Exhibit 10.50


 


EXECUTION VERSION


 


ASSET PURCHASE AGREEMENT


 


by and among


 


American Eagle Energy Corporation


 


and


 


AMZG, Inc.,


 


as the Sellers,


 


and


 


Resource Energy Can-Am LLC,


 


as the Purchaser


 


Dated as of October 21, 2015


 




    	 	 	 



     


    

 


TABLE OF CONTENTS


 


	 	 	Page
	 	 	 
	Article I DEFINITIONS	1
	 	 	 
	1.1	Certain Definitions	1
	1.2	Terms Defined Elsewhere in this Agreement	16
	1.3	Other Definitional and Interpretive Matters	17
	 	 	 
	Article II PURCHASE AND SALE OF ASSETS; ASSUMPTION OF LIABILITIES	19
	 	 	 
	2.1	Purchase and Sale of Assets	19
	2.2	Excluded Assets	22
	2.3	Assumption of Liabilities	22
	2.4	Excluded Liabilities	23
	2.5	Non-Assignment of Assets	25
	2.6	Contract Designation; Cure Costs.	25
	2.7	Further Conveyances and Assumptions	27
	2.8	Assignment to Affiliates of the Purchaser	27
	2.9	Effective Time; Proration.	27
	 	 	 
	Article III CONSIDERATION	28
	 	 	 
	3.1	Base Purchase Price	28
	3.2	Performance Deposit	28
	3.3	Adjustments to Base Purchase Price	29
	3.4	Preliminary Settlement Statement	30
	3.5	Final Settlement of Purchase Price.	30
	 	 	 
	Article IV CLOSING AND TERMINATION	32
	 	 	 
	4.1	Closing Date	32
	4.2	Deliveries by the Sellers	32
	4.3	Deliveries by the Purchaser	33
	4.4	Termination of Agreement	34
	4.5	Procedure Upon Termination	36
	4.6	Effect of Termination.	36
	 	 	 
	Article V REPRESENTATIONS AND WARRANTIES OF THE SELLERS	37
	 	 	 
	5.1	Organization and Good Standing	37
	5.2	Authorization of Agreement	37
	5.3	Conflicts; Consents of Third Parties.	38
	5.4	Financial Statements and Reports.	38
	5.5	Intentionally Blank.	39
	5.6	Compliance with Law; Permits.	39
	5.7	Other Real Property Leases and Owned Real Property.	40
	5.8	Title to Purchased Assets.	41
	5.9	Intellectual Property.	42
	5.10	Material Contracts.	42
	5.11	Litigation.	43


 




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	5.12	Tax Matters	44
	5.13	Environmental Matters	45
	5.14	Labor Matters.	45
	5.15	Employee Benefit Plans.	45
	5.16	Brokers or Financial Advisors	46
	5.17	Mineral Leases.	46
	5.18	Wells.	47
	5.19	Sale Contracts	47
	5.20	Gas Imbalances	47
	5.21	Preferential Purchase Rights	48
	5.22	Current Commitments	48
	5.23	Powers of Attorney	48
	5.24	Intentionally Blank.	48
	5.25	Suitability of Purchased Assets.	48
	5.26	Insurance and Bonds	48
	5.27	Affiliate Transactions	48
	5.28	Sellers as Debtor in Possession; No Trustee	49
	5.29	Required Notices	49
	 	 	 
	Article VI REPRESENTATIONS AND WARRANTIES OF THE PURCHASER	49
	 	 	 
	6.1	Organization and Good Standing	49
	6.2	Authorization of Agreement	49
	6.3	Conflicts; Consents of Third Parties.	50
	6.4	Litigation	50
	6.5	No Other Representations or Warranties	50
	 	 	 
	Article VII BANKRUPTCY COURT MATTERS	51
	 	 	 
	7.1	Competing Transaction	51
	7.2	Bankruptcy Court Filings	51
	 	 	 
	Article VIII COVENANTS	52
	 	 	 
	8.1	Access and Information.	52
	8.2	Actions Pending the Closing.	53
	8.3	Consents and Permits	55
	8.4	Further Assurances.	56
	8.5	Publicity	57
	8.6	Notification of Certain Matters.	57
	8.7	Casualty and Insurance.	58
	8.8	Use of Names	58
	8.9	Confidentiality	59
	8.10	Employee Matters.	59
	8.11	Cooperation	61
	8.12	Release of Liens	61
	8.13	Purchaser Financing Cooperation	62
	8.14	Successor Operator	62
	8.15	Title Defects	62
	8.16	Environmental Defects	62


 




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	8.17	Intentionally Blank.	63
	8.18	Suspense Accounts	63
	8.19	Waiver of Bulk Sales Laws	63
	8.20	Seller’s Records	63
	 	 	 
	Article IX CONDITIONS TO CLOSING	63
	 	 	 
	9.1	Conditions Precedent to Obligations of the Purchaser	63
	9.2	Conditions Precedent to Obligations of the Sellers	64
	9.3	Conditions Precedent to Obligations of the Purchaser and the Sellers	65
	9.4	Frustration of Closing Conditions	65
	 	 	 
	Article X TAXES	65
	 	 	 
	10.1	Transfer Taxes	65
	10.2	Certain Periodic Non-Income Taxes.	66
	10.3	Cooperation and Audits	67
	 	 	 
	Article XI MISCELLANEOUS	67
	 	 	 
	11.1	No Survival of Representations and Warranties	67
	11.2	Expenses	67
	11.3	Injunctive Relief.	68
	11.4	Submission to Jurisdiction; Consent to Service of Process.	68
	11.5	Waiver of Right to Trial by Jury	69
	11.6	Entire Agreement; Amendments and Waivers	69
	11.7	Governing Law	69
	11.8	Notices	69
	11.9	Severability	70
	11.10	Assignment	71
	11.11	Non-Recourse	71
	11.12	Counterparts	71
	11.13	No Presumption	71


 


	Exhibit A	-	Escrow Agreement
	 	 	 
	Schedule 1.1(b)	-	Working Interest and Net Working Interest
	Schedule 1.1(c)	-	Other Permitted Liens
	Schedule 1.1(d)(i)	-	Purchased Contracts
	Schedule 1.1(d)(ii)	-	Excluded Contracts
	Schedule 1.1(e)	-	Executory Contracts
	Schedule 1.1(f)	-	Knowledge of Sellers
	Schedule 2.1(a)	-	Mineral Leases
	Schedule 2.1(d)	-	Wells
	Schedule 2.1(e)	-	Production Facilities
	Schedule 2.1(f)	-	Fixed and Other Assets
	Schedule 2.1(g)	-	Personal Property & Furnishings
	Schedule 2.1(h)	-	Prepaid Amounts
	Schedule 2.1(j)	-	Permits, Easements and Rights of Way


 




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	Schedule 2.2	-	Excluded Assets
	Schedule 2.6	-	Estimated Cure Costs
	Schedule 5.3(a)	-	Conflicts
	Schedule 5.3(b)	-	Preference Rights, Consents, Waivers and Approvals
	Schedule 5.6(a)	-	Compliance with Laws
	Schedule 5.6(b)	-	Permits
	Schedule 5.7(a)	-	Other Real Property Leases and Other Leased Property
	Schedule 5.7(b)	-	Owned Real Property
	Schedule 5.8(a)	-	Liens
	Schedule 5.8(b)	-	Owned or Leased Personal Property
	Schedule 5.9(a)	-	Trademarks and Domain Name Registrations
	Schedule 5.9(b)	-	Purchased Intellectual Property
	Schedule 5.10(a)	-	Material Contracts
	Schedule 5.10(b)	-	Material Contracts - Exceptions
	Schedule 5.10(c)	-	Material Contracts – Hydrocarbon Arrangements
	Schedule 5.11(a)	-	Legal Proceedings
	Schedule 5.11(b)	-	Legal Proceedings Pending or Threatened in Writing
	Schedule 5.12	-	Tax Matters
	Schedule 5.13	-	Environmental Matters
	Schedule 5.14(a)	-	Labor Matters
	Schedule 5.15(a)	-	Employee Benefit Plans
	Schedule 5.17(b)	-	Defensible Title to Mineral Leases
	Schedule 5.17(c)	-	Net Mineral Acres in Undeveloped Leases
	Schedule 5.17(d)	-	Execution Date Accrued Suspense Funds
	Schedule 5.18(c)	-	Plugging and Abandonment Obligations
	Schedule 5.18(d)	-	Inactive Wells
	Schedule 5.19	-	Sale Contracts
	Schedule 5.20	-	Gas Imbalances
	Schedule 5.21	-	Preferential Purchase Rights
	Schedule 5.22	-	Current Commitments
	Schedule 5.26	-	Insurance and Bonds
	Schedule 5.27	-	Affiliate Transactions


 




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ASSET PURCHASE AGREEMENT


 


ASSET PURCHASE AGREEMENT
(this “Agreement”), by and among Resource Energy Can-Am LLC, a Delaware limited liability company (the
“Purchaser”), American Eagle Energy Corporation, a Nevada corporation (the “Company”),
and each of the Company’s subsidiaries listed on the signature pages hereto (together with the Company, each a “Seller”
and, collectively, the “Sellers”), is dated as of the latest date set forth below any Seller or Purchaser’s
signature on the signature pages hereto (the “Execution Date”).


 


Recitals:


 


A.           The
Sellers are debtors and debtors in possession under title 11 of the United States Code, 11 U.S.C. §§ 101, et seq.
(the “Bankruptcy Code”), and filed petitions for relief under chapter 11 of the Bankruptcy Code on May
8, 2015 (the “Petition Date”) in the United States Bankruptcy Court for the District of Colorado (the
“Bankruptcy Court”), where the Sellers’ bankruptcy cases are jointly administered under Case No.
15-15073-HRT (collectively, the “Bankruptcy Case”).


 


B.           The
Sellers are engaged in the business of onshore oil and natural gas exploration, development and production in the United States
of America, including North Dakota and Montana (such business as conducted by the Sellers, the “Business”).


 


C.           Subject
to the terms and conditions set forth herein, the Purchaser has agreed to purchase, and the Sellers have agreed to sell, free and
clear of all Liens (other than Permitted Liens) and Excluded Liabilities, the Purchased Assets, which are substantially all of
the assets comprising the Business (the “Asset Sale”), in accordance with sections 363 and 365 of the
Bankruptcy Code.


 


NOW, THEREFORE, in
consideration of the premises and the mutual representations, warranties, covenants and agreements contained herein, and for other
good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the parties hereby agree as follows:


 


Article
I


DEFINITIONS


 


1.1           Certain
Definitions. For purposes of this Agreement, the following terms, when used herein with initial capital letters, have the
meanings specified in this Section 1.1 or in other Sections of this Agreement identified in Section 1.2:


 


“Adjustment
Escrow Amount” means $1,000,000.


 


“Adjustment
Escrow Limit” means an amount equal to the Adjustment Escrow Amount.


 




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“Affiliate”
means, with respect to any Person, any other Person that, directly or indirectly through one or more intermediaries, controls,
or is controlled by, or is under common control with, such Person, and the term “control” (including the terms “controlled
by” and “under common control with”) means the possession, directly or indirectly, of the power to direct or
cause the direction of the management and policies of such Person, whether through ownership of voting securities, by contract
or otherwise.


 


“Ancillary
Agreements” means the Assignment and Assumption Agreement, the Bill of Sale, the Assignment of Mineral Leases; Mineral
Deed and the Assignment of Other Real Property Leases.


 


“Approved
Budget” means the Budget attached as “Exhibit A” to the Cash Collateral Order.


 


“Assignment
and Assumption Agreement” means the Assignment and Assumption Agreement to be executed by the Sellers and the Purchaser
on the Closing Date, in form and substance reasonably acceptable to the Sellers and the Purchaser.


 


“Assignment
of Mineral Leases; Mineral Deed” means, collectively: (a) the Mineral Deed; (b) the Royalty Deed; and (c) the Assignment
of Oil, Gas and Mineral Leases and Bill of Sale to be executed by the Sellers and the Purchaser on the Closing Date, , in each
case in form and substance reasonably acceptable to the Sellers and the Purchaser.


 


“Assignment
of Other Real Property Leases” means the Assignment of Other Real Property Leases to be executed by the Sellers and
the Purchaser on the Closing Date, , in form and substance reasonably acceptable to the Sellers and the Purchaser.


 


“Auction”
means the “Auction” as defined in the Bidding Procedures Order.


 


“Bankruptcy
Laws” shall mean the Bankruptcy Code, the Federal Rules of Bankruptcy Procedure and any applicable local rules and
chambers rules of the Bankruptcy Court.


 


“Bidding
Procedures Order” means that Order of the Bankruptcy Court, entered on July 24, 2015 (Docket No. 252), as such Order
may be further amended in a manner agreed to by the Purchaser (acting in its sole discretion).


 


“Bill of
Sale” means the Bill of Sale to be executed by the Sellers and the Purchaser on the Closing Date, in form and substance
reasonably acceptable to the Sellers and the Purchaser.


 


“Business
Day” means any day that is not a Saturday, a Sunday or other day of the year on which banking institutions in New
York City are required or authorized by Law to be closed.


 


“Cash Collateral
Order” means the Final Order (i) Authorizing Use of Cash Collateral Pursuant to Section 363 of the Bankruptcy Code
and (ii) Providing Adequate Protection to Secured Parties Pursuant to Sections 361, 362, And 363 of the Bankruptcy Code, entered
by the Bankruptcy Court on July 12, 2015 (Docket No. 222).


 


“Cash Collateral
Order Termination Date” means a “Termination Date” as defined in the Cash Collateral Order.


 




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“Closing
Payment” means (a) the Estimated Purchase Price, minus (b) the Adjustment Escrow Amount, minus (c)
the Performance Deposit.


 


“COBRA”
means the Consolidated Omnibus Budget Reconciliation Act of 1985, as amended.


 


“Code”
means the United States Internal Revenue Code of 1986, as amended.


 


“Confidentiality
Agreement” means that certain Confidentiality Agreement, dated May 25, 2015, between Canaccord Genuity Inc. (on behalf
of Sellers) and the Purchaser.


 


“Contract”
means any contract, agreement, commitment, promise or undertaking (including any indenture, note, bond or other evidence of indebtedness,
instrument, license, lease, purchase order or other legally binding agreement) whether written or oral, except for any instrument
(other than any joint operating agreement that constitutes or purports to constitute a covenant running with the land) creating
or evidencing any real property interest, including the Mineral Leases and any easements or rights-of-way.


 


“Cure Costs”
means amounts that must be paid and obligations that otherwise must be satisfied under sections 365(b)(1)(A) and (B) of the Bankruptcy
Code in connection with the assumption by a Seller and/or assignment to the Purchaser of any Purchased Contract as provided herein.


 


“Dataroom”
means the electronic data room maintained on behalf of the Sellers, to the extent made available to the Purchaser.


 


“Defensible
Title” means such title of the applicable Seller to each Purchased Asset that, subject to and except for Permitted
Liens:


 


(a)          with
respect to any Well, the applicable Seller owns an undivided interest in such Well and interests in Mineral Leases covering lands
upon which such Well is located, or within a unit in which such Well is located, which after giving effect to existing spacing
orders, operating agreements, unit agreements, unitization orders and pooling designations and after taking into account all Lease
Burdens; (i) entitle such Seller to a share (expressed as a decimal) of all Hydrocarbons produced from such Well throughout the
duration of the productive life of such Well which is not less than the Net Revenue Interest set forth on Section 1.1(b) of the
Seller Disclosure Schedule in connection with the description of such Well, except for (1) decreases in connection with those operations
from and after the Execution Date in which such party may be a nonconsenting co-owner and (2) decreases resulting from the establishment
or amendment of pools or units and North Dakota Industrial Commission (“NDIC”) assessment of risk penalties
established from and after the Execution Date; and (ii) obligate such Seller to bear a percentage of the costs and expenses for
the maintenance and development of, and operations relating to, such Well not greater than the Working Interest set forth on Section
1.1(b) of the Seller Disclosure Schedule in connection with the description of such Well, without increase throughout the productive
life of such Well, except: (1) for increases that are accompanied by at least a proportionate increase in the Seller Entities’
Net Revenue Interest; (2) for increases resulting from contribution requirements with respect to defaults by co-owners under applicable
operating agreements from and after the Execution Date; and (3) as otherwise set forth on Section 1.1(c) of the Seller Disclosure
Schedule;


 




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(b)          with
respect to any Undeveloped Lease, is owned beneficially and of record by a Seller Entity;


 


(c)          is
not subject to an adverse claim that would interfere with the ownership, use, operation or value of the Purchased Assets; and


 


(d)          is
otherwise free and clear of all Liens.


 


“DOL”
means the U.S. Department of Labor.


 


“Employee”
means any employee of any Seller.


 


“Employee
Benefit Plans” means: (a) all “employee benefit plans”, as defined in section 3(3) of ERISA (whether
or not such plan is subject thereto); (b) all employment, consulting or other individual compensation Contracts; and (c) all bonus
or other incentive, equity or equity-based compensation, deferred or other compensation, profit sharing, pension, change-in-control,
severance pay, separation, retention, sick leave, vacation pay, day or dependent care, salary continuation, disability, hospitalization,
medical, life insurance, retiree healthcare, retiree life insurance, other retirement, scholarship, legal services, cafeteria,
life, health, accident, disability, workers’ compensation, paid time off, fringe benefit or other insurance or employee benefit
programs, plans, policies or arrangements, whether written or oral, single employer, multiemployer or multiple employer, or whether
for the benefit of a single individual or more than one individual, as to which any Seller or any of its ERISA Affiliates contributes,
has an obligation to contribute, or has any Liability, contingent or otherwise, with respect to, or otherwise provides to, any
current or former Employee or Service Provider.


 


“Environmental
Defect” means: (a) any violation of, or condition or circumstance giving rise to liability under, any Environmental
Law on any Real Property or with respect to any Purchased Asset, or which arises from the ownership, record keeping, construction,
maintenance, repair or operation thereof; or (b) any condition or circumstance with respect to any Real Property or Purchased Asset,
or the ownership, record keeping, construction, maintenance, repair or operation thereof, which could (with notice or the lapse
of time or both) result in or give rise to, any violation of Environmental Law or any Environmental Liabilities and Obligations.


 


“Environmental
Law” means any Law or Order in effect at the relevant date or for the relevant period relating to the protection
of health (including workplace safety or occupational health) or the environment (including ambient air, indoor air, surface water,
groundwater, land surfaces, sediment or subsurface strata) or natural resources, Releases of or exposure to Hazardous Material
or the handling, generation, treatment, transportation, storage, use, arrangement for disposal or disposal, manufacture, distribution,
formulation, packaging or labeling of Hazardous Materials, including the Comprehensive Environmental Response, Compensation and
Liability Act (42 U.S.C. §§ 9601, et seq.), the Hazardous Materials Transportation Act (49 U.S.C. App. §§ 1801,
et seq.), the Resource Conservation and Recovery Act (42 U.S.C. §§ 6901, et seq.), 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.), the Oil Pollution Act (33 U.S.C. §§ 2701, et seq.), the Federal Insecticide,
Fungicide, and Rodenticide Act (7 U.S.C. §§ 136, et seq.), and the regulations promulgated pursuant thereto and
analogous State and local Laws.


 




    	 	4	 



     


    

 


“Environmental
Liabilities and Obligations” means all Liabilities arising from or related to any impairment or damage to the environment
(including ambient air, indoor air, surface water, groundwater, land surfaces, sediment or subsurface strata) or natural resources,
failure to comply with Environmental Laws, or the Release of or exposure to Hazardous Materials: (a) in connection with the prior
or ongoing ownership or operation of the Business; or (b) on, in, under, to or from the Real Property or any other real property
currently or formerly owned, operated, occupied or leased in connection with the ongoing or prior ownership or operation of the
Business, including but not limited to Liabilities related to: (i) the handling, generation, treatment, transportation, storage,
use, arrangement for disposal or disposal, manufacture, distribution, formulation, packaging or labeling of Hazardous Materials;
(ii) the Release of or exposure to Hazardous Materials; (iii) any other pollution or contamination of the surface, substrata, soil,
air, ground water, surface water or marine environments; (iv) any other obligations imposed under Environmental Laws with respect
to the Business, the Real Property or the Purchased Assets; and (v) all other damages and losses arising under applicable Law as
a result of any of the matters identified in clauses (b)(i) – (iv) of this definition.


 


“ERISA”
means the Employee Retirement Income Security Act of 1974, as amended.


 


“ERISA
Affiliate” means any Affiliate of any Seller and any other entity that, together with such Seller, would be treated
as a single employer under section 4001 of ERISA or section 414 of the Code.


 


“ERISA
Affiliate Liability” means any actual or contingent Liability of any Seller as a result of such Seller being treated
as a single employer under Section 414 of the Code or Section 4001 of ERISA prior to the Closing Date with respect to any other
Person, including all Liabilities (a) under Title IV of ERISA, (b) under Sections 206(g), 302 or 303 of ERISA, (c) under Sections
412, 430, 431, 436 or 4971 of the Code, (d) as a result of the failure to comply with the continuation of coverage requirements
of Section 601 et seq. of ERISA and Section 4980B of the Code, and (e) under corresponding or similar provisions of any foreign
Laws.


 


“Escrow
Agent” means Wells Fargo Bank, N.A.


 


“Escrow
Agreement” means an Escrow Agreement, by and among the Purchaser, the Sellers and the Escrow Agent, substantially
in the form attached hereto as Exhibit A.


 


“Excluded
Contracts” means any Contract to which one or more Seller Entities is a party that is not a Purchased Contract, including
those Contracts listed on Section 1.1(d)(ii) of the Seller Disclosure Schedule.


 


“Excluded
Employee Liabilities” means each of the following:


 




    	 	5	 



     


    

 


(a)          any
Seller’s or any of its Affiliates’ obligations to contribute to, make payments with respect to or provide benefits
under any Employee Benefit Plan, including: (i) any arrangement that provides severance-type, stay or retention pay or change-in-control
payments or benefits (other than with respect to any severance obligations to Transferred Employees due to eligible terminations
of employment incurred after the Closing Date); and (ii) any retention, severance or other arrangement established pursuant to
section 503(c) of the Bankruptcy Code;


 


(b)          any
and all Liabilities arising out of, relating to or resulting from any Legal Proceeding with respect to any Employee Benefit Plan
or any current or former Employee or Service Provider relating to his/her employment or services, or termination of employment
or services, with any Seller or any of its Affiliates;


 


(c)          any
and all Liabilities arising out of, relating to or resulting from any defined benefit pension plans, defined contribution plans,
post-employment health (other than as required by COBRA), welfare or death benefits (and associated Liabilities), or any ERISA
Affiliate Liability;


 


(d)          any
and all Liabilities arising out of, relating to, or resulting from the withdrawal and/or cessation of Transferred Employees or
other Employees or Service Providers from participation in any Employee Benefit Plan, including, if applicable, pursuant to section
4062(e) of ERISA;


 


(e)          any
and all Liabilities arising out of, relating to, or resulting from the engagement or employment, or termination of the engagement
or employment, of any Employees or Service Providers who do not become Transferred Employees (including any Employee who does not
accept an offer of employment with the Purchaser and any former Employee or Service Provider), or any applicant with respect to
potential employment or engagement with any Seller or any of its Affiliates, in each case whether arising before, on or after the
Closing Date; and


 


(f)          any
and all other Liabilities arising out of, relating to or resulting from any current, former or prospective Employees (whether or
not any such Employee becomes a Transferred Employee (including any Employee who does not accept an offer of employment with the
Purchaser)) with respect to their employment or termination of employment with any Seller or any of its Affiliates, including:
(i) payments or entitlements that any Seller or any of its Affiliates may owe or have promised to pay to any current, former or
prospective Employee, including wages, other remuneration, holiday, bonus, severance pay (statutory or otherwise), commission,
Taxes, or insurance premiums; (ii) any and all Liabilities relating to any employment agreement or Contract, any current, former
or negotiated collective bargaining agreement, or the employment practices of any Seller or any of its Affiliates; (iii) any and
all Liabilities under the WARN Act relating to actions, inactions or practices of any Seller or any of its Affiliates on or prior
to the Closing Date (including, for the avoidance of doubt, any reduction in force programs initiated prior to the Closing Date,
even if any employment losses resulting from such reduction in force programs occur on or after the Closing Date); and (iv) any
and all Liabilities relating to workers’ compensation claims and occupational health claims against any Seller or any of
its Affiliates for accidents or injuries occurring on or prior to the Closing, if any.


 




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“Executory
Contracts” means any executory Contract related to the Business to which one or more Seller Entities is a party and
that is set forth on Section 1.1(e) of the Seller Disclosure Schedule, as such Section of the Seller Disclosure Schedule may be
updated by the Purchaser from time to time following the Execution Date (including pursuant to Section 2.6).


 


“Final
Determination” means (i) with respect to any U.S. federal income tax liability, “determination” as defined
in Code Section 1313(a) (provided, however, that in the case of a “determination” specified in Code Section 1313(a)(3)
(relating to refunds), a “Final Determination” shall not occur until the lapse of the Code Section 6532(b) statute
of limitation on a suit for erroneous refund) or an agreement entered into between the taxpayer and the IRS on Form 5701, 870-AD
or any form having a similar effect, and (ii) with respect to any state, local, or foreign income tax liability, a judgment, decree
or order of any court of competent jurisdiction, or a closing agreement or other agreement entered into between the taxpayer and
the applicable taxing authority having a similar effect, as determined under rules analogous to the rules set forth above with
respect to federal income tax liability.


 


“Final
Order” means an order, ruling, decision, verdict, decree, writ, subpoena, mandate, precept, command, directive, consent,
approval, award, judgment, injunction or other similar determination or finding by, before, or under the supervision of the Bankruptcy
Court, or other court of competent jurisdiction with respect to the subject matter, (i) which has not been reversed, stayed, modified,
amended, enjoined, set aside, annulled or suspended and (ii) with respect to which no stay shall have been issued in connection
with any notice of appeal or petition for certiorari filed within any deadline provided by applicable Law and any deadline provided
by applicable Law to file any such a notice of appeal or petition for certiorari shall have passed without any such a notice of
appeal or petition for certiorari having been filed.


 


“First
Lien Lenders” means the holders of the 11.0% Senior Secured Notes Due 2019 issued pursuant to the Pre-Petition Senior
Secured Indenture.


 


“GAAP”
means generally accepted accounting principles in the United States, applied throughout the specified period and the immediately
prior comparable period in a manner consistent with the Sellers’ historical accounting policies.


 


“Governmental
Body” means any government or governmental or regulatory body thereof, or political subdivision thereof, or any agency,
authority, department, commission, board, bureau, official or instrumentality of such body, whether foreign, federal, tribal, state,
or local, or any agency, instrumentality or authority thereof, or any court or arbitrator thereof (public or private) of competent
jurisdiction.


 


“Hazardous
Material” means any substance, material or waste which is regulated by any Governmental Body, including petroleum
and its by-products, asbestos, and any material or substance which is defined as a “hazardous waste,” “hazardous
substance,” “hazardous material,” “restricted hazardous waste,” “industrial waste,” “solid
waste,” “contaminant,” “pollutant,” “toxic waste” or “toxic substance” or
otherwise regulated under any provision of Environmental Law or for which Liability can be imposed under any Environmental Law.


 


“Hydrocarbons”
means oil, gas and other gaseous and/or liquid hydrocarbons or any combination of the foregoing or fractions thereof.


 




    	 	7	 



     


    

 


“Inactive
Employees” means Offered Employees who are: (a) on a Seller-approved leave of absence on the Closing Date as a result
of military service, pregnancy or parental leave, disability leave, medical leave, jury duty or any leave provided under applicable
Law; and (b) expected to return to work in the time permitted for such leave under applicable Law and, for any other leave, in
accordance with the terms of such leave but not longer than one hundred twenty (120) days following the Closing Date.


 


“Indebtedness”
of any Person means, without duplication: (a) the principal of and premium (if any) in respect of (i) indebtedness of such Person
for money borrowed and (ii) indebtedness evidenced by notes, debentures, bonds or other similar instruments for the payment of
which such Person is responsible or liable; (b) all obligations of such Person issued or assumed as the deferred purchase price
of property, all conditional sale obligations of such Person and all obligations of such Person under any title retention agreement
(but excluding trade accounts payable and other accrued current liabilities arising in the ordinary course of business); (c) all
obligations of such Person under leases required to be capitalized in accordance with GAAP; (d) all obligations of such Person
for the reimbursement of any obligor on any letter of credit, banker’s acceptance or similar credit transaction; (e) any
accrued interest, premiums, penalties, breakages, “make whole amounts” and other obligations relating to the foregoing
that would be payable in connection with the repayment of the foregoing; (f) all obligations of the type referred to in clauses
(a) through (e) of any Persons for the payment of which such Person is responsible or liable, directly or indirectly,
as obligor, guarantor, surety or otherwise, including guarantees of such obligations; and (g) all obligations of the type referred
to in clauses (a) through (f) of other Persons secured by any Lien on any property or asset of such Person (whether
or not such obligation is assumed by such Person).


 


“Indenture
Obligations” means, as of any date of determination, the aggregate amount of the obligations then outstanding and
owing under the Pre-Petition Senior Secured Indenture.


 


“Intellectual
Property” means all worldwide intellectual property and rights, title and interests arising from or in respect of
the following: (a) industrial design registrations and applications therefore, utility models, patents and patent applications
(including provisional applications), including continuations, divisionals, continuations in-part, reexaminations and reissues,
extensions, renewals and any patents that may be issued with respect to the foregoing (collectively, “Patents”);
(b) trademarks, service marks, certification marks, collective marks, trade names, business names, slogans, common law trademarks
and service marks, acronyms, forms of advertisement, assumed names, d/b/a’s, fictitious names, trade dress, logos, designs,
devices, signs, symbols, design rights including product design, configuration and packaging rights, internet domain names, icons,
symbols or designations, corporate names, and general intangibles of a like nature and other indicia of identity, origin or quality,
whether registered, unregistered or arising by Law, and all applications, registrations, and renewals for any of the foregoing,
together with the goodwill associated with and symbolized by each of the foregoing (collectively, “Trademarks”);
(c) published and unpublished works of authorship in any medium, whether copyrightable or not, whether in final form or not, in
all media now known or hereafter created, including writings, graphics, artworks, photographs, compositions, sound recordings,
motion pictures and audiovisual works, databases and other compilations of information, computer software, mobile and internet
applications and content, source code, object code, algorithms, and other similar materials, all packaging, advertising and promotional
materials related to the products, and all copyrights and moral rights therein and thereto, and registrations and applications
therefor, and all issuances, renewals, extensions, restorations and reversions thereof, in each case, whether registered or not
(collectively, “Copyrights”); and (d) confidential or proprietary information, inventions and invention
disclosures (whether patentable or not and whether or not reduced to practice), improvements, unregistered designs, trade secrets,
and know-how, including methods, processes, procedures, business plans, strategy, marketing data, marketing studies, advertisements,
schematics, concepts, software and databases (including source code, object code and algorithms), formulae, and compositions, drawings,
prototypes, models, discoveries, technology, research and development and customer information and lists (collectively, “Trade
Secrets”), together with all rights of action and remedies for past, present and future infringement of any of the
foregoing Intellectual Property.


 




    	 	8	 



     


    

 


“Intellectual
Property License” means: (a) any Contract that contains any grant by any Seller Entity to any third Person of any
right to use, publish, perform or exploit any of the Purchased Intellectual Property; and (b) any Contract (other than a Contract
concerning the licensing of generally commercially available software, including “shrink wrap” and “click wrap”
licenses) that contains any grant by any third Person to any Seller Entity of any right to use, modify, copy, publish, perform
or exploit any Intellectual Property of such third Person concerning or relating to the Business part (b) of this definition,
“Inbound Licenses”).


 


“IRS”
means the Internal Revenue Service.


 


“Knowledge
of Sellers” means the actual knowledge of those persons, after reasonable due inquiry, identified on Section 1.1(f)
of the Seller Disclosure Schedule.


 


“Law”
means any law, statute, regulation, rule, code, decree, constitution, ordinance, treaty, rule of common law, decree, directive,
policy or other requirements administered or enforced by or on behalf of, any Governmental Body, including any Order.


 


“Lease
Burdens” means the royalties, overriding royalties, production payments, net profit interests, and all similar interests
burdening the Mineral Leases or production therefrom.


 


“Leased
Real Property” means the property subject to the Mineral Leases and the Other Real Property Leases.


 


“Legal
Proceeding” means any claim, demand, litigation, action, cause of action, suit, audit, dispute, review, hearing,
charge, indictment, complaint or other judicial or administrative proceeding, at law or in equity, before or by any Governmental
Body or arbitration or other similar dispute resolution proceeding.


 


“Liability”
means any debt, loss, liability, claim (including “claim” as defined in the Bankruptcy Code), commitment, undertaking,
damage, Tax, expense, fine, penalty, cost, royalty, deficiency or obligation (including those arising out of any action, such as
any settlement or compromise thereof or judgment or award therein), of any nature, whether known or unknown, disclosed or undisclosed,
express or implied, primary or secondary, direct or indirect, matured or unmatured, determined or undeterminable, on or off balance
sheet, fixed, absolute, contingent, accrued or unaccrued, liquidated or unliquidated, or otherwise and whether due or to become
due, and whether in contract, tort, strict liability or otherwise, and whether or not resulting from third party claims.


 




    	 	9	 



     


    

 


“Lien”
as applied to any Person means, with respect to any property or asset, any mortgage, deed of trust, lien (statutory or otherwise),
pledge, hypothecation, security interest, claim, encumbrance, covenant, condition, encroachment or other survey defect, charge,
pledge, easement, instrument, preference, priority, option, conditional sale agreement, covenant, condition or other similar restriction
(including restrictions on transfer or use), any other right of a third party (including purchase rights, rights of first offer
or refusal and drag or tag along rights or assertion that any contract which is not a Purchased Contract or right thereunder “runs
with the land” or is otherwise an encumbrance upon any Purchased Asset) or any other interest in property, of any kind or
nature, whether secured or unsecured, choate or inchoate, filed or unfiled, scheduled or unscheduled, recorded or unrecorded, contingent
or non-contingent, material or non-material, known or unknown, whether imposed by Law, Contract or otherwise, including any Liens
granted pursuant to the Cash Collateral Order.


 


“Multiemployer
Plan” means a plan as defined in section 3(37) of ERISA or section 4001(a)(3) of ERISA.


 


“Net Revenue
Interest” means, with respect to any Person, the interest of such Person in and to all Hydrocarbons produced, saved,
and sold from or allocated to a Mineral Lease or Well after giving effect to all Lease Burdens measured by, or payable out of production
therefrom


 


“Notes”
means the 11.0% Senior Secured Notes due 2019 issued pursuant to the Pre-Petition Senior Secured Indenture.


 


“Order”
means any order, injunction, judgment, decree, ruling, writ, assessment or arbitration award of a Governmental Body.


 


“Permits”
means any approvals, authorizations, consents, franchises, licenses, permits, waivers, operating permits, easements, qualifications,
grants, concessions, exceptions, rulings, waivers, variances, registrations, certificates or other forms of permission, exemptions,
plans and the like, of any Governmental Body.


 


“Permitted
Liens” means:


 


(a)          Lease
Burdens which do not reduce Seller Entities’ Net Revenue Interest in any Well to less than that described in Section 1.1(b)
of the Seller Disclosure Schedule;


 


(b)          (i)
the Assumed Liabilities and (ii) all operating agreements, unit agreements, unitization and pooling designations and declarations,
gathering and transportation agreements, processing agreements, gas, oil and liquids purchase, sale and exchange agreements, and
other similar agreements which are Purchased Contracts, so long as in the case of this clause (ii), (1) such agreements
do not reduce Seller Entities’ Net Revenue Interest in any Well to less than that described in Section 1.1(b) of the Seller
Disclosure Schedule or increase the applicable Seller Entities’ Working Interest in any Well above that shown Section 1.1(b)
of the Seller Disclosure Schedule, without a proportionate increase in the Net Revenue Interest of such Seller Entity; (2) all
amounts due and payable by Seller Entities thereunder have been paid or will be paid by the applicable Seller Entity at or prior
to Closing; and (3) the Seller Entities are not in material default thereunder;


 




    	 	10	 



     


    

 


(c)          regulatory
authority of governmental agencies not presently or previously violated, easements, surface leases and rights, plat restrictions
and similar encumbrances, provided that they do not materially detract from the value or materially increase the cost of operation
of the Well or other Purchased Asset affected thereby or otherwise adversely affect the operation thereof;


 


(d)          consents
to assignment required from state and federal governments, Indian tribes and similar authorities that customarily are obtained
following the delivery of an assignment;


 


(e)          conventional
rights of reassignment obligating Seller Entities to reassign or offer to reassign its interest in any Mineral Lease upon a final
release or abandonment of such Mineral Lease;


 


(f)          liens,
charges, encumbrances and irregularities in title that have been cured by possession because of (i) prescription, (ii) applicable
statutes of limitation for adverse possession or (iii) marketable title or other similar Laws or the doctrine of laches, in each
case unless affirmative evidence shows that another Person has a superior claim of title to the Acquired Assets;


 


(g)          statutory
Liens for current period Taxes not yet delinquent or the amount or validity of which is being contested in good faith by appropriate
proceedings for which adequate accruals or reserves have been established in accordance with GAAP on the Public Financial Statements
consistent with past practices;


 


(h)          zoning,
entitlement and other land use by any Governmental Body provided that such regulations have not been violated;


 


(i)          any
other minor imperfections in title, charges, easements, restrictions, licenses and encumbrances that (i) do not interfere with
the ordinary course of business, (ii) would not and would not reasonably be expected to, whether individually or in the aggregate,
materially affect the value of the Purchased Assets and the present use or operation of such Purchased Assets and (iii) do not
reduce Seller Entities’ Net Revenue Interest in any Well to less than that described in Section 1.1(b) of the Seller Disclosure
Schedule or increase the applicable Seller Entities’ Working Interest in any Well above that shown Section 1.1(b) of the
Seller Disclosure Schedule, without a proportionate increase in the Net Revenue Interest of such Seller Entity; provided,
however, that, in the case of each of clauses (a) – (1) of this definition, none of such items secures,
arises from, constitutes or relates to any Indebtedness or Excluded Liabilities or obligations under any Excluded Contracts; and


 


(j)          prior
to the Closing solely for the purpose of determining Defensible Title, any Liens that will be released by the Sale Order at no
cost to the Purchaser.


 




    	 	11	 



     


    

 


“Person”
means any individual, corporation, limited liability company, partnership, firm, joint venture, association, joint-stock company,
trust, unincorporated organization, Governmental Body or other entity.


 


“Pre-Petition
Senior Secured Indenture” means that certain Indenture, dated as of August 27, 2014, by and among the Company,
as issuer, the other Sellers as guarantors thereunder, and the Trustee, pursuant to which the 11.0% Senior Secured Notes Due 2019
were issued (as amended and/or supplemented from time to time).


 


“Preferential
Purchase Right” means any enforceable preferential purchase right, right of first refusal, right of first offer or
similar right that is exercisable by any Person in respect of any Purchased Asset(s) in connection with the consummation of the
transactions contemplated hereby.


 


“Property
Costs” means all operating and production expenses and capital expenditures directly attributable to the Purchased
Assets incurred in the ordinary course of business in accordance with the Approved Budget, this Agreement and applicable operating
agreements and Contracts, including any general, administrative or overhead costs payable to third parties under such operating
agreements and Contracts; provided that “Property Costs” shall not include any (a) Periodic Non-Income
Taxes, (b) income Taxes, (c) general, administrative or overhead costs of Sellers, or (d) amounts incurred to cure or attempting
to cure any Title Defect, Environmental Defect or casualty losses.


 


“Purchased
Contracts” means any Contract related to the Business to which one or more Seller Entities is a party that is set
forth on Section 1.1(d)(i) of the Seller Disclosure Schedule, as such Section of the Seller Disclosure Schedule may be updated
by the Purchaser from time to time following the Execution Date (including pursuant to Section 2.6).


 


“Purchased
Intellectual Property” means any and all Intellectual Property owned by any Seller Entity including all rights of
action and remedies for past, present and future infringements thereof.


 


“Purchaser
Material Adverse Effect” means any event, change, effect, condition, state of facts, occurrence or circumstance (regardless
of whether such event, change, effect, condition, state of facts, occurrence or circumstance constitutes a breach of any representation,
warranty or covenant of the Purchaser hereunder) which has had or would reasonably be expected to have, individually or when considered
together with any other event, change, effect, condition, state of facts, occurrence or circumstance, a material and adverse effect
on the ability of the Purchaser to consummate the transactions contemplated by this Agreement, the Ancillary Agreements and each
other agreement, document or instrument contemplated hereby or thereby or to perform their respective obligations under this Agreement,
the Ancillary Agreements and each other agreement, document or instrument contemplated hereby or thereby or, to the extent applicable,
with respect to all proceedings incident thereto (including the Bankruptcy Case).


 


“Real Property”
means the Owned Real Property and the Leased Real Property.


 




    	 	12	 



     


    

 


“Release”
means any release, spill, emission, leaking, pumping, pouring, placing, injection, deposit, disposal, discharge, dispersal, discarding,
abandoning, migration, emptying, escaping, dumping or leaching into or through the indoor or outdoor environment, or into or out
of any property.


 


“Remedial
Action” means all actions to: (a) clean up, remove, treat, monitor or in any other way address any Hazardous Material,
including actions to remediate environmental conditions, restore environmental quality and address natural resource damages; (b)
prevent the Release of any Hazardous Material so it does not endanger or threaten to endanger public health or welfare or the indoor
or outdoor environment; (c) perform pre-remedial studies and investigations or post-remedial monitoring and care; or (d) to correct
a condition of noncompliance with Environmental Laws.


 


“Representative”
means, with respect to any Person, any and all directors, officers, partners, managers, employees, consultants, financial advisors,
counsel, accountants and other agents, including potential financing sources of such Person.


 


“Sale Order”
means an order entered by the Bankruptcy Court:


 


(a)          that
was on appropriate notice to all parties entitled to notice of the motion to approve the sale of the Purchased Assets, this Agreement
or the transactions contemplated hereby;


 


(b)          that
is not subject to a stay pending appeal;


 


(c)          that
is in form and substance acceptable to the Purchaser; and


 


(d)          that
provides, at least, the following: (i) approval of this Agreement; (ii) authorization of the sale of the Purchased Assets to the
Purchaser pursuant to this Agreement and sections 363 and 365 of the Bankruptcy Code free and clear of all Liens and all Liabilities
of any kind or nature whatsoever, whether at law or in equity, including without limitation, free and clear of any rights or claims
based on theories of transferee or successor liability under any applicable Law, whether arising before or after the filing of
the petitions for relief under chapter 11 of the Bankruptcy Code on the Petition Date, and any rights or claims based on Excluded
Contracts or representing Excluded Liabilities, save and excepting only those Liabilities expressly assumed by the Purchaser in
writing under this Agreement and Permitted Liens; (iii) the Purchaser has acted in “good faith” within the meaning
of and are entitled to the protections of section 363(m) of the Bankruptcy Code; (iv) this Agreement was negotiated, proposed and
entered into by the parties without collusion, in good faith and from arm’s length bargaining positions; (v) authorization
of the assumption and assignment of all of the Purchased Contracts pursuant to sections 363 and 365 of the Bankruptcy Code; (vi)
reasonable and customary exculpation and release language for the benefit of the Purchaser; and (vii) this Agreement and the transactions
contemplated hereby may, subject to the terms set forth herein, be enforced specifically against and binding upon, and not subject
to rejection or avoidance by any Seller Entity or their respective estates or any chapter 7 or chapter 11 trustee of the Sellers
or other representative of their respective estates.


 


“SEC”
means the U.S. Securities and Exchange Commission.


 




    	 	13	 



     


    

 


“SEC Filings”
means reports, including schedules and exhibits thereto, filed by the Company with the SEC under the Securities Exchange Act of
1934, as amended (the “Exchange Act”).


 


“Seller
Disclosure Schedule” means the disclosure schedule delivered by the Company to the Purchaser on the date hereof and
as may be amended, modified, or supplemented prior to the Closing by the Purchaser in accordance with this Agreement.


 


“Seller
Entities” means the Sellers and all controlled Affiliates of the Sellers.


 


“Seller
Material Adverse Effect” means any event, change, effect, condition, state of facts, occurrence or circumstance (regardless
of whether such event, change, effect, condition, state of facts, occurrence or circumstance constitutes a breach of any representation,
warranty or covenant of the Sellers hereunder) which has had or would reasonably be expected to have, individually or when considered
together with any other events, changes, effects, conditions, states of facts, occurrences or circumstances: (a) a material adverse
effect on or a material adverse change in or to the Business (including its results of operations or financial condition) or the
Purchased Assets, considered as a whole; (b) a material adverse change on or a material adverse change in or to the ability of
the Sellers to consummate the transactions contemplated by this Agreement, the Ancillary Agreements and each other agreement, document
or instrument contemplated hereby or thereby or to perform their obligations under this Agreement, the Ancillary Agreements and
each other agreement, document or instrument contemplated hereby or thereby or, to the extent applicable, with respect to all proceedings
incidental thereto (including the Bankruptcy Case); or (c) the effect of preventing or materially delaying the consummation of
the transactions contemplated by this Agreement, the Ancillary Agreements and each other agreement, document or instrument contemplated
hereby or thereby, other than in the case of clauses (a) and (c), any such event, change, effect, condition, state
of facts, occurrence or circumstance resulting from: (i) any change in the United States or foreign economies or financial markets
in general; (ii) any change that generally affects the Hydrocarbons exploration, production, gathering, transportation or processing
industries generally; (iii) reclassifications or recalculations of Hydrocarbon reserves in the ordinary course of business; (iv)
changes in the price of Hydrocarbons; (v) natural declines in well performance; (vi) earthquakes, hostilities, acts of war, sabotage
or terrorism or military actions or any escalation or material worsening of any such hostilities, acts of war, sabotage or terrorism
or military actions existing or underway as of the date hereof; (vii) any change in applicable Laws or accounting rules, in each
case only to the extent occurring after the date of this Agreement; and (viii) any effect resulting from the public announcement
of this Agreement; provided, however, that the foregoing clauses (i), (ii), (iii), (iv),
(v), (vi) and (vii) shall not apply if such event, change, effect, condition, state of facts, occurrence or
circumstance has had or would reasonably be expected to have, individually or when considered with any other events, changes, effects,
conditions, state of facts, occurrences or circumstances, a disproportionate effect on the Business (including its results of operations
or financial condition) or the Purchased Assets, considered as a whole, compared to other Persons which operate in the same industry
in which the Sellers operate (in which case such event, change, effect, condition, state of facts, occurrence or circumstance shall
be taken into account in determining whether there has been a Seller Material Adverse Effect).


 




    	 	14	 



     


    

 


“Service
Provider” means any consultant or independent contractor who is or has been performing services to any Seller.


 


“Tax Authority”
means any government, or agency, instrumentality or employee thereof, charged with the administration of any Law or regulation
relating to Taxes.


 


“Taxes”
means: (a) all federal, state, local or foreign taxes, charges, levies, fees, imposts, assessments, unclaimed property obligations
or similar governmental charges, including all net income, gross receipts, capital, sales, use, ad valorem, value added, transfer,
franchise, profits, inventory, capital stock, license, withholding, payroll, employment, social security, escheat, unemployment,
excise, severance, stamp, occupation, property and estimated taxes; (b) any item described in clause (a) for which a taxpayer
is liable as a transferee or successor, by reason of the regulations under section 1502 of the Code, or by contract, indemnity
or otherwise; and (c) all interest, penalties, fines, additions to tax or additional amounts imposed by any Tax Authority in connection
with any item described in clause (a) or (b).


 


“Tax Return”
means all returns, declarations, reports, estimates, information returns and statements required to be filed in respect of any
Taxes (including any attachments thereto or amendments thereof).


 


“Title
Defect” means any Lien, defect or other matter that causes a Seller Entity not to have Defensible Title.


 


“Treasury
Regulations” means the United States Treasury regulations promulgated under the Code.


 


“Trustee”
means U.S. Bank National Association, exclusively in its capacity as trustee and collateral agent for the First Lien Lenders.


 


“Undeveloped
Leases” means Mineral Leases which are not, as of the Execution Date, producing or capable of producing in paying
quantities and which will expire upon expiration of the primary term or, if applicable, any optional extension of the primary term
of such lease if: (a) production in paying quantities is not established prior to the expiration of the primary term or, if applicable,
any optional extension of the primary term of such lease; or (b) operations to extend the primary or, if applicable, any optional
extension of the primary term thereof are not commenced and in progress at the expiration of such primary term or extension thereof.


 


“WARN Act”
means the Worker Adjustment and Retraining Notification Act (29 USC § 2101 et seq.) and any similar Law.


 


“Winning
Bidder” means the “Winning Bidder” as defined in the Bidding Procedures Order.


 


“Working
Interest” means, with respect to any Person, the interest of such Person in and to a Mineral Lease or Well that is
burdened with the obligation to bear and pay costs and expenses of drilling, completion, maintenance, development, and operations
on or in connection with such Mineral Lease or Well, but without regard to the effect of any Lease Burdens measured by, or payable
out of production therefrom.


 




    	 	15	 



     


    

 


1.2           Terms
Defined Elsewhere in this Agreement. For purposes of this Agreement, the following terms have meanings set forth in the
Sections indicated:


 


	Term	 	Section
	Accrued PTO	 	8.10(g)
	Accrued Suspense Funds	 	4.2(p)
	Agreement	 	Preamble
	Asset Sale	 	Recitals
	Assumed Liabilities	 	2.3
	Bankruptcy Case	 	Recitals
	Bankruptcy Code	 	Recitals
	Bankruptcy Court	 	Recitals
	Bankruptcy Expense	 	2.4(k)
	Base Purchase Price	 	3.1
	Business	 	Recitals
	Chapter 11 Deposits	 	2.1(v)
	Closing	 	4.1
	Closing Date	 	4.1
	Company	 	Preamble
	Competing Transaction	 	7.1
	Copyright	 	1.1
	Effective Time	 	2.9(a)
	Environmental Defect Property	 	8.16
	Environmental Permits	 	5.13
	Estimated Cure Costs	 	2.6(a)
	Estimated Purchase Price	 	3.4
	Exchange Act	 	1.1
	Excluded Assets	 	2.2
	Excluded Liabilities	 	2.4
	Execution Date	 	Preamble
	Final Purchase Price	 	3.5(a)
	Final Settlement Statement	 	3.5(a)
	Final Settlement Statement Deadline	 	3.5(a)
	Inbound Licenses	 	1.1
	Initial Cure Notice	 	2.6(a)
	Material Contracts	 	5.10(a)
	Mineral Interests	 	2.1(a)
	Mineral Leases	 	2.1(a)
	NDIC	 	1.1
	Necessary Consent	 	2.5
	Offered Employees	 	8.10(b)
	Other Real Property Leases	 	5.7(a)
	Other Leased Real Property	 	5.7(a)
	Owned Real Property	 	5.7(b)
	Patents	 	1.1
	Performance Deposit	 	3.2
	Periodic Non-Income Taxes	 	10.2(a)


 




    	 	16	 



     


    

 


	Term	 	Section
	Petition Date	 	Recitals
	Post-Closing Straddle Period	 	10.2(b)
	Pre-Closing Financial Statements	 	8.1(c)
	Pre-Closing Straddle Period	 	10.2(b)
	Preliminary Settlement Statement	 	3.4
	Production Facilities	 	2.1(e)
	Proposed Final Settlement Statement	 	3.5(a)
	Public Financial Statements	 	5.4(a)
	Purchase Price	 	3.3
	Purchased Assets	 	2.1
	Purchaser	 	Preamble
	Purchaser Termination Date	 	4.4(a)
	Retained Records	 	2.2(c)
	Seller	 	Preamble
	Seller Termination Date	 	4.4(a)
	Sellers	 	Preamble
	Seller Policies	 	8.7(a)
	Seller’s Records	 	2.1(l)
	Straddle Period	 	10.2(b)
	Title Defect Property	 	8.15
	Trademarks	 	1.1
	Trade Secrets	 	1.1
	Transfer Taxes	 	10.1
	Transferred Employees	 	8.10(b)
	Wells	 	2.1(d)


 


1.3           Other
Definitional and Interpretive Matters. Unless otherwise expressly provided, for purposes of this Agreement, the following
rules of interpretation shall apply:


 


(a)          Words
in the singular shall include the plural and vice versa, and words of one gender shall include the other genders, in each case,
as the context requires;


 


(b)          the
term “hereof,” “herein,” “hereinafter” and “herewith” and words of similar import
shall, unless otherwise stated, be construed to refer to this Agreement as a whole and not to any particular provision of this
Agreement in which such words appear, and Article, Section, paragraph, clause, subclause and Exhibit references in this Agreement
are to the corresponding Articles, Sections, paragraphs, clauses, subclauses and Exhibits to this Agreement and the Seller Disclosure
Schedule (as applicable) unless otherwise specified;


 


(c)          the
division of this Agreement into Articles, Sections and other Subdivisions and the insertion of headings are for convenience of
reference only and will not affect or be utilized in construing or interpreting this Agreement;


 


(d)          the
word “including” and words of similar import when used in this Agreement shall mean “including, without limitation,”
unless otherwise specified and will not be construed to limit any general statement that it follows to the specific or similar
items or matters immediately following it;


 




    	 	17	 



     


    

 


(e)          the
terms “Dollars” and “$” mean U.S. Dollars, the lawful currency of the United States of America;


 


(f)          references
herein to any Person shall include such Person’s heirs, executors, personal representatives, administrators, successors and
assigns; provided, that nothing contained in this Section 1.3, is intended to authorize any assignment or transfer not otherwise
permitted by this Agreement;


 


(g)          references
herein to a Person in a particular capacity or capacities shall exclude such Person in any other capacity;


 


(h)          with
respect to the determination of any period of time, the word “from” means “from and including” and the
words “to” and “until” each means “to but excluding”;


 


(i)          the
word “or” shall be disjunctive but not exclusive;


 


(j)          references
herein to any Law shall be deemed to refer to such Law as amended, modified, codified, reenacted, replaced, supplemented or superseded
in whole or in part and in effect from time to time, including any successor legislation thereto, and also to all rules and regulations
promulgated thereunder, and references to any section or other provision of a Law means that section or provision of such Law in
effect from time to time and constituting the substantive amendment, modification, codification, reenactment, replacement or supplement
of such section or other provision;


 


(k)          references
herein to any Contract mean such Contract as amended, supplemented or modified (including any waiver thereto) in accordance with
the terms thereof;


 


(l)          references
to “made available” shall mean that such documents or information referenced shall have been provided in the Dataroom
to the Purchaser and its Representatives at least one (1) Business Day prior to the Execution Date;


 


(m)          if
the last day for the giving of any notice or the performance of any act required or permitted under this Agreement is a day that
is not a Business Day, then the time for the giving of such notice or the performance of such action shall be extended to the next
succeeding Business Day;


 


(n)          references
herein to “as of the date hereof,” “as of the date of this Agreement” or words of similar import will be
deemed to mean “as of the date of the execution and delivery of this Agreement”;


 


(o)          all
Exhibits and the Seller Disclosure Schedule annexed hereto or referred to herein are hereby incorporated in and made a part of
this Agreement as if set forth in full herein, and any capitalized terms used in any Exhibit or Section of the Seller Disclosure
Schedule but not otherwise defined therein shall be defined as set forth in this Agreement; and


 




    	 	18	 



     


    

 


(p)          terms
used herein which are defined in GAAP are, unless specifically defined herein, used herein as defined in GAAP.


 


Article
II

PURCHASE AND SALE OF ASSETS; ASSUMPTION OF LIABILITIES


 


2.1           Purchase
and Sale of Assets. On the terms and subject to the conditions set forth in this Agreement, at the Closing, the Purchaser
shall purchase, acquire and accept from the applicable Seller Entity, and the Sellers shall and shall cause the applicable Seller
Entity to sell, assign, transfer, convey and deliver to the Purchaser, all of each Seller’s or Seller Entity’s right,
title and interest in, to and under all assets, properties, rights and interests of every kind and description, tangible or intangible,
of the Seller Entities used or held for use in the conduct of the Business, free and clear of all Liens (other than Permitted Liens)
and all Excluded Liabilities (collectively, the “Purchased Assets”), including, but not limited to, the
following:


 


(a)          all
term and fee mineral and royalty interests (the “Mineral Interests”) and all oil, gas and/or mineral
leases and any ratifications or amendments to such leases together with all leaseholds, record title and operating rights, royalty
interests or overriding royalty interests owned by the Sellers in such leases (together with the Mineral Interests, the “Mineral
Leases”), including those Mineral Leases listed on Section 2.1(a) of the Seller Disclosure Schedule;


 


(b)          all
unitization and pooling agreements, declarations and orders, and the units created thereby, in each case, to the extent relating
to any of the Mineral Leases and the production of Hydrocarbons therefrom;


 


(c)          all
Purchased Contracts, including any and all audit rights provided for in such Purchased Contracts;


 


(d)          all
oil, gas, water supply, and salt water disposal and other wells, whether producing, shut-in or abandoned, that are located on the
Mineral Leases or on lands pooled or unitized therewith or used or held for use in the conduct of the Business (the “Wells”),
including those Wells listed on Section 2.1(d) of the Seller Disclosure Schedule, and related personal property, fixtures, pipelines,
inventory, equipment and improvements located on the Mineral Leases or on lands pooled or unitized therewith and used or obtained
in connection with the ownership, exploration, development or operation of the Mineral Leases, or the production, sale, processing,
treating, storing, gathering, transportation or disposal of Hydrocarbons, water or any other substance produced therefrom or attributable
thereto;


 


(e)          all
pipelines listed on Section 2.1(e) of the Seller Disclosure Schedule, together with all gathering lines, above-ground facilities
or structures, compression equipment, dehydrators, drips, valves, pipes, scrubbers, machinery, gauges, meters, fittings, fixtures,
units, tanks, traps, cathodic protection equipment, equipment towers, field separators, liquids extractors, recorders, storage
sheds, pump houses, radios and similar equipment related thereto that are used or held for use in the conduct of the Business (the
“Production Facilities”);


 




    	 	19	 



     


    

 


(f)          all
fixed assets, leasehold improvements, vehicles, production equipment assets, machinery and equipment relating to the Business,
including water supply and salt water disposal systems, and all other assets, machinery and equipment that are used or held for
use in the conduct of the Business, in each case, that are used or held for use in the conduct of the Business, including the assets
set forth on Section 2.1(f) of the Seller Disclosure Schedule;


 


(g)          all
tangible personal property and interests therein owned by any Seller Entity, including all furniture, furnishings and tools, including
the property set forth on Section 2.1(g) of the Seller Disclosure Schedule;


 


(h)          all
prepaid expenses, prepaid rents, prepaid insurance, utility deposits, advance payments and deposits on contractual obligations
made in connection with the Business, including the items set forth on Section 2.1(h) of the Seller Disclosure Schedule;


 


(i)          all
claims and rights under contracts, supplier agreements, purchase orders, work orders, leases of equipment, machinery, production
machinery, tooling and other items of personal property or otherwise, in each case relating to the Business;


 


(j)          Permits,
easements and rights-of-way used or held for use in the conduct of the Business, including the Permits, easements and rights-of-way
set forth on Section 2.1(j) of the Seller Disclosure Schedule;


 


(k)          all
seismic licenses, seismic data and other geological and seismic records and related technical data and information related to the
Mineral Leases, including any geologic and geophysical interpretations, in each case to the extent (i) such licenses, data and
information is currently owned and may be assigned without third party consent or expenditures beyond tape copying costs and expenses
or (ii) the Purchaser desires to acquire any such license, data or information and bear the cost, if any, of assignment or transfer;


 


(l)          all
files, books, data, information and records of the Sellers or their Affiliates relating to the Business and/or the Purchased Assets
(but excluding the Sellers’ Retained Records), including plats, surveys, maps, cross-sections, production records, electric
logs, cuttings, cores, core data, pressure data, decline and production curves, well files and related matters, division of interest
records, division orders, lease and title files, environmental and regulatory files, title opinions, abstracts of title, title
curative documents, lease operating statements, geologic and geophysical data (including interpretive data and analysis) and all
other accounting information, marketing reports, statements, gas balancing information and all other documents relating to customers,
sales information, supplier lists, records, literature and correspondence (collectively, “Seller’s Records”);


 




    	 	20	 



     


    

 


(m)          all
of the Sellers’ right, title and interest to the Hydrocarbons produced from the Mineral Leases, products refined and manufactured
therefrom and the accounts, revenues and proceeds from the sale thereof to the extent such production has been produced or accrued
at or after the Effective Time or is held on the Mineral Leases or in the tanks or is line fill (for the avoidance of doubt, unless
covered by an upward adjustment to the Base Purchase Price pursuant to Section 3.3(a), the Purchased Assets shall not include
any Hydrocarbons produced and sold in the ordinary course of business prior to the Effective Time);


 


(n)          all
rights and obligations relating to gas imbalances (production, gathering, processing, transportation or otherwise) that are associated
with the Purchased Assets;


 


(o)          all
rights of any Seller Entity with respect to the Owned Real Property, together with all facilities, improvements, fixtures and other
appurtenances thereto and rights in respect thereof and all servitudes, easements, rights-of-way, other surface use agreements,
and water use agreements to the extent used in connection with the Business;


 


(p)          all
rights of any Seller Entity under non-disclosure, confidentially or similar agreements entered into with third parties in connection
with the sale of the Business or any part of the Business;


 


(q)          all
rights, claims, causes of action and credits of any Seller Entity relating to any Purchased Asset or Assumed Liability;


 


(r)          all
warranties, guarantees and similar rights related to the Purchased Assets, including warranties and guarantees made by suppliers,
manufacturers and contractors under the Purchased Assets, and claims against suppliers and other third parties in connection with
the Purchased Contracts;


 


(s)          the
Purchased Intellectual Property;


 


(t)          all
post-petition adequate assurance deposits provided to utilities and any deposits provided to suppliers or service providers to
the Sellers on a pre-petition or post-petition basis (collectively, the “Chapter 11 Deposits”) unless
specifically provided for under a Purchased Contract, in which case it shall be a Purchased Asset;


 


(u)          refunds,
credits and rebates of Taxes for any period or portion thereof prior to or ending on the Closing Date; and


 


(v)         all
goodwill and other intangible assets associated with the: (i) Trademarks included in the Purchased Intellectual Property; and (ii)
the Business.


 


Each Seller shall receive
in exchange for its sale, assignment, transfer, conveyance and delivery of the Purchased Assets of such Seller to the Purchaser,
its share of the Purchase Price.


 




    	 	21	 



     


    

 


2.2           Excluded
Assets. Notwithstanding any other provision of this Agreement, the Sellers shall, at the Closing, retain, the Purchaser
shall not acquire, and the Purchased Assets shall not include, any right, title or interest in the following assets, properties,
rights and interests of the Sellers (collectively, the “Excluded Assets”):


 


(a)          all
rights, claims, causes of action and credits to the extent relating to any Excluded Asset or Excluded Liability, including any
such item to the extent arising under any guarantee, warranty, indemnity or similar right in favor of a Seller Entity in respect
of an Excluded Asset or Excluded Liability;


 


(b)          shares
of capital stock or other equity interest of any Seller or any securities convertible into, exchangeable or exercisable for shares
of capital stock or other equity interest of any Seller;


 


(c)          any
minute books, stock ledgers, corporate seals and stock certificates of the Sellers, and other similar books and records that the
Sellers are required by Law to retain, including Tax Returns and any supporting documentation related thereto, financial statements
and corporate or other entity filings (the “Retained Records”); provided, however, that
the Purchaser shall have access to, and the right to make copies of, any portions of such Retained Records, including any Tax Returns
of the Sellers and any Tax Returns that relate to the Business or any of the Purchased Assets including, in each case, any schedules
and attachments thereto;


 


(d)          all
cash and cash equivalents of the Sellers as of the Effective Time;


 


(e)          all
Excluded Contracts;


 


(f)          all
accounts receivable related to the Business attributable to periods prior to the Effective Time;


 


(g)          all
shares of capital stock or other equity interest of any third-party or any securities convertible into, exchangeable or exercisable
for shares of capital stock or other equity interest of any third-party;


 


(h)          any
Title Defect Property or Environmental Defect Property that the Purchaser elects to exclude from the Purchased Assets pursuant
to Sections 8.15 and 8.16, as applicable; and


 


(i)          any
other assets or properties of Sellers set forth on Section 2.2 of the Seller Disclosure Schedule.


 


2.3           Assumption
of Liabilities. On the terms and subject to the conditions set forth in this Agreement, at the Closing, the Purchaser shall
assume, effective as of the Closing, and shall timely perform and discharge in accordance with their respective terms, the following
Liabilities of the Sellers existing as of the Closing Date (collectively, the “Assumed Liabilities”):


 




    	 	22	 



     


    

 


(a)          subject
to Section 3.3, any Cure Costs that the Purchaser is required to pay pursuant to Section 2.6(c);


 


(b)          any
Transfer Taxes; and


 


(c)          Property
Costs incurred after the Effective Time for which the Purchaser is responsible under Section 2.9(b).


 


2.4           Excluded
Liabilities. Notwithstanding anything to the contrary set forth herein, the Purchaser shall not assume and shall be deemed
not to have assumed, and the Sellers shall remain liable with respect to, any and all Liabilities of the Sellers arising out of,
relating to or otherwise in respect of the Business, the Employees, or the Purchased Assets prior to the Closing Date, and all
other Liabilities of any Seller Entity, other than the Assumed Liabilities (collectively, the “Excluded Liabilities”).
Without limiting the foregoing, for the avoidance of doubt, except to the extent that any of the following constitute an Assumed
Liability, the Sellers shall remain responsible for, and the Purchaser shall not be obligated to assume, and does not assume, and
hereby disclaims all of the Excluded Liabilities, including all of the following Liabilities of any Seller Entity (each of which
shall constitute an Excluded Liability hereunder):


 


(a)          all
Liabilities arising out of or relating to the Business, the Purchased Assets or the ownership, operation or conduct thereof;


 


(b)          all
Liabilities for accrued expenses and accounts payable of the Business;


 


(c)          all
Liabilities relating to the Indenture Obligations or the Cash Collateral Order (including any adequate protection provided pursuant
to the Cash Collateral Order);


 


(d)          all
Liabilities arising out of any of the Excluded Assets, including Contracts that are not Purchased Contracts and any Title Defect
Property, Environmental Defect Property or other Purchased Asset that the Purchaser elects to exclude from the Purchased Assets
pursuant to Sections 8.15 or 8.16, as applicable, or that is otherwise permitted under this Agreement;


 


(e)          all
Environmental Liabilities and Obligations, based on facts, occurrences or conditions: (i) first arising or existing on or prior
to the Closing Date; or (ii) arising at any time at any properties other than the Real Property, including any Liabilities arising
from any disposal of Hazardous Materials off-site of the Real Property prior to the Closing Date, and any fines or penalties or
criminal actions imposed in connection with any violation of Environmental Laws prior to the Closing Date; provided, however,
that nothing in this Agreement shall: (A) release, nullify, or enjoin the enforcement of any liability to a Governmental Body under
Environmental Laws (or any associated liabilities for penalties, damages, cost recovery, or injunctive relief) that any entity
would be subject to as the owner, lessor, lessee, or operator of any Real Property after the Closing Date; or (B) in any way diminish
the obligations of the Sellers to comply with Environmental Laws consistent with their rights and obligations as debtors in possession
under the Bankruptcy Code;


 




    	 	23	 



     


    

 


(f)          all
Liabilities relating to any claims for infringement, dilution, misappropriation or any other violation of the rights of any third
parties or caused by use of the Purchased Intellectual Property by a Seller Entity;


 


(g)          except
as otherwise expressly provided in this Agreement with respect to Transfer Taxes and Periodic Non-Income Taxes, (i) all Liabilities
for Taxes of any Seller Entity that are attributable to any period, or portion thereof, before or after the Closing Date and (ii)
all liability for Taxes in respect of the Purchased Assets that are attributable to any period, or portion thereof, before the
Closing Date;


 


(h)          all
Excluded Employee Liabilities;


 


(i)          all
Liabilities arising as a result of any Legal Proceedings, whether initiated prior to or following the Closing Date, to the extent
related to the Business or the Purchased Assets on or prior to the Closing Date, including any actions for breach of contract,
product liability, any tort actions or any Legal Proceeding scheduled or required to be scheduled on Section 5.11 of the Disclosure
Schedules;


 


(j)          all
Liabilities arising under any Indebtedness of any Seller Entity or any obligations or Liabilities to equity holders of any Seller
Entity;


 


(k)          all
Liabilities with respect to any costs, fees and expenses (including all legal, accounting, financial advisory, valuation, investment
banking and other third party advisory or consulting fees and expenses) incurred by or on behalf of any Seller Entity in connection
with or arising from the Bankruptcy Case or the transactions contemplated by this Agreement, the Ancillary Agreements and each
other agreement, document or instrument contemplated hereby or thereby (the “Bankruptcy Expenses”);


 


(l)          all
Liabilities: (i) existing prior to the filing of the Bankruptcy Case that are subject to compromise under the Bankruptcy Case,
other than the Cure Costs with respect to any Purchased Contracts; and (ii) to the extent not otherwise expressly assumed pursuant
to Section 2.3, incurred subsequent to the filing of the Bankruptcy Case and prior to the Closing;


 


(m)          all
Liabilities relating to any theories of law or equity involving successors or transferees;


 


(n)          all
Liabilities and obligations of any Seller Entity under this Agreement, the Ancillary Agreements and each other agreement, document
or instrument contemplated hereby or thereby or any Contract entered into in connection herewith or therewith;


 


(o)          all
Liability, warranty and similar claims for damages, illness or injury to person or property and all other Liabilities, regardless
of when made or asserted, to the extent arising out of or incurred in connection with the conduct of the Business or the ownership
or operation of the Purchased Assets, on or before the Closing Date;


 




    	 	24	 



     


    

 


(p)          all
Liabilities for the gross negligence or willful misconduct of any Seller or their Affiliates, regardless of when made or asserted,
to the extent arising out of or incurred in connection with the conduct of the Business or the ownership or operation of the Purchased
Assets, on or before the Closing Date;


 


(q)          all
Liabilities for any fines or penalties or criminal actions imposed by any Governmental Body, regardless of when made or asserted,
to the extent arising out of or incurred in connection with the conduct of the Business or the ownership or operation of the Purchased
Assets, on or before the Closing Date; and


 


(r)          all
Liabilities for the nonpayment or mispayments of any Working Interest, Net Revenue Interest or Lease Burdens, regardless of when
made or asserted, to the extent attributable to periods prior to the Closing Date.


 


2.5           Non-Assignment
of Assets. Notwithstanding any other provision of this Agreement to the contrary, this Agreement shall not constitute an
agreement to assign or transfer and shall not affect the assignment or transfer of any Purchased Asset if (a) an attempted assignment
or transfer thereof, without the approval, authorization or consent of, or granting or issuance of any license or permit by, any
third party thereto or a Governmental Body (each such action, a “Necessary Consent”), would constitute a breach,
default or violation thereof or of any Law or Order or in any way adversely affect the rights of the Purchaser thereunder and (b)
the Bankruptcy Court has not entered an Order providing that such Necessary Consent is not required. In such event, such assignment
or transfer is subject to such Necessary Consent being obtained, and the Sellers shall use their commercially reasonable efforts
to obtain the Necessary Consents with respect to any such Purchased Asset or any claim or right or any benefit arising thereunder
for the assignment or transfer thereof to the Purchaser as the Purchaser may reasonably request. For the avoidance of doubt, any
asset that would be a Purchased Asset but is not assigned in accordance with this Section 2.5 shall not be considered a
“Purchased Asset” for purposes hereof unless and until such asset is assigned to the Purchaser following the Closing
Date upon receipt of any Necessary Consent and Bankruptcy Court approval. If such Necessary Consent is not obtained, or if an attempted
assignment or transfer thereof would be ineffective or would adversely affect the rights of the Purchaser to such Purchased Asset
following the Closing, the Sellers shall cooperate with the Purchaser in any reasonable arrangement to provide for the Purchaser
to obtain the benefits and assume the obligations thereunder in accordance with this Agreement, including subcontracting, sub licensing,
or sub-leasing tot Purchaser, or under which the applicable Seller would enforce for the benefit of the Purchaser all of its rights
thereunder.


 


2.6           Contract
Designation; Cure Costs.


 




    	 	25	 



     


    

 


(a)          As
of the Execution Date, Section 2.6 of the Seller Disclosure Schedule sets forth each Executory Contract and the Sellers’
good faith estimate of the amount of the Cure Costs (the “Estimated Cure Costs”) payable in respect of
each such Executory Contract (and if the Sellers believe in good faith that no Cure Cost is estimated to be payable in respect
of any particular Executory Contract, the amount of such Cure Cost designated for such Contract shall be “$0.00”).
The Sellers represent and warrant to the Purchaser that the Estimated Cure Costs with respect to each such Executory Contract reflects,
if applicable, the amount of Cure Costs that may have been agreed to between the Seller and a counterparty in connection with an
Initial Cure Notice as well as any Cure Costs that may have been asserted by the non-debtor parties in response to an Initial Cure
Notice, but which have not been resolved prior to the Execution Date. On the date that is no later than ten (10) days following
the Execution Date, the Purchaser, in its sole discretion by written notice to the Sellers, may (i) exclude from being assigned
to the Purchaser any Executory Contract and/or (ii) designate any Executory Contract as a Purchased Contract. Thereafter, to the
extent that the Sellers have not previously provided a notice (an “Initial Cure Notice”) following the original
date of entry of the Bidding Procedures Order, the Sellers shall deliver a notice in a form reasonably acceptable to the Purchaser
to all non-debtor counterparties to an Executory Contract designated by the Purchaser as a Purchased Contract, which notice shall
state, among other things: (i) the proposed Cure Cost for such Executory Contract and (ii) an objection deadline for such non-debtor
party to object to the proposed Cure Cost. Subject to the limitations set forth in the Cash Collateral Order, to the extent that
any objections are received from such non-debtor parties in response to such notice, the Sellers shall use their commercially reasonable
efforts to resolve such disputes with the applicable non-debtor party. Notwithstanding anything herein to the contrary, at any
time prior to the Closing, the Purchaser shall be entitled, in its sole discretion, to: (i) remove any Executory Contract previously
designated as a Purchased Contract from the schedule of Purchased Contracts on Section 1.1(d)(i) of the Seller Disclosure Schedule
and add such Executory Contract to the schedule of Excluded Contracts on Section 1.1(d)(ii) of the Seller Disclosure Schedule by
providing written notice thereof to the Sellers, and any Executory Contract so added shall be deemed to be an “Excluded Contract”
and shall not be deemed to be a “Purchased Contract” or an “Executory Contract” for all purposes hereunder
without further action by the parties, except as expressly contemplated by the Bidding Procedures Order; and (ii) designate any
Executory Contract previously designated as an Excluded Contract to be a Purchased Contract by adding such Executory Contract to
the schedule of Purchased Contracts on Section 1.1(d)(i) of the Seller Disclosure Schedule and remove such contract from the schedule
of Excluded Contracts, and any Executory Contract so designated shall be deemed to be a “Purchased Contract” and an
“Executory Contract” for all purposes hereunder without further action by the parties, except as expressly contemplated
by the Bidding Procedures Order.


 


(b)          The
Sellers shall give written notice to the Purchaser prior to the submission by any Seller Entity of any motion in its Bankruptcy
Case to assume or reject any Contract related to the Business together with a copy of the proposed Assumption Order; provided,
however, that in no event shall any Seller Entity seek to reject, or reject, any Contract related to the Business prior
to the Closing Date unless prior written approval has been obtained from the Purchaser; and provided, further, that
the Sellers shall not seek to reject, or reject, any Contract that is an Executory Contract.


 




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(c)          Subject
to Section 3.3, to the extent that any Executory Contract that is a Purchased Contract requires the payment of Cure Costs
in order to be assigned to the Purchaser and assumed pursuant to sections 363 and 365 of the Bankruptcy Code, the Cure Costs related
to such Executory Contract shall be paid by the Purchaser. The Purchaser shall not be required to make any payment of Cure Costs
for, or otherwise have any Liabilities with respect to, any Contract that is not a Purchased Contract. The Purchaser will cooperate
with Sellers in demonstrating the Purchaser’s ability to provide adequate assurance of future performance on its behalf and
on behalf of its designees as required under the Bankruptcy Code, including section 365(f)(2)(B) thereof; provided, however,
that the Purchaser will not be required to provide any security, guarantees, credit support or other financial accommodations in
connection with any Purchased Contract.


 


(d)          Notwithstanding
anything to the contrary herein, the Purchaser may from time to time prior to the Closing in its sole discretion designate any
Purchased Contract as an Excluded Contract by providing written notice thereof to the Sellers. Such Contract (i) shall be removed
from the schedule of Purchased Contracts on Section 1.1(d)(i) of the Seller Disclosure Schedule and to the extent applicable, removed
from the schedule of Executory Contracts on Section 1.1(e) of the Seller Disclosure Schedule, and (ii) shall be added to the schedule
of Excluded Contracts on Section 1.1(d)(ii) of the Seller Disclosure Schedule and shall not be deemed to be a “Purchased
Contract,” or an “Executory Contract” for all purposes hereunder, in each case, without further action by the
parties.


 


2.7           Further
Conveyances and Assumptions. From time to time following the Closing, the Sellers and the Purchaser shall, and shall cause
their respective Affiliates to, execute, acknowledge and deliver all such further conveyances, notices, assumptions, assignments,
releases and other instruments, and shall take such further actions, as may be reasonably necessary or appropriate to assure fully
to the Purchaser and its respective successors or assigns, conveyance of all of the properties, rights, titles, interests, estates,
remedies, powers and privileges intended to be conveyed to the Purchaser under this Agreement and to assure fully to each Seller
and its Affiliates and their successors and assigns, the assumption of the liabilities and obligations intended to be assumed by
the Purchaser under this Agreement, and to otherwise make effective the transactions contemplated hereby; provided, however,
that nothing in this Section 2.7 shall require the Purchaser or any of its Affiliates to purchase any Assets other than
the Purchased Assets or assume any Liabilities other than the Assumed Liabilities.


 


2.8           Assignment
to Affiliates of the Purchaser. Prior to the Closing, the Purchaser shall have the right to assign its rights to receive
all or any part of the Purchased Assets and its obligations to assume all or any part of the Assumed Liabilities, in each case
to one or more Affiliates of the Purchaser by providing written notice to the Company and each such designated Affiliate shall
be deemed to be a the Purchaser for all purposes hereunder and under the Ancillary Agreements, except that no such assignment shall
relieve the Purchaser of any of its obligations hereunder.


 


2.9           Effective
Time; Proration.


 


(a)          Subject
to the other terms and conditions of this Agreement, possession of the Purchased Assets shall be transferred from the Sellers to
the Purchaser at the Closing, but certain financial benefits and burdens of the Purchased Assets, and the ownership thereof, shall
be transferred effective as of 7:00 a.m., Mountain Time, on November 1, 2015 (the “Effective Time”),
as described below.


 




    	 	27	 



     


    

 


(b)          The
Purchaser shall be entitled to all production of Hydrocarbons from or attributable to the Mineral Leases and the Wells at and after
the Effective Time (and all products and proceeds attributable thereto), and to all other income, proceeds, receipts and credits
earned with respect to the Purchased Assets at or after the Effective Time and, subject to the terms of this Agreement, shall be
responsible for (and entitled to any refunds with respect to) all Property Costs incurred at and after the Effective Time. Should
the Purchaser receive after Closing any proceeds or other income to which the Sellers are entitled under Section 2.9(c),
the Purchaser shall fully disclose, account for and promptly remit the same to the Sellers. Should the Purchaser pay after Closing
any Property Costs for which the Sellers are responsible under Section 2.9(c), the Sellers shall reimburse the Purchaser
promptly after receipt of an invoice with respect to such Property Costs.


 


(c)          The
Sellers shall be entitled to all production of Hydrocarbons from or attributable to the Mineral Leases and the Wells prior to the
Effective Time (and all products and proceeds attributable thereto), and to all other income, proceeds, receipts and credits earned
with respect to the Purchased Assets prior to the Effective Time and, subject to the terms of this Agreement, shall be responsible
for (and entitled to any refunds with respect to) all Property Costs incurred prior to the Effective Time. Should the Sellers receive
after Closing any proceeds or other income to which the Purchaser is entitled under Section 2.9(b), the Sellers shall fully
disclose, account for, segregate and promptly remit the same to the Purchaser. Until remitted to Purchaser or until the Base Purchase
Price is reduced in accordance with Section 3.3(b)(ii), such amounts shall be deemed held in trust by Seller and shall not
be property of Sellers’ estates or subject to any Liens whatsoever. Should the Sellers pay after Closing any Property Costs
for which the Purchaser is responsible under Section 2.9(b), the Purchaser shall reimburse the Sellers promptly after receipt
of an invoice with respect to such Property Costs.


 


Article
III

CONSIDERATION


 


3.1           Base
Purchase Price. The purchase price payable by the Purchaser to the Sellers for the Purchased Assets shall be Thirty-Six
Million, Seven Hundred Fifty Thousand Dollars ($36,750,000.00) (the “Base Purchase Price”). The Base
Purchase Price shall be adjusted in accordance with Section 3.3.


 


3.2           Performance
Deposit. The Parties shall use their commercially reasonable efforts to establish the escrow accounts contemplated by the
Escrow Agreement as promptly as practicable following the Execution Date. Within one (1) Business Day following the establishment
of the deposit escrow account with the Escrow Agent pursuant to the Escrow Agreement, the Purchaser shall deposit with the Escrow
Agent a performance deposit (together with any interest that accrues on such amount in the escrow account, the “Performance
Deposit”) in an amount equal to Three Million Six Hundred Seventy-Five Thousand Dollars ($3,675,000.00), which represents
ten percent (10%) of the Base Purchase Price, to assure the Purchaser’s performance under this Agreement subject to the terms
and conditions of this Agreement. If this Agreement is terminated prior to the Closing, the distribution of the Performance Deposit
shall be governed by the provisions of Section 4.6. If Closing occurs, the parties shall execute and deliver to the Escrow
Agent a joint written instruction instructing the Escrow Agent to release the Performance Deposit to the Sellers and the Performance
Deposit shall be credited against the Purchase Price at Closing.


 




    	 	28	 



     


    

 


3.3           Adjustments
to Base Purchase Price. The Base Purchase Price shall be adjusted as follows, with the amount resulting from the below
adjustments to the Base Purchase Price hereinafter referred to as the “Purchase Price”:


 


(a)          The
Base Purchase Price shall be adjusted upward by the following amounts (without duplication):


 


(i)          an
amount equal to all Property Costs attributable to the ownership and operation of the Purchased Assets which are incurred at or
after the Effective Time and prior to the Closing Date but paid by the Sellers (as is consistent with Section 2.9), but
excluding, for the avoidance of doubt, (A) any Periodic Non-Income Taxes, (B) any income Taxes and (C) any amounts previously reimbursed
to the Sellers pursuant to Section 2.9;


 


(ii)         an
amount equal to, to the extent that such amounts have been received by the Purchaser and not remitted or paid to the Sellers in
accordance with Section 2.9, all proceeds from the production of Hydrocarbons from or attributable to the Mineral Leases
and the Wells prior to the Effective Time, less any applicable Lease Burdens (which shall have been paid or shall be paid by the
Purchaser);


 


(iii)        the
amount of all Periodic Non-Income Taxes allocated to the Purchaser in accordance with Section 10.2 but that are paid or
otherwise economically borne by the Sellers; and


 


(iv)        the
amount, if any, by which the Estimated Cure Costs set forth on Section 2.6 of the Seller Disclosure Schedule in respect of the
Purchased Contracts, taken as a whole, exceed the aggregate actual Cure Costs paid by the Purchaser in respect of the Purchased
Contracts, taken as a whole.


 


(b)          The
Base Purchase Price shall be adjusted downward by the following amounts (without duplication):


 


(i)          an
amount equal to all Property Costs attributable to the ownership and operation of the Purchased Assets which are incurred prior
to the Effective Time but paid by the Purchaser (as is consistent with Section 2.9), but excluding, for the avoidance of
doubt, (A) any Periodic Non-Income Taxes, (B) any income Taxes and (C) any amounts previously reimbursed to the Purchaser pursuant
to Section 2.9;


 


(ii)         an
amount equal to, to the extent that such amounts have been received by the Sellers and not remitted or paid to the Purchaser in
accordance with Section 2.9, all proceeds from the production of Hydrocarbons from or attributable to the Mineral Leases
and Wells at and after the Effective Time, less applicable Lease Burdens (which shall have been paid or shall be paid by the Sellers)
and any other proceeds attributable to the Purchased Assets at and after the Effective Time;


 




    	 	29	 



     


    

 


(iii)        the
amount of all Periodic Non-Income Taxes allocated to the Sellers in accordance with Section 10.2 but that are paid or otherwise
economically borne by the Purchaser;


 


(iv)        the
amount, if any, by which the aggregate actual Cure Costs paid by the Purchaser in respect of the Purchased Contracts, taken as
a whole, exceed the Estimated Cure Costs set forth on Section 2.6 of the Seller Disclosure Schedule in respect of the Purchased
Contracts, taken as a whole; and


 


(v)         the
amount of the Accrued Suspense Funds.


 


3.4           Preliminary
Settlement Statement. No later than five (5) Business Days prior to the Closing Date, the Sellers will provide the Purchaser
a good faith preliminary settlement statement (the “Preliminary Settlement Statement”) identifying all
adjustments to the Base Purchase Price to be made at Closing (and Sellers’ calculations as to each such adjustment) and the
Sellers’ resulting estimate of the Purchase Price as of the Closing (the “Estimated Purchase Price”).
Prior to the Closing, the Purchaser may deliver to the Sellers a written report containing any proposed changes the Purchaser may
have to the Preliminary Settlement Statement and the parties will confer in good faith upon any such proposed changes. The Preliminary
Settlement Statement as agreed upon by the parties will be used to determine the adjustments to the Base Purchase Price at Closing
under this Section 3.4. If the parties are unable to reach an agreement as to the Preliminary Settlement Statement, either
party shall have the right to file with the Bankruptcy Court a motion seeking approval of the Preliminary Settlement Statement
proposed by such party.


 


3.5           Final
Settlement of Purchase Price.


 


(a)          As
soon as reasonably practicable after the Closing but not later than the 60th day following the Closing Date (the “Final
Settlement Statement Deadline”), the Sellers shall prepare and deliver to the Purchaser a statement setting forth
the final calculation of the adjustments to the Base Purchase Price (and the Sellers’ calculations of each such adjustment)
(the “Proposed Final Settlement Statement”). The Sellers shall supply reasonable documentation available
to support such calculation. If the Sellers do not deliver to the Purchaser a Proposed Final Settlement Statement on or before
the Final Settlement Statement Deadline, the Purchaser shall be entitled to deliver to the Sellers a Proposed Final Settlement
Statement, in which case any reference in the portion of this Section 3.5(a) following this sentence to the Sellers shall
be deemed to be a reference to the Purchaser and any reference in the portion of this Section 3.5(a) following this sentence
to the Purchaser shall be deemed to be a reference to the Sellers. As soon as reasonably practicable but not later than the 30th
day following receipt of the Proposed Final Settlement Statement, the Purchaser may deliver to Sellers a written report containing
any changes that the Purchaser propose be made to the Proposed Final Settlement Statement; provided that if the Purchaser
fail to deliver the Sellers such a written report within such 30 day period, the Proposed Final Settlement Statement shall be the
Final Settlement Statement for all purposes under this Agreement. The Sellers may deliver a written report to the Purchaser during
this same period reflecting any changes that Sellers proposes to be made to the Proposed Final Settlement Statement as a result
of additional information received after the Proposed Final Settlement Statement was prepared. The parties shall undertake to agree
on the final statement of the Purchase Price (the “Final Settlement Statement”) no later than 45 days
after Sellers’ delivery of the Proposed Final Settlement Statement to the Purchaser. In the event that the parties cannot
reach agreement on the Final Settlement Statement within such period of time, each party shall have the right to right to file
with the Bankruptcy Court a motion seeking approval of the Preliminary Settlement Statement proposed by such party. The Purchase
Price as provided in the Final Settlement Statement is hereinafter referred to as the “Final Purchase Price.”


 




    	 	30	 



     


    

 


(b)          Within
ten (10) days after the determination of the Final Settlement Statement:


 


(i)          If
the Final Purchase Price exceeds the Estimated Purchase Price, then the parties shall execute and deliver to the Escrow Agent a
joint written instruction instructing the Escrow Agent to release the entire Adjustment Escrow Amount to the Sellers and if (A)
the amount of such excess is greater than or equal to the Adjustment Escrow Limit, the Purchaser shall pay to the Sellers an amount
equal to the Adjustment Escrow Limit (it being understood and agreed by the parties that the Sellers’ receipt of such amount
shall be in full satisfaction of any such excess (notwithstanding the fact that such excess was greater than the Adjustment Escrow
Limit)) and the Purchaser shall have no further obligations or Liabilities to the Sellers in respect of such excess; or (B) if
the amount of such excess is less than the Adjustment Escrow Limit, the Purchaser shall pay to the Sellers an amount equal to such
excess; or


 


(ii)         If
the Estimated Purchase Price exceeds the Final Purchase Price, then if (A) the amount of such excess is greater than or equal to
the Adjustment Escrow Amount, then the parties shall execute and deliver to the Escrow Agent a joint written instruction instructing
the Escrow Agent to release the entire Adjustment Escrow Amount to the Purchaser (it being understood and agreed by the parties
that the Purchaser’s receipt of such amount shall be in full satisfaction of any such excess (notwithstanding the fact that
such excess was greater than the Adjustment Escrow Amount)) and the Sellers shall have no further obligations or Liabilities to
the Purchaser in respect of such excess; or (B) if the amount of such excess is less than the Adjustment Escrow Amount, then the
parties shall execute and deliver to the Escrow Agent a joint written instruction instructing the Escrow Agent to release to the
Purchaser an amount equal to such excess and to the Sellers the remainder of the Adjustment Escrow Amount.


 


(c)          All
payments made or to be made under this Agreement to the Sellers shall be made by electronic transfer of immediately available funds
to the accounts designated by the Sellers in writing to the Purchaser. All payments made or to be made under this Agreement to
the Purchaser shall be made by electronic transfer of immediately available funds to the accounts designated by the Purchaser in
writing to the Sellers.


 




    	 	31	 



     


    

 


Article
IV

CLOSING AND TERMINATION


 


4.1           Closing
Date. Subject to the satisfaction of the conditions set forth in Sections 9.1, 9.2, 9.3 and 9.4
hereof (or the waiver thereof by the party entitled to waive that condition), the closing of the purchase and sale of the Purchased
Assets and the assumption of the Assumed Liabilities provided for in Article II hereof (the “Closing”)
shall be deemed to take place at the offices of the Company located at 2549 W. Main Street, Suite 202, Littleton, Colorado 80120
at 10:00 a.m. (New York City time) on (a) the later of (i) the date that is three (3) Business Days following the satisfaction
or waiver in writing of all of the conditions to the obligations of the parties set forth in Article IX (other than (x)
the conditions to the obligations of the Purchaser set forth in Section 9.1(c) or (y) conditions that, by their nature,
are to be satisfied at the Closing, but subject to the satisfaction or waiver of all conditions at Closing) or (ii) the date that
is one (1) Business Day following the satisfaction or waiver in writing of the conditions to the obligations of the Purchaser set
forth in Section 9.1(c), or (b) at such other time and date or at such other place as is agreed to in writing by the parties
hereto. The date on which the Closing is held is referred to in this Agreement as the “Closing Date.”
The transfer of the Purchased Assets and Assumed Liabilities shall be deemed to take place and be effective on the Closing Date
at 12:01 a.m. where the Purchased Asset or Assumed Liability resides, exists or arises.


 


4.2           Deliveries
by the Sellers. At the Closing, the Sellers shall deliver, or cause to be delivered, to the Purchaser (or such other Person
as may be indicated below):


 


(a)          one
or more duly executed Bills of Sale;


 


(b)          one
or more duly executed Assignment and Assumption Agreements;


 


(c)          duly
executed and acknowledged Assignments of Mineral Leases, including, for the avoidance of doubt, duly executed and acknowledged
Mineral Deeds and Royalty Deeds covering the Mineral Interests, in each case in sufficient counterparts to facilitate recording;


 


(d)          one
or more duly executed and acknowledged Assignments of Other Real Property Leases;


 


(e)          duly
executed and acknowledged special or limited warranty deeds conveying title to the Owned Real Property in recordable form;


 


(f)          with
respect to properties operated by the Seller Entities, change of operator forms and other similar forms required by state regulatory
authorities or under applicable joint operating agreements (in form reasonably acceptable to Purchaser);


 


(g)          duly
executed and acknowledged assignments of Federal, State and Indian leases on forms prescribed therefor;


 




    	 	32	 



     


    

 


(h)          letters-in-lieu
of transfer orders directed to the purchaser of the Hydrocarbons and other remitters of production revenues directing them to make
payment to the Purchaser following the Closing or under applicable joint operating agreements (in form reasonably acceptable to
Purchaser);


 


(i)          the
officer’s certificates required to be delivered pursuant to Sections 9.1(a) and 9.1(b);


 


(j)          certificates
executed by each Seller that such Seller is not a foreign person within the meaning of section 1445(f)(3) of the Code, which certificates
shall set forth all information required by, and otherwise be executed in accordance with, Treasury Regulation section 1.1445-2(b)(2);


 


(k)          a
complete and correct hard copy or electronic copy of the materials contained in the electronic Dataroom to the extent such materials
relate to the Purchased Assets or the Business and were made available to the Purchaser before the Closing;


 


(l)          a
certified copy of the Sale Order;


 


(m)          in
accordance with Section 3.2, a duly executed joint written instruction instructing the Escrow Agent to release the Performance
Deposit to the Sellers in accordance with the Escrow Agreement;


 


(n)          UCC-3,
mortgage releases, and other release documents, in form and substance reasonably acceptable to the Purchaser, to evidence the release
of any and all Liens arising from or relating to the Notes or the Senior Secured Indenture on the Purchased Assets;


 


(o)          the
Seller’s Records in accordance with Section 8.20;


 


(p)          a
schedule listing the accrued suspense funds as of the Closing (the “Accrued Suspense Funds”); and


 


(q)          all
other deeds, endorsements, assignments and other instruments of conveyance, transfer and release, in form and substance reasonably
acceptable to the Purchaser, as may be necessary, to convey and assign the Purchased Assets to the Purchaser and vest title therein
in the Purchaser (in each case free and clear of all Liens other than Permitted Liens and Excluded Liabilities).


 


4.3           Deliveries
by the Purchaser. At the Closing, the Purchaser shall deliver to the Sellers (or such other Person as may be indicated
below).


 


(a)          the
Closing Payment;


 


(b)          the
Adjustment Escrow Amount to the account designated by the Escrow Agent in the Escrow Agreement;


 


(c)          one
or more duly executed Bills of Sale;


 




    	 	33	 



     


    

 


(d)          one
or more duly executed Assignment and Assumption Agreements;


 


(e)          duly
executed and acknowledged Assignments of Mineral Leases, in sufficient counterparts to facilitate recording;


 


(f)          one
or more duly executed and acknowledged Assignments of Other Real Property Leases;


 


(g)          the
officer’s certificates required to be delivered pursuant to Sections 9.2(a) and 9.2(b);


 


(h)          with
respect to properties operated by the Sellers, change of operator forms and other similar forms required by state regulatory authorities
prepared by the applicable Seller and executed by the Purchaser;


 


(i)          duly
executed and acknowledged assignments of Federal, State and Indian leases on forms prescribed therefor;


 


(j)          in
accordance with Section 3.2, a duly executed joint written instruction instructing the Escrow Agent to release the Performance
Deposit to the Sellers in accordance with the Escrow Agreement;


 


(k)          letters-in-lieu
of transfer orders, prepared by the applicable Seller and executed by the Purchaser, directed to the purchasers of the Hydrocarbons
and other remitters of production revenues directing them to make payment to the Purchaser following the Closing.


 


4.4           Termination
of Agreement. This Agreement may be terminated prior to the Closing as follows:


 


(a)          (i)
by the Purchaser, upon prior written notice to the Sellers, if the Closing has not occurred by 5:00 p.m. New York time on November
30, 2015 (the “Purchaser Termination Date”); provided, however, that if the Closing has
not occurred on or before the Purchaser Termination Date due to a material breach of any representations, warranties, covenants
or agreements contained in this Agreement by the Purchaser, then the Purchaser may not terminate this Agreement pursuant to this
Section 4.4(a); or (ii) by the Sellers, upon prior written notice to the Purchaser, if the Closing has not occurred by 5:00
p.m. New York time on November 30, 2015 (the “Seller Termination Date”); provided, however, that if the
Closing has not occurred on or before the Seller Termination Date due to a material breach of any representations, warranties,
covenants or agreements contained in this Agreement by the Sellers, then the Sellers may not terminate this Agreement pursuant
to this Section 4.4(a);


 


(b)          by
mutual written consent of the Sellers and the Purchaser;


 


(c)          by
the Purchaser upon the occurrence of a Seller Material Adverse Effect;


 




    	 	34	 



     


    

 


(d)          by
the Purchaser, if a Seller breaches any representation or warranty or any covenant or agreement contained in this Agreement, and
such breach (i) would result in a failure of a condition set forth in Sections 9.1 or 9.3 and (ii) (A) cannot be
cured by the Purchaser Termination Date, or (B) if capable of being cured, has not been cured by the earlier of (x) ten (10) Business
Days after the giving of written notice by the Purchaser to the Sellers of such breach (which notice shall specify in reasonable
detail the nature of such breach and the Purchaser’s intention to terminate this Agreement if such breach or failure is not
cured) and (y) one (1) Business Day prior to the earlier of the Purchaser Termination Date and the date on which this Agreement
may otherwise be terminated by the Purchaser in accordance with Section 4.4; provided, that the Purchaser is not
then in material breach of any representation, warranty, covenant or agreement contained in this Agreement. Notwithstanding any
other provision of this Agreement to the contrary, the Purchaser shall not be able to terminate this Agreement prior to Closing
as a result of the breach by the Sellers of any representation or warranty contained in this Agreement (disregarding, for this
purpose, any materiality or similar qualification) unless the aggregate effect of all such breaches detracts from the value of
the Purchased Assets or the Business by an amount greater than or equal to seven and one half percent (7.5%) of the Base Purchase
Price.


 


(e)          by
the Sellers, if the Purchaser breaches any representation or warranty or any covenant or agreement contained in this Agreement,
and such breach (i) would result in a failure of a condition set forth in Sections 9.2 or 9.4 and (ii) (A) cannot
be cured by the Seller Termination Date, or (B) if capable of being cured, has not been cured by the earlier of (x) ten (10) Business
Days after the giving of written notice by the Sellers to the Purchaser of such breach notice (which notice shall specify in reasonable
detail the nature of such breach and the Sellers’ intention to terminate this Agreement if such breach or failure is not
cured) and (y) one (1) Business Day prior to the earlier of the Seller Termination Date and the date on which this Agreement may
otherwise be terminated by the Sellers in accordance with Section 4.4; provided, that no Seller is then in material
breach of any representation, warranty, covenant or agreement contained in this Agreement;


 


(f)          by
the Sellers or the Purchaser if there is in effect a final non-appealable Order of a Governmental Body of competent jurisdiction
restraining, enjoining or otherwise prohibiting the consummation of the transactions contemplated by this Agreement or the Ancillary
Agreements; it being agreed that the parties hereto shall promptly appeal any adverse determination which is not non-appealable
and pursue such appeal with reasonable diligence unless and until this Agreement is terminated pursuant to this Section 4.4;


 


(g)          by
the Purchaser, if (i) the Sellers accept a Competing Transaction or otherwise designate another Person to be the Winning Bidder
in respect of any of the Purchased Assets, or (ii) the Bankruptcy Court shall have entered an Order authorizing the consummation
of a Competing Transaction;


 


(h)          by
the Purchaser, if the Bankruptcy Court shall have stated, declared or determined that it will not enter the Sale Order ;


 




    	 	35	 



     


    

 


(i)          by
the Purchaser, (x) if the Purchaser is not declared the Winning Bidder at the Auction on or prior to October 21, 2015 or (y) the
Sale Order is not entered by November 6, 2015 or the Sale Order shall not have become a Final Order within fourteen (14) days after
such date;


 


(j)          by
the Purchaser, if prior to the Closing, any creditor shall obtain relief from the automatic stay with respect to any Purchased
Assets (provided that the aggregate value of all Purchased Assets affected by any such relief exceeds $500,000), or if there
shall occur a Cash Collateral Order Termination Date; or


 


(k)          by
the Purchaser, if, prior to the Closing, the Bankruptcy Case is converted into a case under chapter 7 of the Bankruptcy Code or
dismissed or if a trustee is appointed in the Bankruptcy Case.


 


4.5           Procedure
Upon Termination. In the event of a termination of this Agreement pursuant to Section 4.4 hereof, written notice
thereof shall forthwith be given to the other party or parties by the terminating party, and this Agreement shall terminate as
described below, and the transactions contemplated by this Agreement shall be abandoned, without further action by the Purchaser
or the Sellers except as provided in Section 4.6. If this Agreement is terminated as provided herein, each party shall return
or destroy all information of the other party in accordance with the Confidentiality Agreement.


 


4.6           Effect
of Termination.


 


(a)          In
the event that this Agreement is terminated as provided herein, then each of the parties shall be relieved of its duties and obligations
arising under this Agreement after the date of such termination and there shall be no liability or obligation on any of the Purchaser
or the Sellers, or any of their respective Representatives under this Agreement or in connection with the transactions contemplated
hereby; provided, however, that the provisions of this Section 4.6, Article XI (other than, in the
case of any termination of this Agreement by the Purchaser, Section 11.3) and, to the extent necessary to effectuate the
foregoing enumerated provisions, Sections 1.1, 1.2 and 1.3 hereof, shall survive any such termination and
shall be enforceable hereunder; provided, further, that nothing in this Section 4.6 shall be deemed to release Sellers from
liability for any breach of this Agreement prior to the date of termination, or fraudulent or criminal acts, the remedies for which
shall not be limited by the provisions of this Agreement.


 


(b)          If
this Agreement is terminated (i) by the Sellers pursuant to Section 4.4(a) and, at the time of such termination, the Purchaser
is in material breach of this Agreement, (ii) by the Sellers pursuant to Section 4.4(e), or (iii) by the Purchaser otherwise
than as expressly permitted by Section 4.4, then the Performance Deposit shall be distributed to the Sellers, but shall
not constitute liquidated damages, and the Sellers and the bankruptcy estates shall retain all other rights, remedies, claims counterclaims,
and defenses, including the right to seek equitable or injunctive relief..


 




    	 	36	 



     


    

 


(c)          If
this Agreement is terminated for any reason other than as provided in Section 4.6(b), then the Performance Deposit shall
be returned to the Purchaser.


 


(d)          The
Purchaser and the Sellers shall execute and deliver a joint written instruction to the Escrow Agent within two (2) Business Days
following the termination of this Agreement instructing the Escrow Agent to distribute the Performance Deposit as required by this
Section 4.6.


 


(e)          Nothing
in this Section 4.6 shall limit the Purchaser’s right to specific performance under Section 11.3 prior to the
termination of this Agreement.


 


Article
V

REPRESENTATIONS AND WARRANTIES OF THE SELLERS


 


Except as set forth
in the Seller Disclosure Schedule delivered by the Sellers to the Purchaser on the Effective Date, each Seller hereby jointly and
severally represents and warrants to the Purchaser that all of the statements contained in this Article V are true and correct.


 


5.1           Organization
and Good Standing. Each Seller is an entity duly organized, validly existing and in good standing under the laws of the
jurisdiction of its organization and, subject to the limitations imposed on such Seller as a result of having filed a petition
for relief under the Bankruptcy Code, has the requisite power and authority to own, lease and operate its properties and to carry
on its business (including the Business) as now conducted and as now proposed to be conducted. Each Seller is duly qualified or
licensed to do business in each jurisdiction in which the actions to be performed hereunder or in which the nature of its business
or the ownership or leasing of its properties makes such qualification or licensing necessary for it to carry on its business (including
the Business) as now conducted and as now proposed to be conducted, except where the failure to be so qualified would not be, individually
or in the aggregate, material.


 


5.2           Authorization
of Agreement. Subject to entry of the Bidding Procedures Order and the Sale Order and such other authorization as is required
by the Bankruptcy Court, each Seller has the requisite power and authority to execute and deliver this Agreement, the Ancillary
Agreements and each other agreement, document or instrument contemplated hereby or thereby to which it is a party and to perform
its respective obligations hereunder and thereunder. The execution and delivery of this Agreement, the Ancillary Agreements and
each other agreement, document or instrument contemplated hereby or thereby to which it is a party and the consummation of the
transactions contemplated hereby and thereby have been duly authorized by all requisite corporate or similar action on the part
of each Seller. This Agreement, the Ancillary Agreements and each other agreement, document or instrument contemplated hereby or
thereby to which it is a party has been duly and validly executed and delivered, and each agreement, document or instrument contemplated
hereby or thereby to be delivered at or prior to Closing shall be duly and validly executed and delivered, by the applicable Seller
Entity and (assuming the due authorization, execution and delivery by the other parties hereto and the entry of the Sale Order)
this Agreement, the Ancillary Agreements and each other agreement, document or instrument contemplated hereby or thereby to which
it is a party constitutes legal, valid and binding obligations of each applicable Seller Entity enforceable against such Seller
Entity in accordance with its respective terms and provisions, subject to general principles of equity, including principles of
commercial reasonableness, good faith and fair dealing (regardless of whether enforcement is sought in a proceeding at law or in
equity).


 




    	 	37	 



     


    

 


5.3           Conflicts;
Consents of Third Parties.


 


(a)          Except
as set forth on Section 5.3(a) of the Seller Disclosure Schedule, the execution and delivery by each Seller of this Agreement,
the Ancillary Agreements and each other agreement, document or instrument contemplated hereby or thereby to which it is a party,
the consummation of the transactions contemplated hereby and thereby and compliance by such Seller with any of the provisions hereof
or thereof do not and shall not conflict with, or result in any violation of or default (with or without notice or lapse of time,
or both) under, or give rise to a right of termination, cancellation or acceleration of any obligation or to loss of a material
benefit under, or give rise to any obligation of any Seller to make any payment under or to the increased, additional, accelerated
or guaranteed rights or entitlements of any Person under, or result in the creation of any Liens upon any of the Purchased Assets
or cancellation under any provision of: (i) the certificate of incorporation and bylaws or comparable organizational documents
of the Sellers; (ii) subject to entry of the Sale Order, any Purchased Contract or Permit to which a Seller Entity is a party or
by which any of the properties or assets of such Seller Entity are bound; (iii) subject to entry of the Sale Order, any Order;
or (iv) subject to entry of the Sale Order, any applicable Law.


 


(b)          There
are no Necessary Consents. Except as set forth on Section 5.3(b) of the Seller Disclosure Schedule or on Section 5.6(a) of the
Seller Disclosure Schedule, and except to the extent not required if the Sale Order is entered, no consent, waiver, approval, Order,
Permit or authorization of, or declaration or filing with, or notification to, any Person or Governmental Body is required on the
part of any Seller Entity in connection with the execution and delivery of this Agreement, the Ancillary Agreements or any other
agreement, document or instrument contemplated hereby or thereby to which any Seller Entity is a party, the compliance by the Sellers
with any of the provisions hereof or thereof, the consummation of the transactions contemplated hereby or thereby or the taking
by the Sellers of any other action contemplated hereby or thereby (with or without notice or lapse of time, or both), except for:
(i) the entry of the Sale Order; and (ii) consents that are customarily obtained following the consummation of an asset sale of
this type and nature (e.g., consents to assign for Federal, State and Indian leases).


 


5.4           Financial
Statements and Reports.


 


(a)          The
audited consolidated financial statements as of and for the year ended December 31, 2014, and unaudited consolidated financial
statements as of and for the six months ended June 30, 2015, of the Company and its subsidiaries included or incorporated by reference
in the SEC Filings, are referred to herein as the “Public Financial Statements.” The Public Financial
Statements: (i) comply in all material respects with the applicable requirements under the Exchange Act and the rules and regulations
of the SEC thereunder; (ii) present fairly in all material respects the consolidated financial position, results of operations
and cash flows of the Company and its subsidiaries on the basis stated therein as of the dates and for the applicable periods;
and (iii) have been prepared in accordance with GAAP consistently applied for the periods involved, except to the extent disclosed
therein.


 




    	 	38	 



     


    

 


(b)          As
of the Closing Date, the Pre-Closing Financial Statements: (i) comply in all material respects with the instructions and guidelines
promulgated by the Office of the United States Trustee for the preparation of monthly operating reports for business by debtors;
and (ii) present fairly in all material respects the consolidated financial position, results of operations and cash flows of the
Company and its subsidiaries, the financial position, results of operations and cash flows of the Company and each of its subsidiaries
individually and each segment of the Business on the basis stated therein as of the dates and for the applicable periods.


 


(c)          The
Sellers maintain systems of accounting controls sufficient to provide reasonable assurances that: (i) transactions are executed
in accordance with management’s general or specific authorization; and (ii) transactions are recorded as necessary to permit
the preparation of financial statements in conformity with GAAP and to maintain accountability for assets and liabilities.


 


5.5           Intentionally
Blank.


 


5.6           Compliance
with Law; Permits.


 


(a)          Except
as otherwise specifically directed by the Bankruptcy Court or as set forth in Section 5.6(a) of the Seller Disclosure Schedule
and except in the case of clauses (i) and (ii) of this Section 5.6(a) where such conduct, failure to obtain,
non-compliance or violations would not, individually or in the aggregate, be material: (i) the Sellers own and operate the Purchased
Assets and have conducted the Business in accordance with all Laws, Orders and Permits applicable to the Sellers and the Purchased
Assets; (ii) the Business is, and at all times has been, in compliance with all applicable Laws, Orders and Permits (including
any anti-bribery Laws) and has obtained all approvals necessary for owning and operating the Wells and has made all necessary filings
with all Governmental Bodies having jurisdiction necessary for owning and operating the Wells; (iii) to the Knowledge of the Sellers,
all Wells that have been drilled, completed and operated, have had all production therefrom accounted for and paid to the Persons
entitled thereto, and the Wells have been operated, in material compliance with all applicable Federal, Indian, State and local
Laws and applicable rules and regulations of the Federal, Indian, State and local Governmental Bodies having jurisdiction thereof,
except for the royalties that are currently held in suspense in accordance with applicable Laws and the Mineral Leases as of the
Execution Date that are set forth in Section 5.17(d) of the Seller Disclosure Schedule; (iv) neither the Sellers nor any of the
Sellers’ Representatives has received: (A) any written notice or other communication from a Governmental Body that alleges
that the Business is not in compliance with any Law, Order or Permit applicable to the Business or the operations of the Business
or the Purchased Assets in any material respect; or (B) any written notice or other communication regarding material deficiencies
in the compliance practices, procedures, methodologies or methods of the Business or its employees or internal compliance controls,
including any complaint, allegation, assertion or claim that the Business or its employees has engaged in illegal practices.


 




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(b)          Except
as set forth in Section 5.6(b) of the Seller Disclosure Schedule and except in the case of clauses (i) and (iii)
of this Section 5.6(b) where such failure to make filings or notices, defaults or the failure to hold Permits, would not,
individually or in the aggregate, be material: (i) all filings and notices relating to the Mineral Leases, or the ownership or
operation thereof, required to be made by the Sellers with all Governmental Bodies have been made by or on behalf of the Sellers;
(ii) the Sellers have not received any written notice of a claim that the Sellers are in default in any respect under the terms
of any Mineral Lease or under any other agreement, contract or commitment to which any part of such Mineral Lease is subject and
the Sellers are not in default in any respect under the terms of any Mineral Lease or under any other agreement, contract or commitment
to which any part such Mineral Lease is subject; (iii) the Sellers hold, and to the extent applicable, have timely filed applications
to renew, all of the Permits necessary for (A) the operation of the Business as currently conducted and currently proposed to be
conducted and the ownership and (B) operation of the Purchased Assets; (iv) all such Permits are valid and in full force and effect,
and there are no Legal Proceedings pending or threatened, that are reasonably expected to result in the revocation, cancellation,
suspension or modification of any such Permits, and such Permits are transferable to the Purchaser without material expense and
without causing such Permits to be revoked, cancelled, suspended or modified; and (v) there are no Legal Proceedings pending or
threatened, with respect to any alleged failure to have all Permits required in connection with (A) the operation of the Business
as currently conducted and currently proposed to be conducted or (B) in connection with the ownership or operation of the Purchased
Assets.


 


5.7           Other
Real Property Leases and Owned Real Property.


 


(a)          Section
5.7(a) of the Seller Disclosure Schedule contains a list, as of the Execution Date, of all leases, subleases and ground leases
of real property used or held for use in the conduct of the Business (including all modifications, extensions or amendments thereto)
under which any of the Sellers are a tenant other than the Mineral Leases (as so modified, extended or amended, the “Other
Real Property Leases” and the real property leased thereunder, the “Other Leased Real Property”).
The Sellers have made available to the Purchaser true, correct and complete copies of all Other Real Property Leases including
all amendments, modifications, extensions, renewals, guaranties and other agreements relating thereto. Each of the Other Real Property
Leases is in full force and effect and is enforceable in accordance with its terms against the Sellers and each other party thereto,
except as where the failure of such Other Real Property Lease to be in full force and effect and enforceable has not had and would
not be material. Other than as a result of the commencement of the Bankruptcy Case, none of the Sellers nor any other party to
any Other Real Property Lease is in breach or default under any Other Real Property Lease, and no event or condition has occurred
that constitutes or would constitute (with or without notice or lapse of time or both), a breach or default on the part of the
Sellers or any other party to such Other Real Property Lease, nor have the Sellers received any notice of any such breach, default,
event or condition, except, in each case, for any such breach, default, event or condition that, individually or in the aggregate,
has not had and would not be material. Except as would not be material: (i) all improvements leased, licensed or otherwise occupied
by the Sellers on the Other Leased Real Property are in a state of good working order and repair in all material respects and are
adequate and suitable for the purposes which they are currently or intended to be used; and (ii) there are no leases, subleases,
licenses, concessions, options or rights of first refusal to purchase or lease, or other agreements, written or oral, granting
to any party or parties the right of use or occupancy of any Other Leased Real Property or any portion thereof and there are no
parties (other than the Sellers) in possession of the Other Leased Real Property or any portion thereof.


 




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(b)          Section
5.7(b) of the Seller Disclosure Schedule contains a complete list of all real property that is owned in fee by the Sellers (the
Sellers’ fee simple interest therein together with all owned buildings, improvements and structures thereon, the “Owned
Real Property”. The Sellers own the Owned Real Property in fee simple subject to no Liens except Permitted Liens.


 


5.8           Title
to Purchased Assets.


 


(a)          Except
as set forth on Section 5.8(a) of the Seller Disclosure Schedule, the Sellers own the Purchased Assets free and clear of all Liens
(other than Permitted Liens) and, subject to the entry of the Sale Order, at the Closing, the Purchaser shall be vested with Defensible
Title to such Purchased Assets, free and clear of all Liens (other than Permitted Liens) and all Excluded Liabilities, to the fullest
extent permissible under Law, including section 363(f) of the Bankruptcy Code.


 


(b)          The
Sellers own or lease, subject to their rights and the rights of third parties under joint operating agreements where applicable,
all fixed assets, leasehold improvements, vehicles, production equipment, and other personal property currently used in connection
with the Business or in connection with the ownership or operation of the Purchased Assets of which a Seller is the operator of
record. Section 5.8(b) of the Seller Disclosure Schedule sets forth a true, complete and correct list of all owned or leased personal
property used in connection with the Business or in connection with the ownership or operation of the Purchased Assets of which
a Seller is the operator of record.


 


(c)          The
Sellers own, lease or otherwise have the right to use all necessary rights of way and related surface damage agreements that are
currently used with the operation of the Business or in connection with the ownership or operation of the Purchased Assets or the
production, gathering, compression, treatment, storage, sale or disposal of Hydrocarbons, water or other minerals or substances
produced from the Mineral Leases.


 




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5.9           Intellectual
Property.


 


(a)          Section
5.9(a) of the Seller Disclosure Schedule sets forth a complete list of all material unregistered Trademarks included in the Purchased
Intellectual Property and domain name registrations included in the Purchased Intellectual Property. None of the Purchased Intellectual
Property is subject to registrations or application for registration.


 


(b)          Except
as set forth on Section 5.9(b) of the Seller Disclosure Schedule:


 


(i)          A
Seller Entity owns all Purchased Intellectual Property and has valid rights in and to, including all rights to use, reproduce,
publish, distribute, transmit, perform, display, and create derivative works of, as applicable, all such Purchased Intellectual
Property as such Intellectual Property is used in the ordinary course of business, in each case, free and clear of all Liens (other
than Permitted Liens) and Excluded Liabilities.


 


(ii)         The
Seller Entities have made reasonable efforts to protect and maintain the proprietary nature of each material item of Purchased
Intellectual Property and the confidentiality of the confidential Trade Secrets and other confidential information material to
the Business.


 


(iii)        In
the operation of the Business as conducted in the ordinary course of business: (A) no Seller Entity is violating, and since the
Petition Date, has violated, any Intellectual Property rights of any other Person; and (B) there are no Legal Proceedings, pending
or threatened, concerning any claim that a Seller Entity has infringed, diluted, misappropriated, or otherwise violated any Intellectual
Property rights of any other Person.


 


(c)          The
Seller Entities take and have taken commercially reasonable actions to protect the confidentiality, integrity and security of its
software, databases, systems, networks and Internet sites and all information stored or contained therein or transmitted thereby
from potential unauthorized use, access, interruption or modification by third parties. The Seller Entities are in compliance with
all applicable Laws with regards to the transmission and storage of such information.


 


5.10        Material
Contracts.


 


(a)          Section
5.10(a) of the Seller Disclosure Schedule sets forth a true, correct and complete list of all Contracts (excluding, for the avoidance
of doubt, Permits and Mineral Leases) to which the Sellers are a party or are bound, or by which any of the Purchased Assets are
bound, as of the Execution Date, whether or not made in the ordinary course of business, which are material to the operation of
the Business and/or the ownership and operation of the Purchased Assets (collectively, the “Material Contracts”).
The Sellers have made available to the Purchaser true, correct and complete copies of each Material Contract. Notwithstanding anything
to the contrary, “Material Contracts” shall include all Purchased Contracts and all Executory Contracts
requiring the payment for services in any twelve month period of in excess of $50,000 or in the aggregate for the remaining term
of the Contract after the date of this Agreement of in excess of $100,000.


 




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(b)          Except
as set forth on Section 5.10(b) of the Seller Disclosure Schedule: (i) each Material Contract is a valid and binding agreement
of those Sellers that are party thereto, enforceable in accordance with its terms against such Sellers and against each other party
thereto; (ii) the Sellers have performed, and each other party thereto has performed or shall perform, each term, covenant and
condition of each Material Contract required to be performed; and (iii) other than the commencement of the Bankruptcy Case, no
event has occurred that would, with the passage of time or compliance with any applicable notice requirements or both, constitute
a breach, violation or default by the Sellers or the other parties thereto under any of the Material Contracts.


 


(c)          Except
as set forth on Section 5.10(c) of the Seller Disclosure Schedule, the Sellers have not, with respect to the Material Contracts
or otherwise: (i) become overproduced as to any Well or Mineral Lease so as to have a balancing obligation relative thereto, nor
has it otherwise received any quantity of Hydrocarbons to be paid for thereafter other than in the normal cycle of billing; or
(ii) received prepayments, advance payments or loans which shall require the performance of services or provision of Hydrocarbons
under such Material Contracts on or after the Closing Date without being currently paid therefor other than in the normal cycle
of billing. Except as set forth on Section 5.10(c) of the Seller Disclosure Schedule, the Sellers are not obligated, by virtue
of any prepayment arrangement, make up right under production sales contract containing a “take or pay” or similar
provision, gas balancing agreement, production payment or any other arrangement to deliver Hydrocarbons, or proceeds from the sale
thereof, attributable to the Mineral Leases at some future time without then or thereafter receiving the full contract price therefor.
Except as set forth on Section 5.10(c) of the Seller Disclosure Schedule, there is no call upon, option to purchase or similar
right to obtain Hydrocarbons from the Mineral Leases in favor of any Person other than pursuant to renewal rights or automatic
renewal provisions contained in existing Contracts for the sale of Hydrocarbons.


 


5.11        Litigation.


 


(a)          Except
for the general pendency of the Bankruptcy Case, or as set forth on Section 5.11(a) of the Seller Disclosure Schedule, there are
no Legal Proceedings pending or threatened that affect any of the Purchased Assets or the Business or that could reasonably be
expected to give rise to any material Liability of the Purchaser or adversely affect the Purchaser’s ability to conduct the
Business after the Closing or the ownership or use by the Purchaser of the Purchased Assets in the operation of the Business after
the Closing.


 


(b)          Except
for the general pendency of the Bankruptcy Case, or as set forth on either Section 5.6(a) or Section 5.11(b) of the Seller Disclosure
Schedule, there is no Legal Proceeding pending or threatened in writing against the Sellers or any of the Purchased Assets before
any Governmental Body, arbitrator, or arbitration panel relating to rentals or royalties payable by the Sellers with respect to
any Seller’s interest in the Purchased Assets or Hydrocarbons produced from the Purchased Assets. Neither the Business nor
any of the Purchased Assets is subject to any outstanding Order.


 




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5.12        Tax
Matters. Except as set forth on Section 5.12 of the Seller Disclosure Schedule: (a) all material Tax Returns required to
be filed by or with respect to the Sellers or the Purchased Assets have been properly prepared and timely filed, and all such Tax
Returns (including information provided therewith or with respect to thereto) are true, complete and correct in all material respects;
(b) the Sellers have fully and timely paid all Taxes owed by the Sellers or owed with respect to the Purchased Assets (whether
or not shown on any Tax Return), and have made adequate provision for any Taxes that are not yet delinquent, for all taxable periods,
or portions thereof, ending on or before the date hereof; (c) all withholding tax requirements imposed on or with respect to the
Sellers and the Purchased Assets have been satisfied in full in all respect; (d) no audit or other proceeding by any Governmental
Body is active, pending or threatened with respect to any Taxes due from or with respect to the Sellers or with respect to the
Purchased Assets; (e) no Governmental Body has given written notice of any intention to assert any deficiency or claim for additional
Taxes against the Sellers or with respect to the Purchased Assets and no claim has been made by any Governmental Body in a jurisdiction
where the Sellers do not file Tax Returns that it is or may be subject to taxation by that jurisdiction; (f) all deficiencies for
Taxes asserted or assessed against the Sellers or with respect to the Purchased Assets have been fully and timely paid or settled;
(g) the Sellers have provided to the Purchaser copies of all Tax audit reports affecting the Purchased Assets or the Business that
have been issued with respect to the previous five (5) taxable years of the Sellers; (h) there are no outstanding agreements extending
or waiving the statutory period of limitations applicable to any deficiency, claim for, or the period for the collection or assessment
or reassessment of, Taxes due from the Sellers or with respect to the Purchased Assets for any taxable period and no request for
any such waiver or extension is currently pending; (i) there are no Liens for Taxes upon the assets or properties of the Sellers,
including the Purchased Assets, except for statutory Liens for current period Taxes not yet delinquent; (j) none of the Purchased
Assets constitutes “tax exempt use property” within the meaning of section 168(h)(1) of the Code; and (k) none of the
Purchased Assets is property required to be treated as being owned by another person pursuant to the provisions of section 168(f)(8)
of the Internal Revenue Code of 1954, as amended and in effect immediately prior to the enactment of the Tax Reform Act of 1986.
None of the Purchased Assets are held by or subject to any contractual arrangement between the Sellers, on the one hand, and any
other person, on the other hand, whether owning undivided interests therein or otherwise, that is classified as a partnership for
United States federal tax purposes and no transfer of any part of the Purchased Assets pursuant to this Agreement will be treated
as a transfer of an interest or interests in any partnership for federal income tax purposes.


 




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5.13        Environmental
Matters. Except as set forth on Section 5.13 of the Seller Disclosure Schedule, (a) with respect to the Purchased Assets
and the Business, no Seller Entity is the subject of any outstanding Order nor has any Seller Entity received any written notice,
complaint or inquiry from any Governmental Body or any other Person respecting (i) Environmental Laws, Environmental Permits or
Hazardous Materials, or (ii) a Remedial Action; (b) there is no investigation or Legal Proceeding pending or threatened that could
reasonably be expected to result in the Sellers or the Purchaser incurring any material Liability pursuant to any applicable Environmental
Law in connection with the Purchased Assets or the Business, including without limitation, any such Liability relating to the off-site
treatment, storage, recycling or handling of any Hazardous Materials by or on behalf of the Sellers in connection with the Purchased
Assets or the Business; (c) there has been no Release of Hazardous Materials and no Person has been exposed to Hazardous Materials
at, to, on, under or from the Real Property or in connection with the Business in a manner that could result in material Liability
under Environmental Laws; (d) the Sellers are and have been in compliance with Environmental Laws with respect to the Business,
the Purchased Assets and the Real Property; and (e) the Sellers have obtained, maintain and are in compliance with, and to the
extent applicable, have timely filed applications to renew, all Permits which are required under or pursuant to Environmental Laws
(the “Environmental Permits”) for the ownership or the operation of the Purchased Assets and the Business,
all such Environmental Permits are valid and in good standing, no Seller Entity has been advised by any Governmental Body of any
actual or potential change in the status or terms and conditions of such Environmental Permit, and all material Environmental Permits
held by the Sellers in connection with the Purchased Assets and the Business have been made available to the Purchaser. The Sellers
have delivered or made available to the Purchaser copies of all reports, assessments or tests with respect to compliance of the
Business or the Real Property with any Environmental Laws or the presence or Release of Hazardous Material which are in the possession,
custody or control of any Seller Entity. Neither the execution of this Agreement nor consummation of the transaction contemplated
by this Agreement shall require any notification to or consent of any Governmental Body or the undertaking of any Remedial Actions
pursuant to Environmental Laws.


 


5.14        Labor
Matters.


 


(a)          The
Sellers have made available to the Purchaser a true, correct and complete list as of the Execution Date of all Employees, including
each Employee’s: (i) name; (ii) job title or function; (iii) job location; (iv) salary or wage rate; and (v) bonus opportunity,
commission status or other incentive compensation paid or payable for 2015. Section 5.14(a) of the Seller Disclosure Schedule sets
forth a true, correct and complete list of all Service Providers, including each such Person’s: (A) name; (B) function or
services provided; (C) job location; and (D) current compensation structure. No Employee or Service Provider is located outside
the jurisdiction of the United States.


 


(b)          No
Seller has made any declarative statement to any Employee that such Employee would be retained by the Purchaser or transfer with
the Business after the Closing.


 


(c)          There
are no collective bargaining agreements or other Contracts with any labor unions or representatives of employees to which any Seller
is a party, bound or subject to, and no such agreements or Contracts are being negotiated or contemplated.


 


5.15        Employee
Benefit Plans.


 


(a)          Section
5.15(a) of the Seller Disclosure Schedule sets forth a true, correct and complete list of: (i) each Employee Benefit Plan; and
(ii) a description of any commitment or announcement by any Seller or any of its Affiliates of an intention, to create any additional
employee benefit or compensation plans, policies or arrangements for any Employee or Service Provider or to modify, suspend or
terminate any Employee Benefit Plan, except as pursuant to any applicable Law. No Employee Benefit Plan is maintained outside of
the jurisdiction of the United States.


 




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(b)          No
Employee Benefit Plan is a Multiemployer Plan, and none of the Sellers and its ERISA Affiliates has at any time maintained or contributed
to, or had any Liability in respect of, any Multiemployer Plan. No Employee Benefit Plan is a “multiple employer welfare
arrangement” as defined in section 3(40) of ERISA.


 


(c)          With
respect to each Employee Benefit Plan: (i) no Legal Proceedings (other than routine claims for benefits) are pending or threatened;
(ii) no facts or circumstances exist that would reasonably be expected to give rise to any such Legal Proceedings; (iii) no audit
or other Legal Proceeding by the DOL, the IRS or any other Governmental Body is pending or threatened; and (iv) there are no audits
or Legal Proceedings initiated pursuant to the Employee Plans Compliance Resolution System or similar proceedings pending with
the IRS or DOL.


 


(d)          As
of the Execution Date, all contributions (including all employer contributions and employee salary reduction contributions), premium
payments and Liabilities required to be made under the terms of any Employee Benefit Plan in respect of any Employee Benefit Plan
or in accordance with applicable Law have been timely made or accrued in accordance with GAAP, and all contributions, premium payments
and Liabilities for any period ending on or prior to the Closing Date which are not yet due will, on or prior to the Closing Date,
have been paid.


 


5.16        Brokers
or Financial Advisors. No Person has acted, directly or indirectly, as a broker, agent, finder or financial advisor for
the Sellers in connection with the transactions contemplated by this Agreement and each agreement, document or instrument contemplated
hereby, and no Person is entitled to any fee or commission or like payment in respect thereof, except Canaccord Genuity Inc., whose
fees, costs and expenses shall be paid by the Sellers.


 


5.17        Mineral
Leases.


 


(a)          Section
2.1(a) of the Seller Disclosure Schedule sets forth a true, correct and complete list of all Mineral Leases owned or leased by
the Sellers. All of the Mineral Leases are in full force and effect as of the Execution Date, and the Sellers are not in breach
or violation of or default in any respect under any Mineral Lease.


 


(b)          The
Sellers have Defensible Title to the Mineral Leases, except as set forth on Section 5.17(b) of the Seller Disclosure Schedule.


 


(c)          Section
5.17(c) of the Seller Disclosure Letter sets forth with respect to the Undeveloped Leases (i) the approximate total net mineral
acres covered by Sellers’ interest in the Undeveloped Leases located in Sellers’ (A) Spyglass Property, in Divide County,
North Dakota, and (B) Sheridan, Daniels, and Richland Counties, Montana, and (ii) the approximate total net mineral acres covered
by the Undeveloped Leases in each such area subject to lease expirations in each year from 2015 through 2020 and beyond (if applicable).


 




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(d)          All
royalties, overriding royalty interests and other payments due under each of the Mineral Leases and applicable Law have been timely
and accurately paid, except (i) to the extent the Sellers were specifically directed not to pay such amounts by the Bankruptcy
Court, and (ii) amounts that are being held in suspense as a result of returned mail, checks not negotiated, title issues, or other
required actions of the royalty owners in the ordinary course of business, in circumstances that do not provide any third party
a right to terminate any such Mineral Lease. Section 5.17(d) of the Seller Disclosure Schedule lists the accrued suspense funds
as of the Execution Date.


 


5.18        Wells.


 


(a)          Section
2.1(d) of the Seller Disclosure Schedule sets forth a true, correct and complete list of all Wells owned by the Sellers for use
in connection with the Business as of the Execution Date. All Wells operated by the Sellers and, to the Knowledge of the Sellers,
all Wells operated by third parties in which the Sellers have a working interest, have been drilled and completed at locations,
and within the limits, permitted by Governmental Body, all applicable leases, contracts, and pooling, spacing or unit agreements.
Section 2.1(d) of the Seller Disclosure Schedule indicates the Wells in which any Seller is the operator of as of the Execution
Date. There is no pending vote, or any outstanding request for a vote (whether written or oral), to have any Seller removed as
operator of any of the Wells for which any Seller is currently designated as the operator.


 


(b)          
No Well is subject to penalties on allowables due to overproduction prior to the Execution Date or any other violation of Law.


 


(c)          Except
as set forth on Section 5.18(c) of the Seller Disclosure Schedule, there are no Wells that: (i) Seller is currently obligated by
any applicable Law or Contract to currently plug, dismantle or abandon; or (ii) have been plugged, dismantled, or abandoned in
a manner that does not comply in all respects with applicable Law or Contract.


 


(d)          Section
5.18(d) of the Seller Disclosure Schedule contains a list of all Wells operated by Sellers that are inactive as of the Execution
Date. All Wells included in the Purchased Assets that are being utilized as water supply or salt water disposal wells are properly
permitted and equipped for such operations.


 


5.19        Sale
Contracts. Except as set forth on Section 5.19 of the Seller Disclosure Schedule and except for (a) contracts governing
the sale of oil or gas in the ordinary course of business which are terminable by the Sellers without penalty on thirty (30) or
fewer days’ notice, or (b) the disposition in the ordinary course of business of equipment no longer suitable for or used
in oil and gas field operations, there are no Contracts or options to which any of the Sellers is a party outstanding for the sale,
exchange or transfer of any of the Sellers’ interest in the Purchased Assets or any portion thereof.


 


5.20        Gas
Imbalances. Except as set forth on Section 5.20 of the Seller Disclosure Schedule, there do not exist, as of the most recent
date for which information is available that is set forth on Section 5.20 of the Seller Disclosure Schedule, any gas imbalances
(gathering, processing, transportation or otherwise) that are associated with the Purchased Assets that would require a payment
to a third party and for which the Purchaser would (following consummation of the transactions contemplated hereby) be responsible.


 




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5.21        Preferential
Purchase Rights. Except as set forth on Section 5.21 of the Seller Disclosure Schedule, there are no Preferential Purchase
Rights relating to any of the Purchased Assets.


 


5.22        Current
Commitments. Section 5.22 of the Seller Disclosure Schedule sets forth, as of the Execution Date, all authorities for expenditures
relating to the Purchased Assets to drill or rework the Wells or for other capital expenditures pursuant to the Purchased Contracts
or otherwise for which all of the activities anticipated in such authorities for expenditures or commitments have not been completed
by the Execution Date.


 


5.23        Powers
of Attorney. There are no Persons holding a power of attorney on behalf of the Sellers that would enable any such Person
to sell, convey, assign, lease, encumber or otherwise transfer or dispose of any of the Purchased Assets.


 


5.24        Intentionally
Blank.


 


5.25        Suitability
of Purchased Assets.


 


(a)          The
Purchased Assets constitute all the assets used or held for use by the Sellers in connection with or otherwise related to the Business,
other than the Excluded Assets.


 


(b)          Since
September 30, 2014, there has been no condemnation, seizure, damage, destruction or other casualty loss (whether or not covered
by insurance) affecting any of the Purchased Assets or the Business which has not subsequently been completely repaired, replaced
or restored.


 


5.26        Insurance
and Bonds. Section 5.26 of the Seller Disclosure Schedule sets forth a true, correct and complete list of all insurance
policies of the Sellers which insure the Business or any of the Purchased Assets, and a true, correct and complete list of all
letters of credit, surety bonds and performance bonds required to be obtained by the Sellers in connection with the Business. All
such insurance policies are in full force and effect, all premiums with respect thereto covering all periods up to and including
the Closing have been paid, and other than has been disclosed on Section 5.26 of the Seller Disclosure Schedule, no notice of cancellation
or termination has been received with respect to any such insurance policy.


 


5.27        Affiliate
Transactions. Except as set forth in Section 5.27 of the Seller Disclosure Schedule, no current or former director, officer,
employee, Affiliate or Representative of the Business (nor any spouse or child of any of such Persons, or any trust, partnership
or corporation in which any of such Persons has a material economic interest): (a) owns any property, assets, interests and rights,
tangible or intangible, that is a Purchased Asset or that is material to the conduct of the Business; (b) has filed or otherwise
has any Legal Proceeding against the Business; (c) is a controlling Affiliate of any customer or supplier of the Business; or (d)
is a party to or the beneficiary of any Contract with the Business.


 




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5.28        Sellers
as Debtor in Possession; No Trustee. From the Petition Date through the Execution Date, the Sellers have been at all times
in their Bankruptcy Case debtors-in-possession pursuant to section 1107 of the Bankruptcy Code, no trustee or examiner has been
appointed in the Bankruptcy Case and no motion has been filed requesting the appointment of a trustee or examiner.


 


5.29        Required
Notices. The Sellers have complied with all notice provisions of the Bankruptcy Laws. Without limiting the generality of
the foregoing, the Sellers have delivered adequate notice of the sale of the Purchased Assets free and clear of all Liens (other
than Permitted Liens) and Excluded Liabilities to (a) each Person who is the beneficiary of or a holder of any Lien in and to any
of the Purchased Assets, (b) each counterparty to each of the Purchased Contracts and each of the Excluded Contracts, (c) each
Person holding or asserting any Net Revenue Interest or Working Interest in the Purchased Assets or to whom there are owed any
amounts and (d) each Person who is the beneficiary of any Lease Burdens burdening the Mineral Leases or production therefrom.


 


Article
VI

REPRESENTATIONS AND WARRANTIES OF THE PURCHASER


 


The Purchaser hereby
represents and warrants to the Sellers that:


 


6.1          Organization
and Good Standing. The Purchaser is an entity duly organized, validly existing and in good standing under the laws of the
state of its organization.


 


6.2          Authorization
of Agreement. The Purchaser has the requisite power and authority to execute and deliver this Agreement, the Ancillary
Agreements and each other agreement, document or instrument contemplated hereby or thereby to which it is a party and to perform
its obligations hereunder and thereunder. The execution and delivery of this Agreement, the Ancillary Agreements and each other
agreement, document or instrument contemplated hereby or thereby to which it is a party and the consummation of the transactions
contemplated hereby have been duly authorized by all requisite corporate or similar action on the part of the Purchaser. This Agreement,
the Ancillary Agreements and each other agreement, document or instrument contemplated hereby or thereby to which the Purchaser
is a party has been duly and validly executed and delivered, and each agreement, document or instrument contemplated hereby to
be delivered at or prior to Closing shall be duly executed and delivered by the Purchaser and (assuming the due authorization,
execution and delivery by the other parties hereto) this Agreement, the Ancillary Agreements and each other agreement, document
or instrument contemplated hereby or thereby to which the Purchaser is a party constitutes the legal, valid and binding obligations
of the Purchaser enforceable against the Purchaser in accordance with its respective terms and provisions, subject to applicable
bankruptcy, insolvency, reorganization, moratorium and similar laws affecting creditors’ rights and remedies generally, and
subject, as to enforceability, to general principles of equity, including principles of commercial reasonableness, good faith and
fair dealing (regardless of whether enforcement is sought in a proceeding at law or in equity).


 




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6.3          Conflicts;
Consents of Third Parties.


 


(a)          The
execution and delivery by the Purchaser of this Agreement, the Ancillary Agreements and each other agreement, document or instrument
contemplated hereby or thereby to which the Purchaser is a party, the consummation of the transactions contemplated hereby and
thereby, or compliance by the Purchaser with any of the provisions hereof or thereof do not conflict with, or result in any violation
of or default (with or without notice or lapse of time, or both) under, or give rise to a right of termination or cancellation
under any provision of (i) the certificate of incorporation and bylaws or comparable organizational documents of the Purchaser;
(ii) any Contract or Permit to which the Purchaser is a party or by which any of the properties or assets of the Purchaser are
bound; (iii) any Order; or (iv) any applicable Law, other than, in the case of clauses (ii), (iii) and (iv),
such conflicts, violations, defaults, terminations or cancellations that would not reasonably be expected to have, individually
or in the aggregate, a Purchaser Material Adverse Effect.


 


(b)          No
consent, waiver, approval, Order, Permit or authorization of, or declaration or filing with, or notification to, any Person or
Governmental Body is required on the part of the Purchaser in connection with the execution and delivery of this Agreement, the
Ancillary Agreements and each other agreement, document or instrument contemplated hereby or thereby to which the Purchaser is
a party, the compliance by the Purchaser with any of the provisions hereof or thereof, the consummation of the transactions contemplated
hereby or thereby, the taking by the Purchaser of any other action contemplated hereby or thereby, except for (i) the entry of
the Sale Order and (ii) such other consents, waivers, approvals, Orders, Permits, authorizations, declarations, filings and notifications,
the failure of which to obtain or make, would not reasonably be expected to have, individually or in the aggregate, a Purchaser
Material Adverse Effect.


 


6.4          Litigation.
There are no Legal Proceedings pending or, to the knowledge of the Purchaser, threatened against the Purchaser, or to which the
Purchaser is otherwise a party before any Governmental Body, which, if adversely determined, would reasonably be expected to have,
individually or in the aggregate, a Purchaser Material Adverse Effect. The Purchaser is not subject to any Order, except to the
extent the same would not reasonably be expected to have, individually or in the aggregate, a Purchaser Material Adverse Effect.


 


6.5          No
Other Representations or Warranties. The Purchaser acknowledges that the Sellers are not making any representations or
warranties whatsoever, express or implied, beyond those expressly made by the Sellers in this Agreement, the Assignment and Assumption
Agreement, and the other Ancillary Agreements, and each other agreement, document or instrument contemplated hereby or thereby.


 




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Article
VII

BANKRUPTCY COURT MATTERS


 


7.1           Competing
Transaction. The Sellers acknowledge and agree that they have exercised their discretion under the Bidding Procedures Order
to modify the procedures and requirements thereunder and accordingly, the Purchaser is a “Qualified Bidder” and the
transactions contemplated by this Agreement constitute a “Qualified Bid” in respect of the Bidding Procedures Order.
The provisions of this Agreement will supersede any conflicting provision in the Bidding Procedures Order. From and after the Execution
Date, the Sellers agree not to, and to cause their respective Representatives and Affiliates not to, initiate contact with, or
solicit or encourage the submission of, any inquiries, proposals, or offers by any Person (other than the Purchaser and its respective
Affiliates and Representatives) with respect to any transaction (or series of transactions) involving the direct or indirect sale,
transfer or other disposition of (i) all, or substantially all of, the Purchased Assets or (ii) portions of the Purchased Assets
that constitute less than all or substantially all of the Purchased Assets, to a purchaser or purchasers other than the Purchaser
or effecting any other transaction, including any credit bid transactions, the consummation of which would be substantially inconsistent
with the transactions contemplated by this Agreement to the extent, but only to the extent, that the Company is permitted or required
by the Bidding Procedures Order (a “Competing Transaction”).


 


7.2           Bankruptcy
Court Filings. Following the Execution Date, the Sellers shall thereafter pursue diligently the entry of the Sale Order,
and the Purchaser agrees that it shall promptly take such actions as are reasonably requested by the Sellers to assist in obtaining
entry of the Sale Order and a finding of adequate assurance of future performance by the Purchaser of the Purchased Contracts,
including furnishing affidavits or other documents or information for filing with the Bankruptcy Court for the purposes, among
others, of providing necessary assurances of performance by the Purchaser under this Agreement and demonstrating that the Purchaser
is a “good faith” purchaser under section 363(m) of the Bankruptcy Code. In the event that the entry of the Sale
Order is appealed or a stay pending appeal is sought, the Sellers shall diligently oppose the appeal or the stay pending appeal
and seek the dismissal of any appeal (including a petition for certiorari, motion for rehearing, reargument, reconsideration or
revocation). Notwithstanding the foregoing, any resulting amendments, supplements or other modifications to this Agreement or any
Ancillary Agreement or resulting changes to the Bidding Procedure Order and the Sale Order shall be subject to the Purchaser’s
approval acting in its sole discretion. The Sellers shall provide the Purchaser with drafts of any and all pleadings and proposed
orders to be filed or submitted in connection with this Agreement and the transactions contemplated hereby sufficiently in advance
of the proposed filing date so as to permit the Purchaser sufficient time to review and comment on such drafts, and such pleadings
and proposed orders shall be in form and substance reasonably acceptable to the Purchaser. The Sellers shall give the Purchaser
reasonable advance notice of any hearings regarding the motions required to obtain the issuance of the Sale Order and the Purchaser
shall have the right to attend and seek to be heard at any such hearings.


 




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Article
VIII

COVENANTS


 


8.1           Access
and Information.


 


(a)          From
the Execution Date through the Closing Date, the Purchaser shall be entitled, through its officers, employees, consultants and
Representatives (including, without limitation, its legal advisors and accountants), to make such investigation of the properties,
businesses and operations of the Business, including the conduct of environmental assessments of the Real Property and title checks,
and such examination of the books and records of the Business, the Purchased Assets and the Assumed Liabilities as it reasonably
requests and to make extracts and copies of such books and records. From the Execution Date through the Closing Date, the Sellers
shall also provide the Purchaser with unrestricted 24/7 access to the Purchased Assets and the Seller’s Records and use their
commercially reasonable efforts to provide the Purchaser with access to all vendors, services providers, consultants, pumpers,
purchasers of productions, gatherers, processors, lessors, landowners and other Persons with whom the Seller Entities have a commercial
relationship with respect to the Purchased Assets. With respect to Purchased Assets operated by third parties, any access shall
be subject to the consent of such third party operators, which consent Seller shall use commercially reasonable efforts to obtain.
The Sellers shall direct and use their commercially reasonable efforts to cause the other Seller Entities and their respective
officers, employees, consultants, agents, accountants, attorneys and other Representatives to cooperate with the Purchaser and
the Purchaser’s Representatives in connection with such access, investigation and examination. No investigation by the Purchaser
or its Representatives prior to or after the Execution Date shall affect or be deemed to modify any of the representations, warranties,
covenants or agreements of the Sellers contained in this Agreement. From the Execution Date through the Closing Date, the Sellers
shall promptly deliver or make available to the Purchaser all material pleadings, motions, notices, statements, schedules, applications,
reports and other papers filed in any other judicial or administrative proceeding related to the Business, the Purchased Assets
and the transactions contemplated by this Agreement. It is understood that if a third-party operator, and not any Seller or Affiliate
of any Seller, controls access to any of the Real Property or other property that constitute Purchased Assets, the Sellers shall
use all commercially reasonable efforts to cause such operator(s) to permit the Purchaser to have access to such Purchased Assets.
From and after the Execution Date, the Seller’s shall also use their commercially reasonable efforts to assist the Purchaser
in transitioning the field and back office operations of the Purchased Assets by the Sellers to the Purchaser at Closing.


 


(b)          The
Purchaser shall indemnify and hold harmless Sellers from and against any and all claims arising from the Purchaser’s inspection
of the Purchased Assets (including claims for personal injuries, property damage and reasonable documented attorneys’ and
experts’ fees) AND SPECIFICALLY INCLUDING THOSE CLAIMED TO BE ATTRIBUTABLE TO, ARISING OUT OF, OR CAUSED BY THE NEGLIGENCE
OR STRICT LIABILITY OF THE SELLERS, WHETHER IN WHOLE OR IN PART, BUT EXCLUDING CLAIMS TO THE EXTENT CAUSED BY THE SELLERS’
WILLFUL MISCONDUCT OR GROSS NEGLIGENCE.


 


(c)          From
the Execution Date until the Closing Date, the Sellers shall provide to the Purchaser within fourteen (14) days after each fiscal
calendar month beginning on the first day of the first fiscal calendar month after the Execution Date until the Closing Date, monthly
financial data, operating statements and information as is regularly prepared for the Sellers’ internal use in respect of
the Business, including the monthly operating statements required to be filed with the Bankruptcy Court. Such financial information
described this Section 8.1(c) (the “Pre-Closing Financial Statements”) shall be prepared by the
Sellers in good faith in accordance with the Company’s policies for preparation of such financial information and the books
of account and records of the Business and shall comply in all material respects with the instructions and guidelines promulgated
by the Office of the United States Trustee for the preparation of monthly operating reports for business by debtors.


 




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8.2           Actions
Pending the Closing.


 


(a)          Except
(1) as required by applicable Law or by the Bankruptcy Case, (2) as otherwise expressly contemplated by this Agreement, or (3)
with the prior written consent of the Purchaser, during the period from the Execution Date to and through the Closing Date, the
Sellers shall, and shall cause the other Seller Entities to:


 


(i)          conduct
the Business (A) in substantially the same manner as conducted as of the Execution Date in the ordinary course of business and
(B) as a reasonable prudent operator, in a good and workmanlike manner, in accordance with good oilfield practice, and in compliance
with applicable Law;


 


(ii)         use
their commercially reasonable efforts to (A) maintain and preserve the business organization and management of the Business intact,
(B) keep available the services of the Employees, and (C) maintain the existing relations with customers, distributors, suppliers,
creditors, business partners, Service Providers, Employees and others having business dealings with the Business;


 


(iii)        file
all material Tax Returns and pay or deposit all material Taxes on a timely basis in the ordinary course of business during the
pendency of the Bankruptcy Case;


 


(iv)        (A)
maintain all Purchased Assets in good repair, working order and condition (ordinary wear and tear excepted) and from time to time
make, or cause to be made, all necessary or appropriate repairs, replacements and improvements thereto in the ordinary course of
business, (B) maintain the Seller’s Records in accordance with good industry practice, and (C) defend and protect the Purchased
Assets from infringement or deterioration;


 


(v)         pay
all undisputed accounts payable and collect all accounts receivable in the ordinary course of business and consistent with the
Cash Collateral Order; and


 


(vi)        comply
with all applicable Laws (including Environmental Laws) in all material respects.


 


(b)          Except
(1) as required by applicable Law or permitted within the Bankruptcy Case, (2) as permitted under the Cash Collateral Order, (3)
as otherwise contemplated by this Agreement, or (4) with the prior written consent of the Purchaser, during the period from the
Execution Date to and through the Closing Date, the Sellers shall not, and shall cause the other Seller Entities not to:


 


(i)          permit,
offer, agree or commit (in writing or otherwise) to permit, any of the Purchased Assets to become subject, directly or indirectly,
to any Lien or Legal Proceeding, except for any Permitted Liens;


 




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(ii)         enter
into any Contract for the direct or indirect sale (whether by merger, sale of assets or stock, or otherwise), transfer, financing,
assignment, conveyance, lease recapitalization or other disposition of the Business as a whole or any Purchased Asset (including
any Hydrocarbon sales, supply, or exchange contract, but excluding, any disposition in connection with the plugging and abandoning
of dry or non-commercial Wells) or that otherwise affects any Purchased Asset or the ability of the Purchaser to determine the
number of Employees (if any) it will be hiring, their qualifications and their terms and conditions of employment; provided, that
this Section 8.2(b)(ii) shall not be deemed to prohibit the Sellers from entering into Contracts for the purchase, gathering,
processing, transportation, and sale of Hydrocarbon production in the ordinary course of business; provided, however,
that each such Contract is terminable by the applicable Seller without penalty upon sixty (60) days or less notice;


 


(iii)        other
than in the ordinary course of business (A) enter into any Contract that would constitute a Material Contract, if in effect on
the Execution Date, or (B) assume, amend, modify or terminate any Material Contract to which a Seller Entity is a party or by which
any Seller Entity is bound and that is used in or related to the Business or the Purchased Assets (including any Purchased Contract),
or fail to exercise any renewal right with respect to any Material Contract (including any Real Property Lease) that by its terms
would otherwise expire;


 


(iv)        move
any equipment, machinery, or other Purchased Assets from the facilities of the Business, except for the movement in the ordinary
course of business of any personal property, fixtures, equipment or other Purchased Assets related to a Well that has been plugged
and abandoned as dry or non-commercial;


 


(v)         make
or change any Tax election, change an annual accounting period, adopt or change any accounting method, file any amended Tax Return,
enter into any closing agreement, settle or compromise any Tax claim or assessment relating to the Business, surrender any right
to claim a refund of Taxes, consent to any extension or waiver of the limitation period applicable to any Tax claim or assessment
relating to the Business, or take any other similar action relating to the filing of any Tax Return or the payment of any Tax;


 


(vi)        increase
the compensation or benefits (including granting any bonuses, whether monetary or otherwise) of any current or former Employee
or Service Provider;


 


(vii)       grant
or increase any severance, retention, change-of-control or similar payments to any current or former Employee or Service Provider
other than as provided for in any Employee Benefit Plan or written Contract made available to the Purchaser prior to the Execution
Date; or


 


(viii)      enter
into any collective bargaining agreement or similar Contract;


 


(ix)         compromise
any Indebtedness or claim or waive or release any right of the Seller Entities that constitutes a Purchased Asset;


 




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(x)          assign,
sublet, pledge, encumber, terminate, amend or modify in any manner any Real Property;


 


(xi)         permit
the lapse of any right relating to the Purchased Intellectual Property or any other intangible Purchased Asset;


 


(xii)        use
any Purchased Asset (other than cash or cash equivalents of the Business) to pay for any cost or expense arising out of or relating
to the transactions contemplated hereby;


 


(xiii)       enter
into any Contract to license any Purchased Intellectual Property or renew, extend, expand or otherwise amend the terms of any existing
Intellectual Property License;


 


(xiv)      commit
to participate in the drilling of any new Well, other new operations on the Real Property or commence capital projects in each
case that are (A) inconsistent with the terms of the Cash Collateral Order or the Approved Budget or (B) in excess of $25,000 in
the aggregate to all working interest owners in the applicable Purchased Assets;


 


(xv)       take
any action to amend, restate or otherwise modify the Approved Budget;


 


(xvi)      merge
or consolidate any Seller Entity with any other Person or acquire any business or equity interests or any other Person;


 


(xvii)     take
(or fail to take) any action that would constitute or result in an Event of Default (as defined in the Cash Collateral Order);


 


(xviii)    maintain
insurance in a manner consistent with the insurance policies set forth on Section 5.26 of the Seller Disclosure Schedule;


 


(xix)       commence,
settle or compromise any Legal Proceeding that affects any of the Purchased Assets or the Business or that could reasonably be
expected to adversely affect the Purchaser’s ability to conduct the Business after the Closing or the ownership or use by
the Purchaser of the Purchased Assets in the operation of the Business after the Closing; or


 


(xx)        take,
or agree, commit or offer (in writing or otherwise) to take, (A) any actions in violation of this Section 8.2(b) and/or
(B) any actions outside of the ordinary course of the Sellers’ business as of the Execution Date.


 


8.3           Consents
and Permits. The Sellers shall use their best efforts, and the Purchaser shall use its commercially reasonable efforts
and shall cooperate with the Sellers, to obtain at the earliest practicable date all consents and approvals contemplated by this
Agreement, including, the consents and approvals referred to in Section 5.3(b) hereof and the Necessary Consents. The Purchaser
and the Sellers shall use their commercially reasonable efforts to obtain the issuance, or transfer of, all Permits (including
Environmental Permits) required to be issued, transferred or reissued to the Purchaser in connection with the acquisition of the
Purchased Assets and the operation of the Business by the Purchaser following the Closing Date. The Sellers shall use their best
efforts, and the Purchaser shall use its commercially reasonable efforts, to give and make all notices and reports that the Sellers
or the Purchaser are required to make to the appropriate Governmental Bodies and other Persons with respect to the Permits (including
Environmental Permits) that may be necessary for the sale of the Purchased Assets to the Purchaser at the Closing.


 




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8.4           Further
Assurances.


 


(a)          Subject
to the other provisions of this Agreement, the Purchaser and each Seller shall use their commercially reasonable efforts to (i)
take all actions necessary or appropriate to consummate the transactions contemplated by this Agreement, (ii) provide the other
parties with reasonable cooperation and take such actions as such other parties may be reasonably request in connection with the
consummation of the transactions contemplated by this Agreement, (iii) at or following the Closing (to the extent applicable),
execute and deliver such additional documents, instruments, assignments, conveyances and assurances (including with respect to
the Owned Real Property (but excluding, for purposes of clarification, any Mineral Leases or Owned Real Property that is fee minerals
only), all such affidavits, certificates and other instruments as may be required by a nationally recognized title company or as
reasonably requested by the Purchaser for purpose of issuing title insurance policies to the Purchaser, and take such further actions
as may be reasonably required to carry out the provisions hereof and give effect to the transactions contemplated by this Agreement,
and (iv) cause the fulfillment at the earliest practicable date of all of the conditions to their respective obligations to consummate
the transactions contemplated by this Agreement. Without limiting the foregoing, each of the Purchaser and the Sellers shall use
its commercially reasonable efforts to defend any Legal Proceedings which would prevent the condition to Closing described in Section
9.3(a) from being satisfied, including seeking to have any stay or temporary restraining order entered by any court or other
Governmental Body with respect thereto vacated or reversed, and shall cooperate with each other in connection with the foregoing.


 


(b)          If
after the Closing, (i) the Purchaser holds any Excluded Assets or Excluded Liabilities or (ii) any Seller Entity holds any Purchased
Assets or Assumed Liabilities (including any proceeds, income, revenues, monies and other items attributable to the Purchased Assets),
the Purchaser or the applicable Seller Entity, shall promptly transfer (or cause to be transferred) such assets or assume (or cause
to be assumed) such Liabilities to or from (as the case may be) the other party. Prior to any such transfer, the party receiving
or possessing any such asset shall hold it in trust for such other party. The Sellers hereby grant the Purchaser an irrevocable
power of attorney to endorse such checks, drafts and other instruments, and any check, draft or other instrument arising from and
after the Closing that constitute Purchased Assets issued in the name of the Sellers.


 




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8.5           Publicity.
The initial press release concerning this Agreement and the transactions contemplated hereby shall be in a form agreed to by the
parties. Prior to the Closing, none of the parties hereto shall issue any press release concerning this Agreement or the transactions
contemplated hereby without obtaining the prior written approval of the other party hereto, which approval shall not be unreasonably
withheld, denied, conditioned or delayed, unless such disclosure is otherwise required by applicable Law or by the Bankruptcy Court
with respect to filings to be made with the Bankruptcy Court in connection with this Agreement; provided, however,
that the party intending to make such release uses its commercially reasonable efforts consistent with such applicable Law or Bankruptcy
Court requirement to consult with the other party with respect to the text thereof to the extent practicable. After the Closing,
the parties may issue public announcements regarding the transactions contemplated hereby so long as such announcements, in the
case of announcements made by the Sellers, do not disclose the specific terms or conditions of this Agreement except where such
terms and conditions have already been disclosed as required by Law, applicable stock exchange regulation or in filings that any
Seller has made in the Bankruptcy Court; provided, however, that the issuing party shall use its commercially reasonable
efforts consistent with such applicable Law or Bankruptcy Court requirement to consult with the other party with respect to the
text thereof to the extent practicable.


 


8.6           Notification
of Certain Matters.


 


(a)          From
time to time prior to the Closing, the Sellers shall promptly deliver written notice to the Purchaser of (i) any event, change,
effect, condition, state of facts, or occurrence that comes to the Knowledge of Sellers that (A) would reasonably be expected to
(x) cause a breach of the Sellers’ covenants under this Agreement, (y) render the satisfaction of the conditions in Section
9.1 or Section 9.3 reasonably unlikely to be fulfilled, or (z) prevent, prohibit or delay the Closing, (B) would reasonably
be expected to constitute a Seller Material Adverse Effect; or (C) that, if occurring or arising or in existence before or on the
date of this Agreement would have caused a representation or warranty of the Sellers to be inaccurate or deficient; (ii) any notice
or other written communication from any Person alleging that the consent of such Person is or may be required in connection with
the consummation of the transactions contemplated by this Agreement; and (iii) the commencement of any Legal Proceedings relating
to the Business or the Purchased Assets. The delivery of any notice pursuant to this Section 8.6(a) shall not have any effect
on the satisfaction of the condition to closing set forth in Section 9.1(a) or the Purchaser’s right to terminate
the Agreement pursuant to Section 4.4(c), and shall not be deemed to amend or supplement any Section of the Seller Disclosure
Schedule, limit or otherwise affect any remedies available to the Purchaser or prevent or cure any misrepresentations or breach
of warranty.


 


(b)          From
time to time prior to the Closing, the Purchaser shall promptly deliver written notice to the Sellers of (i) any event, change,
effect, condition, state of facts, or occurrence that comes to the knowledge of the Purchaser that (A) would reasonably be expected
to (x) cause a breach the Purchaser’s covenants under this Agreement, (y) render the satisfaction of the conditions in Section
9.2 or Section 9.3 reasonably unlikely to be fulfilled, or (z) prevent, prohibit or delay the Closing, (B) would reasonably
be expected to constitute a Purchaser Material Adverse Effect; or (C) that, if occurring or arising or in existence before or on
the date of this Agreement would have caused a representation or warranty of the Purchaser to be inaccurate or deficient; and (ii)
any notice or other written communication from any Person alleging that the consent of such Person is or may be required in connection
with the consummation of the transactions contemplated by this Agreement. The delivery of any notice pursuant to this Section
8.6(b) shall not have any effect on the satisfaction of the condition to closing set forth in Section 9.2(a) or Sellers’
right to terminate the Agreement pursuant to Section 4.4(d), and shall not be deemed to limit or otherwise affect any remedies
available to the Sellers or prevent or cure any misrepresentations or breach of warranty.


 




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8.7           Casualty
and Insurance.


 


(a)          The
Sellers shall maintain until Closing all existing insurance policies relating to the Business or the Purchased Assets (the “Seller
Policies”), at their sole cost and expense. If, between the Execution Date and the Closing, any of the Purchased
Assets shall be damaged or destroyed by fire, theft, vandalism or other casualty event, or become subject to any condemnation or
eminent domain proceeding, the Sellers shall promptly notify the Purchaser in writing of such fact and the Purchaser shall have
the option to (i) acquire such Purchased Assets on an “as is” basis and take an assignment from the Sellers of any
and all insurance proceeds payable to the Sellers, and any and all third party claims of Sellers, in respect of such event, (ii)
elect to exclude such Purchased Asset from this Agreement, or (iii) in the event such event would have a Seller Material Adverse
Effect, terminate this Agreement and the transactions contemplated hereby.


 


(b)          The
Sellers shall add the Purchaser (or cause the Purchaser to be added) as an additional insured or loss payee, as applicable, on
each Seller Policy for the duration of each Seller Policy as is in effect on the Execution Date, effective as of the Closing Date.
For the avoidance of doubt, except for insurance policies that expire prior to the Closing Date (which Sellers shall be required
to maintain through the Closing Date in accordance with Section 8.2), the Sellers shall not be required to renew any Seller
Policy beyond the duration that is in effect on the Execution Date. The Purchaser shall be entitled to insurance proceeds paid
under such Seller Policies with respect to any claim relating to a Purchased Asset or an Assumed Liability or the Business generally
from and after the Closing Date.


 


8.8           Use
of Names. After the Closing, the Sellers shall, and shall cause the Seller Entities to, promptly discontinue use of and,
as applicable, remove from any buildings, signs, vehicles or other asset or property of any Seller Entity, any Trademarks included
in the Purchased Intellectual Property and any variations thereof.


 




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8.9           Confidentiality.
The Purchaser acknowledges and understands that this Agreement may be publicly filed in the Bankruptcy Court and further made available
by the Sellers to prospective bidders and that, except as prohibited herein, such disclosure shall not be deemed to violate any
confidentiality obligations owing to the Purchaser, whether pursuant to this Agreement or otherwise. The Sellers acknowledge and
agree that from and after the Closing, all non-public information relating to the Business, including the Purchased Assets and
the Assumed Liabilities, shall be valuable and proprietary to the Purchaser and its Affiliates. The Sellers agree that, from and
after the Closing, no Seller shall, and the Sellers shall cause the other Seller Entities not to, disclose to any Person any information
relating to the Purchaser and its Affiliates, or the Business, including the Purchased Assets and the Assumed Liabilities, except
as required by Law or as otherwise becomes available in the public domain other than through any action by any Seller in violation
of its obligations under this Section 8.9; provided, however, that the Sellers shall use their commercially
reasonable efforts, and shall cause the other Seller Entities to use their commercially reasonable efforts, consistent with such
applicable Law requirement to consult with the Purchaser with respect to the text thereof to the extent practicable. The Sellers
acknowledge and agree that the remedies at law for any breach or threatened breach of this Section 8.9 by any Seller Entity
are inadequate to protect the Purchaser and its respective Affiliates and that the damages resulting from any such breach are not
readily susceptible to being measured in monetary terms. Accordingly, without prejudice to any other rights or remedies otherwise
available to the Purchaser or its respective Affiliates, each party acknowledges and agrees that upon any breach or threatened
breach by a Seller Entity of the terms and conditions of this Section 8.9, the Purchaser and its respective Affiliates,
as applicable shall be entitled to immediate injunctive relief and to an order restraining any threatened or future breach from
any court of competent jurisdiction without proof of actual damages or posting of any bond in connection with any such remedy.
The provisions of this Section 8.9 shall survive the Closing.


 


8.10        Employee
Matters.


 


(a)          The
Sellers shall promptly update the list of Employees provided pursuant to Section 5.14(a) of the Seller Disclosure Schedule to reflect
any and all employment or service hirings or terminations occurring prior to the Closing Date, with the final such update to occur
no later than five (5) Business Days prior to the Closing Date (it being understood that the Sellers will inform the Purchaser
in writing of the termination of employment or services of an Employee or Service Provider following the date hereof). In addition,
the Sellers shall provide the Purchaser no later than five (5) Business Days following the Closing Date a true, correct and complete
list of any and all employment losses (within the meaning of the WARN Act) incurred by the Sellers during the ninety (90) day period
prior to and including the Closing Date.


 


(b)          The
Sellers shall provide the Purchaser, upon execution of this Agreement, with access to the Employees at times and in a manner reasonably
acceptable to the Seller, and with information reasonably requested by the Purchaser with respect to compensation and benefits
of the Employees. The Purchaser or one of its Affiliates may (but is not obligated to) offer employment to such Employees as it
may determine in its sole discretion (the “Offered Employees”). Any Offered Employees who (i) accept
the offer of employment from the Purchaser or one of its Affiliates and (ii) commence employment with the Purchaser or one of its
Affiliates as of immediately following the Closing shall be referred to herein as the “Transferred Employees.”
Unless a written acceptance of an offer of employment is required by applicable Law, an Offered Employee who is actively at work
with the Purchaser or one of its Affiliates as of the Closing Date and continues employment shall be deemed to have accepted the
offer of employment from the Purchaser or one of its Affiliates, unless such Offered Employee specifically declines such offer
of employment.


 




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(c)          The
employment of any Transferred Employee with the Purchaser or one of its Affiliates shall commence immediately upon the Closing
and shall be deemed, for all purposes, consistent with applicable Law and except as otherwise expressly provided herein, to have
occurred with no interruption or break in service and no termination of employment; provided, however, that any Inactive
Employee shall not be considered a Transferred Employee unless and until such Inactive Employee returns to active status pursuant
to the following sentence, and notwithstanding anything herein to the contrary, the Purchaser and its Affiliates shall only be
responsible for Liabilities relating to the Inactive Employee from and after the date such Inactive Employee becomes a Transferred
Employee. The employment of any Inactive Employee with the Purchaser or one of its Affiliates, as applicable, shall be effective
upon his or her return to active work, provided that the Inactive Employee reports to work with the Purchaser or one of its Affiliates,
as applicable, within fifteen (15) days after the end of any such approved leave and, to the extent permitted by applicable Law,
in no event later than one hundred twenty (120) days following the Closing Date, and, as of such date, such Inactive Employee shall
be a Transferred Employee. Each Transferred Employee shall be hired on an “at will” basis unless otherwise agreed by
the Purchaser.


 


(d)          The
Sellers shall terminate, or shall cause to be terminated, the employment of all Transferred Employees effective as of the Closing
or, with respect to any Inactive Employee who becomes a Transferred Employee after the Closing Date in accordance with Section
8.10(c), upon their return to active work with the Purchaser or one of its Affiliates, as applicable. Subject to, and effective
as of, the Closing, the Sellers shall offer to each of the Transferred Employees a waiver and release from any and all contractual,
common law or other restrictions enforceable by the Sellers and their respective Affiliates on the employment, activities or other
conduct of such individuals after their termination of employment with the Sellers except with respect to obligations related to
confidentiality and trade secrets which shall become effective upon such Transferred Employee’s execution of a mutual release
of liability between such Transferred Employee and the Sellers releasing any and all claims against each other, other than those
that arise out of intentional misconduct, fraud, breaches of confidentiality or theft of trade secrets. Prior to the Closing Date,
and to the extent necessary to implement this sentence, the Sellers shall cause to be taken all actions as may be reasonably required
to amend any Employee Benefit Plan and take or cause to be taken all other action as may be reasonably required to provide that
severance or separation payments shall not be payable to any Transferred Employee on account of such employee’s termination
of employment with the Sellers and its Affiliates.


 


(e)          Pursuant
to the “Standard Procedure” provided in section 4 of Revenue Procedure 2004-53, 2004-2 C.B. 320, (i) the Purchaser
and the Sellers shall report on a predecessor/successor basis as set forth therein, (ii) the Sellers will not be relieved from
filing a Form W-2 with respect to any Transferred Employees for any tax period ending immediately prior to the Closing Date and
the tax year including the Closing Date with respect to the portion of such year that such Transferred Employee was employed by
the Sellers and their Affiliates, and (iii) the Purchaser will undertake to file (or cause to be filed) a Form W-2 for each such
Transferred Employee with respect to the portion of the year during which such Transferred Employees are employed by the Purchaser
that includes the Closing Date, excluding the portion of such year that such Transferred Employees were employed by the Sellers
and their Affiliates.


 




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(f)           The
Purchaser shall be responsible for all workers’ compensation claims relating to any Transferred Employees if the incident
or alleged incident giving rise to the claim occurred after the Closing Date. The Sellers shall be responsible for all workers’
compensation claims relating to any Transferred Employees if the incident or alleged incident giving rise to the claim occurred
on or prior to the Closing Date.


 


(g)          With
respect to any accrued but unused vacation or paid time-off benefits (“Accrued PTO”) to which any Transferred
Employee is entitled pursuant to the vacation policy or other arrangement applicable to such Transferred Employee immediately prior
to the Closing as reflected in Section 5.15(a) of the Sellers Disclosure Schedule, the Purchaser shall, or shall cause its Affiliate
to, either (i) allow such Transferred Employee to use such Accrued PTO or (ii) to the extent permitted by applicable Law, pay or
have Seller pay (at Seller’s expense) any or all of the value of such Accrued PTO to such Transferred Employee in cash.


 


(h)          Nothing
herein, express or implied, shall confer upon any other Persons (including any current or former employee of the Seller, the Purchaser
or any of their respective Affiliates) any rights or remedies hereunder, including any right to employment or continued employment
for any specified period or continued participation in any Employee Benefit Plan or other benefit plan, or any nature or kind whatsoever
under or by reason of this Agreement. Nothing herein restricts or precludes the right of the Purchaser to terminate the employment
of any Transferred Employee. The Purchaser and the Sellers agree that the provisions contained herein are not intended to be for
the benefit of or otherwise be enforceable by, any third party, including any current or former Employee or Service Provider. Nothing
in this Section 8.10, express or implied, shall be (i) deemed an amendment of any Employee Benefit Plan providing benefits
to any Employee, or (ii) construed to prevent the Purchaser or its Affiliates from terminating or modifying to any extent or in
any respect any employee benefit plan that the Purchaser or its Affiliates may establish or maintain.


 


(i)           Notwithstanding
anything in this Agreement to the contrary, if requested by the Purchaser in writing, the Sellers shall provide the Purchaser,
upon execution of this Agreement, with access to such Employees as the Purchaser elects, at times and in a manner reasonably acceptable
to the Seller, to allow the Purchaser to negotiate and offer post-Closing consulting agreements with such Employees.


 


8.11        Cooperation.
The parties shall cooperate with each other to cause the Business to be orderly transitioned from the Sellers to the Purchaser
and to minimize the disruption to the Business resulting from the transactions contemplated hereby as reasonably requested by any
party, including facilitating the transition of key customer and supplier relationships of the Business to the Purchaser.


 


8.12        Release
of Liens. Prior to the Closing, subject to the limitations of the Bankruptcy Case and the Cash Collateral Order, the Sellers
shall use all commercially reasonable efforts to pay or cause the payment of or otherwise obtain releases of claims that any Person
may have for goods and/or services secured by a Lien on the Purchased Assets with respect to which such goods and/or services were
furnished or rendered, including any claims for goods and/or services rendered in connection with any Wells or associated Production
Facilities.


 




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8.13        Purchaser
Financing Cooperation. From the Execution Date through and until the Closing Date, the Sellers shall use all commercially
reasonable efforts to cause their respective officers, employees and other Representatives to use all commercially reasonable efforts
to assist the Purchaser, its Affiliates and their respective Representatives in obtaining any financing necessary to fund the Business
from and after the Closing, including by taking the following actions: (a) make senior management, Representatives and advisors
of the Sellers reasonably available for meetings and due diligence sessions with prospective financing sources; (b) cooperate with
prospective lenders, placement agents, initial purchasers and their respective advisors in performing their due diligence; and
(c) assist the Purchaser in procuring credit agreements, hedging arrangements, notes, mortgages, pledge and security documents,
landlord waivers, estoppels, consents, and approvals and other definitive financing documents or other requested certificates or
documents (including solvency certificates to the extent required).


 


8.14        Successor
Operator. The Sellers shall use their commercially reasonable efforts to support the Purchaser’s efforts to be appointed
or cause the Purchaser’s designee to be appointed the successor operator of each Well operated by a Seller, to the extent
permitted under any applicable joint operating agreement and to designate and/or appoint by assignment, to the extent legally possible
and permitted under any such applicable joint operating agreement, the Purchaser or the Purchaser’s designee as successor
operator with respect to the Purchased Assets on or after the Closing Date.


 


8.15        Title
Defects. Prior to the Closing Date, the Purchaser shall be entitled to conduct due diligence on the Sellers’ title
to the Real Property. If, at any time prior to the Closing Date, the Purchaser identifies any matters which, in the Purchaser’s
reasonable opinion, constitute Title Defects, the Purchaser may, in its sole discretion, notify the Sellers of the Purchased Assets
affected by such Title Defects (each, a “Title Defect Property”) and require that any such Title Defect
Property be excluded from the Purchased Assets. Any Title Defect Property which the Purchaser elects to exclude from the Purchased
Assets shall be designated as an Excluded Asset and deemed to be an Excluded Asset for all purposes under this Agreement, the Ancillary
Agreements and each other agreement, document or instrument contemplated hereby or thereby, and any Liabilities associated with
such Title Defect Property shall be designated as Excluded Liabilities and deemed to be Excluded Liabilities for all purposes under
this Agreement, the Ancillary Agreements and each other agreement, document or instrument contemplated hereby or thereby.


 


8.16        Environmental
Defects. Prior to the Closing Date, the Purchaser shall be entitled to conduct environmental due diligence on the Real
Property. If, at any time prior to the Closing Date, the Purchaser identifies any event, circumstance or condition which, in its
reasonable opinion, constitutes an Environmental Defect, the Purchaser may, in its sole discretion, notify the Sellers of the Purchased
Assets (or portions thereof) affected by such Environmental Defect (each, an “Environmental Defect Property”)
and require that any such Environmental Defect Property be excluded from the Purchased Assets Any Environmental Defect Property
which the Purchaser elects to exclude from the Purchased Assets shall be designated as an Excluded Asset and deemed to be an Excluded
Asset for all purposes under this Agreement, the Ancillary Agreements and each other agreement, document or instrument contemplated
hereby or thereby, and any Liabilities associated with such Environmental Defect Property shall be designated as Excluded Liabilities
and deemed to be Excluded Liabilities for all purposes under this Agreement, the Ancillary Agreements and each other agreement,
document or instrument contemplated hereby or thereby.


 




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8.17        Intentionally
Blank.


 


8.18        Suspense
Accounts. At the Closing, the Base Purchase Price shall be reduced by the amount of the Accrued Suspense Funds in accordance
with Section 3.3(b)(v). The Purchaser agrees to indemnify, defend and hold the Sellers harmless from, and assume full responsibility
for, the proper distribution of the Accrued Suspense Funds (but only to the extent the Base Purchase Price was adjusted in accordance
with Section 3.3(b)(v)).


 


8.19        Waiver
of Bulk Sales Laws. To the greatest extent permitted by applicable Law, the Purchaser and the Sellers hereby waive compliance
by the Purchaser and the Sellers with the terms of any bulk sales or similar Laws in any applicable jurisdiction in respect of
the transactions contemplated by this Agreement. The Sale Order shall exempt the Sellers and the Purchaser from compliance with
any such Laws.


 


8.20        Seller’s
Records. At or prior to Closing, Sellers shall deliver the Seller’s Records to the Purchaser. If any of the Seller’s
Records are stored electronically, Sellers shall deliver such Seller’s Records to the Purchaser in the format in which they
are currently maintained; provided that, if requested by the Purchaser in writing, Sellers shall use their commercially reasonable
efforts to deliver such electronic records in such other format as may be reasonably requested by the Purchaser).


 


Article
IX

CONDITIONS TO CLOSING


 


9.1           Conditions
Precedent to Obligations of the Purchaser. The obligation of the Purchaser to consummate the transactions contemplated
by this Agreement is subject to the fulfillment, on or prior to the Closing Date, of each of the following conditions (any or all
of which may be waived by the Purchaser, in whole or in part, to the extent permitted by applicable Law):


 


(a)          the
representations and warranties of the Sellers contained in this Agreement shall be true and correct in all respects on and as of
the Closing, except to the extent expressly made as of an earlier date, in which case such representations and warranties shall
be true and correct in all respects as of such earlier date, (in each case without regard to any materiality or similar qualifications),
except for such breaches that in the aggregate do not detract from the value of the Purchased Assets or the Business by an amount
greater than or equal to seven and one half percent (7.5%) of the Base Purchase Price, and the Purchaser shall have received a
certificate signed by an authorized officer of each Seller on behalf of such Seller, dated the Closing Date, to the foregoing effect;


 




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(b)          the
Sellers shall have performed and complied in all material respects with all covenants, obligations and agreements required in this
Agreement to be performed or complied with by them prior to or on the Closing Date, and the Purchaser shall have received a certificate
signed by an authorized officer of each Seller on behalf of such Seller, dated the Closing Date, to the forgoing effect;


 


(c)          the
Bankruptcy Court shall have entered the Sale Order, the Sale Order shall be in full force and effect and not stayed and shall not
have been reversed or modified since the date of its entry, the time provided by applicable Law to appeal or request modification
or reconsideration of the Sale Order shall have passed and either (i) no appeals or requests for modifications or reconsideration
shall have been filed prior to such time or (ii) in the event any appeal or request has been filed with respect to entry of the
Sale Order, the Purchaser shall have determined in good faith that the pendency of such appeal or request, if ultimately successful,
could not reasonably be expected to materially detract from the value of the Purchased Assets or the Business or materially increase
the Liabilities assumed by Purchaser;


 


(d)          no
Seller Material Adverse Effect shall have occurred with respect to the Business or Purchased Assets since the Execution Date;


 


(e)          at
the Closing, the Purchaser shall acquire one hundred percent (100%) of the value of the operating and gross assets of the Business
as of the Petition Date (including the Purchased Contracts), excluding for the purposes of such determination, any Purchased Assets
transferred, assigned or conveyed to the Purchaser that are subject to Preferential Purchase Right(s) , any assets designated by
the Purchaser as Excluded Asset or contracts designated by the Purchaser as Excluded Contracts, subject to ordinary course depletion
of hydrocarbons since the Petition Date;


 


(f)          during
each calendar week (beginning at 12:00 a.m. Monday and ending at 11:59 p.m. Sunday) from the Effective Time until the Closing,
the Purchased Assets that are operated by Sellers shall have produced (net to Sellers’ interest in the Purchased Assets)
not less than 6,650 barrels of oil (pro-rated for any partial weeks and, for the avoidance of doubt, excluding any oil equivalents);
and


 


(g)          the
Sellers shall have delivered, or caused to be delivered, to the Purchaser all of the items set forth in Section 4.2.


 


9.2           Conditions
Precedent to Obligations of the Sellers. The obligations of the Sellers to consummate the transactions contemplated by
this Agreement are subject to the fulfillment, on or prior to the Closing Date, of each of the following conditions (any or all
of which may be waived by the Sellers, in whole or in part, to the extent permitted by applicable Law):


 




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(a)          the
representations and warranties of the Purchaser contained in this Agreement that are not qualified by materiality or Purchaser
Material Adverse Effect or similar qualification shall be true and correct in all material respects on and as of the Closing, except
to the extent expressly made as of an earlier date, in which case such representations and warranties shall be true and correct
in all material respects as of such earlier date, and the representations and warranties of the Purchaser contained in this Agreement
that are qualified by materiality or the Purchaser Material Adverse Effect or similar qualification shall be true and correct in
all respects on and as of the Closing, except to the extent expressly made as of an earlier date, in which case such representations
and warranties shall be true and correct in all respects as of such earlier date, and the Sellers shall have received a certificate
signed by an authorized officer of the Purchaser on behalf of the Purchaser dated the Closing Date, to the foregoing effect;


 


(b)          The
Purchaser shall have performed and complied in all material respects with all covenants, obligations and agreements required in
this Agreement to be performed or complied with by the Purchaser prior to or on the Closing Date, and the Sellers shall have received
a certificate signed by an authorized officer of the Purchaser on behalf of the Purchaser dated the Closing Date, to the foregoing
effect; and


 


(c)          The
Purchaser shall have delivered to the Sellers all of the items set forth in Section 4.3.


 


9.3           Conditions
Precedent to Obligations of the Purchaser and the Sellers. The respective obligations of the Purchaser and the Sellers
to consummate the transactions contemplated by this Agreement are subject to the fulfillment, on or prior to the Closing Date,
of each of the following conditions (any or all of which may be waived by the Purchaser and the Sellers, in whole or in part, to
the extent permitted by applicable Law):


 


(a)          there
shall not be in effect any Order by a Governmental Body restraining, enjoining or otherwise prohibiting the consummation of the
transactions contemplated hereby; and


 


(b)          the
Bankruptcy Court shall have entered the Sale Order and the Sale Order shall be in full force and effect and not stayed and shall
not have been reversed or modified since the date of entry.


 


9.4           Frustration
of Closing Conditions. No party may rely on the failure of any condition set forth in Sections 9.1, 9.2,
or 9.3, as the case may be, if such failure was caused by such party’s failure to comply with or breach of any provision
of this Agreement.


 


Article
X

TAXES


 


10.1         Transfer
Taxes. All documentary, stamp, transfer, motor vehicle registration, sales, use, excise and other similar non-income Taxes
and all filing and recording fees (and any penalties and interest associated with such Taxes and fees) arising from or relating
to the consummation of the transactions contemplated by this Agreement that are not eliminated by the application of Section 1146(a)
of the Bankruptcy Code (collectively, “Transfer Taxes”) shall be borne by the Purchaser, regardless of
the party on whom liability is imposed under the provisions of the Laws relating to such Transfer Taxes. The Sellers and the Purchaser
shall consult and cooperate in timely preparing and making all filings, Tax Returns, reports and forms as may be required to comply
with the provisions of the Laws relating to such Transfer Taxes and shall cooperate and otherwise take commercially reasonable
efforts to obtain any available refunds for or exemptions from such Transfer Taxes, including preparing exemption certificates
and other instruments as are applicable to claim available exemptions from the payment of Transfer Taxes under applicable Law and
executing and delivering such affidavits and forms as are reasonably requested by the other party.


 




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10.2         Certain
Periodic Non-Income Taxes.


 


(a)          With
respect to any real or personal property or other periodic Taxes not based on income or receipts (“Periodic Non-Income
Taxes”) that are assessed on, or in respect of, the Purchased Assets and attributable to any period that begins after
the Closing Date, if any Seller pays such Periodic Non-Income Taxes, as promptly as practicable after delivery to the Purchaser
of proof of such payment, and in any case within five (5) Business Days, the Purchaser shall pay to such Seller the amount of such
Periodic Non-Income Taxes paid by such Seller. With respect to any Periodic Non-Income Taxes that are assessed on, or in respect
of, the Purchased Assets and attributable to any period that ends on or prior to the Closing Date, if the Purchaser pays such Periodic
Non-Income Taxes, as promptly as practicable after delivery to the applicable Seller of proof of such payment, such Seller shall
pay to the Purchaser the amount of such Periodic Non-Income Taxes paid by the Purchaser.


 


(b)          With
respect to any Periodic Non-Income Taxes that are assessed on, or in respect of, the Purchased Assets and attributable to any period
which includes but does not end on the Closing Date (a “Straddle Period”): (i) if any Seller pays such
Periodic Non-Income Taxes, as promptly as practicable after delivery to the Purchaser of proof of such payment, and in any case
within five (5) Business Days, the Purchaser shall pay to such Seller the amount of such Periodic Non-Income Taxes paid by such
Seller that are attributable to the portion of such Straddle Period beginning after the Closing Date (the “Post-Closing
Straddle Period”); and (ii) if the Purchaser pays such Periodic Non-Income Taxes, as promptly as practicable after
delivery to the applicable Seller of proof of such payment, such Seller shall pay to the Purchaser the amount of such Periodic
Non-Income Taxes paid by the Purchaser that are attributable to the portion of such Straddle Period up to and including the Closing
Date (the “Pre-Closing Straddle Period”). For purposes of this Section 10.2(b), the amount of
Periodic Non-Income Taxes for a Straddle Period that are attributable to a Pre-Closing Straddle Period or a Post-Closing Straddle
Period shall be determined as follows, (x) Periodic Non-Income Taxes that are attributable to the severance or production of Hydrocarbons
shall be allocated to the period in which the severance or production giving rise to such Periodic Non-Income Taxes occurred, (y)
Periodic Non-Income Taxes that are based upon or related to income or receipts or imposed on a transactional basis (other than
such Periodic Non-Income Taxes described in clause (x)), shall be allocated to the period in which the transaction giving
rise to such Periodic Non-Income Taxes occurred, and (z) Periodic Non-Income Taxes that are ad valorem, property or other Periodic
Non-Income Taxes imposed on a periodic basis pertaining to a Straddle Period shall be based upon the ratio of the number of days
in the Pre-Closing Straddle Period to the total number of days in the Straddle Period, and the amount of Periodic Non-Income Taxes
attributable to a Post-Closing Straddle Period shall be based upon the ratio of the number of days in the Post-Closing Straddle
Period to the total number of days in the Straddle Period.


 




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(c)          The
party that has the primary obligation to do so under applicable Law shall timely pay to the applicable Governmental Body any Periodic
Non-Income Taxes covered by this Section 10.2.


 


10.3         Cooperation
and Audits. The Purchaser and the Sellers shall, and shall cause their respective Representatives and Affiliates to, cooperate
fully with each other in connection with the filing of Tax Returns and any audit, litigation, or other proceeding with respect
to Taxes relating to the Purchased Assets and with regards to any other Tax matters (including the execution of appropriate powers
of attorney) and shall make available to the other all information, records and documents relating to Taxes as are reasonably requested
by the other until the expiration of the applicable statute of limitations and any extension thereof and the conclusion of all
Legal Proceedings with respect to such Taxes. Such cooperation shall include making employees available on a mutually convenient
basis to provide additional information and explanation of any material provided under this Agreement. The Sellers and the Purchaser
shall, and shall cause their respective Representatives and Affiliates to, retain all books and records with respect to Tax matters
pertinent to the Purchased Assets relating to any taxable period beginning before the Closing Date until the expiration of the
statute of limitations of the respective Taxable periods and to abide by all record retention agreements entered into with any
Governmental Body.


 


Article
XI

MISCELLANEOUS


 


11.1         No
Survival of Representations and Warranties. The parties hereto agree that the representations and warranties contained
in this Agreement and the Ancillary Agreements shall not survive the Closing hereunder, and none of the parties shall have any
liability to each other after the Closing for any breach thereof. The parties hereto agree that the covenants contained in this
Agreement and the Ancillary Agreements to be performed at or after the Closing shall survive the Closing hereunder until the expiration
of the applicable statute of limitations or for such shorter period explicitly specified therein, and each party hereto shall be
liable to the other after the Closing for any breach thereof.


 


11.2         Expenses.
Except as otherwise expressly provided in this Agreement, whether or not the transactions contemplated hereby are consummated,
(a) each of the Sellers shall bear its own expenses and (b) the Company shall bear the reasonable expenses of the Purchaser, in
each case incurred in connection with the negotiation and execution of this Agreement and each other agreement, document and instrument
contemplated by this Agreement and the consummation of the transactions contemplated hereby and thereby and all proceedings incident
thereto. This Section 11.2 shall not apply with respect to any costs or expenses incurred by the parties in connection with
any action for a breach of this Agreement or any other agreement, document and instrument contemplated by this Agreement.


 




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11.3         Injunctive
Relief.


 


(a)          The
parties agree that irreparable damage would occur in the event that any of the provisions of this Agreement or the Ancillary Agreements
(as applicable) were not performed in accordance with their specific terms or were otherwise breached, and that damages at law
may be an inadequate remedy for the breach of any of the covenants, promises and agreements contained in this Agreement or the
Ancillary Agreements (as applicable), and, accordingly, (i) prior to the Closing, the Purchaser shall be entitled to injunctive
relief to prevent any such breach, and to enforce specifically the terms and provisions of this Agreement, including without limitation
specific performance of such covenants, promises or agreements or an order enjoining any Seller from any threatened, or from the
continuation of any actual, breach of the covenants, promises or agreements contained in this Agreement and (ii) from and after
the Closing, any party hereto shall be entitled to injunctive relief to prevent any such breach, and to enforce specifically the
terms and provisions of this Agreement or the Ancillary Agreements (as applicable), including without limitation specific performance
of such covenants, promises or agreements or an order enjoining a party from any threatened, or from the continuation of any actual,
breach of the covenants, promises or agreements contained in this Agreement or the Ancillary Agreements (as applicable). The rights
set forth in this Section 11.3 shall be in addition to any other rights which a party hereto may have at law or in equity
pursuant to this Agreement or the Ancillary Agreements (as applicable).


 


(b)          The
parties hereby agree not to raise any objections to the availability of the equitable remedy of specific performance to prevent
or restrain breaches of this Agreement or the Ancillary Agreements (as applicable) by the Purchaser or the Sellers, as applicable,
and to enforce specifically the terms and provisions of this Agreement or the Ancillary Agreements (as applicable) to prevent breaches
or threatened breaches of, or to enforce compliance with, the respective covenants and obligations of the Purchaser or the Sellers,
as applicable, under this Agreement or the Ancillary Agreements (as applicable) all in accordance with the terms of this Section
11.3.


 


11.4         Submission
to Jurisdiction; Consent to Service of Process.


 


(a)          Without
limiting any party’s right to appeal any order of the Bankruptcy Court, (i) the Bankruptcy Court shall retain exclusive jurisdiction
to enforce the terms of this Agreement and to decide any claims or disputes which may arise or result from, or be connected with,
this Agreement, any breach or default hereunder, or the transactions contemplated hereby, and (ii) any and all proceedings related
to the foregoing shall be filed and maintained only in the Bankruptcy Court, and the parties hereby consent to and submit to the
jurisdiction and venue of the Bankruptcy Court for such purposes and shall receive notices at such locations as indicated in Section
11.8 hereof; provided, however, that if the Bankruptcy Cases have been closed pursuant to section 350 of the
Bankruptcy Code, the parties agree to unconditionally and irrevocably submit to the exclusive jurisdiction of the courts of the
State of New York and of the federal courts sitting in the borough of Manhattan in the State of New York and any appellate court
from any thereof, for the resolution of any such claim or dispute. The parties hereby irrevocably waive, to the fullest extent
permitted by applicable law, any objection which they may now or hereafter have to the laying of venue of any such dispute brought
in such court or any defense of inconvenient forum for the maintenance of such dispute. Each of the parties hereto agrees that
a judgment in any such dispute may be enforced in other jurisdictions by suit on the judgment or in any other manner provided by
Law.


 




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(b)          Each
of the parties hereto hereby consents to process being served by any party to this Agreement in any Legal Proceeding by delivery
of a copy thereof in accordance with the provisions of Section 11.8.


 


11.5         Waiver
of Right to Trial by Jury. Each party to this Agreement waives any right to trial by jury in any action, matter or proceeding
regarding this Agreement or any provision hereof.


 


11.6         Entire
Agreement; Amendments and Waivers. This Agreement (including the Seller Disclosure Schedule and Exhibits), the Ancillary
Agreements and each other agreement, document or instrument contemplated hereby or thereby represent the entire understanding and
agreement between the parties hereto with respect to the subject matter hereof and supersedes all prior discussions and agreements
between the parties with respect to the subject matter hereof. Except as otherwise expressly provided herein, this Agreement may
be amended, supplemented or changed, and any provision hereof can be waived, only by written instrument making specific reference
to this Agreement signed by the party against whom enforcement of any such amendment, supplement, modification or waiver is sought.
No action taken pursuant to this Agreement, including any investigation by or on behalf of any party, shall be deemed to constitute
a waiver by the party taking such action of compliance with any representation, warranty, covenant or agreement contained herein.
The waiver by any party hereto of a breach of any provision of this Agreement shall not operate or be construed as a further or
continuing waiver of such breach or as a waiver of any other or subsequent breach. No failure on the part of any party to exercise,
and no delay in exercising, any right, power or remedy hereunder shall operate as a waiver thereof, nor shall any single or partial
exercise of such right, power or remedy by such party preclude any other or further exercise thereof or the exercise of any other
right, power or remedy. All remedies hereunder are cumulative and are not exclusive of any other remedies provided by law.


 


11.7         Governing
Law. This Agreement shall be construed, performed and enforced in accordance with, and governed by, the Laws of the State
of New York (without giving effect to the principles of conflicts of Law thereof), except to the extent that the Laws of such State
are superseded by the Bankruptcy Code or other applicable federal Law.


 


11.8         Notices.
All notices and other communications under this Agreement shall be in writing and shall be deemed given (i) when delivered personally
by hand, (ii) when sent by facsimile or email transmission (so long as confirmation of transmission is electronically or mechanically
generated and kept on file by the sending party) or (iii) one (1) Business Day following the day sent by overnight courier (with
written confirmation of receipt), in each case to the respective Persons at the following addresses, email addresses or facsimile
numbers (or to such other address, e-mail address or facsimile number as a party may have specified by notice given to the other
party pursuant to this provision):


 




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If to the Sellers, to:


 


American Eagle Energy Corporation


2549 W. Main Street, Suite 202


Littleton, Colorado 80120


Facsimile: 303-798-5767


Attention: Mr. Brad Colby


Email: bradcolby@amzgcorp.com


 


With a copy (which shall not constitute
notice) to:


 


BakerHostetler LLP


200 South Orange Ave.


SunTrust Center, Suite 2300


Post Office Box 112 (32802-0112)


Orlando, Florida 32801-3432


Facsimile: (407) 841-0168


Attention: Elizabeth Green and Jorian
Rose


Email: egreen@bakerlaw.com and jrose@bakerlaw.com


 


If to the Purchaser, to:


 


Resource Energy Can-Am LLC


1805 Shea Center Drive, Suite 100


Highlands Ranch, CO 80129


Attention: Paul Favret – Chief
Executive Officer and President


Facsimile: 720.387.8621


Email: pfavret@resource-energy-US.com


 


With a copy (which shall not constitute
notice) to:


 


Vinson & Elkins LLP


666 Fifth Avenue


26th Floor


New York, NY 10103-0040


Attention: James J. Fox


Facsimile: 917.849.5328


Email: jfox@velaw.com


 


11.9         Severability.
If any term or other provision of this Agreement is invalid, illegal, or incapable of being enforced by any law or public policy,
all other terms and provisions of this Agreement shall nevertheless remain in full force and effect so long as the economic or
legal substance of the transactions contemplated hereby is not affected in any manner materially adverse to any party. Upon such
determination that any term or other provision is invalid, illegal, or incapable of being enforced, the parties hereto shall negotiate
in good faith to modify this Agreement so as to effect the original intent of the parties as closely as possible in an acceptable
manner in order that the transactions contemplated hereby are consummated as originally contemplated to the greatest extent possible.


 




    	 	70	 



     


    

 


11.10         Assignment.
This Agreement shall be binding upon and inure to the benefit of the parties hereto and their respective successors and permitted
assigns, and nothing in this Agreement shall create or be deemed to create any third party beneficiary rights in any Person or
entity not a party to this Agreement. No assignment of this Agreement or of any rights or obligations hereunder may be made by
either the Sellers or the Purchaser (by operation of law or otherwise) without the prior written consent of the other parties hereto
and any attempted assignment without the required consents shall be void; provided, however, that (a) the Purchaser
may assign some or all of its rights or delegate some or all of its obligations hereunder to one or more of its Affiliates and
(b) the Sellers may assign some or all of their rights or delegate some or all of their obligations hereunder to successor entities
(including any liquidating trust) pursuant to a Chapter 11 plan confirmed by the Bankruptcy Court. No assignment of any obligations
hereunder shall relieve the parties hereto of any such obligations. Upon any such permitted assignment, the references in this
Agreement to the Sellers or the Purchaser shall also apply to any such assignee unless the context otherwise requires.


 


11.11         Non-Recourse.
No past, present or future director, officer, employee, contractor, agent, incorporator, member, partner or equityholder of the
parties to this Agreement shall have any liability for any obligations or liabilities of the Sellers or the Purchaser, as applicable,
under this Agreement or any agreement entered into in connection herewith of or for any claim based on, in respect of, or by reason
of, the transactions contemplated hereby and thereby. Any claim or cause of action based upon, arising out of, or related to this
Agreement or any agreement, document or instrument contemplated hereby may only be brought against Persons that are expressly named
as parties hereto or thereto, and then only with respect to the specific obligations set forth herein or therein. Other than the
parties hereto, no other party shall have any liability or obligation for any of the representations, warranties, covenants, agreements,
obligations or liabilities of any party under this Agreement or the agreements, documents or instruments contemplated hereby or
of or for any Legal Proceeding based on, in respect of, or by reason of, the transactions contemplated hereby or thereby (including
the breach, termination or failure to consummate such transactions), in each case whether based on contract, tort, fraud, strict
liability, other Laws or otherwise and whether by piercing the corporate veil, by a claim by or on behalf of a party hereto or
another Person or otherwise. In no event shall any Person be liable to another Person for any remote, speculative or punitive damages
with respect to the transactions contemplated hereby.


 


11.12         Counterparts.
This Agreement may be executed in one or more counterparts, and by the different parties in separate counterparts, each of which
shall be deemed to be an original copy of this Agreement and all of which, when taken together, shall be deemed to constitute one
and the same agreement. Delivery of an executed counterpart of a signature page to this Agreement by facsimile or other electronic
means (including portable document format) shall be as effective as delivery of a manually executed counterpart of this Agreement.


 


11.13         No
Presumption. The parties to this Agreement agree that this Agreement was negotiated fairly between them at arm’s
length and that the final terms of this Agreement are the product of the parties’ negotiations. Each party represents and
warrants that it has sought and received legal counsel of its own choosing with regard to the contents of this Agreement and the
rights and obligations affected hereby. The parties agree that this Agreement shall be deemed to have been jointly and equally
drafted by them, and that the provisions of this Agreement therefore should not be construed against a party or parties on the
grounds that the party or parties drafted or was more responsible for drafting the provisions.


 


[Signature pages follow]


 




    	 	71	 



     


    

 


IN WITNESS WHEREOF,
the parties hereto have caused this Agreement to be executed as of the dates set forth following their respective signatures by
their respective officers thereunto duly authorized.


 


	 	SELLERS:
	 	 
	 	AMERICAN EAGLE ENERGY CORPORATION 
	 	 	 
	 	By:	/s/ Brad Colby
	 	Name:	Brad Colby
	 	Title:	President
	 	 	 
	 	Date:	October 21, 2015
	 	 	 
	 	AMZG, INC.
	 	 	 
	 	By:	/s/ Brad Colby
	 	Name:	Brad Colby
	 	Title:	President
	 	 	 
	 	Date:	October 21, 2015


 




     


     


    

 


	 	PURCHASER:
	 	 
	 	RESOURCE ENERGY CAN-AM LLC
	 	 	 
	 	By:	/s/ Paul Favret
	 	Name:	Paul Favret
	 	Title:	Chief Executive Officer
	 	 	 
	 	Date:	October 21, 2015


 




     


     


    

 


Exhibit
A


 


ESCROW
AGREEMENT


 




    	 	A-1