thereof having jurisdiction, in addition to any other remedy to whichthe parties may be entitled under this Agreement or at law or in equity.

 

**Section 12.5.****   ****Binding Effect; Assignment; NoThird Party Benefit**.  This Agreement shall be binding upon andinure to the benefit of the parties hereto and their respective heirs, legalrepresentatives, successors, and permitted assigns.  Except as otherwise expressly provided inthis Agreement, neither this Agreement nor any of the rights, interests, orobligations hereunder shall be assigned by any of the parties hereto withoutthe prior written consent of the other parties. Except as provided in Section 8.5 and Article XI,nothing in this Agreement, express or implied, is intended to or shall conferupon any Person other than the parties hereto, and their respective heirs,legal representatives, successors, and permitted assigns, any rights, benefits,or remedies of any nature whatsoever under or by reason of this Agreement.

 

**Section 12.6.****   ****Severability**. If any provision of this Agreement is held to be unenforceable, thisAgreement shall be considered divisible and such provision shall be deemedinoperative to the extent it is deemed unenforceable, and in all other respectsthis Agreement shall remain in full force and effect; provided, however, that ifany such provision may be made enforceable by limitation thereof, then suchprovision shall be deemed to be so limited and shall be enforceable to themaximum extent permitted by Applicable Law.

 

**Section 12.7.****   ****GOVERNING LAW**. THIS AGREEMENT SHALL BE GOVERNED BY AND CONSTRUED AND ENFORCED INACCORDANCE WITH THE INTERNAL LAWS OF THE STATE OF TEXAS, WITHOUT REGARD TO THEPRINCIPLES OF CONFLICTS OF LAWS THEREOF.

 

**Section 12.8.****   ****Counterparts**. This instrument may be executed in any number of identical counterparts,each of which for all purposes shall be deemed an original, and all of whichshall constitute collectively, one instrument. It is not necessary that each party hereto execute the same counterpartso long as identical counterparts are executed by each such party hereto.  This instrument may be validly executed anddelivered by facsimile or other electronic transmission.

 

**Section 12.9.****   ****WAIVER OF CONSUMER RIGHTS**. BUYER HEREBY WAIVES ITS RIGHTS UNDER THE TEXAS DECEPTIVE TRADEPRACTICES-CONSUMER PROTECTION ACT, SECTION 17.41 ET SEQ., BUSINESS ANDCOMMERCE CODE, A LAW THAT GIVES CONSUMERS SPECIAL RIGHTS AND PROTECTIONS, ANDANY SIMILAR LAW IN ANY OTHER STATE TO THE EXTENT SUCH ACT OR SIMILAR LAW WOULDOTHERWISE APPLY.  AFTER CONSULTATION WITHAN ATTORNEY OF BUYER’S OWN SELECTION, BUYER VOLUNTARILY CONSENTS TO THISWAIVER.

 

**Section 12.10.****   ****Replacement Bonds, Letters ofCredit and Guarantees**.

 

The Parties understand that none of thebonds, letters of credit and guarantees, if any, posted by LP Sellers or anyother Affiliate with any Governmental Authority or third Person and relating tothe LP Sellers or the LP Properties are to be transferred to Buyer.  On or before LP Closing, Buyer shall obtain,or cause to be obtained in the name of Buyer, replacements for such bonds, 

 

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letters of credit and guarantees, and shallcause, effective as of the LP Closing, cancellation or return to LP Sellers ofthe bonds, letters of credit or guarantees posted by LP Sellers.  Buyer may also provide evidence that suchreplacements are not necessary as a result of existing bonds, letters of creditor guarantees that Buyer has previously posted as long as such existing bonds,letters of credit or guarantees are adequate to secure the release of thoseposted by LP Sellers.  Except for bonds,letters of credit and guarantees related primarily to the LP Excluded Assets,Schedule 12.10 identifies the bonds, letters of credit and guarantees posted byLP Sellers as of the date noted on such schedule.

 

**ARTICLEXIIIDefinitions and References**

 

**Section 13.1.****       ****Certain Defined Terms**. When used in this Agreement, the following terms shall have therespective meanings assigned to them in this Section 14.1:

 

“**AAA**”means the American Arbitration Association.

 

“**Affiliate**”means any Person directly or indirectly controlling, controlled by or undercommon control with a Person.

 

“**Agreement**”means this Asset Purchase and Sale Agreement, as hereafter amended or modifiedin accordance with the terms hereof.

 

“**ApplicableLaw**” means any statute, law, principle of common law, rule,regulation, judgment, order, ordinance, requirement, code, writ, injunction, ordecree of any Governmental Entity, exclusive of Environmental Laws.

 

“**AssumedObligations**” means all obligations to timely fulfill, perform, pay,and discharge (or cause to be timely fulfilled, performed, paid or discharged)all of the costs, obligations and liabilities of LP Sellers, known or unknown,with respect to the LP Properties; regardless of whether such obligations aroseprior to or after the Effective Date, including but not limited to: (i) theobligation to (x) plug and abandon or remove and dispose of all wells,platforms, structures, flow lines, pipelines and other equipment, pits andholding ponds now or hereafter located on the LP Oil and Gas Properties, (y) capand bury all flow lines and other pipelines now or hereafter located on the LPOil and Gas Properties, and (z) remedy all Environmental Liabilities withrespect to the LP Properties, including any actual or potential NORMcontamination or chloride or other contamination of groundwater; (ii) obligations and liabilities arising from or in connection with any Imbalances,whether before, on or after the Effective Date; (iii) obligations to payworking interests, royalties, overriding royalties and other interests held insuspense and transferred to Buyer pursuant to Section 7.11 (iv)  allTaxes assessed with respect to a period which begins on or after the EffectiveDate; and (v) obligations with respect to the disputes, actions, suits andproceedings, regardless of the LP Properties to which such disputes, actionsand proceedings relate; provided, that Assumed Obligations does not mean orinclude LP Sellers’ obligations and liabilities with respect to the RetainedObligations.

 

“**Business Day**” means a day other than aSaturday, Sunday or day on which commercial banks in the State of Texas areauthorized or required to be closed for business.

 

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“**Code**”means the Internal Revenue Code of 1986, or any comparable successor statutethereto, as amended.

 

“**ConfidentialityAgreement**” means that certain Confidentiality Agreement by andbetween LP Sellers and Buyer dated March 24, 2008.

 

“**Dollars**”**or**“**$**” means U.S.Dollars.

 

“**EffectiveDate**” means April 1, 2008.

 

“**EnvironmentalLaws**” means all national, state, municipal or local laws, rules,regulations, statutes, ordinances or orders of any Governmental Entitypertaining to the protection of human health or the environment, including theComprehensive Environmental Response, Compensation and Liability Act, asamended by the Superfund Amendments and Reauthorization Act, 42 U.S.C.§ 9601 et seq. (“**CERCLA**”), theSolid Waste Disposal Act, as amended by the Resource Conservation and RecoveryAct, 42 U.S.C. § 6901 et seq., the Federal Water Pollution Control Act, asamended by the Clean Water Act, 33 U.S.C. § 1251 et seq., the Clean Air Act,42 U.S.C. §7401 et seq., the Toxic Substances Control Act, 15 U.S.C. §2601 et seq., and any similar state or local statutes.

 

“**EnvironmentalLiabilities**” means any and all damages (including any remedial,removal, response, abatement, clean-up, investigation and/or monitoring costsand associated legal costs) incurred or imposed (a) pursuant to anyagreement order, notice of responsibility, directive (including directivesembodied in Environmental Laws), injunctions, judgment or similar documents(including settlements) arising out of, in connection with, or under EnvironmentalLaws, or (b) pursuant to any claim by a Governmental Entity or any otherPerson for personal injury, property damage, damage to natural resources,remediation, or payment or reimbursement of response costs incurred or expendedby such Governmental Entity or other Person pursuant to common law or statuteand related to the use or release of Hazardous Materials.

 

“**ExistingHedges**” mean any Hedges affecting the LP Properties on the LPClosing Date.

 

“**GoverningDocuments**” means, when used with respect to an entity, the documentsgoverning the formation and operation of such entity, including (i) in theinstance of a corporation, the articles or incorporation and bylaws of suchcorporation, (ii) in the instance of a partnership, the partnership agreement,and (iii) in the instance of a limited liability company, the certificateof formation and limited liability company agreement.

 

“**GovernmentalEntity**” means any court or tribunal in any jurisdiction (domestic orforeign) or any federal, state, county, municipal or other governmental orquasi-governmental body, agency, authority, department, board, commission,bureau or instrumentality.

 

“**HazardousMaterials**” means (i) any substance or material that is listed,defined or otherwise designated as a “hazardous substance” under Section 101(14)of CERCLA, (ii) any petroleum or petroleum products, (iii) radioactivematerials, urea formaldehyde, asbestos and PCBs and (iv) any otherchemical substance or waste that is regulated by any Governmental Entity underany Environmental Law.

 

29

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“**Hedge**”means any future derivative, swap, collar, put, call, cap, option or othercontract that is intended to benefit from, relate to, or reduce or eliminatethe risk of fluctuations in interest rates, basis risk or the price ofcommodities, including Hydrocarbons.

 

“**Hydrocarbons**”means oil, gas, other liquid or gaseous hydrocarbons, or any of them or anycombination thereof, and all products and substances extracted, separated, processedand produced therefrom.

 

“**Imbalances**”means gas production, pipeline, storage, processing or other imbalanceattributable to substances produced from the LP Oil and Gas Properties.

 

“**Knowledge**”of LP Sellers (or similar references to LP Sellers’ knowledge) means allinformation of which either the Chief Executive Officer, President and ChiefOperating Officer, Senior Vice President, Operations and the Executive VicePresident and Chief Financial Officer, of LP Sellers, have actual knowledge.Knowledge of Buyer (or similar references to Buyer’s knowledge) means allinformation of which either the Chief Executive Officer, President and ChiefOperating Officer, Senior Vice President, Operations and the Executive VicePresident and Chief Financial Officer, of LP Sellers, have actual knowledge.

 

**“Laws”** means allstatutes, rules, regulations, ordinances, orders, and codes of GovernmentalAuthorities.

 

“**Leases**”means oil, gas or mineral leases, leasehold estates, operating rights and otherrights authorizing the owner thereof to explore or drill for and produceHydrocarbons and other minerals, contractual rights to acquire any such of theforegoing interest, which have been earned by performance, and fee mineral,royalty and overriding royalty interest, net profits interest, productionpayments and other interest payable out of Hydrocarbon production, in eachcase, in which LP Sellers have an interest.

 

“**Lender**”means the lenders party to the Credit Facility.

 

“**Lien**”means any claim, lien, mortgage, security interest, pledge, charge, option,right-of-way, easement, encroachment, or encumbrance of any kind.

 

“**MaterialAdverse Effect**” means any change, development, or effect(individually or in the aggregate) which is, or is reasonably likely to be,materially adverse (i) to the business, assets, results of operations orcondition (financial or otherwise) of a party, or (ii) to the ability of aparty to perform on a timely basis any material obligation under this Agreementor any agreement, instrument, or document entered into or delivered inconnection herewith; provided, however, that changes, developments or effectsrelating to (x) the economy in general (including any effects on theeconomy arising as a result of acts of terrorism or the credit markets), (y) changesin Hydrocarbon commodity prices or other changes affecting the U.S. oil and gasindustry generally, or (z) the announcement of the transactionscontemplated hereby, shall not be deemed to constitute a Material AdverseEffect with respect to LP Sellers and shall not be considered in determiningwhether a Material Adverse Effect has occurred with respect to LP Sellers.

 

30

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“**Net RevenueInterest**” means an interest (expressed as a percentage or decimal fraction)in and to all Hydrocarbons produced and saved from or attributable to an Oiland Gas LP Property.

 

“**Permits**”means licenses, permits, franchises, consents, approvals, variances,exemptions, and other authorizations of or from Governmental Entities.

 

“**Person**”means any individual, corporation, partnership, joint venture, association,joint-stock company, trust, enterprise, unincorporated organization, orGovernmental Entity.

 

“**Proceedings**”means all proceedings, actions, claims, suits, investigations, and inquiries byor before any arbitrator or Governmental Entity.

 

“**ReasonableBest Efforts**” means a party’s reasonable best efforts in accordancewith reasonable commercial practice; provided, however, no party shall berequired to file or threaten litigation in order to have performed “ReasonableBest Efforts”.

 

**“RetainedObligations”** means LP Sellers’ obligations and liabilities (i) underthe Credit Facility or any amounts that may be due and owing LP Sellers’officers, employees or owners, (ii) with respect to the LP ExcludedAssets, or (iii) with respect to royalties, and Taxes attributable to theLP Properties for all periods prior to the Effective Date.

 

“**Securities Act**” shall mean the SecuritiesAct of 1933, as amended, and all rules and regulations under such Act.

 

“**LP Sellers Disclosure Schedule**” shall mean aschedule delivered by LP Sellers to Buyer on the date hereof which sets forthadditional information regarding the representations and warranties of LPSellers contained herein and information called for hereby.

 

“**Tax Returns**”mean any return, report, statement, form or similar statement required to befiled with respect to any Taxes (including any attached schedules), including,without limitation, any information return, claim for refund, amended return ordeclaration of estimated Taxes.

 

**“Tax”or**“**Taxes**” means any income taxes orsimilar assessments or any sales, excise, occupation, use, ad valorem,property, production, severance, transportation, employment, payroll,franchise, or other tax imposed by any United States federal, state, or local(or any foreign or provincial) taxing authority, including any interest,penalties, or additions attributable thereto.

 

“**WorkingInterest**” means the percentage of costs and expenses attributable tothe maintenance, development and operation of an Oil and Gas LP Property.

 

**Section 13.2.****   ****Certain Additional Defined Terms**. In addition to such terms as are defined in the preamble to thisAgreement and in Section 14.1, the following terms are used in thisAgreement as defined in the Articles or Sections set forth opposite such terms:

 

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| **Defined Term**                           | ** ** | **Reference**               |
|--------------------------------------------|------------|-----------------------------|
| **Accounting Dispute**                     | ** ** | **Section 2.3(c)**     |
| **Accounting Referee**                     | ** ** | **Section 2.3(c)**     |
| **Adjusted Purchase Price**                | ** ** | **Section 2.1**        |
| **Allocated Value**                        | ** ** | **Section 8.1(c)(i)**  |
| **Assignment**                             | ** ** | **Section 9.1(f)**     |
| **Buyer’s Environmental  Consultant** | ** ** | **Section 8.2(a)**     |
| **Buyer’s Environmental Review**      | ** ** | **Section 8.2(a)**     |
| **Buyer’s Losses**                    | ** ** | **Section 11.2**       |
| **LP Closing**                             | ** ** | **Article III**        |
| **LP Closing Date**                        | ** ** | **Article III**        |
| **Cure Period**                            | ** ** | **Section 8.4(c)**     |
| **Defect Dispute**                         | ** ** | **Section 8.3**        |
| **Defects Escrow**                         | ** ** | **Section 8.4(c)**     |
| **Defects Escrow Agent**                   | ** ** | **Section 8.4(c)**     |
| **Defects Escrow Agreement**               | ** ** | **Section 8.4(c)**     |
| **Defensible Title**                       | ** ** | **Section 8.1(d)(i)**  |
| **Environmental Defect**                   | ** ** | **Section 8.2(e)(i)**  |
| **Environmental Defect Notice**            | ** ** | **Section 8.2(c)**     |
| **Environmental Defect Value**             | ** ** | **Section 8.2(e)(ii)** |
| **Environmental Information**              | ** ** | **Section 8.2(b)**     |
| **Examination Period**                     | ** ** | **Section 8.1(a)**     |
| **LP Excluded Assets**                     | ** ** | **Section 1.2**        |
| **Indemnified Party**                      | ** ** | **Section 11.5**       |
| **Indemnifying Party**                     | ** ** | **Section 11.5**       |
| **Independent Expert**                     | ** ** | **Section 8.3**        |
| **Notice Period**                          | ** ** | **Section 11.5**       |
| **LP Oil and Gas Properties**              | ** ** | **Section 1.1**        |
| **Permitted Encumbrances**                 | ** ** | **Section 8.1(d)(ii)** |
| **Post-LP Closing Defect**                 | ** ** | **Section 8.4(c)**     |
| **LP Properties**                          | ** ** | **Section 1.1**        |
| **Purchase Price**                         | ** ** | **Section 2.1**        |
| **Records**                                | ** ** | **Section 1.1(f)**     |
| **Request Date**                           | ** ** | **Section 2.3(c)**     |
| **Rules**                                  | ** ** | **Section 8.3**        |
| **LP Sellers’ Losses**                | ** ** | **Section 11.3**       |
| **Suspended Proceeds**                     | ** ** | **Section 7.11**       |
| **Survival Date**                          | ** ** | **Section 11.2(b)**    |

 

**Section 13.3.****       ****References, Titles andConstruction**.

 

(a)           All references in this Agreement toarticles, sections, subsections and other subdivisions refer to correspondingarticles, sections, subsections and other subdivisions of this Agreement unlessexpressly provided otherwise.

 

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(b)           Titles appearing at the beginning of anyof such subdivisions are for convenience only and shall not constitute part ofsuch subdivisions and shall be disregarded in construing the language containedin such subdivisions.

 

(c)           The words “this Agreement”, “thisinstrument”, “herein”, “hereof”, “hereby”, “hereunder” and words of similarimport refer to this Agreement as a whole and not to any particular subdivisionunless expressly so limited.

 

(d)           Words in the singular form shall beconstrued to include the plural and viceversa, unless thecontext otherwise requires.  Pronouns inmasculine, feminine and neuter genders shall be construed to include any othergender.

 

(e)           Unless the context otherwise requires orunless otherwise provided herein, the terms defined in this Agreement whichrefer to a particular agreement, instrument or document also refer to andinclude all renewals, extensions, modifications, amendments or restatements ofsuch agreement, instrument or document, provided that nothing contained in thissubsection shall be construed to authorize such renewal, extension,modification, amendment or restatement.

 

(f)            Examples shall not be construed to limit,expressly or by implication, the matter they illustrate.

 

(g)           The word “or” is not intended to be exclusiveand the word “includes” and its derivatives means “includes, but is not limitedto” and corresponding derivative expressions.

 

(h)           No consideration shall be given to thefact or presumption that one party had a greater or lesser hand in drafting thisAgreement.

 

(i)            All references herein to “$” or “dollars”shall refer to U.S. Dollars.

 

(j)            Exhibits A, B, C, and D and Schedules 2.5, 4, and 12.10are attached hereto.  Each such Exhibit andSchedule is incorporated herein by reference for all purposes and references tothis Agreement shall also include such Exhibit or Schedule unless thecontext in which used shall otherwise require.

 

**[REMAINDEROF PAGE INTENTIONALLY LEFT BLANK]**

 

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**IN WITNESS WHEREOF**, this Agreement is executedby the parties hereto on the date set forth above.

 
| ** ** | **LP  SELLERS:**                                                            |
|------------|-----------------------------------------------------------------------------|
| ** ** | ** **                                                                  | ** ** |
|       | LINN  ENERGY HOLDINGS, LLC, a                                               |
|       | Delaware  limited liability company                                         |
|       |                                                                        |   |
|       |                                                                        |   |
|       | By:                                                                         | /s/  Mark E. Ellis |
|       | Name:  Mark E. Ellis                                                        |
|       | Title:  President and Chief Operating Officer                               |
|       |                                                                        |   |
|       |                                                                        |   |
|       | MARATHON  85-II LIMITED                                                     |
|       | PARTNERSHIP  a West Virginia limited                                        |
|       | partnership                                                                 |
|       |                                                                        |   |
|       | By:                                                                         | Linn  Energy Holdings, LLC, General |
|       | Partner                                                                     |
|       |                                                                        |
|       |                                                                        |
|       | By:                                                                         | /s/  Mark E. Ellis |
|       |                                                                        | Mark  E. Ellis, President and Chief  Operating Officer |
|       |                                                                        |   |
|       | MARATHON  85-III LIMITED  PARTNERSHIP, a West Virginia limited  partnership |
|       |                                                                        |   |
|       | By:                                                                         | Linn  Energy Holdings, LLC, General |
|       | Partner                                                                     |
|       |                                                                        |
|       |                                                                        |
|       | By:                                                                         | /s/  Mark E. Ellis |
|       |                                                                        | Mark  E. Ellis, President and Chief  Operating Officer |
|            |                                                                             |  |  |  |

** **

** **

**SIGNATUREPAGE TO ASSET PURCHASE AND SALE AGREEMENT- Appalachia Region**

 

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|   | **BUYER:**                                |
|--------|-------------------------------------------|
|   | ** **                                |
|   | XTO  ENERGY INC., a Delaware  corporation |
|   |                                      |
|   |                                      |
|   | By:                                       | /s/  Vaughn O. Vennerberg, II |
|   |                                      | Vaughn  O. Vennerberg, II, Senior  Executive Vice President & Chief of  Staff |

 

 

**SIGNATURE PAGE TO ASSET PURCHASEAND SALE AGREEMENT- Appalachia Region**

 

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**EXHIBIT A-1**

** **

**LEASES**

 

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**EXHIBIT A-2**

** **

**RIGHTS OF WAY**

 

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**EXHIBIT A-3**

** **

**MINERAL TRACTS**

 

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**EXHIBIT A-4**

** **

**REAL PROPERTY**

 

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**EXHIBIT A-5**

** **

**VEHICLE LIST**

 

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**EXHIBIT B**

** **

**LP EXCLUDED ASSETS**

 

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**EXHIBIT B-1**

 

**FIELD OFFICE**

 

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**EXHIBIT B-2**

 

**EQUIPMENT**

 

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**EXHIBIT B-3**

 

**VEHICLES**

 

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**EXHIBIT C**

** **

**ALLOCATION OF PURCHASE PRICE**

 

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**EXHIBIT D**

**FORM OF ASSIGNMENT**

 

THE STATE OF[KENTUCKY/PENNSYLVANIA/VIRGINIA/WEST VIRGINIA]

 

COUNTIES OF                       

 

ASSIGNMENT AND BILL OF SALE

 

[MARATHON 85-II LIMITED PARTNERSHIP/ MARATHON 85-III LIMITEDPARTNERSHIP], a West Virginia limited partnership, (“Grantor”), for Ten Dollarsand other good and valuable consideration (the receipt and sufficiency of whichare hereby acknowledge), does hereby SELLS and ASSIGNS unto XTO ENERGY INC., aDelaware corporation (herein called “Grantee”),whose address is**                                                **,all of Grantor’s right, title and interests in and to the following:

 

1.1           Allright, title and interest of Grantor in and to the Leases described on Exhibit Aattached hereto and made a part hereof for all purposes (and any ratificationsand/or amendments to such Leases, whether or not such ratifications oramendments are described on such Exhibit A);

 

1.2           Withoutlimitation of the foregoing but subject to the provisions in this Assignmentand Bill of Sale regarding Excluded LP Properties, all other right, title andinterest (of whatever kind or character, whether legal or equitable, andwhether vested or contingent) of Grantor in and to the oil, gas, and otherminerals in and under or that may be produced from the lands described in Exhibit Ahereto or described in any of the Leases described on such Exhibit A(including interests in Leases, overriding royalties, production payments andnet profits interests in such lands or such Leases, and fee mineral interests,fee royalty interests, and other interests in so far as they cover such lands),even though Grantor’s interests therein may be incorrectly described in, oromitted from, such Exhibit A;

 

1.3           Allrights, titles and interests of Grantor in and to, or otherwise derived from,all presently existing and valid oil, gas, or mineral unitization, pooling, orcommunitization agreements, declarations, and/or orders and in and to theproperties covered and the units created thereby (including all units formedunder orders, rules, regulations, or other official acts of any federal, state,or other authority having jurisdiction, voluntary unitization agreements,designations and/or declarations) relating to the properties described in paragraphs 1.1 and 1.2  (b) above;

 

1.4           Allrights, titles, and interests of Grantor in and to the Material Contracts andall presently existing and valid production sales (and sales related)contracts, operating agreements, and other agreements and contracts whichrelate to any of the properties described in paragraphs 1.1, 1.2 and1.3 above, or which relate to the exploration, development, operation,or maintenance thereof or the treatment, storage, transportation or marketingof production therefrom (or allocated thereto);

 

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1.5           Allrights, titles, and interests of Grantor in and to all materials, supplies,machinery, equipment, improvements and other personal property and fixtures(including all wells, wellhead equipment, pumping units, flowlines, tanks,buildings, injection facilities, saltwater disposal facilities, compressionfacilities, gathering systems, and other equipment), and all easements,rights-of-way, surface leases and other surface rights, all Permits andlicenses, and all other appurtenances being used or held for use in connectionwith, or otherwise related to, the exploration, development, operation ormaintenance of any of the properties described in paragraphs 1.1, 1.2and 1.3 above, or the treatment, storage, transportation, or marketingof production therefrom (or allocated thereto); and

 

1.6           Subjectto any third party rights, all of Grantor’s lease files, title opinions,production records, well files, accounting records (but not including generalfinancial and accounting records attributable to Grantor or Grantor’sbusiness), seismic records and surveys, gravity maps, electric logs, geologicalor geophysical data and records, and other files, documents and records ofevery kind and description which relate to the properties described above (the “Records”);provided, however that Grantor may retain copies of any or all of the Records;

 

The properties, rights and interests specified in the foregoingparagraphs 1.1 through 1.6 exclusive of the Excluded LPProperties (defined below), are herein sometimes collectively called the “SubjectLP Properties.”

 

Any provision contained in this Assignment and Bill of Salenotwithstanding, the Subject LPProperties do not include, and there is hereby expressly excepted and excludedtherefrom and reserved to Grantor, all other assets, properties, and businessof Grantor, including the following:

 

2.1           Anyaccounts receivable or accounts payable accruing before the Effective Date;

 

2.2           Allof Grantor’s right, title, and interest in any oil, gas, or mineral Leases,overriding royalties, production payments, net profits interests, fee mineralinterests, fee royalty interests and other interests in oil, gas, and otherminerals not expressly included in the definition of LP Oil and Gas Propertiesand all oil, gas or other hydrocarbon production from or attributable to theSubject LP Properties with respect to all periods prior to the Effective Date,all proceeds attributable thereto, and all Hydrocarbons that, at the EffectiveDate, are owned by Grantor and are in storage or within processing plants;

 

2.3           Anyrebate or refund of costs, Taxes, or expenses borne by Grantor or Grantor’spredecessors in title attributable to periods prior to the Effective Date;

 

2.4           Anyand all proceeds from the settlements of contract disputes with purchasers ofHydrocarbons from the Subject LP Properties, including settlement oftake-or-pay disputes, insofar as said proceeds are attributable to periods oftime prior to the Effective Date;

 

2.5           Anyand all proceeds from settlements with regard to reclassification of oil or gasproduced from the Subject LP Properties, insofar as said proceeds areattributable to periods of time prior to the Effective Date;

 

2.6           Allcontracts of insurance or indemnity;

 

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2.7           Allclaims (including insurance claims) and causes of action of Grantor against oneor more third parties arising from acts, omission, or events occurring prior tothe Effective Date and all claims under any joint interest audit attributableto any period prior to the Effective Date;

 

2.8           Alllimited liability company, financial, tax, and legal (other than title) booksand records of Grantor;

 

2.9           Anygeological, geophysical or seismic data, materials, or information, includingmaps, interpretations, records, or other technical information related to orbased upon any such data, materials or information, and any other asset, data,materials, or information, the transfer of which is restricted or prohibitedunder the terms of any third party license, confidentiality agreement, or otheragreement or the transfer of which would require the payment of a fee or otherconsideration to any third party; provided, however, that if any such data,materials, or information is transferable upon payment of a fee or otherconsideration, and if Buyer has paid such fee or other consideration prior tothe LP Closing Date, then such data, materials, or information shall betransferred to Buyer;

 

2.10         Allshare drive and accounting servers related to the Subject LP Propertiesregardless of where such servers are located;

 

2.11         Allof Grantor’s accounting or other administrative systems, computer software,patents, trade secrets, copyrights, names, trademarks, logos, and otherintellectual property;

 

2.12         Alldocuments and instruments of Grantor that may be protected by anattorney-client privilege (exclusive of title opinions in respect of the LP Oiland Gas Properties and all documents and instruments related to any matters inGrantor’s Disclosure Schedule);

 

2.13         Allof the other properties, interests and assets described on Exhibit B,together with any rights, liabilities, or obligations associated with suchassets;

 

2.14         TheExisting Hedges and all hedging transactions and any gains or lossesattributable to any hedging activities, whether occurring before or after the EffectiveDate;

 

2.15         Anyother right or interest in and to the Subject LP Properties to the extentattributable to the period prior to the Effective Date;

 

2.16         Allbonds, letters of credit and guarantees if any, posted by Grantor or anyAffiliate with any Governmental Authority or third person and relating to theSubject LP Properties;

 

2.17         All(a) correspondence or other documents or instruments of Grantor relatingto the transactions contemplated hereby, (b) lists of other prospectivepurchasers of Grantor or the Subject LP Properties compiled by Grantor, (c) bidssubmitted to Grantor by other prospective purchasers of Grantor or the SubjectLP Properties, (d) analyses by Grantor or any Affiliates thereof submittedby other prospective purchasers of Grantor or the Subject LP Properties and (e) correspondencebetween or among Grantor or its Affiliates or their respective representatives 

 

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withrespect to, or with, any other prospective purchasers from Grantor or theSubject LP Properties; and

 

2.18         Allassets associated with Grantor’s Affiliate, Mid Atlantic Well Service, Inc.and its operations.

 

The properties and interests specified in the foregoing paragraphs 2.1through 2.18 are herein collectively called the “Excluded LP Properties”.  Itis understood that certain of the Excluded LP Properties may not be embraced bythe term “Subject LP Properties”.  Thefact that certain assets have been expressly excluded is not intended tosuggest that had they not been excluded they would have constituted Subject LPProperties and may not be used to interpret the meaning of any word or phraseused in describing the Subject LP Properties.

 

This Assignment and Bill of Sale is made by Grantor and accepted byGrantee subject to all matters shown of record in                     Counties, [Kentucky/Pennsylvania/Virginia/West Virginia], and the other publicrecords of that State.

 

This Assignment and Bill of Sale is madesubject to that certain Limited Partnership Asset Purchase and Sale Agreement(the “Agreement”) between Grantor and Grantee dated                                             .  The Agreement contains certainrepresentations, warranties, covenants, indemnities and agreements between theparties, some of which may survive the delivery of this Assignment and Bill ofSale, as more particularly provided for therein, but third parties mayconclusively rely on this Assignment and Bill of Sale to vest title to theSubject LP Properties in Grantee.  TheAgreement also contains certain defined terms which are used in this Assignmentand Bill of Sale with the same meaning as set out in this Assignment and Billof Sale.

 

**EXCEPT AS SET OUT IN SECTION 4.1 OF THEAGREEMENT, THIS ASSIGNMENT AND BILL OF SALE IS MADE BY GRANTOR AND ACCEPTED BYGRANTEE WITHOUT ANY WARRANTY OF TITLE, EXPRESS OR IMPLIED.  IN ADDITION, GRANTOR EXPRESSLY DISCLAIMS ANYAND ALL REPRESENTATIONS AND WARRANTIES, EXPRESS, IMPLIED, STATUTORY OROTHERWISE,  WITHOUT LIMITATION OF THEFOREGOING, THE SUBJECT LP PROPERTIES ARE CONVEYED PURSUANT HERETO WITHOUT ANYWARRANTY OR REPRESENTATION WHETHER EXPRESS, IMPLIED, STATUTORY OR OTHERWISE,RELATING TO THE CONDITION, QUANTITY, QUALITY, FITNESS FOR A PARTICULAR PURPOSE,CONFORMITY TO THE MODELS OR SAMPLES OF MATERIALS OR MERCHANTABILITY OF ANYEQUIPMENT OR ITS FITNESS FOR ANY PURPOSE, AND WITHOUT ANY OTHER EXPRESS,IMPLIED, STATUTORY OR OTHER WARRANTY OR REPRESENTATION WHATSOEVER.  GRANTEE HAS INSPECTED, OR WAIVED GRANTEE’SRIGHT TO INSPECT, THE SUBJECT LP PROPERTIES FOR ALL PURPOSES AND SATISFIEDITSELF AS TO THEIR PHYSICAL AND ENVIRONMENTAL CONDITION, BOTH SURFACE ANDSUBSURFACE, INCLUDING BUT NOT LIMITED TO CONDITIONS SPECIFICALLY RELATED TO THEPRESENCE, RELEASE OR DISPOSAL OF HAZARDOUS SUBSTANCES, SOLID WASTES ORNATURALLY OCCURRING RADIOACTIVE MATERIALS (“NORM”).  GRANTEE IS RELYING SOLELY UPON ITS OWN**

 

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**INSPECTION OF THE SUBJECT LP PROPERTIES, ANDGRANTEE SHALL ACCEPT ALL OF THE SAME IN THEIR “AS IS, WHERE IS” CONDITION.  ALSO WITHOUT LIMITATION OF THE FOREGOING,GRANTOR MAKES NO WARRANTY OR REPRESENTATION, EXPRESS, IMPLIED, STATUTORY OROTHERWISE, AS TO THE ACCURACY OR COMPLETENESS OF ANY DATA, REPORTS, RECORDS,PROJECTIONS, INFORMATION OR MATERIALS NOW, HERETOFORE OR HEREAFTER FURNISHED ORMADE AVAILABLE TO GRANTEE IN CONNECTION WITH THIS ASSIGNMENT INCLUDING, WITHOUTLIMITATION, RELATIVE TO PRICING ASSUMPTIONS, OR QUALITY OR QUANTITY OFHYDROCARBON RESERVES (IF ANY) ATTRIBUTABLE TO THE SUBJECT LP PROPERTIES OR THEABILITY OR POTENTIAL OF THE SUBJECT PROPERTIES TO PRODUCE HYDROCARBONS OR THEENVIRONMENTAL CONDITION OF THE SUBJECT LP PROPERTIES OR ANY OTHER MATTERSCONTAINED IN THE MATERIALS FURNISHED OR MADE AVAILABLE TO GRANTEE BY GRANTOR ORBY GRANTOR’S AGENTS OR REPRESENTATIVES. ANY AND ALL SUCH DATA, RECORDS, REPORTS, PROJECTIONS, INFORMATION AND OTHERMATERIALS (WRITTEN OR ORAL) FURNISHED BY GRANTOR OR OTHERWISE MADE AVAILABLE ORDISCLOSED TO GRANTEE ARE PROVIDED AS A CONVENIENCE AND SHALL NOT CREATE OR GIVERISE TO ANY LIABILITY OF OR AGAINST GRANTOR AND ANY RELIANCE ON OR USE OF THESAME SHALL BE AT GRANTEE’S SOLE RISK TO THE MAXIMUM EXTENT PERMITTED BY LAW.**

 

TO HAVE AND TO HOLD the Subject LP Properties unto Grantee, and its successors andassigns, forever, subject as aforesaid.

 

By acceptance of this Assignment, Grantee has agreed (i) to assume, and to timely pay and perform, allduties, obligations and liabilities relating to the ownership and/or operationof the Subject LP Properties regardlessof whether the same accrued or otherwise arose before or after the effectivedate hereof (including, without limitation, those arising under thecontracts and agreements described in subparagraph (c) above), and (ii) to indemnify and hold Grantor, itsrespective Affiliates, and its or their respective directors, officers,employees, attorneys, contractors and agents harmless from and against any andall claims, actions, causes of action, liabilities, damages, losses, costs orexpenses (including, without limitation, court costs and attorneys’ fees) ofany kind or character arising out of or otherwise relating to the ownershipand/or operation of the Subject LP Properties regardless of whether the same accrued or otherwise arose before or afterthe effective date hereof.  Inconnection with (but not in limitation of) the foregoing, it is specificallyunderstood and agreed that such duties,obligations and liabilities shall be deemed to include all mattersarising out of the condition of the Subject LP Properties on the effective date hereof (including,without limitation, within such matters all obligations to properly plug andabandon, or replug and re-abandon, wells located on the Subject LP Properties,to restore the surface of the Subject LP Properties and to comply with, or tobring the Subject LP Properties into compliance with, applicable environmentallaws, rules, regulations and orders, including conducting any remediationactivities which may be required on or otherwise in connection with activitieson the Subject LP Properties), regardless of whether such condition or theevents giving rise to such condition arose or occurred before or after the effective date hereof, and theassumptions and indemnifications by Grantee provided for in the 

 

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first sentence of this section shall expressly cover and include suchmatters.  **THE FOREGOING ASSUMPTIONS AND INDEMNIFICATIONS SHALL APPLY WHETHER OR NOTSUCH DUTIES, OBLIGATIONS OR LIABILITIES, OR SUCH CLAIMS, ACTIONS, CAUSES OFACTION, LIABILITIES, DAMAGES, LOSSES, COSTS OR EXPENSES ARISE OUT OF (i) NEGLIGENCE(INCLUDING SOLE NEGLIGENCE, SINGLE NEGLIGENCE, CONCURRENT NEGLIGENCE, ACTIVE ORPASSIVE NEGLIGENCE, BUT EXPRESSLY NOT INCLUDING GROSS NEGLIGENCE) OF GRANTOR ORANY OTHER INDEMNIFIED PARTY, OR (ii) STRICT LIABILITY.**

 

Grantor agrees to execute and deliver to Grantee, from time to time,such other and additional instruments, notices, division orders, transferorders and other documents, and to do all such other and further acts andthings as may be necessary to more fully and effectively grant, convey andassign to Grantee the Subject LP Properties.

 

This Assignment is being executed in several counterparts all of whichare identical, except that, tofacilitate recordation, certain counterparts hereof may contain only thatportion of Exhibit A which contains specific descriptions of the SubjectLP Properties located in the recording jurisdiction in which the particularcounterpart is to be recorded. All of such counterparts together shall constitute one and the sameinstrument.  Complete copies of this Assignment containing the entire Exhibit Ahave been recorded in  County,[Kentucky/Pennsylvania/Virginia/West Virginia] and retained by Grantor andGrantee.

 

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IN WITNESS WHEREOF this Assignment has been executed by the parties hereto on the dates of theirrespective acknowledgments effective as to runs of oil and deliveries ofgas, and for all other purposes, as of 7:00 a.m. local time at the locations of the Subject LP Properties, respectively,on April 1, 2008 (the “Effective Date”).

 
|   | “GRANTOR”                                                        |
|--------|----------------------------------------------------------------------------|
|   |                                                                       |
|   | MARATHON 85-II LIMITED  PARTNERSHIP, a West Virginia limited  partnership  |
|   |                                                                       |
|   | By; Linn Energy Holdings, LLC, General  Partner                            |
|   |                                                                       |
|   |                                                                       |
|   | By:                                                                        |   |
|   | Name:                                                                      |   |
|   | Title:                                                                     |   |
|   |                                                                       |   |
|   | MARATHON 85-III LIMITED  PARTNERSHIP, a West Virginia limited  partnership |
|   |                                                                       |
|   | By: Linn Energy Holdings, LLC, General  Partner                            |
|   |                                                                       |
|   |                                                                       |
|   | By:                                                                        |   |
|   | Name:                                                                      |   |
|   | Title:                                                                     |   |
|   |                                                                       |
|   | “GRANTEE”                                                        |
|   |                                                                       |
|   | XTO ENERGY INC., a Delaware  corporation                                   |
|   |                                                                       |
|   |                                                                       |
|   | By:                                                                        |   |
|   | Name:                                                                      |   |
|   | Title:                                                                     |   |
|        |                                                                            |  |  |  |  |  |

 

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**[ACKNOWLEDGMENTS]**

 

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