exhibit101.htm


    
      
 

    

    


    


    EXHIBIT
10.1

    


    STOCK
PURCHASE AND SALE AGREEMENT

    


    


    BETWEEN

    


    


    VOYAGER
GAS HOLDINGS, L.P.

    (“Seller”)

     

    VOYAGER
GAS CORPORATION

    (“Company”)

     

    


     

    and

     

    


     

    ABC
FUNDING, INC.

     

    (“Buyer”)

     

    as
of

     

    MAY
22, 2008

     

    


     

    


     

    


     


    
      
        
           

        

         


      

      
         


        
          

        

      

      
         


      

    


    TABLE OF
CONTENTS

     

    Page

     

     

    
      	
              ARTICLE I.

            	
              DEFINITIONS
      AND INTERPRETATION 

            	
              1

            


    

    
      	
               
      

            	
              1.1

            	
              Defined
      Terms 

            	
              1

            


    

    
      	
               
      

            	
              1.2

            	
              References 

            	
              1

            


    

    
      	
               
      

            	
              1.3

            	
              Articles
      and Sections 

            	
              1

            


    

    
      	
               
      

            	
              1.4

            	
              Number
      and Gender 

            	
              1

            


    

     

    
      	
              ARTICLE
      II.

            	
              PURCHASE
      AND SALE 

            	
              1

            


    

    
      	
               
      

            	
              2.1

            	
              Purchase
      and Sale 

            	
              1

            


    

    
      	
               
      

            	
              2.2

            	
              Base
      Consideration; Cash Portion; Consideration Shares. 

            	
              2

            


    

    
      	
               
      

            	
              2.3

            	
              Deposit 

            	
              2

            


    

    
      	
               
      

            	
              2.4

            	
              Adjustments
      to the Cash Portion 

            	
              2

            


    

    
      	
               
      

            	
              2.5

            	
              Unregistered
      Shares; Legends; Registration 

            	
              3

            


    

     

    
      	
              ARTICLE
      III.

            	
              REPRESENTATIONS
      AND WARRANTIES OF SELLER 

            	
              3

            


    

    
      	
               
      

            	
              3.1

            	
              Representations
      and Warranties of Seller as to Seller 

            	
              3

            


    

    
      	
               
      

            	
              3.2

            	
              Representations
      and Warranties of Seller and the Company as to the
      Company 

            	
              4

            


    

    
      	
               
      

            	
              3.3

            	
              Representations
      and Warranties of Seller and the Company as to the
      Assets 

            	
              11

            


    

    
      	
               
      

            	
              3.4

            	
              Disclaimer 

            	
              14

            


    

     

     

    
      	
              ARTICLE
      IV.

            	
              REPRESENTATIONS
      AND WARRANTIES OF BUYER 

            	
              15

            


    

    
      	
               
      

            	
              4.1

            	
              Representations
      and Warranties of Buyer 

            	
              15

            


    

     

    
      	
              ARTICLE
      V.

            	
              ACCESS;
      DUE DILIGENCE 

            	
              17

            


    

    
      	
               
      

            	
              5.1

            	
              Access
      to Records 

            	
              17

            


    

    
      	
               
      

            	
              5.2

            	
              Operational
      and Environmental Assessment 

            	
              18

            


    

    
      	
               
      

            	
              5.3

            	
              Defects,
      Environmental Conditions and Related Adjustments. 

            	
              18

            


    

    
      	
               
      

            	
              5.4

            	
              Preferential
      Purchase Rights and Consents to Assign. 

            	
              20

            


    

     

     

    
      	
              ARTICLE
      VI.

            	
              OTHER
      MATTERS PRIOR TO CLOSING 

            	
              21

            


    

    
      	
               
      

            	
              6.1

            	
              Operations 

            	
              21

            


    

    
      	
               
      

            	
              6.2

            	
              Conduct
      of Business 

            	
              21

            


    

    
      	
               
      

            	
              6.3

            	
              Casualty
      Event 

            	
              22

            


    

    
      	
               
      

            	
              6.4

            	
              Publicity 

            	
              22

            


    

    
      	
               
      

            	
              6.5

            	
              Exclusivity 

            	
              22

            


    

    
      	
               
      

            	
              6.6

            	
              Compliance
      with Conditions 

            	
              23

            


    

    
      	
               
      

            	
              6.7

            	
              Mutual
      Assurances 

            	
              23

            


    

    
      	
               
      

            	
              6.8

            	
              Notification
      of Certain Matters 

            	
              23

            


    

    
      	
               
      

            	
              6.9

            	Continuation
      of the Company’s Existing Indemnification Obligations	
              23

            


    

    
      	
               
      

            	
              6.10

            	
              Termination
      of Certain Agreements 

            	
              23

            


    

    
      	
               
      

            	
              6.11

            	
              Discharge
      of Debt 

            	
              23

            


    

    
      	
               
      

            	
              6.12

            	
              Hedging
      Transactions 

            	
              24

            


    

    
      	
               
      

            	
              6.13

            	
              Resignation
      of Officers and Directors 

            	
              24

            


    

    
      	
               
      

            	
              6.14

            	
              2008
      First Quarter Unaudited Financial Statements; Supplemental Unaudited
      Financial Statements 

            	
              24

            


    

    
      	
               
      

            	
              6.15

            	
              Employee
      Matters. 

            	
              24

            


    

    
      	
               
      

            	
              6.16

            	
              Filing
      of Proxy/Information Statement; Amendment to Buyer’s Articles of
      Incorporation 

            	
              24

            


    

     

    
      
        
        

      

      
        - 
i   -

        
          

        

      

      
        
        

      

    

     

    
      	
              ARTICLE
      VII.

            	
              CONDITIONS;
      TERMINATION; REMEDIES 

            	
              25

            


    

    
      	
               
      

            	
              7.1

            	
              Conditions
      Precedent to Seller’s and the Company’s Obligation to
      Close 

            	
              25

            


    

    
      	
               
      

            	
              7.2

            	
              Conditions
      Precedent to Buyer’s Obligation to Close 

            	
              25

            


    

    
      	
               
      

            	
              7.3

            	
              Termination 

            	
              26

            


    

    
      	
               
      

            	
              7.4

            	
              Remedies 

            	
              26

            


    

     

     

    
      	
              ARTICLE
      VIII.

            	
              CLOSING

            	
              27

            


    

    
      	
               
      

            	
              8.1

            	
              Closing 

            	
              27

            


    

    
      	
               
      

            	
              8.2

            	
              Preliminary
      Settlement Statement 

            	
              27

            


    

    
      	
               
      

            	
              8.3

            	
              Actions
      at Closing 

            	
              27

            


    

     

     

    
      	
              ARTICLE
      IX.

            	
              POST
      CLOSING MATTERS 

            	
              28

            


    

    
      	
               
      

            	
              9.1

            	
              Final
      Settlement Statement 

            	
              28

            


    

    
      	
               
      

            	
              9.2

            	
              Records 

            	
              29

            


    

    
      	
               
      

            	
              9.3

            	
              Further
      Cooperation 

            	
              29

            


    

    
      	
               
      

            	
              9.4

            	
              Confidentiality. 

            	
              29

            


    

    
      	
               
      

            	
              9.5

            	
              Gauging
      and Strapping 

            	
              29

            


    

    
      	
               
      

            	
              9.6

            	
              Name
      Change 

            	
              29

            


    

     

     

    
      	
              ARTICLE
      X.

            	
              TAX
      MATTERS 

            	
              30

            


    

    
      	
               
      

            	
              10.1

            	
              Tax
      Returns 

            	
              30

            


    

    
      	
               
      

            	
              10.2

            	
              Transfer
      Taxes 

            	
              30

            


    

    
      	
               
      

            	
              10.3

            	
              Cooperation 

            	
              30

            


    

    
      	
               
      

            	
              10.4

            	
              Tax-Sharing
      Agreements 

            	
              30

            


    

     

     

    
      	
              ARTICLE
      XI.

            	
              SURVIVAL;
      INDEMNIFICATION 

            	
              30

            


    

    
      	
               
      

            	
              11.1

            	
              Survival 

            	
              30

            


    

    
      	
               
      

            	
              11.2

            	
              Indemnity
      as Sole Remedy 

            	
              31

            


    

    
      	
               
      

            	
              11.3

            	
              Indemnities
      of Buyer 

            	
              31

            


    

    
      	
               
      

            	
              11.4

            	
              Indemnities
      of Seller 

            	
              31

            


    

    
      	
               
      

            	
              11.5

            	
              Limitations
      on Indemnities. 

            	
              31

            


    

    
      	
               
      

            	
              11.6

            	
              Assertion
      of Claims; Notices; Defense; Settlement. 

            	
              32

            


    

    
      	
               
      

            	
              11.7

            	
              Limitation
      on Damages 

            	
              32

            


    

    
      	
               
      

            	
              11.8

            	
              Additional
      Indemnification of Buyer 

            	
              33

            


    

     

     

    
      	
              ARTICLE
      XII.

            	
              MISCELLANEOUS 

            	
              33

            


    

    
      	
               
      

            	
              12.1

            	
              Exhibits 

            	
              33

            


    

    
      	
               
      

            	
              12.2

            	
              Expenses 

            	
              33

            


    

    
      	
               
      

            	
              12.3

            	
              Assignment 

            	
              33

            


    

    
      	
               
      

            	
              12.4

            	
              Notices 

            	
              33

            


    

    
      	
               
      

            	
              12.5

            	
              ENTIRE
      AGREEMENT; CONFLICTS 

            	
              34

            


    

    
      	
               
      

            	
              12.6

            	
              Amendment 

            	
              35

            


    

    
      	
               
      

            	
              12.7

            	
              Waiver;
      Rights Cumulative 

            	
              35

            


    

    
      	
               
      

            	
              12.8

            	
              GOVERNING
      LAW; CONSENT TO JURISDICTION 

            	
              35

            


    

    
      	
               
      

            	
              12.9

            	
              Severability 

            	
              35

            


    

    
      	
               
      

            	
              12.10

            	
              Arbitration. 

            	
              35

            


    

    
      	
               
      

            	
              12.11

            	
              Counterparts 

            	
              36

            


    

     

    
      
        
        

      

      
        - 
ii  -

        
          

        

      

      
        
        

      

    

    SCHEDULES

    
      	
              Schedule
      1.1

            	
              -

            	
              Defined Terms

            
	
              Schedule
      3.1(d)

            	
              -

            	
              Seller’s Litigation

            
	
              Schedule
      3.1(e)

            	
              -

            	
              Required Consents and Approvals –
      Seller

            
	
              Schedule
      3.1(f)

            	
              -

            	
              Seller’s Compliance with
    Laws

            
	
              Schedule
      3.2(d)

            	
              -

            	
              Company Litigation

            
	
              Schedule
      3.2(e)

            	
              -

            	
              Required Consents and Approvals –
      Company

            
	
              Schedule
      3.2(f)

            	
              -

            	
              Matters
      Relating to the Shares

            
	
              Schedule 3.2(g)

            	
              -

            	
              Company Financial
  Statements

            
	
              Schedule 3.2(i)

            	
              -

            	
              Current Company Accounts
      Receivable

            
	
              Schedule 3.2(j)

            	
              -

            	
              Material Changes

            
	
              Schedule 3.2(l)(iii)

            	
              -

            	
              Company Tax Returns

            
	
              Schedule 3.2(o)

            	
              -

            	
              Company Insurance
  Policies

            
	
              Schedule 3.2(p)

            	
              -

            	
              Company Compliance with
  Laws

            
	
              Schedule 3.2(q)

            	
              -

            	
              Company Employee Matters

            
	
              Schedule 3.2(r)

            	
              -

            	
              Employee Benefit Matters

            
	
              Schedule 3.3(f)

            	
              -

            	
              Preferential Purchase Rights; Consents to
      Assignment-Assets

            
	
              Schedule 3.3(j)

            	
              -

            	
              Environmental Matters

            
	
              Schedule 3.3(l)

            	 
      	
              Contracts Not Terminable Upon 30 Days
      Notice

            
	
              Schedule 3.3(m)

            	
              -

            	
              Imbalances and Similar
    Matters

            
	
              Schedule 3.3(o)

            	
              -

            	
              AFEs; Commitments for
      Expenditures

            
	
              Schedule 3.3(p)

            	
              -

            	
              Drilling Obligations

            
	
              Schedule 3.3(q)

            	
              -

            	
              Areas of Mutual Interest and Similar
      Matters

            
	
              Schedule 3.3(r)

            	
              -

            	
              Company Hedges

            
	
              Schedule 4.1(j)(iii)

            	
              -

            	
              Buyer Outstanding
  Securities

            
	
              Schedule 4.1(j)(iv)

            	
              -

            	
              Buyer’s Subsidiary

            
	
              Schedule 4.1(l)

            	
              -

            	
              Buyer Adverse Event or
      Liability

            
	
              Schedule 4.1(m)

            	
              -

            	
              Buyer’s Outstanding
      Indebtedness

            
	
              Schedule 8.3(h)

            	
              -

            	
              Seller’s Opinion of
  Counsel

            
	
              Schedule 8.3(j)

            	
              -

            	
              Buyer’s Opinion of
  Counsel

            
	
              Schedule 9.1

            	
              -

            	
              Working Capital
  Methodology

            
	 
      	 
      	 
      


    

     

    EXHIBITS

    
      	
              Exhibit
      A

            	
              -

            	
              Assets

            
	
              Exhibit A-1

            	
              -

            	
              Leases

            
	
              Exhibit A-2

            	
              -

            	
              Wells; Working Interests and Net Revenue
      Interests; Allocated Values

            
	
              Exhibit A-3

            	
              -

            	
              Real Property Interests

            
	
              Exhibit A-4

            	
              -

            	
              Contracts

            
	
              Exhibit
      B

            	
              -

            	
              Terms of Registration Rights
      Agreement

            


    

    



    
      
        
          


        

         


      

      
        - 
iii  -  

        
          

        

      

      
         


      

    


    STOCK PURCHASE AND SALE
AGREEMENT

     

    THIS
STOCK PURCHASE AND SALE AGREEMENT (“Agreement”) is
executed as of this 22nd day of
May, 2008, by Voyager Gas Holdings, L.P., a Texas limited partnership (“Seller”), Voyager Gas
Corporation, a Delaware corporation (the “Company”), and ABC
Funding, Inc., a Nevada corporation (“Buyer”).

     

    RECITALS

     

    WHEREAS,
Seller owns all of the issued and outstanding shares of common stock, par value
$.01 per share, of the Company;
and

     

    WHEREAS,
the Company is the owner of certain oil and gas properties and assets located in
the State of Texas described more particularly herein;

     

    WHEREAS,
Seller desires to sell and transfer, and Buyer desires to purchase and pay for,
all of the issued and outstanding shares of common stock, par value $0.01 per
share, of the Company (the “Shares”).

     

    NOW,
THEREFORE, for and in consideration of the mutual promises contained herein, the
benefits to be derived by each Party hereunder, and other good and valuable
consideration, the receipt and sufficiency of which are hereby acknowledged,
Seller, the Company, and Buyer agree as follows:

     

    ARTICLE
I.

     

    DEFINITIONS
AND INTERPRETATION

     

    1.1 Defined
Terms.  In addition to the terms defined in the introductory
paragraph and the Recitals of this Agreement, for purposes hereof, the
capitalized expressions and terms set forth in Schedule 1.1 and the
cover page(s) for Exhibit A shall have
the meanings set forth therein, unless expressly indicated
otherwise.  Other terms may be defined elsewhere in this Agreement and
shall, for purposes hereof, have the meanings so specified, unless expressly
indicated otherwise.

     

    1.2 References.  The
words “hereby,” “herein,” “hereinabove,” “hereinafter,” “hereinbelow,” “hereof,”
“hereto,” “hereunder,” and words of similar import when used in this Agreement
shall refer to this Agreement as a whole and not to any particular article,
section, or provision of this Agreement.  References in this Agreement
to articles, sections, exhibits, or schedules are to such articles, sections,
exhibits, or schedules of this Agreement unless otherwise
specified.

     

    1.3 Articles and
Sections.  This Agreement, for convenience only, has been
divided into articles and sections.  The rights and other legal
relations of the parties hereto shall be determined from this Agreement as an
entirety and without regard to the aforesaid division into articles and sections
and without regard to headings prefixed to such articles and
sections.

     

    1.4 Number and
Gender.  Whenever the context requires, reference herein made
to a single number shall be understood to include the plural; and likewise, the
plural shall be understood to include the singular.  Words denoting
sex shall be construed to include the masculine, feminine, and neuter, when such
construction is appropriate; and specific enumeration shall not exclude the
general but shall be construed as cumulative.  Definitions of terms
defined in the singular or plural shall be equally applicable to the plural or
singular, as applicable, unless otherwise indicated.

     

    ARTICLE
II.

     

    PURCHASE
AND SALE

     

    2.1 Purchase and
Sale.  Subject to the terms hereof, Seller agrees to sell and
convey to Buyer, and Buyer agrees to purchase from Seller and pay for, the
Shares.  The transfer of the Shares from Seller to Buyer shall be
effective as of the Effective Time.

     

    
      
        
        

      

      
        1

        
          

        

      

      
        
        

      

    

     

    2.2 Base Consideration; Cash
Portion; Consideration Shares.

     

    (a) The base
consideration (the “Base Consideration”)
for all of the Shares shall be FORTY-TWO MILLION AND NO/100 DOLLARS
($42,000,000.00).  The Base Consideration shall be payable as
follows:  (i) THIRTY-FIVE MILLION AND NO/100 DOLLARS ($35,000,000.00)
in cash (the “Cash
Portion”), plus or minus the adjustments provided for in Section 2.4, and (ii)
17,500,000 shares of Buyer’s common stock, par value $0.001 per share (the
“Consideration
Shares”), having an agreed upon value of SEVEN MILLION AND NO/100 DOLLARS
($7,000,000.00).

     

    (b) The Base
Consideration, plus or minus the adjustments to the Cash Portion provided for in
Section 2.4,
shall be referred to herein as the “Adjusted
Consideration.”

     

    (c) The
Adjusted Consideration paid upon the surrender of the Shares in accordance with
the terms hereof shall be deemed to have been paid in full satisfaction of all
rights pertaining to the Shares.  After the Closing Date, there shall
be no further registration of transfers on the stock transfer books of the
Company of the Shares that were outstanding immediately prior to the Closing
Date.

     

    2.3 Deposit.  Concurrently
with the execution of this Agreement, Buyer has delivered to Seller, by bank
wire transfer of immediately available U.S. funds into the account designated by
Seller to Buyer in writing, the sum of EIGHT HUNDRED THOUSAND AND NO/100 DOLLARS
($800,000.00) (the “Deposit”).  The
Deposit shall be held in a money-market or similar interest-bearing account of
the Company at Bank of Texas, N.A., and shall bear interest at the rate or rates
established for such account from time to time by Bank of Texas,
N.A.  If the transactions contemplated herein are consummated in
accordance with the terms hereof, the Deposit, plus the earned interest, shall
be credited against the Adjusted Cash Portion to be paid by Buyer at the
Closing.  If this Agreement is terminated by Buyer or Seller in
accordance with Section 7.3, the
Deposit shall be returned to Buyer or retained by Seller as provided in Section
7.4.  If the Deposit is returned to Buyer, or if Buyer receives
credit for same against the Adjusted Cash Portion paid at Closing, such payment
or credit, as applicable, shall be in the amount of the Deposit plus the amount
of such earned interest.

     

    2.4 Adjustments to the Cash
Portion.  The Cash Portion shall be subject to adjustment as of
the time of the Closing as provided hereinafter (as so adjusted, the “Adjusted Cash
Portion”).  The Adjusted Cash Portion shall equal the Cash
Portion:

     

    (a) plus the amount of the value
of all merchantable Hydrocarbons produced from or allocable to the Assets
existing in pipelines, storage tanks, or other processing or storage facilities
upstream of the delivery points to the relevant purchasers as of March 31, 2008,
the quantity of such Hydrocarbons to be determined as provided in Section
9.5, and the value thereof to
be based on the contract price applicable to the relevant category of
Hydrocarbons in effect as of March 31, 2008, (or the market value, if there is
no contract price, as of March 31, 2008), less, to the extent applicable,
amounts payable as royalties, overriding royalties, and other burdens upon such
Hydrocarbons and production, severance, and similar Taxes deducted by the
purchaser of such Hydrocarbons;

     

    (b) plus, to the extent that it
is a positive amount, the amount of the Working Capital of the
Company;

     

    (c) less permitted
reductions (if any) provided for in Section 5.3 and Section
5.4;

     

    (d) less an amount equal
to all amounts to be paid by the Company to pay and discharge in full all
indebtedness of the Company under the Bank Credit Agreement as of March 31,
2008, together with any penalty or premium incurred by the Company
for  prepayment of such indebtedness;

     

    (e) less an amount equal
to the aggregate amount of all fees, costs, and expenses paid or payable by the
Company to all advisors, counsel, accountants, engineers, and other consultants
and representatives of Seller or the Company in connection with the transactions
contemplated in this Agreement; and

     

    
      
        
        

      

      
        2

        
          

        

      

      
        
        

      

    

     

    (f) less or plus, as applicable,
any other amount provided for elsewhere in this Agreement or otherwise agreed
upon by Seller and Buyer as being an adjustment to the Cash
Portion.

     

    All
adjustments to the Cash Portion provided for in this Section 2.4 shall be
determined without duplication and on an accrual basis, in accordance with GAAP
consistently applied.

     

    2.5 Unregistered Shares;
Legends; Registration.  The Consideration Shares to be issued to
Seller as contemplated in Section 2.2(a) will not be registered under the
Securities Act or registered or qualified for sale under any state securities
Law and cannot be resold without registration or an exemption under the
Securities Act.  Such shares will therefore be “restricted securities”
as defined in Rule 144 under the Securities Act.  Each certificate
representing the Consideration Shares shall bear a restrictive legend
referencing the Securities Act.  At the Closing, Seller and Buyer will
execute the Registration Rights Agreement relating to the Consideration
Shares.

     

    ARTICLE
III.

     

    REPRESENTATIONS
AND WARRANTIES OF SELLER

     

    3.1 Representations and
Warranties of Seller as to Seller.  Subject to the matters
disclosed in the Schedules to this Agreement, Seller represents and warrants to
Buyer as follows:

     

    (a) Seller is
a limited partnership duly organized and validly existing under the Laws of the
State of Texas.  The general partner of Seller is VGH GP, L.L.C., a
limited liability company duly organized, validly existing, and in good standing
under the Laws of the State of Texas.  Seller has all requisite power
and authority to own and operate its property (including, without limitation,
the Shares) and to carry on its business as now conducted.

     

    (b) Seller
has full capacity, power, and authority to enter into and perform this Agreement
and the transactions contemplated herein.  The execution, delivery,
and performance by Seller of this Agreement have been duly and validly
authorized and approved by all necessary limited partnership action on the part
of Seller, and this Agreement and the documents executed in connection herewith
are, or upon their execution and delivery will be, the valid and binding
obligations of Seller and enforceable against Seller in accordance with their
terms, subject to the effects of bankruptcy, insolvency, reorganization,
moratorium, and similar Laws, as well as to principles of equity (regardless of
whether such enforceability is considered in a proceeding in equity or at
law).

     

    (c) The
execution, delivery, and performance by Seller of this Agreement and the
consummation of the transactions contemplated herein will not (i) conflict
with or result in a breach of any provisions of the organizational documents of
Seller, (ii) result in a default or the creation of any Lien or give rise
to any right of termination, cancellation, or acceleration under any of the
terms of any Asset, note, bond, mortgage, indenture, license, or other
agreement, document, or instrument to which Seller is a party or by which Seller
or its property may be bound, or (iii) violate any order, writ, injunction,
judgment, decree, or Law applicable to Seller or its property.

     

    (d) Except as
set forth on Schedule
3.1(d), there is no Claim by any Person or Governmental Authority
(including, without limitation, expropriation or forfeiture proceedings), and no
legal, administrative, or arbitration proceeding pending or, to Seller’s
Knowledge, threatened against Seller or any of its property, or to which Seller
is a party, that reasonably may be expected to have a Material Adverse Effect on
the ability of Seller to consummate the transactions contemplated in this
Agreement.

     

    (e) Except as
set forth in Schedule
3.1(e), and except for approvals by Governmental Authorities customarily
obtained after the Closing, no authorization, consent, approval, exemption,
franchise, permit, or license of, or filing with, any Governmental Authority or
any other Person is required to authorize, or is otherwise required by any
Governmental Authority or any other Person in connection with, the valid
execution and delivery by Seller of this Agreement, the transfer of the Shares
to Buyer, or the performance by Seller of its other obligations
hereunder.

     

    
      
        
        

      

      
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    (f) Except as
set forth in Schedule
3.1(f), Seller has complied in all material respects with all Laws
applicable to Seller, its business, and its properties (other than Environmental
Laws, as to which Seller’s sole representations and warranties are set forth in
Sections 3.3(j) and
3.3(k), and Laws relating to Taxes, as to which Seller’s sole
representations and warranties are set forth in Section
3.2(l)).  Seller has not received notice from any Governmental
Authority or other Person that Seller is in violation of or not in compliance
with any such applicable Law.

     

    (g) Seller is
the sole owner, beneficially and of record, of title to all of the Shares, free
and clear of all Liens, equities, proxies, options, or restrictions, other than
restrictions on transfer that may be imposed by federal or state securities
Laws.

     

    (h) Seller
has not engaged any financial advisor, broker, or finder, or incurred any
liability, contingent or otherwise, in favor of any such other Person relating
to the transactions contemplated in this Agreement.

     

    (i) There are
no bankruptcy, insolvency, reorganization, or arrangement proceedings pending,
being contemplated by, or to Seller’s Knowledge, threatened against Seller or
any Affiliate that controls Seller.

     

    3.2 Representations and
Warranties of Seller and the Company as to the
Company.  Subject to the matters disclosed in the Schedules to
this Agreement, Seller and the Company jointly and
severally represent and warrant to Buyer as follows:

     

    (a) The
Company is a corporation duly organized, validly existing, and in good standing
under the Laws of the State of Delaware and is qualified to do business as a
foreign corporation in and is in good standing under the Laws of the State of
Texas.  The Company has all requisite power and authority to own and
operate its properties (including, without limitation, the Assets) and to carry
on its business as now conducted.

     

    (b) The
Company has full capacity, power, and authority to enter into and perform this
Agreement and the transactions contemplated herein.  The execution,
delivery, and performance by the Company of this Agreement has been duly and
validly authorized and approved by all necessary corporate action on the part of
the Company, and this Agreement and the documents executed in connection
herewith are, or upon their execution and delivery will be, the valid and
binding obligations of the Company and enforceable against the Company in
accordance with their terms, subject to the effects of bankruptcy, insolvency,
reorganization, moratorium, and similar Laws, as well as to principles of equity
(regardless of whether such enforceability is considered in a proceeding in
equity or at law).

     

    (c) The
execution, delivery, and performance by the Company of this Agreement and the
consummation of the transactions contemplated in this Agreement will not
(i) conflict with or result in a breach of any provisions of the
organizational documents of the Company, (ii) result in a default or the
creation of any Lien or give rise to any right of termination, cancellation, or
acceleration under any of the terms of any Lease, Contract, Real Property
Interest, Permit, credit agreement (including, without limitation, the Company’s
senior credit facility with Bank of Texas, N.A.), note, bond, mortgage,
indenture, license, or other agreement, document, or instrument to which the
Company is a party or by which the Company or any of the Assets may be bound, or
(iii) violate any order, writ, injunction, judgment, decree, or Law
applicable to the Company or the Assets.

     

    (d) Except as
set forth on Schedule
3.2(d), there is no Claim by any Person or Governmental Authority
(including, without limitation, expropriation or forfeiture proceedings), and no
legal, administrative, or arbitration proceeding pending or, to Seller’s and the
Company’s Knowledge, threatened against the Company or the Assets, or to which
the Company is a party, that reasonably may be expected to (i) challenge
the title of the Company to any of the Assets, or (ii) otherwise have a
Material Adverse Effect on the Company or the Assets (other than matters
relating to Environmental Laws, as to which Seller’s and the Company’s sole
representations and warranties are set forth in Sections 3.3(j) and
3.3(k), and
matters relating to Taxes, as to which Seller’s and the Company’s sole
representations and warranties are set forth in Section
3.2(l)).

     

    
      
        
        

      

      
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    (e) Except as
set forth in Schedule
3.2(e), and except for approvals by Governmental Authorities customarily
obtained after the Closing, no authorization, consent, approval, exemption,
franchise, permit, or license of, or filing with, any Governmental Authority or
any other Person is required to authorize, or is otherwise required by any
Governmental Authority or any other Person (other than third Person consents to
assignment arising under the terms of the Leases, Real Property Interests, and
Contracts that are triggered by the transactions contemplated therein, as to
which Seller’s and the Company’s sole representations and warranties are set
forth in Section
3.3(f)) in connection with, the valid execution and delivery by the
Company of this Agreement, or the performance by the Company of its other
obligations hereunder.

     

    (f) With
respect to the capitalization of the Company:

     

    (i) The
authorized capital stock of the Company consists of ten (10) shares of common
stock, par value $0.01 per share.

     

    (ii) All of
the shares of the authorized capital stock of the Company are issued and
outstanding on the date of this Agreement and constitute the Shares for purposes
hereof.  None of the Shares are held by the Company as treasury
stock.

     

    (iii) All of
the Shares have been duly authorized and validly issued, are fully paid and
non-assessable, and were issued free of preemptive rights.

     

    (iv) Except as
set forth in this Section 3.2(f), there
are outstanding (A) no shares of other capital stock or other voting securities
of the Company, (B) no securities of the Company or any other Person convertible
into or exchangeable for shares of capital stock or voting securities of the
Company, (C) no options, warrants, subscriptions, calls, commitments, or other
rights to acquire from the Company, and no obligation of the Company to issue,
deliver, sell, purchase, redeem, or acquire any capital stock, other voting
securities, or securities convertible into or exchangeable for capital stock or
other voting securities of the Company, (D) no equity equivalents, interests in
the ownership or earnings of the Company, or other similar rights, (E) no
outstanding obligations of the Company to repurchase, redeem, or otherwise
acquire any of the foregoing securities, options, equity equivalents, interests,
or rights, or (F) no other agreement, commitment, or obligation of Seller or the
Company that relates in any way to the sale, assignment, transfer, encumbrance,
or delivery of the Shares.

     

    (v) The
Company does not currently own and, except for the Merged Subsidiary, has never
owned, any capital stock, partnership interests, limited liability company
member interests, equity securities, or equivalent voting interests in any other
Person.

     

    (vi) The
Merged Subsidiary was organized as a Texas limited liability company on July 25,
2006, and was merged with and into the Company effective as of February 20,
2007.

     

    (vii) At the
Closing, there will be no shareholder agreement, voting trust or other agreement
or understanding to which the Company is a party or by which it is bound
relating to the voting of any shares of the capital stock of the
Company.

     

    (viii) There are
no outstanding stock appreciations, phantom stock, profit participation, or
similar rights with respect to the Company.

     

    (ix) All
accrued dividends on the Shares (if any), whether or not declared, have been
paid.

     

    (g) Schedule 3.2(g)
contains an accurate and complete copy of the Financial
Statements.  The Company’s Auditors are PCAOB
certified.  The Financial Statements (i) have been prepared in
accordance with GAAP; (ii) fairly present the consolidated financial condition
and the results of operations, changes in shareholders’ equity, and cash flows
of the Company  and, when applicable, the Merged Subsidiary, as at the
respective dates of and for the periods referred to in such financial
statements; (iii) reflect the consistent application of such accounting
principles throughout the periods involved, except as disclosed in the notes to
such financial statements; and (iv) have been prepared from and are in
accordance with the accounting records of the Company and, when applicable, the
Merged Subsidiary.  Seller has also delivered to Buyer copies of all
letters from the Company’s Auditors to the board of directors or the audit
committee of Seller, the Company, or the Merged Subsidiary during the thirty six
(36) months preceding the execution of this Agreement, together with copies of
all responses thereto.

     

    
      
        
        

      

      
        5

        
          

        

      

      
        
        

      

    

     

    (h) The
Company has implemented and maintains a system of internal controls over
financial reporting sufficient to provide reasonable assurance regarding the
reliability of financial reporting and the preparation of financial statements
for external purposes in accordance with GAAP, including, without limitation,
that (i) transactions are executed in accordance with management’s general or
specific authorizations, (ii) transactions are recorded as necessary to permit
preparation of financial statements in conformity with GAAP and to maintain
asset accountability, (iii) access to assets is permitted only in accordance
with management’s general or specific authorization, and (iv) the recorded
accountability for assets is compared with the existing assets at reasonable
intervals, and appropriate action is taken with respect to any
differences.

     

    (i) Schedule 3.2(i)
contains a complete and accurate list of all accounts receivable as of the date
of March 31, 2008, which list sets forth the aging of each such account
receivable.  Except to the extent paid prior to the Effective Time,
such accounts receivable are or will be as of the Effective Time current and
collectible net of the respective reserves shown on the 2007 Year End Balance
Sheet (which reserves are adequate and calculated consistent with past
practice).  There is no contest, Claim, defense, or right of set-off,
other than returns in the ordinary course of business of the Company, under any
Contract with any account debtor of an account receivable relating to the amount
or validity of such account receivable.

     

    (j) Except as
set forth on Schedule
3.2(j), since December 31, 2007, (i) there has not occurred (A) any
Casualty Event (whether or not covered by insurance) that has resulted, or may
reasonably be expected to result, in Damages in excess of $100,000.00, or (B)
any other adverse change in the physical operating condition of the Assets or
the financial condition, operations, or business of the Company that has had, or
may reasonable be expected to have, a Material Adverse Effect, and (ii) neither
Seller nor the Company has taken any action that would constitute a breach of
Section 6.1 or
Section 6.2 if
such provisions had been in effect prior to the execution of this
Agreement.

     

    (k) To the
Knowledge of the Seller and the Company, the Company has no liabilities of any
kind that would have been required to be reflected in, reserved against or
otherwise described on the 2007 Year End Balance Sheet or in the notes thereto
in accordance with GAAP and were not so reflected, reserved against, or
described, other than (i) current liabilities incurred in the ordinary course of
business consistent with past practices after December 31, 2007, and (ii)
liabilities incurred in connection with the transactions contemplated
herein.  Except as set forth in the Financial Statements, the Company
is not liable upon or with respect to, or obligated in any other way to provide
funds in respect of or to guarantee or assume in any manner, any debt,
obligation, dividend, or distribution of any other Person.

     

    (l) With
respect to tax matters:

     

    (i) The
Company and the Merged Subsidiary have filed all Tax Returns that they were
required to file under applicable Laws and regulations.  All such Tax
Returns were correct and complete in all respects and were prepared in
substantial compliance with all applicable Laws and regulations.  All
Taxes due and owing by the Company and the Merged Subsidiary (whether or not
shown on any Tax Return) have been paid.  Neither the Company nor the
Merged Subsidiary is currently the beneficiary of any extension of time within
which to file any Tax Return other than the Company’s and the Merged
Subsidiary’s 2007 federal income Tax Return.  No Claim has ever been
made by a Governmental Authority in a jurisdiction in which the Company or the
Merged Subsidiary does not file a Tax Return that the Company or the Merged
Subsidiary is or may be subject to taxation by that
jurisdiction.  There are no Liens for Taxes (other than Taxes not yet
due and payable) upon any of the Assets.

     

    
      
        
        

      

      
        6

        
          

        

      

      
        
        

      

    

     

    (ii) The
Company has withheld and paid, and during its period of existence, the Merged
Subsidiary withheld and paid, all Taxes required to have been withheld and paid
in connection with any amounts paid or owing to any employee, independent
contractor, creditor, stockholder, or other Person.

     

    (iii) Neither
Seller nor any director or officer (or employee responsible for Tax matters) of
the Company expects any Governmental Authority to assess any additional Taxes
for any period for which Tax Returns have been filed for the Company and the
Merged Subsidiary.  No foreign, federal, state, or local Tax audits or
administrative or judicial Tax proceedings are pending or being conducted with
respect to the Company or the Merged Subsidiary.  Neither Seller nor
the Company has received from any foreign, federal, state, or local taxing
authority (including jurisdictions where the Company and the Merged Subsidiary
have not filed Tax Returns), for the Company, the Merged Subsidiary, or
otherwise, any (A) notice indicating an intent to open an audit or other review,
(B) request for information related to Tax matters, or (C) notice of deficiency
or proposed adjustment for any amount of Tax proposed, asserted, or assessed by
any taxing authority against the Company or the Merged
Subsidiary.  Schedule 3.2(l) lists
all federal, state, local, and foreign income Tax Returns filed with respect to
the Company and the Merged Subsidiary for taxable periods ended on or after
December 31, 2004, indicates those Tax Returns that have been audited, and
indicates those Tax Returns that currently are the subject of an
audit.  Concurrently with the execution of this Agreement, Seller has
delivered to Buyer correct and complete copies of all federal income Tax
Returns, examination reports, and statements of deficiencies assessed against or
agreed to by the Company and the Merged Subsidiary filed or received since May
1, 2004.

     

    (iv) The
Company has not waived, and during its period of existence, the Merged
Subsidiary did not waive, any statute of limitations in respect of Taxes or
agreed to any extension of time with respect to a Tax assessment or
deficiency.

     

    (v) The
Company is not, and during its period of existence the Merged Subsidiary was
not, a party to any agreement, contract, arrangement or plan that has resulted
or could result, separately or in the aggregate, in the payment of (A) any
“excess parachute payment” within the meaning of Section 280G of the Code (or
any corresponding provision of state, local or foreign Tax law), or (B) any
amount that will not be fully deductible as a result of Section 162(m) of the
Code (or any corresponding provision of state, local or foreign Law related to
Taxes).  The Company and, to the extent applicable, the Merged
Subsidiary have disclosed on their federal income Tax Returns all positions
taken therein that could give rise to a substantial understatement of federal
income Tax within the meaning of Section 6662 of the Code.  The
Company is not, and during its period of existence, the Merged Subsidiary was
not, a party to, or bound by, any Tax allocation or sharing agreement, except
the Company has agreed to indemnify certain parties in connection with the
Exchange Agreement dated to be effective January 23, 2007, by and between the
Company and Rattikin Exchange Services, Inc.  Neither the Company nor
the Merged Subsidiary (X) has ever been a member of an Affiliated Group filing a
consolidated federal income Tax Return, and (Y) has never had any Liability for
the Taxes of any Person (other than Company) under Section 1.1502-6 of the
Treasury Regulations (or any similar provision of state, local, or foreign law),
as a transferee or successor, by contract, or otherwise.

     

    (vi) The
Company is not, and during its period of existence, was not, a party to any
contract or agreement that creates, and did not otherwise make an election to be
treated as, for federal income Tax purposes, (A) a partnership among the parties
to such contract or agreement for which a partnership income Tax Return is
required to be filed under the provisions of Subchapter K of Chapter 1 of
Subtitle A of the Code (other than a partnership for which an election is in
effect pursuant to Section 761 of the Code and the Treasury Regulations
thereunder to be excluded from such provisions), or (B) an association taxable
as a corporation.  The Merged Subsidiary filed a Form 1065 U.S. Return
of Partnership Income for the period ended December 31, 2006, and will file a
Form 1065 U.S. Return of Partnership Income for the period commencing on January
1, 2007, and ending on the date of the merger of the Merged Subsidiary with and
into the Company.  Such Tax Return for the period ended December 31,
2006, did indicate, and the Tax Return for the period ending December 31, 2007,
will indicate, that Texas Reverse Exchange Holding Company, LLC, is the sole
member of the Merged Subsidiary.

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

    (vii) Seller is
not a foreign person within the meaning of Section 1445(f)(3) of the Code or a
U.S. real property holding corporation within the meaning of Section 897(c)(2)
of the Code.

     

    (viii) Beginning
with the calendar year ending December 31, 2004, and for each calendar year
thereafter, the Company has not participated, and during its period of
existence, the Merged Subsidiary did not participate, in a transaction required
to be registered or disclosed to the Internal Revenue Service pursuant to
Section 6111 of the Code or Section 1.6011-4 of the Treasury Regulations, or for
which lists are required to be maintained pursuant to Section 6112 of the
Code.

     

    (ix) Intentionally
omitted.

     

    (x) The
unpaid Taxes of the Company, including any unpaid Taxes of the Merged
Subsidiary, (A) did not, as of December 31, 2007, exceed the reserve for
Liability for Taxes (rather than any reserve for deferred Taxes established to
reflect timing differences between book and Tax income) set forth on the face of
the 2007 Year End Balance Sheet (rather than in any notes thereto) and (B) do
not exceed that reserve as adjusted for the passage of time through the
Effective Time in accordance with the past custom and practice of the Company in
filing its Tax Returns.  Since December 31, 2007, the Company has not
incurred any liability for Taxes arising from extraordinary gains or losses, as
that term is used in GAAP, outside the ordinary course of business consistent
with past practices.

     

    (xi) The
Company will not be required to include any item of income in, or exclude any
item of deduction from, taxable income for any taxable period (or portion
thereof) ending after the Effective Time as a result, for the Company, the
Merged Subsidiary, or otherwise, of any:  (A) change in method of
accounting for a taxable period ending on or prior to the Effective Time; (B)
“closing agreement” as described in Section 7121 of the Code (or any
corresponding or similar provision of state, local or foreign income Tax Law)
executed on or prior to the Effective Time; (C) intercompany transaction or
excess loss account described in Treasury Regulations under Section 1502 of the
Code (or any corresponding or similar provision of state, local or foreign
income Tax Law); (D) installment sale or open transaction disposition made on or
prior to the Effective Time; or (E) prepaid amount received on or prior to the
Effective Time.

     

    (xii) The
Shares and the Assets are free and clear of Liens filed pursuant to any Law or
regulation related to Taxes, except for Permitted Encumbrances.

     

    (xiii) The
Company has not distributed, and during the period of its existence, the Merged
Subsidiary did not distribute, stock of another Person, or has had its stock
distributed by another Person, in a transaction that was purported or intended
to be governed in whole or in part by Sections 355 or 361 of the
Code.

     

    (m) The
minute books of the Company contain an accurate record of the corporate actions
of the shareholders and directors (and any committees thereof) of the Company
(including the Merged Subsidiary) since the formation thereof.  The
Company maintains such books of account and other business records required by
applicable Law or necessary to conduct the business of the Company, except where
the failure to do so would not, individually or in the aggregate, have a
Material Adverse Effect.  Such books of account have been kept
accurately in the ordinary course of business.  All Tax Returns and
records that relate to the business of the Company and the Merged Subsidiary are
located in the offices of the Company.

     

    
      
        
        

      

      
        8

        
          

        

      

      
        
        

      

    

     

    (n) The
Company is in compliance with all of the covenants, provisions, and requirements
of its senior credit facility dated as of March 22, 2005, with Bank of Texas,
N.A.

     

    (o) Schedule 3.2(o) sets
forth all insurance policies maintained in effect by, or on behalf of, the
Company.  Seller or the Company, as applicable, have paid all premiums
required under, and are otherwise in compliance with, the terms of all such
insurance policies or self-insurance programs, all of which policies or
programs, or renewals thereof, have been during the period since the formation
of the Company, and are as of the date of execution of this Agreement, in full
force and effect.

     

    (p) Except as set forth on
Schedule 3.2(p), the Company has complied in all material respects with
all Laws applicable to the business and operations of the Company (including,
without limitation, Laws requiring the provision of surety bonds or other forms
of security or financial assurance with respect to the performance of plugging
and abandonment and other operations on the Assets, but excluding Environmental
Laws, as to which Seller’s and the Company’s sole representations and warranties
are set forth in Sections 3.3(j) and
3.3(k), and
Laws relating to Taxes, as to which Seller’s and the Company’s sole
representations and warranties are set forth in Section
3.2(l)).  Neither the Company nor, to Seller’s or the Company’s
Knowledge, any other Person, has received notice from any Governmental Authority
or other Person that any such applicable Law has been violated or not complied
with by the Company or any other Person.

     

    (q) Schedule 3.2(q)
contains a complete and accurate list of all officers and employees of the
Company, directly or by contract, as applicable (the “Company Employees”),
the job title of each Company Employee, his or her assigned work location, date
of hire, monthly salary or hourly wage rate (as applicable and in effect as of
December 31, 2006, and December 31, 2007), most recent federal Form W-2, and a
list indicating any increases in cash compensation which have occurred or are
scheduled to occur after December 31, 2007.  There are no material
changes in the cash compensation payable to the Company Employees for calendar
year 2008 that are not reflected on Schedule
3.2(q).  Except as set forth in Schedule 3.2(q), the
Company is not a party to or obligated under any consulting, employment,
severance, termination or similar agreement with respect to any of the Company
Employees, or any deferred compensation, incentive, bonus, profit sharing,
pension, stock option, stock purchase or similar plan or other arrangement or
other fringe benefit plan entered into or maintained for the benefit of the
Company Employees, which agreement, plan, or arrangement will extend beyond or
obligate the Company after the Closing.  The Company is in material
compliance with all Laws pertaining to the Company Employees, including all such
Laws relating to wages, hours, collective bargaining, discrimination, civil
rights, safety and health, workers’ compensation and the collection,
withholding, and remittance of payroll and other employment-based
Taxes.  To the Knowledge of Seller and the Company, there is no event,
fact, or circumstance arising out of or relating in any way to any employment
relationship between the Company and any Company Employee that may reasonably be
expected to result in a cause of action against the Company.  The
Company has never been a party to any agreement with any union, labor
organization or collective bargaining unit. No Company Employees are represented
by any union, labor organization or collective bargaining unit.  To
the Knowledge of Seller and the Company, none of the Company Employees has
declared an intention or taken any action to organize, join, or affiliate with
any  union or labor organization.  To the Knowledge of
Seller and the Company, all Company Employees are citizens of, or are otherwise
authorized to be employed in, the United States.

     

    (r) With respect to matters
pertaining to employee benefit plans:

     

    (i) Schedule 3.2(r) sets
forth a complete and accurate list of (A) all those “employee benefit plans,” as
defined in Section 3(3) of ERISA, sponsored or maintained as of the date of this
Agreement by the Company, or to which the Company has an
obligation  to contribute (each, a “Company Employee Benefit
Plan”; and together, the “Company Employee Benefit
Plans”), and (B) all those policies or programs, sponsored or maintained
by the Company but not involving a Company Employee Benefit Plan, which provide
for the payment or provision of severance, sick leave, vacation pay, short term
disability and/or salary continuation, deferred compensation, stock options,
stock purchase rights, educational assistance or scholarships (each, a “Company Benefit
Policy”; and together, the “Company Benefit
Policies”).  Prior to the execution of this Agreement, Seller
has caused the Company to deliver to Buyer complete and accurate copies
of:  (A) all documents that set forth the terms of each Company
Employee Benefit Plan and any related trust, and with respect to any such
Company Employee Benefit Plan that is intended to constitute a “qualified plan”
within the meaning of Section 401(a) of the Code, the most recent determination
letter for each such Plan; (B) all documents that set forth the terms of each
Company Benefit Policy; (C) any and all contracts with Third Party
administrators, actuaries, investment managers, consultants and other
independent contractors that relate to any Company Employee Benefit Plan and all
insurance policies purchased by or to provide benefits under any Company
Employee Benefit Plan; (D) any and all reports submitted within the four (4)
years preceding the date of this Agreement by third party administrators,
actuaries, investment managers, consultants or other independent contractors
with respect to any Company Employee Benefit Plan; and (E) the Form 5500s filed
in each of the most recent three (3) plan years with respect to each Company
Employee Benefit Plan (to the extent not exempt by regulation from such
filing(s)), including all schedules thereto and the opinions of independent
accountants (where applicable).  Except for the Company Employee
Benefit Plans and the Company Benefit Policies, the Company does not maintain or
have a fixed or contingent liability with respect to, any employee benefit,
pension, or other compensation plan.

     

    
      
        
        

      

      
        9

        
          

        

      

      
        
        

      

    

     

    (ii) To the
Knowledge of the Seller and the Company, except as set forth on Schedule 3.2(r)
hereto, the Company, and each Company Employee Benefit Plan is in full
compliance with ERISA, the Code, and other applicable Laws (as
relevant).  With respect to each Company Employee Benefit Plan and
each Company Benefit Policy, there exists no condition or set of circumstances
that could reasonably be expected to result in liability which is reasonably
likely to have a Material Adverse Effect under ERISA, the Code, or any other
applicable Law.  All filings required by ERISA and the Code as to each
Company Employee Benefit Plan and each Company Benefit Policy have been timely
filed, and all notices and disclosures to participants and beneficiaries
required by either ERISA or the Code have been timely provided.

     

    (iii) To the
Knowledge of Seller and the Company, (A)  each Company Employee
Benefit Plan that constitutes a “qualified plan” under Section 401(a) of the
Code is qualified in form and operation under Section 401(a), (B) where
relevant, each trust for each such Company Employee Benefit Plan is exempt from
federal income tax under Section 501(a) of the Code, and (C) no event has
occurred or circumstance exists that will or could give rise to disqualification
or loss of tax exempt status of any such Company Employee Benefit Plan or
trust.

     

    (iv) Neither
the execution and delivery of this Agreement nor the consummation of the
transactions contemplated hereby will result in any payment becoming due to any
employee or group of employees of the Company, which payment will not be made at
or prior to the Closing.  Except as set forth on Schedule 3.2(r), each
Company Employee Benefit Plan and each Company Benefit Policy can be terminated
within thirty (30) days without payment of any additional contribution or amount
and without the vesting or acceleration of any benefits promised by such Company
Employee Benefit Plan or Company Benefit Policy.

     

    (v) To the
Knowledge of Seller and the Company, (A) all contributions and payments made or
accrued with respect to  each Company Employee Benefit Plan and each
Company Benefit Policy are deductible (as relevant) under Section 162 and
Section 404 of the Code, (B) no amount, or any asset of any Company Employee
Benefit Plan, is subject to the tax imposed on unrelated
business  income, and (C) no payment that is due or may become due to
any director, officer, employee or agent of the Company will be non-deductible
to the Company (as applicable) under Section 280G of the Code or will cause the
Company to have an obligation to make any “gross up” or other compensating
payments to any recipient of any payment.

     

    (vi) The
Company does not sponsor, maintain or contribute to, and does not have any
obligation to maintain or contribute to, any employee welfare benefit plan or
similar arrangement which provides retiree medical benefits or continuing
coverage to or for any employee or former employee, or any dependent of any such
employee or former employee, following the termination of Company employment by
any such employee or former employee, except as may be required by the
continuation coverage provisions set forth in Part 6 of Title I of ERISA
(relating to the COBRA continuation coverage Laws).

     

    
      
        
        

      

      
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    (vii) Except as
set forth on Schedule
3.2(r) hereto, neither the Company nor any ERISA Affiliate of the Company
sponsors, maintains, contributes to, or participates in any “multi-employer
pension plan,” as defined in Section 3(37) of ERISA, any “defined benefit plan,”
as defined in Section 414(l) of the Code, or any “multiple employer welfare
arrangement,” within the meaning of Section 3(40)(A) of ERISA, or any other
employee pension benefit plan subject to Title IV of ERISA.

     

    (s) To the
Knowledge of the Seller and the Company, the operation of the business of the
Company does not infringe any patent, copyright, trademark or other proprietary
rights of others, and the Company has not received any notice from any third
Person of any such alleged infringement by the Company.

     

    (t) The
Company is not subject to regulation under the Investment Company Act of 1940 or
any state public utilities Laws.

     

    (u) Seller
acknowledges that the Consideration Shares to be delivered by Buyer under this
Agreement are not registered under the Securities Act or registered or qualified
for sale under any state securities Law and cannot be resold without
registration under or an exemption from the Securities Act.  Seller is
acquiring the Consideration Shares for its own account for investment and not
with a view toward the sale or distribution of the Consideration
Shares.  Seller has sufficient knowledge and experience in financial
and business matters to enable it to evaluate the risks of acquiring the
Consideration Shares and has the ability to bear the economic risks of such
investment.

     

    3.3 Representations and
Warranties of Seller and the Company as to the Assets.  Subject
to the matters disclosed in the Schedules to this Agreement, Seller and the
Company jointly and severally represent and warrant to Buyer as follows with
respect to the Assets:

     

    (a) Exhibit A contains a
description of all material Assets of the Company.  The Assets
described on Exhibit
A constitute all of the assets and properties, tangible and intangible,
of any nature whatsoever, necessary for the operation of the business of the
Company in the manner presently conducted by the Company and include all of the
operating assets of the Company.

     

    (b) With
respect to title to the Assets:

     

    (i) The
Company has title to all of the Assets, free of Defects.  For purposes
of this Section
3.3(b), the $25,000 threshold incorporated into the definition of
“Defects” shall be disregarded.  Notwithstanding any other provision
hereof to the contrary, Buyer’s sole and exclusive remedy in the case of a
breach of the warranty contained in this Section 3.3(b)(i)
shall be an adjustment to the Cash Portion in accordance with the terms of Section
5.3.

     

    (ii) Effective
as of the Effective Time, Seller agrees, for a period of one (1) year after the
Closing Date, to warrant and defend the title to the Assets, subject to and
excepting all Permitted Encumbrances, against the lawful Claims of all Persons
claiming the same, or any part thereof, but limited to Claims arising by,
through, or under Seller, the Company, and/or the Merged Subsidiary but not
otherwise.  Notwithstanding any other provision hereof to the
contrary, Buyer’s sole and exclusive remedy with respect to a breach of the
warranty contained in this Section 3.3(b)(ii)
shall be the recovery of damages in an amount not to exceed the Allocated Value
of the relevant Asset (except for Claims of or Liabilities to third Persons, in
which case such limitation shall not apply).

     

    
      
        
        

      

      
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    (c) The
Company has, in all material respects, fulfilled all requirements for filings,
certificates, consents, approvals, disclosures, and similar matters contained in
the Leases and applicable Law, and the Company is fully qualified to own,
operate, and transfer the Leases under the terms thereof and applicable
Law.  The Company is not in material breach or material default, and
there has occurred no event, fact, or circumstance that, with the lapse of time
or the giving of notice, or both, would constitute such a material breach or
material default by the Company, with respect to any terms of any Lease, and, to
the Knowledge of Seller and the Company, no other Person owning an interest in,
or serving as operator of, any Lease is in material breach or material default
with respect to any of its obligations thereunder.  No lessor under
any Lease has given or, to the Knowledge of Seller or the Company, threatened to
give notice of any action to terminate, cancel, rescind, repudiate, or procure a
judicial reformation of any Lease or any provision thereof.  The
Company has correctly made, or caused to be correctly made, all rentals, shut-in
well payments, and other lease maintenance payments due in respect of the Leases
thereunder.

     

    (d) Except
for such items as are being properly held in suspense in accordance with
applicable Law, the Company has properly and accurately paid all royalties,
overriding royalties, compensatory royalties, and other, similar payments
attributable to the Company’s interest due in respect of Hydrocarbon production
from the Leases and Wells in accordance with the terms of the relevant Lease(s)
and Contract(s) and applicable Law.

     

    (e) Each
Lease authorizes surface operations on the lands covered thereby for the
drilling, development, operation, and production of Hydrocarbon wells, or for
those Leases as to which surface operations are restricted or impractical for
operational or regulatory reasons, there exist Leases covering contiguous
acreage from which surface operations with respect to such surface-restricted
Leases may be conducted.

     

    (f) Except as
otherwise reflected in Schedule 3.3(f), none
of the Leases, Real Property Interests, or Contracts is subject to a
preferential right to purchase, right of first refusal, right of first offer,
third Person consent to assignment requirement, or similar right or restriction,
the operation of which is triggered by the transactions contemplated in this
Agreement.  Notwithstanding any other provision hereof to the
contrary, Buyer’s sole and exclusive remedy for a breach of the representation
and warranty contained in this Section 3.3(f) is set
forth in Section
5.4.

     

    (g) To the
Knowledge of the Seller and the Company, each of the Real Property Interests is
in full force and effect.  The Company has, in all material respects,
fulfilled all requirements for filings, certificates, consents, approvals,
disclosures, and similar matters contained in the Real Property Interests and
applicable Law, and the Company is fully qualified to own, operate, and transfer
the Real Property Interests under the terms thereof and applicable
Law.  The Company is not in material breach or material default, and
there has occurred no event, fact, or circumstance that, with the lapse of time
or the giving of notice, or both, would constitute such a material breach or
material default by the Company, with respect to any of its obligations under
any Real Property Interest, and, to the Knowledge of Seller and the Company, no
other Person owning an interest in any Real Property Interest or serving as
operator of any Real Property Interest is in material breach or material default
with respect to any of its obligations thereunder.  No grantor,
lessor, licensor, or other counterparty under any Real Property Interest has
given or, to the Knowledge of Seller or the Company, threatened to give notice
of any action to terminate, cancel, rescind, repudiate, or procure a judicial
reformation of any Real Property Interest or any provision
thereof.  The Company has correctly made, or caused to be correctly
made, all rental and other payments due in respect of the Real Property
Interests thereunder.

     

    (h) The
Company has furnished to Buyer true and correct copies of all of the Contracts
described on Exhibit
A-4, and there are no contracts, agreements, instruments, or documents to
which the Company is a party, or that are binding on the Company, or that
otherwise affect the Company or the Assets other than the Contracts described on
Exhibit
A-4.  With respect to the Contracts: (i) all Contracts are
in full force and effect; (ii) the Company is not in material breach or
material default, and there has occurred no event, fact, or circumstance that,
with the lapse of time or the giving of notice, or both, would constitute such a
material breach or material default by the Company, with respect to the terms of
any Contract; (iii) to the Knowledge of Seller and the Company, no other
party is in material breach or material default with respect to the terms of any
Contract; and (iv) neither the Company nor, to the Knowledge of Seller or
the Company, any other party to any Contract has given or threatened to give
notice of any action to terminate, cancel, rescind, or procure a judicial
reformation of any Contract or any provision thereof.

     

    
      
        
        

      

      
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    (i) The
Company or, to the Knowledge of Seller and the Company, each operator of the
Assets, as applicable, has all Permits required in connection with the business
and operations of the Company and the ownership and operation of the Assets
(other than Permits required under Environmental Laws, as to which Seller’s and
the Company’s sole representations and warranties are set forth in Section
3.3(j)).  The Company or, to the Knowledge of Seller and the
Company, each operator of the Assets, have properly made all filings necessary
or appropriate to obtain such Permits, and all of such Permits and filings are
in full force and effect.  The Company or, to the Knowledge of Seller
and the Company, each operator of the Assets, as applicable, has complied in all
material respects with all such Permits.  Neither the Company nor, to
the Knowledge of Seller or the Company, any other Person has received notice
from any Governmental Authority or other Person that any such Permit or filing
has been violated or not complied with by the Company or any other
Person.

     

    (j) Seller,
the Company, and to the Knowledge of Seller and the Company, each operator of
the Assets, as applicable, has complied in all material respects with all
Environmental Laws and all Permits required under Environmental Laws relating to
the Assets or otherwise with respect to the business and operations of the
Company.  The Company or, to the Knowledge of Seller and the Company,
each operator of the Assets, as applicable, have all Permits required under
Environmental Laws in connection with the ownership and operation of the Assets
or otherwise in connection the business and operations of the Company, and have
properly made all filings necessary or appropriate to obtain such
Permits.  All of such Permits and filings are in full force and
effect.  Except as set forth on Schedule 3.3(j),
there is no legal, administrative, or arbitration proceeding pending or, to the
Knowledge of Seller and the Company, threatened against Seller, the Company, or
any Asset, or to which Seller or  the Company is a party, that may
reasonably be expected to subject Seller, the Company, or the owner of any Asset
to liability in favor of any Governmental Authority or other Person as the
result of any Claim based on the alleged violation of, or non-compliance with,
any Environmental Law or any Permit or filing obtained or made pursuant thereto
by Seller or the Company, or to require Seller, the Company, or any the owner of
any Asset to remediate, remove, or respond to an Environmental Condition or a
threatened Environmental Condition.  Except as set forth on Schedule 3.3(j),
neither Seller nor the Company has entered into any currently effective
agreement with any Governmental Authority based on any violation of an
Environmental Law or any Permit or filing pursuant thereto that requires a
future payment by or restricts or limits the business and operations of the
Company.  Neither Seller nor the Company, nor, to the Knowledge of
Seller or the Company, any other Person, has received notice from any
Governmental Authority or other Person that any such applicable Law, Permit, or
filing has been violated or not complied with, or requesting that remedial
action with respect to an Environmental Condition or threatened Environmental
Condition be taken, by Seller, the Company, or any other Person.  For
purposes of this Section 3.3(j), the
$25,000.00 threshold incorporated into the definition of “Environmental
Condition” shall be disregarded.

     

    (k) As of the
date of this Agreement, the Wells described on Exhibit A-2 are the
only wells currently capable of producing Hydrocarbons located on the
Leases.  All of such Wells have been, or will be, drilled, completed,
and operated within the boundaries of the Leases or within the limits otherwise
permitted by contract and by applicable Law and in compliance with the
provisions of the applicable Contracts and all applicable Laws.  The
production of Hydrocarbons from such Wells has not been in excess of the
allowable production established for each Well.  All Hydrocarbon wells
located on the Leases that have permanently ceased the production of
Hydrocarbons in paying quantities, as well as all plants, pipelines, personal
property, pits, equipment, materials, appurtenances, and facilities located on
or used in connection with the Leases, Wells, and Real Property Interests and
that the Company has abandoned or otherwise permanently ceased to use, have been
plugged and/or abandoned, and all related salvage, site clearance, and surface
restoration operations have been completed, in accordance with applicable Laws
(including, without limitation, Environmental Laws), and all costs and expenses
incurred in connection therewith have been paid in full.  None of the
Wells has been plugged and abandoned.

     

    (l) There are
no calls on production, options to purchase, or similar rights in effect with
respect to any portion of the Hydrocarbons allocable to the Assets, and, except
as set forth on Schedule
3.3(l),  all Contracts for the sale of Hydrocarbons are
terminable without penalty on no more than thirty (30) days’ prior
notice.  The Company is currently receiving the prices provided for
under such sales Contracts with respect to the Hydrocarbons.  All
proceeds from the sale of Hydrocarbons attributable to the interests of the
Company in the Assets have been and are being disbursed to the Company under
appropriate division orders, transfer orders, or similar documents signed by or
otherwise binding on the Company, and no portion of any such proceeds is being
held in suspense, subject to a Claim for refund by the purchaser, used as an
offset or as collateral for other obligations (whether disputed or undisputed),
or otherwise not being paid to the Company as it becomes due in the ordinary
course of business.

     

    
      
        
        

      

      
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    (m) Except as
set forth in Schedule
3.3(m), the Company has no Claim constituting an Asset, and is not
subject to any obligation or Liability, with respect to any Imbalance that
relates to any of the Assets.  Except as set forth in Schedule 3.3(m), the
Company is not obligated by virtue of any prepayment made pursuant to a
“take-or-pay” clause, or under any production payment, forward sale, balancing,
deferred production, or similar arrangement, to deliver Hydrocarbons produced
from or allocable to any Asset at some future time without receiving full
payment therefor at or after the time of delivery.

     

    (n) The
Company has paid, or will pay in accordance with past practices, its
proportionate share of all amounts owed by the Company in connection with the
Assets for which the Company has received invoices from the operator(s) thereof
or the relevant vendors, and there are no past due cash calls or payments due
from the Company under the terms of the Contracts or otherwise with respect to
the Assets.

     

    (o) Schedule
3.3(o) contains a true and complete list and description, as of the
date of execution of this Agreement, of all authorities for expenditures, plans
of exploration and/or development, and other commitments as to which the Company
has become obligated regarding drilling, reworking, or other operations or other
capital expenditures on or relating to the Assets for which all of the
activities or expenditures anticipated in such AFEs, plans, or commitments have
not been completed prior to the date of this Agreement.

     

    (p) Except as
set forth in Schedule
3.1(p), the Company is not subject to any express contractual obligation,
under the terms of any Lease or otherwise, or any demand by any lessor regarding
drainage or otherwise, to drill additional Hydrocarbon wells or engage in other
operations on the Leases in order to earn interests in or to maintain any Lease,
or to comply with the terms of any Lease or Contract or implied covenants
applicable to any Lease, or for any other reason, except for obligations arising
under Contracts that allow the parties thereto to elect whether to
participate.  There are no material operations on the Leases with
respect to which the Company or any other Person has become a non-consenting
party.

     

    (q) Except as
set forth in Schedule
3.3(q), the Assets are not subject to any Contract containing an area of
mutual interest, maintenance of uniform interest, “before payout” or “after
payout” reversion or conversion, or other provision under which the
Company  may be obligated to make assignments to third Persons of
interests in any Asset after the Effective Time.

     

    (r) Schedule 3.3(r)
summarizes the outstanding hedging positions under all outstanding Hedging
Transactions and financial hedging positions of the Company (including fixed
price controls, collars, swaps, caps, options, calls, and puts) as of the date
reflected on Schedule 3.3(r).  None
of the Hedging Transactions have expired or been terminated.  To the
Knowledge of Seller and the Company, the Company is not in material breach or
material default, and there has occurred no event, fact, or circumstance that,
with the lapse of time or the giving of notice, or both, would constitute such a
material breach or material default by the Company, with respect to its
obligations under the documents evidencing the Hedging
Transactions.  Except as set forth on Schedule 3.3(r),
the Company is not subject to any outstanding or unsatisfied margin call or
other request for collateral in connection with the Hedging
Transactions.

     

    (s) All Data
included in the Assets (including specifically, but without limitation, the
three-dimensional seismic data developed by the Company and its proprietary
interpretations thereof) (i) is the property of the Company, (ii) is not
licensed from any other Person, and (iii) is not subject to (A) any restriction
on transferability or transfer fee, the operation or burden of which is
triggered by the transactions contemplated herein, or (B) any obligation of
confidentiality in favor of any other Person that, if not waived, would impede
or impair the use of the Data by, or be reasonably expected to result in
Liability for, the Company or Buyer after the Closing.

     

    
      
        
        

      

      
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    3.4 Disclaimer.  To
the extent required by applicable Law to be operative, the disclaimers of
certain warranties contained in this Section 3.4 are
“conspicuous disclaimers” for purposes of any applicable Law.  EXCEPT
AS EXPRESSLY SET FORTH IN THIS ARTICLE 3, SELLER AND
THE COMPANY HAVE MADE AND MAKE NO REPRESENTATION OR WARRANTY, EXPRESS OR
IMPLIED, AT LAW OR IN EQUITY, IN RESPECT OF THE COMPANY, OR ANY OF THE COMPANY’S
ASSETS, LIABILITIES OR OPERATIONS, INCLUDING WITH RESPECT TO (a) TITLE, (b)
MERCHANTABILITY, DESIGN OR QUALITY, (c) FITNESS FOR ANY PARTICULAR PURPOSE, AND
(d) ANY OTHER REPRESENTATIONS OR WARRANTIES THAT ARE EXPRESSLY
DISCLAIMED.  BUYER ACKNOWLEDGES AND AGREES THAT, EXCEPT TO THE EXTENT
SPECIFICALLY SET FORTH IN THIS ARTICLE 3, BUYER IS
PURCHASING THE SHARES ON AN “AS-IS, WHERE-IS” BASIS.  EXCEPT AS
EXPRESSLY PROVIDED IN THIS ARTICLE 3, THE ASSETS
ARE “AS-IS, WHERE-IS,” AND WITH ALL FAULTS IN THEIR PRESENT CONDITION AND STATE
OF REPAIR.

     

    ARTICLE
IV.

     

    REPRESENTATIONS
AND WARRANTIES OF BUYER

     

    4.1 Representations and
Warranties of Buyer.  Buyer represents and warrants to Seller
as follows:

     

    (a) Buyer is
a corporation duly organized, validly existing, and in good standing under the
Laws of the State of Nevada.  Buyer has all requisite power and
authority to own and operate its property and to carry on its business as now
conducted.  On the Closing Date, Buyer will have all requisite power
and authority to own and operate the Assets.

     

    (b) Buyer has
full capacity, power, and authority to enter into and perform this Agreement and
the transactions contemplated herein.  The execution, delivery, and
performance by Buyer of this Agreement have been duly and validly authorized and
approved by all necessary corporate action of Buyer.  This Agreement
and the documents executed in connection herewith are, or upon their execution
and delivery will be, the valid and binding obligations of Buyer and enforceable
against Buyer in accordance with their terms, subject to the effects of
bankruptcy, insolvency, reorganization, moratorium, and similar Laws, as well as
to principles of equity (regardless of whether such enforceability is considered
in a proceeding in equity or at law).

     

    (c) The
execution, delivery, and performance by Buyer of this Agreement and the
consummation of the transactions contemplated herein will not (i) conflict with
or result in a breach of any provision of the organizational documents of Buyer,
(ii) result in a default or the creation of any Lien or give rise to any right
of termination, cancellation, or acceleration under any of the terms of any
note, bond, mortgage, indenture, license, or other agreement to which Buyer is a
party or by which Buyer or any of its property may be bound, or (iii) violate
any order, writ, injunction, judgment, decree, or Law applicable to Buyer or its
property.

     

    (d) There is
no Claim by any Person or Governmental Authority (including, without limitation,
expropriation or forfeiture proceedings), and no legal, administrative, or
arbitration proceeding pending or, to Buyer’s Knowledge, threatened against
Buyer, or to which Buyer is a party, that reasonably may be expected to have a
Material Adverse Effect upon the ability of Buyer to consummate the transactions
contemplated in this Agreement.

     

    (e) Except
for approvals by Governmental Authorities customarily obtained after the
Closing, no authorization, consent, approval, exemption, franchise, permit, or
license of, or filing with, any Governmental Authority or any other Person is
required to authorize, or is otherwise required in connection with, the valid
execution and delivery by Buyer of this Agreement or the performance by Buyer of
its obligations hereunder and thereunder.

     

    (f) Except
for Buyer’s engagement of Global Hunter Securities, Buyer has not engaged any
financial advisor, broker, agent or finder, or incurred any liability,
contingent or otherwise, in favor of any other such Person relating to the
transactions contemplated by this Agreement.

     

    (g) There are
no bankruptcy, insolvency, reorganization, or arrangement proceedings pending,
being contemplated by, or, to Buyer’s Knowledge, threatened against Buyer or any
Affiliate that controls Buyer.

     

    
      
        
        

      

      
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    (h) Buyer
acknowledges that the Shares being purchased by Buyer under this Agreement are
not registered under the Securities Act or registered or qualified for sale
under any state securities law and cannot be resold without registration under
or an exemption from the Securities Act.  Buyer is acquiring the
Shares for its own account for investment and not with a view toward the sale or
distribution of the Shares.  Buyer has sufficient knowledge and
experience in financial and business matters to enable it to evaluate the risks
of investment in the Shares and has the ability to bear the economic risks of
such investment.

     

    (i) At the
Closing Buyer will have sufficient cash and other sources of immediately
available funds, as are necessary in order to pay the Adjusted Consideration to
Seller at the Closing and otherwise consummate the transactions contemplated
hereby.

     

    (j) With
respect to the capitalization of Buyer:

     

    (i) On the
date of this Agreement, the authorized capital stock of Buyer consists of
24,000,000 shares of common stock, par value $0.001 per share, and 1,000,000
shares of preferred stock, par value $0.001 per share.  On the Closing
Date, the authorized capital stock of Buyer shall consist of one hundred
forty-nine million (149,000,000) shares of common stock, par value $0.001 per
share.

     

    (ii) All of
the issued and outstanding shares of common stock of Buyer have been and, as of
the Closing Date, will have been, duly authorized and validly issued, are and,
as of the Closing Date, will be fully paid and non-assessable, and are and, as
of the Closing Date, will have been issued free of preemptive rights and in
compliance with all applicable securities Laws.

     

    (iii) On the
date of this Agreement and on the Closing Date, except as set forth on Schedule 4.1(j)(iii),
there will be outstanding (A) no other shares of capital stock or other voting
securities of Buyer, (B) no securities of Buyer or any other Person convertible
into or exchangeable for shares of capital stock or voting securities of Buyer,
(C) no options, warrants, subscriptions, calls, commitments, or other rights to
acquire from Buyer, and no obligation of Buyer to issue, deliver, sell,
purchase, redeem, or acquire any capital stock, other voting securities, or
securities convertible into or exchangeable for capital stock or other voting
securities of Buyer, (D) no equity equivalents, interests in the ownership or
earnings of Buyer, or other similar rights, (E) no outstanding obligations of
Buyer to repurchase, redeem, or otherwise acquire any of the foregoing
securities, options, equity equivalents, interests, or rights, or (F) no other
agreement, commitment, or obligation of Buyer that relates in any way to the
sale, assignment, transfer, encumbrance, or delivery of the Consideration
Shares.

     

    (iv) Except as
set forth on Schedule
4.1(j)(iv), Buyer does not currently own, and has never owned, any
capital stock, partnership interests, limited liability company member
interests, equity securities, or equivalent voting interests in any other
Person.

     

    (v) At the
Closing, there will be no shareholder agreement, voting trust, or other
agreement or understanding to which Buyer is a party or by which it is bound
relating to the voting of any shares of the capital stock of Buyer.

     

    (vi) There
are, and on the Closing Date, there will be, no outstanding stock appreciations,
phantom stock, profit participation, or similar rights with respect to
Buyer.

     

    (vii) On the
Closing Date, all accrued dividends on the Consideration Shares (if any),
whether or not declared, will have been paid.

     

    
      
        
        

      

      
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    (k) Buyer has
filed all reports, schedules, forms, statements and other documents required to
be filed by Buyer under the Exchange Act, including pursuant to Section 13(a) or
15(d) thereof, for the two (2) years preceding the date hereof (or such shorter
period as Buyer was required by Law to file such material) (the foregoing
materials, including the exhibits thereto and documents incorporated by
reference therein, being collectively referred to herein as the “SEC Reports”) on a
timely basis or has received a valid extension of such time of filing and has
filed any such SEC Reports prior to the expiration of any such
extension.  As of their respective dates, the SEC Reports complied in
all material respects with the requirements of the Securities Act and the
Exchange Act, as applicable, and none of the SEC Reports, when filed, contained
any untrue statement of a material fact or omitted to state a material fact
required to be stated therein or necessary in order to make the statements
therein, in the light of the circumstances under which they were made, not
misleading.  The financial statements of Buyer included in the SEC
Reports comply in all material respects with applicable accounting requirements
and the rules and regulations of the SEC with respect thereto as in effect at
the time of filing.  Such financial statements have been prepared in
accordance with GAAP, except as may be otherwise specified in such financial
statements or the notes thereto and except that unaudited financial statements
may not contain all footnotes required by GAAP, and fairly present in all
material respects the financial position of Buyer and its consolidated
subsidiaries as of and for the dates thereof and the results of operations and
cash flows for the periods then ended, subject, in the case of unaudited
statements, to normal, immaterial, year-end audit adjustments.

     

    (l) Since the
date of the latest audited financial statements included within the SEC Reports,
except as set forth in Schedule 4.1(l) or as
specifically disclosed in a subsequent SEC Report filed prior to the date
hereof, (i) there has been no event, occurrence or development that has
materially, adversely affected the financial condition, results of operations,
or business of Buyer, taken as a whole, or the aggregate value of the Assets of
Buyer, or otherwise has had or that could reasonably be expected to result in a
Material Adverse Effect, (ii) Buyer has not incurred any liabilities (contingent
or otherwise) other than (A) trade payables and accrued expenses incurred in the
ordinary course of business consistent with past practice and (B) liabilities
not required to be reflected in Buyer’s financial statements pursuant to GAAP or
disclosed in filings made with the SEC, (iii) Buyer has not altered its method
of accounting, (iv) Buyer has not declared or made any dividend or distribution
of cash or other property to its stockholders or purchased, redeemed or made any
agreements to purchase or redeem any shares of its capital stock, and (v) Buyer
has not issued any equity securities to any officer, director or Affiliate,
except pursuant to existing stock plans of Buyer. Buyer does not have pending
before the SEC any request for confidential treatment of
information.  Except as set forth on Schedule 4.1(l), no
event, liability or development has occurred or exists with respect to Buyer or
its subsidiaries or their respective business, properties, operations or
financial condition that would be required to be disclosed by Buyer under
applicable securities Laws at the time this representation is made that has not
been publicly disclosed at least one (1) Business Day prior to the date that
this representation is made.

     

    (m) Set forth
on Schedule
4.1(m) is a description of all of Buyer’s indebtedness for borrowed money
and the material terms thereof.

     

    ARTICLE
V.

     

    ACCESS;
DUE DILIGENCE

     

    5.1 Access to
Records.  From and after the date of execution hereof, Seller
and the Company shall make available to Buyer and its representatives, during
normal business hours at the offices of Seller and the Company, all books,
records, documents, and information of every kind and character (including,
without limitation, originals or photocopies, as available, of all corporate,
legal, financial, and tax records; all land and title records, surveys,
abstracts of title, title insurance policies, title opinions, and title
curative; all lease, contract, division order, marketing, acquisition and
divestiture, correspondence, operations, environmental, insurance, production,
accounting, regulatory, facility, and well records and files in the possession
of Seller or the Company, relating in any way to the Company or its businesses,
operations, financial condition, and the Assets.  In addition, Seller
and the Company shall afford to Buyer and its authorized representatives, during
normal business hours at the offices of Seller and the Company, as applicable,
all geological maps, well logs, and other geological, reserve engineering,
proprietary and (if not subject to disclosure restrictions) licensed
geophysical, and other scientific and technical information, reports,
interpretations, and data (including, without limitation, conventional and
three-dimensional seismic data) relating in any way to the
Assets.  Seller and the Company shall also cause the employees,
counsel, accountants, and other consultants of Seller and the Company to
cooperate with and assist Buyer in connection with such due diligence
review.  Unless prohibited from doing so by confidentiality,
licensing, or other currently effective contractual arrangements, Buyer shall
have the right to photocopy such books, records, documents, information, data,
reports, and interpretations, or any portion thereof, at Buyer’s
expense.  If Buyer requests information not in the possession of
Seller or the Company, or if the disclosure of any such non-proprietary books,
records, documents, information, data, reports, or interpretations is prohibited
or restricted by confidentiality, licensing, or other currently effective
agreements, Seller and the Company shall use reasonable commercial efforts to
obtain from the applicable third Persons the requested books, records,
documents, information, data, reports, and interpretations, or the consent of
such third Persons to the disclosure thereof to Buyer.  If Seller is
prohibited from disclosing any such information to Buyer as the result of any
confidentiality, licensing, or other agreement, Seller or the Company, as
applicable, shall furnish to Buyer a list of all such information not disclosed
to Buyer, together with copies of any agreement restricting or prohibiting
disclosure.  All books, records, documents, information, data,
reports, and interpretations provided to Buyer pursuant to this Section 5.1 shall
constitute “Confidential Information” subject to the terms of the
Confidentiality Agreement.

     

    
      
        
        

      

      
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    5.2 Operational and
Environmental Assessment.  From and after the date of execution
hereof, Seller and the Company shall afford, or shall use reasonable commercial
efforts to cause the relevant operators or other persons to afford, to Buyer and
its authorized representatives, at reasonable times and at the sole cost, risk,
and expense of Buyer or its representatives, as applicable, reasonable access to
and entry upon all of the Assets for the purposes of performing such onsite
inspections, inventories, and assessments of such properties and assets
(including, without limitation, the performance of a Phase I environmental
assessment of the Properties and to conduct any further Phase I or other
non-invasive environmental assessment of the Properties Buyer deems appropriate)
as may be necessary to permit Buyer to prepare reserve engineering and other
reports relating to, and to assess the operational and environmental condition
of, the Assets.  In addition, Seller and the Company shall provide to
Buyer reasonable access to any employees or contract personnel of Seller or the
Company who are responsible for environmental compliance with respect to Assets
or who are otherwise involved in the operation, maintenance, and development of
the Assets.  Buyer shall perform, or shall cause to be performed, all
of such due diligence activities in accordance with applicable Laws and so as
not to interfere unreasonably with the operation of the
Assets.  Seller and the Company shall have the right to have
representatives thereof present to observe Buyer’s environmental review of the
Assets.  Prior to the Closing, unless otherwise required by applicable
Law, Buyer shall (and shall cause Buyer’s environmental consultant, if
applicable, to) treat confidentially any matters revealed by Buyer’s
environmental review and any reports or data generated from such review, and
Buyer shall not (and shall cause Buyer’s environmental consultant, to not)
disclose any environmental information relating to the Assets to any
Governmental Authority or other third Person without the prior written consent
of Seller (unless so required under applicable Law).  Prior to the
Closing, unless otherwise required by applicable Law, Buyer may use the
environmental information generated from Buyer’s environmental assessment of the
Assets only in connection with the transactions contemplated by this
Agreement.  If Buyer, Buyer’s environmental consultant, if applicable,
or any third Person to whom Buyer has provided any environmental information
relating to the Assets becomes legally compelled to disclose any of such
environmental information, Buyer shall provide Seller and the Company with the
notice required buy the Confidentiality Agreement.  If this Agreement
is terminated prior to the Closing, Buyer shall deliver the environmental
information generated from Buyer’s environmental assessment of the Assets to the
Company, which environmental information shall become the sole property of the
Company.  Any provision to the contrary contained in this Agreement
notwithstanding, Buyer shall provide copies of all environmental information
generated from Buyer’s environmental assessment of the Assets to Seller and the
Company without charge.

     

    5.3 Defects, Environmental
Conditions and Related Adjustments.

     

    (a) From time
to time on or before 5:00 p.m., Central Time, on the fifteenth (15th) day
prior to the Scheduled Closing Date, Buyer may give to Seller and the Company
written notice of any claimed Defect or Environmental Condition discovered by
Buyer in its due diligence review of the Assets.  Each such notice
shall set forth (i) a detailed description of the relevant Defect or
Environmental Condition and, as applicable, the Asset affected thereby, (ii) the
Defect Amount or Remediation Estimate applicable thereto as determined by Buyer,
and (iii) the specific documentation or action that Buyer requests to cure or
remedy such Defect or Environmental Condition.  In addition, if Seller
or the Company acquires Knowledge, between the date of execution of this
Agreement and the Closing Date, of any new and material Environmental Condition
affecting any Asset, Seller or the Company, as applicable, shall provide to
Buyer written notice of such fact no later than three (3) Business Days after
Seller’s or the Company’s discovery of such Environmental
Condition.  Any Environmental Condition thus brought to Buyer’s
attention by Seller or the Company shall be deemed to have been asserted by
Buyer in a timely manner as provided in this Section
5.3(a).  Defects and Environmental Conditions discovered by
Buyer in its due diligence pertaining to the Assets but not asserted in a timely
manner as provided in this Section 5.3(a) shall
be deemed to have been waived by Buyer.

     

    
      
        
        

      

      
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    (b) The
Company shall have the first right and option, but not the obligation, to cure
or remedy all such Defects or Environmental Conditions at the Company’s sole
cost, risk, and expense and, in the case of an Environmental Condition, in
accordance with applicable Environmental Laws.  If the Company elects
not to cure or remedy a Defect or Environmental Condition, Seller shall have the
right, but not the obligation, to cure or remedy such Defect or Environmental
Condition at Seller’s sole cost, risk, and expense and, in the case of an
Environmental Condition, in accordance with applicable Environmental
Laws.  If Seller or the Company elects to cure or remedy a Defect or
Environmental Condition, such Party shall provide to Buyer written notice of
such fact as soon as reasonably practical after its receipt of Buyer’s
notice.

     

    (c) If Seller
or the Company elects to cure or remedy a Defect or Environmental Condition, the
relevant Party will commence such curative activities or remediation as soon as
reasonably practicable after their receipt of Buyer’s notice and shall promptly
and diligently continue such efforts until such Defect or Environmental
Condition has been fully cured or remediated (in the case of an Environmental
Condition, in accordance with applicable Environmental Laws).  If
Seller or the Company does not complete such curative activities or remediation
prior to the Closing Date, the Closing Date may be extended, at Buyer’s option
upon written notice to Seller and the Company, for a period of up to sixty (60)
days to permit Seller or the Company to complete such curative activities or
remediation.  If Seller completes such curative activities or
remediation within such sixty-day period, the Parties shall close the
transactions contemplated herein at such time and place as the Parties may
agree.  If Seller or the Company does not complete such curative
activities or remediation prior to the expiration of such sixty-day period, (i)
Buyer may elect to offer Seller and the Company an additional extension of time
within which to complete such curative or remedial actions; or (ii) in the
absence of such an extension, Sections 5.3(d) or Section 5.3(e), as
applicable, will govern.

     

    (d) If Seller
or the Company elects, or is deemed to have elected, not to cure a Defect
asserted in a timely manner under Section 5.3(a), or if
Seller or the Company is unable to cure a Defect in a timely manner as provided
in Section
5.3(c), then Buyer shall accept the affected Asset subject to such
uncured Defect, purchase the Shares at the Closing, and, subject to the terms of
Section 5.3(f),
receive a reduction in the Cash Portion in an amount equal to the Defect Amount
for such uncured Defect agreed to by Seller, the Company, and Buyer or
determined by arbitration as provided in Section
5.3(g).

     

    (e) If Seller
or the Company elects, or is deemed to have elected, not to remedy an
Environmental Condition asserted in a timely manner under Section 5.3(a), or if
Seller or the Company is unable to remedy an Environmental Condition in a timely
manner as provided in Section 5.3(c), then
except as provided hereinafter, Buyer shall accept the affected Asset subject to
such unremedied Environmental Condition, purchase the Shares at the Closing,
and, subject to the terms of Section 5.3(f),
receive a reduction in the Cash Portion equal to the share allocable to the
owner of the Assets of the actual costs, including, without limitation,
Liabilities to Governmental Authorities and other Persons (or in the absence of
actual costs, the Remediation Estimate agreed to by Seller, the Company and
Buyer or determined by arbitration as provided in Section 5.3(g)), to
remedy the relevant Environmental Condition.

     

    (f) Notwithstanding
the terms of Section
5.3(d) or Section 5.3(e) to the
contrary, Buyer shall not be entitled to a reduction in the Cash Portion under
either Section
5.3(d) or Section 5.3(e) unless
the sum of the
aggregate Defect Amounts applicable to all uncured Defects as of the Closing
Date plus the
aggregate actual costs, including, without limitation, Liabilities to
Governmental Authorities and other Persons (or in the absence of actual costs,
the Remediation Estimate agreed to by Seller, the Company, and Buyer or
determined by arbitration as provided in Section 5.3(g)) to
remedy all unremedied Environmental Conditions as of the Closing Date, exceeds
$400,000.00, and then only to the extent of such excess over
$400,000.00.

     

    (g) Seller,
the Company, and Buyer shall endeavor, in good faith, to agree on the existence
of all claimed Defects or Environmental Conditions, the methods of curing or
remedying such Defects or Environmental Conditions, and the Defect Amounts or
Remediation Estimates applicable thereto.  In the event of a dispute
concerning any of such matters that is not resolved prior to the Closing, either
Buyer or Seller may initiate arbitration of such dispute pursuant to the terms
of Section
12.10.  In that event, the Closing shall be deferred until
three (3) Business Days after the issuance of the decision of the arbitrators as
to such dispute.  Following the issuance of the arbitrator’s decision,
the Parties shall have the rights and options provided in Section 5.3(d) and
Section 5.3(e),
as applicable.

     

    
      
        
        

      

      
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    5.4 Preferential Purchase Rights
and Consents to Assign.

     

    (a) As soon
as reasonably practical, but in no event later than ten (10) days after the
execution of this Agreement, the Company shall send to the holder of each
preferential right to purchase burdening the Assets that is triggered by the
transactions contemplated in this Agreement a written notice offering to sell to
such holder, in accordance with the contractual provisions applicable to such
right, the Asset covered by such right on substantially the same terms as this
Agreement and for the Allocated Value applicable to such Asset as set forth in
Exhibit A-2,
subject to adjustments in price in the same manner that the Cash Portion is
adjusted pursuant to Section 2.4.  Similarly,
as soon as reasonably practical, but in no event later than ten (10) days after
the execution of this Agreement, the Company shall send to each Person from whom
a consent to assignment that is triggered by the transactions contemplated in
this Agreement is required prior to the Closing a written notice requesting the
required consent from such Person.

     

    (b) If an
Asset is subject to a preferential right to purchase, right of first refusal,
right of first offer, or similar right that is triggered by the transactions
contemplated in this Agreement and that is exercised prior to the Closing, Buyer
shall purchase the Shares at the Closing, the Cash Portion shall be reduced by
an amount equal to the full Allocated Value of the affected Asset, and Seller
shall be entitled to retain all proceeds paid for the affected Asset by the
Person exercising such preferential right to purchase or similar
right.  If an Asset is subject to a preferential right to purchase,
right of first refusal, right of first offer, or similar right that is triggered
by the transactions contemplated in this Agreement and that is not exercised prior
to the Closing, regardless of whether the time period for the exercise of such
right has passed, title to such Asset shall remain vested in the Company, and no
reduction of the Cash Portion paid at the Closing shall be made with respect
thereto.  If, for any reason, such preferential right to purchase or
similar right is successfully exercised by the holder thereof after the Closing,
Buyer shall be entitled to retain all proceeds paid for the affected Asset by
the holder of the relevant preferential right to purchase or similar
right.  If, prior to the Closing, the holder of such a preferential
right to purchase or similar right notifies Seller or the Company that it
intends to consummate the purchase of an Asset to which its preferential
purchase right applies, with the result that the Cash Portion paid at the
Closing is reduced by the full Allocated Value of the affected Asset, but the
holder of such preferential right fails to consummate the purchase of the
relevant Asset such that the holder’s right expires or is terminated after the
Closing, then within fifteen (15) days after the expiration or termination of
such right, Buyer shall pay to Seller an amount equal to the Allocated Value of
such Asset.

     

    (c) If an
Asset is subject to a third Person consent to assignment that is triggered by
the transactions contemplated in this Agreement and that is required to be
obtained prior to the Closing, but the third Person holding such right to
consent neglects or refuses to give such consent prior to the Closing, Buyer
shall nevertheless purchase the Shares at the Closing.  If the
outstanding consent is a Punitive Consent, the existence of the outstanding
Punitive Consent will constitute a Defect, and the Cash Portion shall be reduced
by an amount equal to the Defect Amount (up to the full Allocated Value of the
affected Asset) calculated with respect thereto.  If the outstanding
consent is not a Punitive Consent, there shall be no reduction of the Cash
Portion with respect thereto.  After the Closing, Seller and the
Company shall continue to use their reasonable commercial efforts (which shall
in no event include any obligation to pay money to the owners of such rights or
undertake any legal obligation) to obtain all outstanding consents to assignment
(including Punitive Consents) as promptly after the Closing as is
possible.  If Seller or the Company obtains such an outstanding
Punitive Consent after the Closing, then within fifteen (15) days after the
receipt of such consent, Buyer shall pay to Seller an amount equal to the Defect
Amount (up to the full Allocated Value of the affected Asset) calculated with
respect to such consent.

     

    
      
        
        

      

      
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    ARTICLE
VI.

     

    OTHER
MATTERS PRIOR TO CLOSING

     

    6.1 Operations.  During
the period between the execution of this Agreement and the Closing Date (the
“Interim
Period”), Seller and the Company shall, to the extent within their
reasonable control: (a) cause the Assets to be maintained and operated in a good
and workmanlike manner consistent with past practices and in compliance with
applicable Laws; (b) obtain the prior written consent of Buyer as to all
material decisions relating to the Assets (other than decisions required for
safety purposes or by other emergencies), including, without limitation,
(i) all contracts or agreements regarding the gathering, processing,
transportation, sale, and marketing of Hydrocarbons with terms of ninety (90)
days or more, (ii) proposed expenditures after the date of this Agreement
related to any individual Asset in an amount greater than U.S. $50,000.00, net
to the interest of the Company in the relevant Asset, (iii) all farmout or
farmin proposals or agreements, (iv) all contracts or agreements regarding
the construction, installation, and operation of any gathering or transportation
pipelines intended to serve any of the Wells, (v) all operations as to
which the Company or any other co-owner of a Lease, Well, or any Personal
Property proposes not to participate, (vi) the plugging and abandonment of
any Well or Personal Property included in the Assets, (vii) the amendment,
release, or abandonment of any Lease, or portion thereof, (viii) the
waiver, compromise, or settlement of any right or Claim pertaining to the
Assets, (ix) all amendments to, or waivers of rights under, or termination
of any Real Property Interest or Contract, and (x) the initiation of any
proceeding before any Governmental Authority pertaining to the Assets; (c)
perform all material obligations of the Company under the Leases, Real Property
Interests, Contracts, and Permits, including, without limitation, the timely and
proper payment of all royalties, overriding royalties, rentals, and other
payments due in respect thereof; (d) promptly notify Buyer of (i) any
notice or threatened notice of which the Company becomes aware relating to any
default, inquiry into any possible default, or action to alter, terminate,
rescind, repudiate, or procure a judicial reformation of any Lease, Real
Property Interest, Contract, or Permit, or any provision thereof, (ii) any
new suit, action, or other proceedings before any court or Governmental
Authority relating to the Assets, and (iii) any other event, fact, or
circumstance of which Seller or the Company acquires Knowledge that may
reasonably be expected to have a Material Adverse Effect or to impair materially
the ability of Seller or the Company to consummate the transactions contemplated
herein; (f) make or give all notifications, filings, consents, or approvals
from, to, or with all Governmental Authorities, and take all other actions
reasonably requested by Buyer, that are necessary or appropriate in connection
with the transactions contemplated herein and the resulting transfer of
ownership of the Company from Seller to Buyer; (g) maintain in effect insurance
with respect to the business and operations of the Company (including the
ownership, use, development, and operation of the Assets), providing the same
type of coverage, in the same amounts, and with the same deductibles as the
insurance maintained in effect by the Company on the date of execution hereof;
(h) timely pay and discharge when due, in the ordinary course of business
consistent with past practices, all costs and expenses incurred in connection
with the business and operations of the Company (including the ownership, use,
development, and operation of the Assets), except to the extent contested in
good faith by the Company utilizing appropriate actions, and keep the Assets
free of Liens that do not constitute Permitted Encumbrances; and (i) not
mortgage, pledge, encumber, dedicate, or sell, or agree to mortgage, pledge,
encumber, dedicate, or sell, any portion of the Assets, except for Permitted
Encumbrances and for the disposition of Hydrocarbons in the ordinary course of
the Company’s business pursuant to Contracts in effect on the date
hereof.

     

    6.2 Conduct of
Business.  During the Interim Period:  (a) Seller
shall, with respect to the Company, to the extent within its reasonable control,
not permit the Company to, and the Company shall not, in each case without the
prior written consent of Buyer, (i) amend its organizational and governing
documents, (ii) change the number of authorized, issued, and outstanding shares
of the Company’s common stock, (iii) issue, authorize, sell, deliver, or agree
to issue, sell, or deliver (whether through the issuance or granting of options,
warrants, commitments, subscriptions, rights to purchase, or otherwise) any
shares of stock of any other class or any other security or equity equivalent of
any class in the Company or enter into any agreement with any Person (other than
Buyer) relating to any of the foregoing, (iv) amend the terms of any of the
Company’s common stock issued and outstanding on the date hereof, (v)
repurchase, redeem, or otherwise acquire any of the issued and outstanding
shares of the Company’s common stock, (vi) change any method of accounting or
any of the accounting principles or practices used by the Company, except for
any change required by reason of a concurrent change in Tax or other Law or
GAAP, (vii) make any material Tax election, except in the ordinary course of
business consistent with past practices, or change any material Tax election
already made, or adopt or change any Tax accounting method except in the
ordinary course of business consistent with past practices, or enter into any
Tax closing agreement, or settle any Tax Claim or assessment, or consent to any
Tax Claim or assessment or any waiver of the statute of limitations for any such
Claim or assessment, (viii) incur, assume, or guarantee any debt or become
liable or responsible for the obligations of another Person, (ix) adopt a plan
of complete or partial liquidation or resolutions providing for or authorizing a
liquidation, dissolution, merger, consolidation, conversion, restructuring,
recapitalization, or other reorganization of the Company, (x) make any loans or
advances to, or investments in, the Company or permit the Company to do the same
with any other Person, (xi) hire any additional employees for the Company, or
(xii) acquire (by merger, consolidation, acquisition or securities or assets or
otherwise) any Person; (b) Seller shall not, without the prior, written consent
of Buyer, make any contribution to the capital of the Company without Buyer’s
prior written consent; and (c) Seller shall not cause the Company to declare a
dividend or otherwise distribute to Seller, prior to the Effective Time, any
cash, cash equivalents, proceeds, or funds in the possession of the Company,
except for dividends on the Shares that accrued and were declared prior to, but
were unpaid as of, April 1, 2007.

     

    
      
        
        

      

      
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    6.3 Casualty
Event.  Seller or the Company shall give Buyer prompt written
notice of any Casualty Event that occurs with respect to any Asset between the
date of this Agreement and the Closing Date, together with a description of the
applicable insurance coverage and an estimate of the exposure of the Company
with respect to such Casualty Event.  Seller shall use commercially
reasonable efforts to cause the Company to repair or, in the case of a Casualty
Event affecting Personal Property, replace with items of equivalent quality and
value, any such Personal Property damaged or taken by the relevant Casualty
Event at the cost and expense of the Company, as applicable.  Subject
to the terms of this Agreement, if a Casualty Event occurs prior to, but remains
unrepaired as of, the Closing Date, Buyer shall nevertheless purchase the Shares
at the Closing.  Seller, if prior to the Closing, or Buyer, if after
the Closing, shall cause the Company to file all permissible Claims under all
applicable insurance policies of the Company with the respect to the relevant
Casualty Event and promptly to remit to Buyer all such insurance proceeds
following the receipt thereof by the Company; provided, however, that Seller
shall have no obligation to make any contribution to capital or other payment in
connection with any such Casualty Event, unless required to do so under the
terms of the organizational or governing documents of the Company. At Buyer’s
request, Seller and the Company shall also assign to Buyer any and all Claims
against third Persons that Seller or the Company may have with respect to such
Casualty Event.

     

    6.4 Publicity.  Prior
to the Closing Date, Seller and Buyer shall consult with each other before
either of them issues any press release or otherwise makes any public statement
with respect to the transactions contemplated by this Agreement, and no Party
shall issue any press release or make any such public statement prior to
obtaining the written approval of the other Party, which approval shall not be
unreasonably withheld or delayed. To the extent such release or public statement
is required by Law, however, the Party intending to make such release or public
statement shall give the other Party the opportunity to review and comment upon
such release or public statement, and the disclosing Party shall accept all
reasonable comments thereto; provided that such reasonable comments are received
by the Party intending to make such release sufficiently in advance of any
applicable filing deadline.

     

    6.5 Exclusivity.  Between
the date of execution of this Agreement and the earlier of the Closing Date or
the termination of this Agreement pursuant to Section 7.3 (the
“Exclusive
Period”), neither Seller, nor the Company, nor any partner of Seller
shall, directly or indirectly, through any officer, director, employee,
affiliate, attorney, financial advisor, or other agent or representative, take
any action to solicit, initiate, seek, or encourage any inquiry, proposal, or
offer from, furnish any information to, or participate in any discussions or
negotiations with, any Person other than Buyer or an Affiliate thereof regarding
any acquisition of the Company, any merger or consolidation with or involving
the Company, any acquisition of any portion of the stock or assets of the
Company, or any public offering of the stock of the Company (any such
transaction being a “Third Person
Transaction”).  Seller, the Company, and the partners of Seller
agree that any such discussions or negotiations (other than negotiations with
Buyer or an Affiliate thereof) in progress on the date of this Agreement will be
immediately terminated and that, in no event will Seller or the Company accept
or enter into an agreement concerning any Third Person Transaction during the
Exclusive Period.  During the Exclusive Period, Seller and Company
will notify Buyer immediately after the receipt by Seller, the Company, or any
partner of Seller (or any of their respective officers, directors, employees,
affiliates, attorneys, financial advisors, or other agents or representatives)
of any proposal for, or inquiry respecting, any Third Person Transaction
involving the Company or any request for non-public information in connection
with such a proposal or inquiry, or for access to the properties, books, or
records of the Company by any Person that informs or has informed Seller, the
Company, or a partner of Seller that it is considering making or has made such a
proposal or inquiry.  Such notice to Buyer will indicate in reasonable
detail the identity of the Person making the proposal or inquiry and the terms
and conditions of such proposal or inquiry.

     

    
      
        
        

      

      
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    6.6 Compliance with
Conditions.  Promptly following the execution of this
Agreement, each Party will proceed diligently to cause all of the conditions to
the other Party’s obligations to close to be satisfied.  If the
conditions to either Party’s obligations to close have been satisfied, or
expressly waived by such Party, in a timely manner as provided herein, and such
Party refuses to close, the Party refusing to close, at the option of the other
Party, shall be deemed to have breached this Agreement.  In addition,
if any Governmental Authority shall have issued any order, decree, ruling or
injunction, or taken any other action that would have the effect of restraining,
enjoining or otherwise prohibiting or preventing the consummation of the
transactions contemplated hereby, the Parties shall use commercially reasonable
efforts to have such order, decree, ruling or injunction or other action
declared ineffective as soon as practicable.

     

    6.7 Mutual
Assurances.  Subject to the terms of this Agreement, each Party
will use reasonable commercial efforts to take, or to cause to be taken, all
actions and to do, or cause to be done, all things necessary, proper, or
advisable under applicable Laws to consummate and make effective the
transactions contemplated by this Agreement, including (a) cooperation in
determining whether any action, approval, or waiver by or in respect of, or
filing with, any Governmental Authority is required in connection with the
consummation of the transactions contemplated by this Agreement; (b) cooperation
in seeking and obtaining any such actions, approvals, waivers, or filings; and
(c) the execution of any additional instruments necessary to consummate the
transactions contemplated hereby.

     

    6.8 Notification of Certain
Matters.  Each Party shall give prompt notice to the other
Party of (a) the occurrence or nonoccurrence of any event that would be likely
to cause any representation or warranty of such Party contained in this
Agreement to be untrue or inaccurate in any material respect at or prior to the
Closing Date and (b) any material failure of such Party to comply with or
satisfy any covenant, condition, or agreement to be complied with or satisfied
by it hereunder; provided, however, that the delivery of any notice pursuant to
this Section
6.8 shall not limit or otherwise affect the remedies available hereunder
to the Party receiving such notice.

     

    6.9 Continuation of the
Company’s Existing Indemnification Obligations.  From and after
the Closing, the Company shall indemnify and hold harmless Seller and each
Person who has been, at any time prior to the Closing, an officer, director or
shareholder of the Company, but to the extent only that Seller or such Persons
were entitled to indemnification from the Company immediately prior to the date
hereof under applicable Law, or the articles of incorporation and bylaws of the
Company.  In addition, the Company shall continue the indemnification
as provided to Natural Gas Partners under the Advisory Services Agreement,
notwithstanding the termination of such Contract as of the Closing
Date.  The provisions of this Section 6.10 shall
survive the Closing and are intended to be for the benefit of, and shall be
enforceable by, Seller, each Person who has been, at any time prior to the
Closing, an officer, director, or shareholder of the Company (including Natural
Gas Partners), and their respective heirs and representatives.

     

    6.10 Termination of Certain
Agreements.  Effective upon the Closing, the Advisory Services
Agreement, the Reimbursement Agreement, the Confidentiality and Noncompete
Agreements, and any other intercompany agreements between Seller, on the one
hand, and the Company, on the other hand, shall be terminated, and no Parties
shall have further rights or obligations thereunder, except for the continuation
of indemnity rights as provided in Section 6.9
hereof.  Further, effective upon the Closing, Seller and Natural Gas
Partners shall cause the Company to cease to be a party to the Subscription and
Contribution Agreement and the Voting and Transfer Restriction
Agreement.  Prior to the Closing, Seller will cause all intercompany
loan accounts and accounts receivable between Seller, on the one hand, and the
Company, on the other hand, to be settled and all amounts owed pursuant thereto
to be paid.

     

    6.11 Discharge of
Debt.  Prior to or concurrently with the Closing, the Company
shall pay and discharge in full (a) all outstanding principal, interest, fees,
penalties and expenses due on indebtedness outstanding under the Bank Credit
Agreement as of the Closing Date and (b) all other outstanding indebtedness of
the Company as of the Closing Date, including, without limitation, all long-term
debt and short-term notes payable reflected in the Supplemental Unaudited
Financial Statements, but excluding: (i) the obligations evidenced by any
Hedging Transactions; and (ii) trade payables and other indebtedness incurred by
Company in the ordinary course of business or in accordance with this
Agreement.  Prior to the Closing, the Company shall pay, as the same
becomes due, all interest, fees and expenses accruing during the period from
March 31, 2008, through the Closing Date on indebtedness under the Bank Credit
Agreement, without regard to when such indebtedness was incurred; provided,
however, that there shall be no reduction of the Cash Portion as the result of
the Company’s payment of any such amounts.  In addition, prior to or
concurrently with the Closing, Seller and the Company shall cause all Liens and
security interests held by the lender under the Bank Credit Agreement and any
other holder of indebtedness of the Company to be released and terminated in
full, so that as of the Closing Date, the Assets will be free and clear of all
Liens except for Permitted Encumbrances.

     

    
      
        
        

      

      
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    6.12 Hedging
Transactions.  Seller and the Company shall use commercially
reasonable efforts to cause the Hedging Transactions to remain in full force and
effect after the Closing and shall take no action to cause any of the Hedging
Transactions to be terminated; provided, however, that prior to the Closing,
neither Seller nor the Company shall be required, and after the Closing, Seller
shall not be required, to expend any money or provide any collateral to cause
the Hedging Transactions to remain in full force and effect after the Closing
Date.  To the extent that, prior to or after the Closing, the
counterparty(ies) in the Hedging Transactions require Buyer or the Company to
provide additional margin or other additional security in order to maintain one
or more of the Hedging Transactions in effect, such additional margin or other
additional security shall be the responsibility of Buyer.

     

    6.13 Resignation of Officers and
Directors.  Each officer and director of the Company and each
Company Employee shall resign his/her position with the Company, effective as of
the Closing Date.

     

    6.14 2008 First Quarter Unaudited
Financial Statements; Supplemental Unaudited Financial
Statements.  As soon as reasonably practicable after the date
of execution of this Agreement, but in no event later than June 3, 2008, Seller
will prepare, or will cause the Company to prepare, at the Company’s expense,
the 2008 First Quarter Unaudited Financial Statements.  No later than
August 15, 2008, Seller will prepare, or will cause the Company to prepare, at
Buyer’s expense, an unaudited consolidated balance sheet of the Company for the
period from April 1, 2008, through June 30, 2008, and the related consolidated
statement of operations, stockholder’s equity, and cash flows for the foregoing
period then ended (the “Supplemental Unaudited
Financial Statements”).  The 2008 First Quarter Unaudited
Financial Statements and the Supplemental Unaudited Financial Statements will be
prepared in accordance with GAAP consistently applied throughout the periods
involved and will fairly present the consolidated financial position and the
results of operations, changes in shareholders’ equity, and cash flows of the
Company as at the respective dates of, and for the respective periods referred
to in, the 2008 First Quarter Unaudited Financial Statements and the
Supplemental Unaudited Financial Statements, except that the 2008 First Quarter
Unaudited Financial Statements and the Supplemental Unaudited Financing
Statements may not contain all of the footnotes required by GAAP and shall be
subject to normal, non-material audit adjustments.

     

    6.15 Employee
Matters.

     

    (a) Prior to
the Closing, the Company shall not terminate the employment of any Company
Employee for any reason other than cause, or implement or commit to implement
any increase in the salary or benefits of any Company Employee (other than the
payment of bonuses earned or accrued prior to the Closing Date), in either case
without the prior, written approval of Buyer.  To the extent that the
Company has committed to pay retention bonuses to any of the Company Employees,
such retention bonuses shall not be paid until the expiration of the six (6)
months after the Closing Date.

     

    (b) With
respect to each Company Employee who resigns his/her position with the Company
at the Closing, the Company shall be solely responsible for the satisfaction and
discharge of all obligations and Liabilities owed to any such resigning Company
Employees with respect to final pay and, to the extent the resigning Company
Employees are entitled thereto, termination or severance pay, accrued vacation,
final benefits distributions, and bonuses.  Buyer shall satisfy and
discharge any obligation owed to any such Company Employee as of the Closing
Date concerning notice of rights under COBRA pertaining to
rights of election to continue medical insurance coverage, as well as notices of
rights under applicable Law concerning vested pension, profit-sharing, and other
retirement benefits.

     

    6.16 Filing of Proxy/Information
Statement; Amendment to Buyer’s Articles of Incorporation.  As
soon as practicable following the date hereof, Buyer shall file with the SEC
either a preliminary (i) Information Statement on Schedule 14C, indicating that
holders owning in excess of fifty percent (50%) of Buyer’s issued and
outstanding common stock have approved amending Buyer’s Articles of
Incorporation to increase the number of authorized shares that Buyer may issue
to 149,000,000, or (ii) Proxy Statement on Schedule 14A, seeking to obtain
approval by the holders of in excess of fifty percent (50%) of Buyer’s issued
and outstanding common stock to amend Buyer’s Articles of Incorporation to
increase the number of authorized shares that Buyer may issue to
149,000,000.  As soon as practicable following the twenty-first
(21st) day
after the mailing of a definitive Information Statement or Proxy Statement, as
the case may be, to all of Buyer’s stockholders, Buyer shall amend its Articles
of Incorporation to increase the number of authorized shares that Buyer may
issue to 149,000,000.

     

    
      
        
        

      

      
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    ARTICLE
VII.

     

    CONDITIONS;
TERMINATION; REMEDIES

     

    7.1 Conditions Precedent to
Seller’s and the Company’s Obligation to Close.  All
obligations of Seller and the Company under this Agreement are subject, at the
option of Seller and the Company, to the fulfillment, on or prior to the Closing
Date, of each of the following conditions:

     

    (a) each and
every representation and warranty of Buyer under this Agreement shall be true
and accurate in all material respects (and in all respects, in the cases of
representations and warranties qualified by materiality or the requirements of a
Material Adverse Effect) as of the date when made and shall be deemed to be made
again at and as of the Closing Date and shall then be true and accurate in all
material respects (and in all respects, in the cases of representations and
warranties qualified by materiality or the requirements of a Material Adverse
Effect);

     

    (b) Buyer
shall have performed and complied in all material respects with each and every
covenant, agreement, and condition required by this Agreement to be performed or
complied with, executed and delivered all documents required to be executed and
delivered, and otherwise taken all actions required to be taken, in each case by
Buyer on or prior to the Closing Date;

     

    (c) no suit,
action, or other proceeding shall be pending or threatened before any court or
arbitration tribunal or any Governmental Authority seeking to enjoin, restrain,
prohibit, or declare illegal, or seeking substantial damages in connection with,
the transactions contemplated in this Agreement;

     

    (d) Buyer
shall have received all consents, authorizations, waivers, and approvals
required to be obtained prior to the Closing by any court or Governmental
Authority under any applicable Law concerning the transactions contemplated
herein;

     

    (e) Buyer and
Seller shall have executed the Registration Rights Agreement; and

     

    (f) Buyer
shall have amended its Articles of Incorporation to increase the number of
authorized shares as set forth in Section
6.16.

     

    7.2 Conditions Precedent to
Buyer’s Obligation to Close.  All obligations of Buyer under
this Agreement are subject, at Buyer’s option, to the fulfillment, on or prior
to the Closing Date, of each of the following conditions:

     

    (a) each and
every representation and warranty of Seller and the Company under this Agreement
(other than the representation and warranty contained in Section 3.3(b)(i), the sole
and exclusive remedy for which is set forth in Section 5.3(d); the
representation and warranty contained in Section 3.3(b)(ii), the sole and
exclusive remedy for which is expressed therein; and the representation and
warranty contained in Section 3.3(f), the sole and exclusive remedy for which is
set forth in Section 5.4) shall be true and accurate in all material
respects (and in all respects, in the cases of representations and warranties
qualified by materiality or the requirements of a Material Adverse Effect) as of
the date when made and shall be deemed to be made again at and as of the Closing
Date and shall then be true and accurate in all material respects (and in all
respects, in the cases of representations and warranties qualified by
materiality or the requirements of a Material Adverse Effect); provided,
however, that no failure of Seller and the Company to fulfill the condition
stated in this Section
7.2(a) will be deemed to result from a breach of the representations and
warranties contained in Section 3.3(j) or Section 3.3(k) (insofar only as such
representation and warranty relates to environmental matters) if such breach
constitutes an Environmental Condition for which Buyer receives a reduction of
the Cash Portion pursuant to Section 5.3;

     

    
      
        
        

      

      
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    (b) Seller
and the Company shall have performed and complied in all material respects with
each and every covenant, agreement, and condition required by this Agreement to
be performed or complied with, executed and delivered all documents required to
be executed and delivered, and otherwise taken all actions required to be taken,
in each case by Seller and the Company on or prior to the Closing
Date;

     

    (c) no suit,
action, or other proceeding shall be pending or threatened before any court or
arbitration tribunal or any Governmental Authority seeking to restrain, enjoin,
prohibit, or declare illegal, or seeking substantial damages in connection with,
the transactions contemplated in this Agreement;

     

    (d) Seller
and the Company shall have received all consents, authorizations, waivers, and
approvals required to be obtained prior to the Closing by any court or
Governmental Authority under any applicable Law concerning the transactions
contemplated herein; and

     

    (e) Seller
and the Company shall have made arrangements with all relevant lenders to pay
and discharge in full all indebtedness of the Company, and obtain releases or
termination statements of all Liens, in each case referred to in Section
6.11.

     

    7.3 Termination.  This
Agreement may be terminated, and the transactions contemplated herein may be
abandoned at any time prior to the Closing:

     

    (a) by mutual
written consent of Seller and Buyer;

     

    (b) by the
Party not in material breach or material default of this Agreement if, prior to
the Closing Date, the other Party is in material breach or material default of
its obligations under this Agreement;

     

    (c) by Buyer,
at Buyer’s option, if the Closing does not occur by the Closing Date for the
reason that any of the conditions contained in Section 7.2 is not
fulfilled or waived in accordance with this Agreement on or before the Closing
Date; provided that all of the conditions set forth in Section 7.1 shall
have been fulfilled by Buyer or waived by Seller on or before the Closing
Date;

     

    (d) by
Seller, at Seller’s option, if the Closing does not occur by the Closing Date
for the reason that any of the conditions contained in Section 7.1 is not
fulfilled or waived in accordance with this Agreement on or before the Closing
Date; provided that all of the conditions set forth in Section 7.2 shall
have been fulfilled by Seller or the Company or waived by Buyer on or before the
Closing Date; or

     

    (e) by Seller
or Buyer, at each Party’s option, if the aggregate amount by which the Cash
Portion is reduced under the terms of Section 5.3 and Section 5.4
(exclusive of the amounts required to discharge the indebtedness secured by the
Liens for which Seller and the Company are obligated to deliver releases at the
Closing pursuant to Section 6.11) equals or exceeds twenty percent (20%) of the
Base Consideration.

     

    7.4 Remedies.  If
this Agreement is terminated pursuant to Section 7.3, this
Agreement shall become void and of no further force and effect, except for the
provisions of Sections
9.4, 11.7, 12.10, and this Section 7.4, all of
which shall survive such termination and remain in full force and
effect.  If this Agreement is terminated by (a) Seller and Buyer
pursuant to Section
7.3(a), or (b) Seller pursuant to Section 7.3(b) or
7.3(d) if Buyer
is unable to fulfill the condition set forth in Section 7.1(d), or
(c) Buyer pursuant to Section 7.3(e) or
Section 7.3(f),
(d) by Buyer pursuant to Section 7.3(b) or
7.3(c) if
Seller and the Company are unable to fulfill the condition set forth in Section 7.2(d),
neither Party shall have any further liability to the other Party as the result
of such termination.  If Seller terminates this Agreement pursuant to
Section 7.3(b)
or Section
7.3(d) as the result of Buyer’s failure to fulfill any condition set
forth in Section
7.1 other than Section 7.1(d), then
in addition to such right of termination, the sole and exclusive remedy of
Seller with respect to such failure by Buyer to fulfill such conditions shall be
the right to retain the Deposit.  If Buyer terminates this Agreement
pursuant to Section
7.3(b) or Section 7.3(c) as the
result of the failure of Seller and the Company to fulfill any condition set
forth in Section 7.2
other than Section 7.2(d), then
in addition to such right of termination, Buyer shall be entitled to the return
of the Deposit, as well as to pursue any and all other remedies available to
Buyer at law or in equity (but not including
specific performance).  If a Party resorts to legal proceedings to
enforce this Agreement or any part thereof, the prevailing Party in such
proceedings shall be entitled to recover all costs incurred by such Party,
including reasonable attorneys’ fees, in addition to any other relief to which
such Party may be entitled.

     

    
      
        
        

      

      
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    ARTICLE
VIII.

     

    CLOSING

     

    8.1 Closing.  The
Closing shall be held at the offices of Jackson Walker L.L.P., at 1401 McKinney,
Suite 1900, Houston, Texas 77010, at 10:00 A.M., Central Time, on the ninetieth
(90th) day
after the date on which Seller or the Company delivers to Buyer the 2008 First
Quarter Unaudited Financial Statements (the “Scheduled Closing
Date”), or at such earlier or later date or other place or time as Seller
and Buyer may agree in writing (the Scheduled Closing Date, as so
adjusted, being referred to herein as the “Closing
Date”).

     

    8.2 Preliminary Settlement
Statement.  No later than three (3) Business Days prior to the
Closing Date, Seller and the Company shall prepare and submit to Buyer a
preliminary settlement statement (the “Preliminary Settlement
Statement”), which sets forth Seller’s estimate of the Adjusted
Consideration, reflecting the Cash Portion, each adjustment thereto made in
accordance with Section 2.4 (including,
without limitation, a calculation of the Working Capital), the proration
of any other amounts required herein, and in each case, the method of
calculating  the same, as of the date of preparation of the
Preliminary Settlement Statement, together with the designation of Seller’s
account for the wire transfer of the Adjusted Cash Portion pursuant to Section
8.3.  If, for any reason, Buyer disputes any information
contained in the Preliminary Settlement Statement, and Buyer and Seller are
unable to resolve such dispute prior to the Closing Date, the Parties shall
submit the dispute to arbitration pursuant to Section 12.10, and
the Closing shall be deferred until three (3) Business Days after the issuance
of the decision of the arbitrators as to such dispute.

     

    8.3 Actions at
Closing.  At the Closing, Seller and Buyer shall take the
following actions:

     

    (a) Seller
shall deliver to Buyer (i) stock certificates representing all of the Shares,
(ii) the minute books and equity registry records of the Company, and (iii) the
written resignations of the officers, directors, and employees of the Company
required under Section
6.13;

     

    (b) Seller
and Buyer shall execute and deliver (i) the Preliminary Settlement Statement and
(ii) the Registration Rights Agreement;

     

    (c) Seller,
Buyer, and Escrow Agent shall have executed and delivered the Escrow
Agreement;

     

    (d) Buyer
shall deliver the estimated Adjusted Consideration as follows:  (i) as
required by Section
11.5(c), to Escrow Agent, the sum of $600,000.00 by bank wire transfer of
immediately available funds to the account established pursuant to the Escrow
Agreement; (ii) to Seller, the remainder of the Adjusted Cash Portion as
reflected in the Preliminary Settlement Statement, by bank wire transfer of
immediately available U.S. funds to an account or accounts designated by Seller
in the Preliminary Settlement Statement; and (iii) to Seller, stock certificates
evidencing the Consideration Shares;

     

    (e) Seller
shall deliver to Buyer releases of all Liens encumbering the Assets that do not
constitute Permitted Encumbrances;

     

    (f) Seller
shall deliver to Buyer all consents, waivers, and other similar matters required
by any Governmental Authority or other Person to be obtained by Seller and the
Company prior to the Closing;

     

    
      
        
        

      

      
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    (g) Seller
shall deliver to Buyer a certificate, dated and effective as of the Closing
Date, executed by the president or an authorized vice president of Seller,
certifying to Buyer that, on the Closing Date, the representations and
warranties of Seller and the Company contained in this Agreement are true and
correct in all material respects (and in all respects, in the case of
representations and warranties qualified by materiality or the requirement of a
Material Adverse Effect) and that all covenants of Seller contained herein have
been performed in all material respects;

     

    (h) Seller
shall deliver to Buyer an opinion, dated the Closing Date, of Baker &
Hostetler LLP, counsel for Seller, that addresses the matters set forth in Schedule 8.3(h), and
that is otherwise subject to customary qualifications and is in form and
substance reasonably satisfactory to Buyer;

     

    (i) Buyer
shall deliver to Seller a certificate, dated and effective as of the Closing
Date, executed by the president or an authorized vice president of Buyer,
certifying to Seller that on the Closing Date, the representations and
warranties of Buyer contained in this Agreement are true and correct in all
material respects (and in all respects, in the case of representations and
warranties qualified by materiality or the requirement of a Material Adverse
Effect) and all covenants of Buyer contained herein have been performed in all
material respects;

     

    (j) Buyer
shall deliver to Seller opinions, dated the Closing Date, of Thompson &
Knight L.L.P. and Jackson Walker L.L.P., counsel for Buyer, that address the
matters set forth in Schedule 8.3(j), and
that are otherwise subject to customary qualifications and are in form and
substance reasonably satisfactory to Seller;

     

    (k) Seller
shall deliver to Buyer a statement that satisfies the requirements of Treas.
Reg. §1.1445-2(b)(2), certifying that Seller is not a “foreign” Person for
federal income tax purposes; and

     

    (l) Seller
and Buyer shall execute such other documents and take such other actions as are
provided for elsewhere in this Agreement or as may be necessary to consummate
the transactions contemplated herein.

     

    ARTICLE
IX.

     

    POST
CLOSING MATTERS

     

    9.1 Final Settlement
Statement.  As soon as reasonably practicable after the Closing
Date, but in no event later than ninety (90) days after the Closing Date, Buyer
shall prepare and deliver to Seller: a final accounting statement, subject to
verification by Seller, which sets forth, in reasonable detail, the final
calculation and amount of the Adjusted Consideration, including the final
calculation of the Working Capital and all other adjustments to the Cash Portion
made in accordance with Section 2.4, and the
actual proration of all other amounts required by this Agreement.  For
purposes of this Agreement, such final accounting statement shall be referred to
as the “Final
Settlement Statement”.  Seller agrees to use reasonable
commercial efforts to assist and cooperate with Buyer in the timely preparation
of the Final Settlement Statement, including the calculation of the Working
Capital.  Buyer agrees to give Seller and its authorized
representatives full access to such employees, officers, and facilities and such
books and records of Buyer and the Company, to the extent within Buyer’s
control, as is reasonably necessary to permit Seller to verify such calculations
and/or review the Final Settlement Statement.  No later than thirty
(30) days after Seller’s receipt of the Final Settlement Statement from Buyer,
Seller shall deliver to Buyer written notice setting forth any changes to the
Final Settlement Statement proposed by Seller.  Buyer and Seller shall
endeavor to agree on the Final Settlement Statement within thirty (30) days
after Buyer’s receipt of Seller’s proposed changes thereto.  If Buyer
and Seller are unable to agree on the Final Settlement Statement on or before
thirty (30) days after Buyer’s receipt of Seller’s proposed changes thereto,
then Buyer and Seller shall submit all unresolved claims and amounts for
arbitration in accordance with the terms of Section
12.10.  If the Parties reach agreement on the Final Settlement
Statement, payment by the Party obligated to do so shall be due on the later of (a) the thirtieth
(30th) day
after the date on which Seller receives the Final Settlement Statement from
Buyer, or (b) five (5) Business Days after such agreement is
reached.  If Seller disputes the Final Settlement Statement in
accordance with this Section 9.1, and such
dispute is resolved by arbitration, payment by the Party obligated to do so
shall be due on the fifth (5th)
Business Day after the arbitrators render their decision.

     

    
      
        
        

      

      
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    9.2 Records.  On
or before the fifteenth (15th)
Business Day after Closing, Seller shall deliver to Buyer, at Buyer’s sole cost
and expense, the Records.  Buyer shall be entitled to all original
Records pertaining to the Company.  Prior to the delivery thereof to
Buyer, Seller may make and retain, at its expense, copies of the
Records.  Buyer agrees to maintain all original Records until the
third (3rd)
anniversary of the Closing Date (or such longer period of time as Seller may
request for those Records relevant for tax audit purposes), or, if any of such
Records pertain to a Claim pending at such third anniversary date, until such
Claim is finally resolved and the time for all appeals has been
exhausted.  Buyer will provide to Seller reasonable access to the
Records for purposes of obtaining information for the preparation of tax
returns, financial statements, and other legitimate business purposes of
Seller.

     

    9.3 Further
Cooperation.  After the Closing Date, Buyer and Seller shall
execute and deliver, or shall cause to be executed and delivered from time to
time, such further documents and instruments, and shall take such other actions
as either Party may reasonably request, to accomplish the transactions
contemplated by this Agreement.  If, after the Closing Date, either
Party receives monies belonging to the other, such amounts shall be promptly
disbursed to the Party entitled to receive them.  If an invoice or
other evidence of an obligation is received by a Party, which is either an
obligation assumed by the other Party or partially an obligation of both Seller
and Buyer, the Parties shall consult with each other, and an adjustment for such
amount will be made either on the Final Settlement Statement, or, if the
evidence of the obligation is not received until after the completion of the
final accounting pursuant to Section 9.1, in cash
as the Parties may agree.  If Seller and Buyer are unable to agree on
the disposition of such an obligation, Seller and Buyer shall submit the matter
to binding arbitration in accordance with the terms of Section
12.10.

     

    9.4 Confidentiality.

     

    (a) Seller’s
and Buyer’s respective obligations under the Confidentiality Agreement shall
terminate upon the Closing.  Buyer agrees that if this Agreement is
terminated for any reason whatsoever, Buyer’s obligations under the
Confidentiality Agreement shall continue in accordance with the terms
thereof.

     

    (b) After the
Closing, Seller agrees not to disclose geological, seismic and other proprietary
data related to the Company or the Assets, or other information that Seller
would treat as confidential if it were the owner of the Company or the Assets or
any confidential information provided by Buyer to Seller, and Buyer agrees not
to disclose proprietary or confidential information other than the Records
provided by Seller to Buyer unless (i) the Party to which such
confidentiality obligation is owed shall have consented thereto in writing,
(ii) disclosure is required pursuant to a court order or by subpoena or
similar legal process, or (iii) disclosure is made on advice of its
counsel, pursuant to a request by a Governmental Body, pursuant to applicable
Law, or to comply with the rules and regulations of any stock exchange, or
(iv) such information has been previously made public (except as a result
of a breach of this Agreement); provided, however, each Party may disclose such
information to its representatives, agents, attorneys, consultants, and auditors
as needed, but in such event, the relevant Party shall use reasonable efforts to
cause such Persons to keep such information confidential.

     

    9.5 Gauging and
Strapping.  Seller or the Company shall have caused all storage
facilities for crude oil, plant products, and other liquid Hydrocarbons located
on or utilized in connection with the Assets to be gauged or strapped as of
March 31, 2008, for those Assets served by the Company as operator prior to the
Closing Date.  In addition, Seller or the Company shall have caused
the gas production meter charts (or if such charts do not exist, the sales meter
charts) on the pipelines transporting gas production from the Assets to be read
as of March 31, 2008, for those Assets served by the Company as operator prior
to the Closing.  Buyer shall be entitled to receive copies, at Buyer’s
expense, of the records of such gauging, strapping, and chart
reading.  For those Assets not operated by the Company prior to the
Closing, applicable state regulatory agency production reports and records shall
be used to determine the amount of crude oil, plant products, and other liquid
Hydrocarbons in storage or gas existing in pipelines as of March 31,
2008.  If such state regulatory agency reports or records are not
available, another method mutually acceptable to the Parties shall be
used.

     

    9.6 Name
Change.  Within sixty (60) days after the Closing Date, Buyer
agrees to take all necessary action (i) with the proper Governmental Authorities
in order to change the name of the Company to exclude any reference to the word
“Voyager” and (ii) to remove the name “Voyager” from all Assets.

     

    
      
        
        

      

      
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    ARTICLE
X.

     

    TAX
MATTERS

     

    10.1 Tax
Returns.  For federal income Tax purposes, the books of the
Company shall be closed as of the Effective Time, and the taxable income or loss
of the Company for any taxable year or period that begins before and ends on or
after the Effective Time shall be computed on the basis of the Company’s
permanent books and records as of the Effective Time.  Except as
provided in Section
10.2, Seller shall cause the Company to prepare and cause to be timely
filed (including extensions) all Tax Returns of the Company that are filed prior
to the Effective Time; provided that Seller shall deliver to Buyer a draft of
each federal income Tax Return (with all supporting records, attachments,
statements, and calculations) and shall provide Buyer not less than ten (10)
days within which to review and comment on such draft income Tax
Returns.  Except as provided in Section 10.2, Buyer
shall prepare and timely file (including extensions), or cause the Company to
prepare and timely file (including extensions), all Tax Returns of the Company
that are filed after the Effective Time; provided that Buyer shall deliver or
cause the Company to deliver to Seller a draft of each such Tax Return (with all
supporting records, attachments, statements, and calculations) and shall provide
Seller not less than ten (10) days within which to review and comment on the
draft Tax Return.  If the Parties are unable to agree upon any matters
to be shown on such Tax Returns prepared by Seller or Buyer pursuant to this
Section 10.1, or
the calculation of any Tax liability to be shown thereon before the fifteenth
(15th) day prior to the due date of the relevant Tax Return (taking into account
available extensions), either Buyer or Seller may initiate the arbitration of
such a dispute pursuant to the terms of Section 12.10.  The
Company shall be responsible for and pay all Taxes shown as owing by the Company
on all such Tax Returns.  Seller shall be liable for and shall pay and
discharge when due all income, franchise or similar Taxes imposed on Seller (and
any consolidated, combined, or unitary group of which Seller is a member)
resulting from the sale and transfer of the Shares to Buyer
hereunder.

     

    10.2 Transfer
Taxes.  Seller and Buyer shall each pay, or cause to be paid,
all sales, use, transfer, and similar Taxes (“Transfer Taxes”), if
any, imposed on it by applicable Law, if any, resulting from the sale and
transfer of the Shares to Buyer hereunder and shall each prepare and file all
Tax Returns required to be filed by it with respect to such Transfer
Taxes.

     

    10.3 Cooperation.  Each
of Seller, the Company, and Buyer shall cooperate with the other Party and
provide the other Party with all information in its possession or to which it
has access (including reasonable access to relevant employees) which may be
reasonably required by the other Party in connection with the preparation of any
Tax Return or determination of any Tax and any audit or examination by any Tax
authority of any Tax Return or payment.  Buyer shall cause the Company
to provide prompt written notice to Seller of any pending or threatened Tax
audit, assessment, or proceeding relating to any Tax liability or any Tax Return
of the Company with respect to any full or partial taxable year or period that
ends before or includes the Effective Time. Buyer and the Company shall also
cooperate with Seller’s reasonable requests to file amended Tax Returns of the
Company for taxable years or periods ending on or before the Effective Time.
Seller shall bear all costs and expenses incurred in connection with the
preparation and filing of any such amended Tax Return and the pursuit of any
refund of Tax arising therefrom. If,  after the Effective Time, Buyer
or the Company receives a refund of any Tax attributable to a taxable year or
period ending before or on the Effective Time, Buyer shall, or shall cause the
Company to, promptly pay to Seller the amount received, together with any
interest received or credited thereon and less the reasonable costs and expenses
of Buyer and the Company incurred in connection with such refund.

     

    10.4 Tax-Sharing
Agreements.  All Tax-sharing or similar agreements with respect
to or involving the Company shall be terminated as of the Effective Time and,
after the Effective Time, the Company shall not be bound thereby or have any
Liability thereunder.

     

    ARTICLE
XI.

     

    SURVIVAL;
INDEMNIFICATION

     

    11.1 Survival.  All
representations, warranties, covenants, agreements, and indemnities of Buyer and
Seller under this Agreement shall survive the Closing and the delivery of the
Shares and shall remain in force and effect as provided in this Article XI,
regardless of any investigation at any time made by or on behalf of Buyer or
Seller, or of any information that Buyer or Seller may have with respect
thereto.  Such survival does not obligate any Party to make any
further representation or warranty after the Closing Date, or to cause any
representation or warranty made hereunder to remain true and correct after the
Closing Date.

     

    
      
        
        

      

      
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    11.2 Indemnity as Sole
Remedy.  If the Closing occurs, then except as otherwise
provided in this Article XI, the
indemnities provided by each Party to the other under this Article XI shall
constitute the sole and exclusive remedies for such Party and its Indemnity
Group after the Closing with respect to (a) the inaccuracy or breach of any
representation or warranty made by the other Party hereunder and (b) a
breach or default in the performance by such other Party of any covenant or
agreement of such other Party contained in this Agreement.  Except as
otherwise provided in this Article XI, if the
Closing occurs, each Party hereby waives any Claim arising under common law, any
statute, or otherwise against the other Party arising from or out of the
inaccuracy or breach of any representation or warranty made by the other Party
hereunder, or the breach or default in the performance by such other Party of
any covenant or agreement of such other Party contained in this Agreement, in
either case that arose or occurred prior to the Closing Date.

     

    11.3 Indemnities of
Buyer.  If the Closing occurs, regardless of any investigation
made at any time by or on behalf of any Party or any information any Party may
have, and regardless of the presence or absence of insurance, Buyer shall
indemnify and hold harmless Seller and its Indemnity Group from and against any
and all Claims and Liabilities caused by, arising out of, resulting from, or
relating in any way to, and to pay to Seller or its Indemnity Group any sum that
Seller or its Indemnity Group pays, or becomes obligated to pay, on account
of:  (a) any breach or default in the performance by Buyer of any
covenant or Agreement of Buyer contained in this Agreement or any document
executed in connection herewith; (b) any breach of a warranty or an inaccurate
or erroneous representation made by Buyer in this Agreement (provided, however,
that for purposes of this Section 11.3, all
qualifications relating to Knowledge, materiality, or the requirement of a
Material Adverse Effect contained in such representations and warranties shall
be disregarded, except for the requirement of a Material Adverse Effect in Section 4.1(k)); and
(c) all duties, obligations, and Liabilities accruing or resulting from, arising
out of, or otherwise associated with the business and operations of the Company
and the ownership, use, and operation of the Assets, whether such duties,
obligations, or Liabilities accrue or arise before, at, or after the Effective
Time, EXCEPT
FOR Claims and
Liabilities for which Buyer is entitled to receive indemnification from Seller
under this Agreement (assuming that Buyer asserts any such right to
indemnification in a timely and proper manner as provided in this Article
XI).

     

    11.4 Indemnities of
Seller.  If the Closing occurs, regardless of any investigation
made at any time by or on behalf of any Party or any information any Party may
have, and regardless of the presence or absence of insurance, Seller shall
indemnify and hold harmless Buyer and its Indemnity Group from and against any
and all Claims and Liabilities caused by, arising out of, resulting from, or
relating in any way to, and to pay Buyer or its Indemnity Group any sum that
Buyer or its Indemnity Group pays or becomes obligated to pay, on account of:
(a) any breach or default in the performance by Seller or the Company of
any covenant or agreement of Seller and/or the Company contained in this
Agreement or any document executed in connection herewith; (b) any breach
of a warranty or an inaccurate or erroneous representation made by Seller and/or
the Company in this Agreement (provided, however, that for purposes of this
Section 11.4,
all qualifications relating to Knowledge, materiality, or the requirement of a
Material Adverse Effect contained in such representations and warranties shall
be disregarded, except for the requirement of a Material Adverse Effect
contained in Section
3.2(j)), and (c) all Retained Liabilities; provided, however, the
indemnity of Seller provided in this Section 11.4 shall
not include Claims and Liabilities arising out of (X) Section 3.3(b), the
sole and exclusive remedies for which are set forth therein, (Y) Section 3.3(f), the
sole and exclusive remedy for which is set forth in Section 5.4, and (Z)
Section 3.3(j)
and Section
3.3(k) (insofar only as the latter representation and warranty relates to
environmental matters), the sole and exclusive remedy for which remedy for which
is set forth in Section
5.3.

     

    11.5 Limitations on
Indemnities.

     

    (a) After the
Closing Date, neither Buyer nor Seller shall be entitled to seek indemnification
from the other Party with respect to the inaccuracy or breach of any
representation or warranty made by such Party hereunder, or a breach or default
in the performance by such Party of any covenant or agreement of that Party
contained in this Agreement, unless the Party seeking indemnification gives
written notice of the alleged breach, inaccuracy, or default to the Party from
whom indemnification is sought no later than nine (9) months after the Closing
Date.

     

    
      
        
        

      

      
        31

        
          

        

      

      
        
        

      

    

     

    (b) Notwithstanding
any other provision of this Agreement, in no event shall Seller be entitled to
receive indemnification under Section 11.3(a) or
Section
11.3(b), nor shall Buyer be entitled to receive indemnification under
Section 11.4
unless: (a) the Liability associated with an individual Claim for which a Party
seeks indemnification exceeds $50,000.00, and (b) the aggregate Liabilities
associated with all Claims for which such Party seeks indemnification exceed
$600,000.00, and then only to the extent of such excess over
$600,000.00.

     

    (c) In no
event shall the aggregate amount actually paid by Seller to Buyer with respect
to Claims for indemnification under Section 11.4 exceed
$600,000.00.  In this regard, at the Closing, Buyer shall deposit in
escrow with Escrow Agent the sum of $600,000.00 out of the Adjusted Cash Portion
payable by Buyer to Seller at the Closing (the “Indemnity
Holdback”).  Escrow Agent shall hold the Indemnity Holdback in
escrow for a period of nine (9) months after the Closing Date (or such longer
period of time as may be required to permit the completion of all arbitration
proceedings under Section 12.10 (if
any) relating to Claims for indemnification by Buyer) subject to and in
accordance with the terms of an escrow agreement in form and substance mutually
acceptable to Escrow Agent, Seller, and Buyer (the “Escrow
Agreement”).  All Liabilities associated with Claims by Buyer
for indemnification under Section 11.4 asserted
in a timely manner as provided in, and that otherwise satisfy the criteria set
forth in, this Section
11.5 shall be satisfied out of the Indemnity Holdback, and Seller shall
have no personal responsibility or Liability for the payment or satisfaction of
the Liabilities associated with any such Claims.  Upon the expiration
of the term of the Escrow Agreement, the Indemnity Holdback, to the extent not
disbursed to Buyer pursuant to this Section 11.5(d),
shall be disbursed to Seller, together with all interest accrued thereon in
accordance with the terms of the Escrow Agreement during the term
thereof.

     

    11.6 Assertion of Claims;
Notices; Defense; Settlement.

     

    (a) Upon the
discovery by a Party entitled to indemnification under any provision of this
Agreement (the “Indemnified Party”)
of facts believed to entitle such Party to indemnification hereunder, including
the receipt by any such Party of notice of a Claim from any third Person, the
Indemnified Party shall give prompt written notice of any such Claim to the
Party obligated to provide the requested indemnification (the “Indemnifying
Party”).  Each such notice shall set forth the facts known to
the Indemnified Party pertaining to the relevant Claim and shall specify the
manner in which the Indemnified Party proposes to respond to such
Claim.

     

    (b) Within
ten (10) days after the receipt by the Indemnifying Party of such notice, the
Indemnifying Party shall state in writing to the Indemnified Party: (i) whether
the Indemnified Party may proceed to respond to the Claim in the manner set
forth in its notice, or (ii) whether the Indemnifying Party shall assume
responsibility for and conduct the negotiation, defense, or settlement of the
Claim, and if so, the specific manner in which the Indemnifying Party proposes
to proceed. If the Indemnifying Party assumes control of the Claim, the
Indemnified Party shall at all times have the right to participate in the
defense thereof and to be represented, at its sole expense, by counsel selected
by it. No such Claim shall be compromised or settled by either the Indemnifying
Party or the Indemnified Party, as applicable, in any manner that admits
liability on the part of the other Party or that might otherwise adversely
affect the interest of such other Party without the prior written consent of
such other Party, which consent will not be unreasonably withheld or delayed. As
a condition precedent to indemnification under this Agreement, the Indemnified
Party shall assign to the Indemnifying Party, and the Indemnifying Party shall
become subrogated to, all rights and Claims, up to the amount of
indemnification, of the Indemnified Party against third Persons arising out of
or pertaining to the matters for which the Indemnifying Party shall provide
indemnification. The amount of the Indemnified Party’s Claim for indemnification
shall be reduced by the amount of any insurance reimbursement paid to the
Indemnified Party pertaining to the Claim.

     

    11.7 Limitation on
Damages.  For the breach or non-performance by any Party of any
representation, warranty, covenant, or agreement contained in this Agreement,
the liability of the obligor shall be limited to direct actual damages only,
except to the extent that the obligee is entitled to specific performance or
injunctive relief.  AS BETWEEN THE PARTIES,
NOTWITHSTANDING ANYTHING TO THE CONTRARY IN THIS AGREEMENT, NEITHER SELLER OR
THE COMPANY NOR BUYER SHALL BE LIABLE TO THE OTHER PARTY AS THE RESULT OF A
BREACH OR A VIOLATION OF ANY REPRESENTATION, WARRANTY, COVENANT, AGREEMENT, OR
CONDITION CONTAINED IN THIS AGREEMENT FOR SPECIAL, CONSEQUENTIAL, INCIDENTAL,
PUNITIVE, EXEMPLARY, OR INDIRECT DAMAGES, LOST PROFITS, OR OTHER BUSINESS
INTERRUPTION DAMAGES, IN TORT, IN CONTRACT, UNDER ANY INDEMNITY PROVISION,
ARISING BY OPERATION OF LAW (INCLUDING, WITHOUT LIMITATION, STRICT LIABILITY),
OR OTHERWISE. WITH RESPECT TO CLAIMS BY THIRD PERSONS, A PARTY MAY RECOVER FROM
THE OTHER PARTY ALL COSTS, EXPENSES, OR DAMAGES (INCLUDING, WITHOUT LIMITATION,
SPECIAL, CONSEQUENTIAL, INCIDENTAL, PUNITIVE, EXEMPLARY, OR INDIRECT DAMAGES),
LOST PROFITS, AND OTHER BUSINESS INTERRUPTION DAMAGES IN ADDITION TO ACTUAL
DIRECT DAMAGES PAID OR OWED TO ANY SUCH THIRD PERSON IN SETTLEMENT OR
SATISFACTION OF CLAIMS AS TO WHICH THE RELEVANT PARTY IS ENTITLED TO
INDEMNIFICATION HEREUNDER.

     

    
      
        
        

      

      
        32

        
          

        

      

      
        
        

      

    

     

    11.8 Additional Indemnification
of Buyer.  Buyer shall defend, indemnify and hold harmless
Seller, the Company and their respective Affiliates and each of their respective
officers, directors, partners, managers and members, against any and all Claims
and Liabilities, joint or several, to which they or any of them may become
subject under the Securities Act of 1933, the Securities Exchange Act of 1934 or
otherwise, insofar as such Claims and Liabilities arise out of or are based upon
any act or omission of Buyer in connection with, or any untrue statement or
alleged untrue statement of a material fact contained in, any registration
statement, prospectus, offering circular, memorandum or other offering material,
or in any supplement thereto or amendment thereof, used by Buyer or any of its
Affiliates to offer for sale or sell securities, whether before or after the
Closing, to fund any portion of the Cash Portion, or arise out of or are based
upon the omission or alleged omission to state therein a material fact required
to be stated therein or necessary to make the statements therein not
misleading.  This indemnity shall be in addition to any liability that
the Buyer may otherwise have under applicable Law or this Agreement, including
but not limited to other liability under this Article XI or this
Agreement and shall not be subject to  any of the limitations on
indemnities set out in Section 11.5 of this
Agreement or to the limitations on damages set out in Section 11.7 of this
Agreement.

     

    ARTICLE
XII.

     

    MISCELLANEOUS

     

    12.1 Exhibits.  All
exhibits and schedules referred to in this Agreement are hereby incorporated
into this Agreement by reference and constitute a part of this Agreement for all
purposes.  Each Party and its counsel has received a complete set of
exhibits and schedules prior to and as of the date of execution of this
Agreement.

     

    12.2 Expenses.  Except
as otherwise specifically provided herein, Buyer shall pay all fees, costs, and
expenses incurred by Buyer, and Seller shall pay all fees, costs, and expenses
incurred by Seller and the Company, in each case in negotiating this Agreement
and in consummating the transactions contemplated by this Agreement, including,
without limitation, legal and accounting fees, costs, and
expenses.  The Company shall bear no portion of such fees, costs, and
expenses.

     

    12.3 Assignment.  Neither
Seller nor Buyer shall assign this Agreement, except to an Affiliate of the
assigning Party by assignment, transfer of equity, merger, reorganization, or
consolidation, without the prior written consent of the non-assigning Party,
which shall not be unreasonably withheld or delayed.  Any such
assignment of rights shall provide for the assumption by the transferee of the
obligations of the assigning Party under this Agreement.  No
assignment of any rights hereunder shall relieve the assigning Party of any
obligations or responsibilities hereunder.  Upon the assumption by
such a transferee of the obligations of the assigning Party under this
Agreement, such transferee shall become primarily liable for all such
obligations assumed.  Notwithstanding any such assumption, however, if
such a transferee fails to perform any of the obligations thus assumed, the
assigning Party shall remain liable for the performance
thereof.  Subject to the foregoing, this Agreement shall be binding
upon and inure to the benefit of the Parties and their respective successors and
assigns.

     

    
      
        
        

      

      
        33

        
          

        

      

      
        
        

      

    

     

    12.4 Notices.  All
notices and communications required or permitted to be given hereunder shall be
in writing and shall be delivered personally, or sent by bonded overnight
courier, or by facsimile transmission (provided any such telegram or facsimile
transmission is confirmed either orally or by written confirmation), addressed
to the appropriate Party at the address for such Party shown below or at such
other address as such Party shall have theretofore designated by written notice
delivered to the Party giving such notice:

     

    
      	
              If to Buyer:

               

              ABC
      Funding, Inc.

              c/o
      Matthew S. Cohen

              919 Third Avenue

              39th Floor

              New York, New
      York  10022

              Attention:  Mr.
      Steven Barrenechea

              Telephone
      No.:  (212) 751-3794

              Facsimile
      No.:  (212) 999-1613

            	
              If to Seller and the Company:

               

              Mr.
      Mike Parker

              Voyager
      Gas Holdings, L.P.

              12225
      Greenville Avenue

              Suite
      870

              Dallas,
      Texas  75243

              Phone:  972-234-9000

              Fax:  972-234-9001

               

              with
      copies to:

               

              Mr. Christopher Ray

              Natural Gas Partners

              125 E. John Carpenter Fwy., Suite
      600

              Irving, Texas  75062

              Phone:  972-432-1444

              Fax:  972-432-1441

               

              and

               

              Mr. John English

              Baker & Hostetler LLP

              1000 Louisiana

              Suite 2000

              Houston,
Texas  77002

              Phone:  713-646-1384

              Fax:  713-750-1717.

            
	 
      


    

    Any
notice given in accordance herewith shall be deemed to have been given on the
Business Day when delivered to the addressee in person or by facsimile or bonded
overnight courier; provided, however, that if any such notice is received after
normal business hours, the notice will be deemed to have been given on the next
succeeding Business Day.  Any Party may change the address, telephone
number, and facsimile number to which such communications to such Party are to
be addressed by giving written notice to the other Party in the manner provided
in this Section
12.4.

     

    12.5 ENTIRE AGREEMENT;
CONFLICTS.   THIS AGREEMENT, THE EXHIBITS HERETO,
THE CONFIDENTIALITY AGREEMENT, THE REGISTRATION RIGHTS AGREEMENT, AND ANY OTHER
DOCUMENTS EXECUTED BY THE PARTIES CONTEMPORANEOUSLY HEREWITH CONSTITUTE THE
ENTIRE AGREEMENT AMONG THE PARTIES PERTAINING TO THE SUBJECT MATTER HEREOF AND
SUPERSEDE ALL PRIOR AGREEMENTS, UNDERSTANDINGS, NEGOTIATIONS, AND DISCUSSIONS,
WHETHER ORAL OR WRITTEN, OF THE PARTIES PERTAINING TO THE SUBJECT MATTER
HEREOF.  THERE ARE NO WARRANTIES, REPRESENTATIONS, OR OTHER AGREEMENTS
BETWEEN THE PARTIES RELATING TO THE SUBJECT MATTER THEREOF EXCEPT AS
SPECIFICALLY SET FORTH HEREIN OR IN THE CONFIDENTIALITY AGREEMENT, THE
REGISTRATION RIGHTS AGREEMENT, OR ANY SUCH CONTEMPORANEOUS AGREEMENTS, AND
NEITHER BUYER, SELLER, NOR THE COMPANY SHALL BE BOUND BY OR LIABLE FOR ANY
ALLEGED REPRESENTATION, PROMISE, INDUCEMENT, OR STATEMENT OF INTENTION NOT SO
SET FORTH.  IN THE EVENT OF A CONFLICT BETWEEN THE TERMS OF THIS
AGREEMENT AND THE TERMS OF ANY OTHER RELATED AGREEMENT, THE TERMS OF THIS
AGREEMENT SHALL GOVERN AND CONTROL; PROVIDED, HOWEVER, THAT THE INCLUSION IN ANY
OTHER SUCH RELATED AGREEMENT OF TERMS NOT ADDRESSED IN THIS AGREEMENT SHALL NOT
BE DEEMED A CONFLICT, AND ALL SUCH ADDITIONAL TERMS SHALL BE GIVEN FULL FORCE
AND EFFECT, SUBJECT TO THE TERMS OF THIS SECTION
12.5.

     

    
      
        
        

      

      
        34

        
          

        

      

      
        
        

      

    

     

    12.6 Amendment.  This
Agreement may be amended only by an instrument in writing executed by the
Parties.

     

    12.7 Waiver; Rights
Cumulative.  Any of the terms, covenants, representations,
warranties, or conditions hereof may be waived only by a written instrument
executed by or on behalf of the Party waiving
compliance.  No  course of dealing on the part of Buyer,
Seller, or the Company, or their respective officers, employees, agents, or
representatives, or any failure by Buyer, Seller, or the Company to exercise any
of its rights under this Agreement, shall operate as a waiver thereof or affect
in any way the right of such Party at a later time to enforce the performance of
such provision.  No waiver by any Party of any condition, or any
breach of any term, covenant, representation, or warranty contained in this
Agreement, in any one or more instances, shall be deemed to be or construed as a
further or continuing waiver of any such condition or breach or a waiver of any
other condition or of any breach of any other term, covenant, representation, or
warranty.  The rights of Buyer, Seller, and the Company under this
Agreement shall be cumulative, and the exercise or partial exercise of any such
right shall not preclude the exercise of any other right.

     

    12.8 GOVERNING LAW; CONSENT TO
JURISDICTION.  THIS AGREEMENT AND THE
LEGAL RELATIONS AMONG THE PARTIES SHALL BE GOVERNED AND CONSTRUED IN ACCORDANCE
WITH THE LAWS OF THE STATE OF TEXAS, EXCLUDING ANY CONFLICTS OF LAW RULE OR
PRINCIPLE THAT MIGHT REFER CONSTRUCTION OF SUCH PROVISIONS TO THE LAWS OF
ANOTHER JURISDICTION.  ALL OF THE PARTIES CONSENT TO THE EXERCISE OF
JURISDICTION IN PERSONAM BY THE COURTS OF THE STATE OF TEXAS FOR ANY ACTION
ARISING OUT OF THIS AGREEMENT.  ALL ACTIONS OR PROCEEDINGS WITH
RESPECT TO, ARISING DIRECTLY OR INDIRECTLY IN CONNECTION WITH, OUT OF, RELATED
TO, OR FROM THIS AGREEMENT SHALL BE LITIGATED IN COURTS HAVING SITUS IN HOUSTON,
HARRIS COUNTY, TEXAS.

     

    12.9 Severability.  If
any term or other provision of this Agreement is invalid, illegal, or incapable
of being enforced by any rule of Law or public policy, all other conditions and
provisions of this Agreement shall nevertheless remain in full force and effect
so long as the economic or legal substance of the transactions contemplated
hereby is not affected in any adverse manner to any Party.  Upon such
determination that any term or other provision is invalid, illegal, or incapable
of being enforced, the Parties 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 to the end that the transactions contemplated
hereby are fulfilled to the extent possible.

     

    12.10 Arbitration.

     

    (a) Any
disagreement, difference, or dispute among the Parties provided in this
Agreement to be resolved by arbitration shall be resolved pursuant to
arbitration according to the procedures set forth in this Section
12.10.  Either Party may commence an arbitration proceeding
hereunder by giving written notice to the other Party.

     

    (b) If the
dispute relates to items reflected in the Preliminary Settlement Statement or in
the Final Settlement Statement (including, without limitation, the calculation
of the Working Capital), Seller and Buyer, no later than five (5) Business Days
after the delivery of the notice commencing the arbitration proceeding, submit
the dispute for resolution by the Designated Accountants.  The Parties
will present their positions to the Designated Accountants in the offices of the
Designated Accountants in Houston, Harris County, Texas, within fifteen (15)
days after the submission of the dispute unless otherwise required by the
Designated Accountants.  The Designated Accountants will be required
to resolve the dispute in a fair and equitable manner in accordance with GAAP
consistently applied (as adjusted, in connection with a dispute relating to a
Working Capital calculation, by and using the methodologies relating to such
calculations embodied in this Agreement) within thirty (30) days after the
presentation by the Parties of their positions.

     

    
      
        
        

      

      
        35

        
          

        

      

      
        
        

      

    

     

    (c) If the
dispute relates to a matter other than one described in Section 12.10(b),
Seller and Buyer, no later than five (5) Business Days after the delivery of the
notice commencing the arbitration proceeding, shall each select an
arbitrator.  Promptly following their selection, the arbitrators
selected by Seller and Buyer jointly shall select a third
arbitrator.  All arbitrators selected under this Section 12.10(c)
shall have at least eight (8) years of professional experience in the oil and
gas industries, and shall not previously have been employed by either Party and
shall not have a direct or indirect interest in either Party or the subject
matter of the arbitration.  The arbitration hearing shall commence as
soon as is practical, but in no event later than thirty (30) days after the
selection of the third arbitrator.  If any arbitrator selected under
this Section
12.10(c) should die, resign, or otherwise be unable to perform his duties
hereunder, a successor arbitrator shall be selected pursuant to the procedures
set forth in this Section
12.10(c).  The arbitrators shall settle all disputes in
accordance with the Federal Arbitration Act and the Commercial Arbitration Rules
of the American Arbitration Association, to the extent that such Rules do not
conflict with the terms of such Act or the terms of this
Agreement.  Any arbitration hearing shall be held in Houston, Harris
County, Texas.

     

    (d) The
decisions of the Designated Accountants and the arbitrators shall be final and
binding on the Parties and, if necessary, may be enforced in any court of
competent jurisdiction.  The Law governing all such disputes shall be
the Laws of the State of Texas, including, without limitation, the Uniform
Commercial Code as in effect in the State of Texas, as the same may be amended
from time to time, but without regard to conflicts of laws
principles.  The fees and expenses of the Designated Accountants and
the arbitrators shall be shared one-half by Seller and one-half by
Buyer.  Any payment to be made as the result of any dispute resolved
by arbitration hereunder shall be due on the later of (i) the date on
which payments are due in connection with the Final Settlement Statement as
provided in Section
9.1, or (ii) the fifth (5th)
Business Day after the Designated Accountants or the arbitrators render their
decision.

     

    12.11 Counterparts.  This
Agreement may be executed in any number of counterparts, and each such
counterpart hereof shall be deemed to be an original instrument, but all of such
counterparts shall constitute for all purposes one agreement.  At the
Parties’ election, this Agreement may be executed by the Parties in different
locations and shall become binding upon both Parties upon the exchange by the
Parties of executed signature pages by facsimile.  In the event of
such a facsimile execution, the Parties shall execute and deliver each to the
other a fully executed original counterpart of this Agreement within thirty (30)
days after such facsimile execution hereof; provided, however, that the failure
of the Parties to execute such an original counterpart of this Agreement shall
not affect or impair the binding character or enforceability of this
Agreement.

     

    [THIS
SPACE LEFT BLANK INTENTIONALLY]

    



    
      
        
          


           

        

         


      

      
        36 


        
          

        

      

      
         


      

    


    IN
WITNESS WHEREOF, Seller, the Company, and Buyer have executed this Agreement on
the date first above written.

     

    SELLER:

     

    


     

    VOYAGER
GAS HOLDINGS, L.P.

     

    By:  VGH
GP, L.L.C., its General Partner

     

    


     

    


     

    


     

    By:  
/s/  Mike
Parker                                                               

     

    Name:   Mike
Parker                                                                        

     

    Title:     President                                                         

     

    


     

    COMPANY:

     

    


     

    VOYAGER
GAS CORPORATION

     

    


     

    


     

    


     

    By:    /s/  Kirk
Pogoloff                                                                       

     

    Name: 
Kirk Pogoloff

     

    Title:   Vice
President                                                                      

     

    



    
      
        
          


          


           

        

         


      

      
         


        
          

        

      

      
         


      

    


    SIGNATURE
PAGE FOR ABC FUNDING, INC., TO STOCK PURCHASE AND SALE AGREEMENT DATED AS OF MAY
___, 2008, BETWEEN VOYAGER GAS HOLDINGS, L.P., AS SELLER, VOYAGER GAS
CORPORATION, AND ABC FUNDING, INC., AS BUYER

     

    BUYER:

     

    


     

    ABC
FUNDING, INC.

     

    


     

    


     

    


     

    By:         /s/  Steven
Barrenechea                                                                          

     

    Steven Barrenechea

     

    Chief Executive Officer

     

    


     

    



    
      
        
          


          


          5042724v.13 

        

         


      

      
         


        
          

        

      

      
         


      

    


    5042724v.13

    SCHEDULE
1.1

     

    


     

    DEFINED
TERMS

     

    The
following terms and expressions shall have the meanings set forth in the
indicated provisions of this Agreement:  “Adjusted Cash Portion”,
Section 2.4;
“Adjusted Consideration”, Section 2.2(b);
“Assets”, Exhibit
A; “Cash Portion”, Section 2.2(a);
“Closing Date”, Section 8.1;
“Company”, Preambles; “Company
Benefit Policy”, Section 3.2(r)(i);
“Company Employees”, Section 3.2(q);
“Company Employee Benefit Plan”, Section 3.2(r)(i);
“Consideration Shares”, Section 2.2(a);
“Contracts”, Exhibit
A; “Deposit”, Section 2.3;
“Effective Time Balance Sheet”, Section 9.1; “Escrow
Agreement”, Section
11.5(c); “Exclusive Period”, Section 6.5; “Final
Settlement Statement”, Section 9.1;
“Hydrocarbons”, Exhibit A;
“Indemnified Party” and “Indemnifying Party”, Section 11.6(a);
“Indemnity Holdback,” Section 11.5(d);
“Interim Period”, Section 6.1;
“Leases”, Exhibit
A; “Permits”, Exhibit A; “Personal
Property”, Exhibit
A; “Preliminary Settlement Statement”, Section 8.2;
“Real Property Interests”, Exhibit A; “Records”,
Exhibit A; “SEC
Reports”, Section
4.1(k); “Shares”, Preambles; “Supplemental Unaudited
Financial Statements”, Section 6.14;
“Third Person Transaction”, Section 6.5;
“Transfer Taxes”, Section 10.2; and
“Wells”, Exhibit
A.

     

    In
addition, the following terms and expressions shall have the meanings set forth
hereinafter:

     

    “Advisory Services Agreement”
means the Advisory Services, Reimbursement, and Indemnification Agreement dated
May 21, 2004, among the Company and Natural Gas Partners.

     

    “Affiliate” means,
with respect to a Party, any Person that directly or indirectly controls, is
controlled by, or is under common control with, the relevant
Party.  For purposes of this definition, the term “control” means the
possession, directly or indirectly, of the power to direct or cause the
direction of the management and policies of a Person, whether through ownership
of voting securities, contract, voting trust, membership in management or in the
group appointing or electing management, or otherwise through formal or informal
arrangements or business relationships.

     

    “Affiliated Group”
means any affiliated group within the meaning of Section 1504(a) of the Code or
any similar group defined under a similar provision of state, local or foreign
Law.

     

    “Allocated Value”
means, with respect to each Lease, Well, Real Property Interest, item of
Personal Property, and other Asset to which value is allocated herein, the
amount set forth on Exhibit A-2 under the
column styled “Allocated Value” for such Lease, Well, Real Property Interest,
item of Personal Property, or other Asset.  For purpose of this
Agreement, Seller and Buyer agree and stipulate that the Allocated Values set
forth in Exhibit A-2
have been established solely for use in calculating adjustments to the
Cash Portion as provided herein, and not for purposes of federal or state income
taxation, such Allocated Values being solely for the convenience of the
Parties.

     

    “Bank Credit Agreement” means
the Credit Agreement dated as of March 22, 2005, among the Company, as Borrower,
and Bank of Texas, N.A., as such agreement may be amended, modified, extended,
or restated from time to time.

     

    “Business Day” means
any day other than a Saturday, Sunday, or other day on which commercial banks in
Houston, Texas, are required or authorized by Law to be closed.

     

    “Casualty Event” means
(a) any fire, explosion, accident, earthquake, act of the public enemy, act of
God, or other similar event or occurrence that results in damage to or the
destruction of any Asset, and (b) any taking of any Asset by condemnation or
under the right of eminent domain.

     

    “Central Time” means
Central Standard Time or Central Daylight Savings Time, as in effect in Houston,
Texas, on the date in question.

     

    
      
        
        

      

      
        Exhibit B
- i

        
          

        

      

      
        
        

      

    

     

    “Claims”, for purposes
of this Agreement, means any and all claims, demands, Liens, notices of
non-compliance or violation, notices of liability or potential liability,
investigations, actions (whether judicial, administrative, or arbitrational),
causes of action, suits, and controversies.

     

    “Closing” means the
consummation of the transactions contemplated in this Agreement.

     

    “COBRA” means the
Consolidated Omnibus Reconciliation Act of 1985, as amended, as contained in
Section 4980B of the Code.

     

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

     

    “Confidentiality
Agreement” means the Confidentiality Agreement dated as of January 11,
2008, among Voyager Gas Holdings, L.P., Voyager Gas Corporation, and ABC
Funding, Inc.

     

    “Confidentiality and
Non-Compete Agreement” means the Confidentiality and Non-Compete
Agreement dated as of May 21, 2004, among Seller, the Company, and certain of
the limited partners in the Company.

     

    “Defect” means any of
the following: Lien, charge; any contract, agreement, or obligation not
constituting an Asset, or defect of title, to the extent only that any of the
foregoing (1) does not constitute a Permitted Encumbrance, and (2) causes, or
could reasonably be expected to cause:  (a) a loss of title, in
whole or in part, by the Company with respect to an Asset; (b) the title to
an Asset not to be good, valid, and indefeasible; (c) an Asset to be
subject to a Lien other than a Permitted Encumbrance; (d) in the case of a
Lease or Well, and without limiting clauses (a), (b), and (c) of this
definition, (i) the Company to receive a percentage of all Hydrocarbons
produced, saved, and marketed from or allocable to such Lease or Well that is
less than the Net Revenue Interest set forth in Exhibit A-2 for such
Lease or Well, without reduction, suspension, or termination for the productive
life of such Lease or Well, or (ii) the Company to be obligated to bear a
percentage of the costs and expenses of operations on and the maintenance and
development of such Lease or Well that is greater than the Working Interest set
forth for such Lease or Well on Exhibit A-2 without
increase for the productive life of such Lease or Well, unless such greater
Working Interest yields a correspondingly greater Net Revenue Interest; or
(e) the Company’s interests in any Asset otherwise to be extinguished or
the operation, use, possession, ownership, or value of the Company’s interest in
any Asset to be materially affected or interfered with, except for Permitted
Encumbrances.  The term “Defect” shall not include
(x) a preferential right to purchase, right of first refusal, right of
first offer, or similar right affecting any Asset (including, without
limitation, any Contract), the operation of which is triggered by the
transactions contemplated herein, regardless of which such right is exercised
prior to the Closing, or (y) except as otherwise provided in Section 5.4(c), a
third Person consent to assignment required before an Asset may be assigned, the
operation of which is triggered by the transactions contemplated herein, that is
not obtained prior to the Closing, both which are governed by Section
5.4.  Notwithstanding the preceding terms of this definition,
in no event shall any of the foregoing items constitute a “Defect” for purposes
of Section 5.3
unless the Defect Amount calculated therefor as provided herein equals or
exceeds $25,000.00.

     

    “Defect Amount”
means:  (a) if the relevant Defect affects all of the Company’s
interest in an Asset, such that the Defect results in a complete failure of
title with respect thereto, the Defect Amount shall equal the full Allocated
Value for the affected Asset; (b) if the Defect constitutes undischarged taxes,
indebtedness, or Liens encumbering all or any portion of any Asset, the Defect
Amount shall equal the sum necessary to be paid to the obligee to remove the
Defect; (c) if the Defect results from a deficiency in the Company’s actual Net
Revenue Interest relative to that shown for the affected Lease or Well on Exhibit A-2 and on
which the Allocated Value of such Lease or Well is based, the Defect Amount
shall equal the positive difference (if any)
obtained by subtracting (i) the
product
obtained by multiplying the
Allocated Value for the affected Lease or Well by the ratio of the actual Net
Revenue Interest being conveyed to the Net Revenue
Interest set forth for such Lease or Well on Exhibit A-2, from (ii) the
Allocated Value for such Lease or Well; (d) if the Defect results from the
Company’s actual expense-bearing interest in a Lease or Well being greater than
the Working Interest shown for the affected Lease or Well on Exhibit A-2 and on
which the Allocated Value of such Lease or Well is based, and such larger
expense-bearing interest is not accompanied by a proportionate increase in the
Company’s Net Revenue Interest in such Lease or Well, the Defect Amount shall
equal the positive difference (if any)
obtained by subtracting (i) a
recalculated Allocated Value for such Lease or Well using the same production
rates, pricing, costs, tax forecasts, and discount factors used to calculate the
original Allocated Value for such Lease or Well, adjusted to account for the
diminution in the net present value of the future cash flows that results from
the higher expense-bearing interest, from (ii) the
Allocated Value for such Lease or Well set forth on Exhibit B; and (e) if
the Defect is one other than the Defects described above in clauses (a), (b), (c), and (d) of this
definition, the Defect Amount shall equal an amount determined by Seller and
Buyer by evaluating the portion of the Assets affected by such Defect, the legal
effect of the Defect, and the potential economic effect of the Defect over the
life of the Assets affected.

     

    
      
        
        

      

      
        Exhibit B
- ii

        
          

        

      

      
        
        

      

    

     

    “Designated
Accountants” means Reimer, McGuinness & Associates, P.C.

     

    “Effective Time” means
7:00 a.m., Central Time, on the Closing Date.

     

    “Environmental
Contaminants” means “hazardous substances” and “pollutants or
contaminants”, as those terms are defined in Section 101 of the Comprehensive
Environmental Response, Compensation and Liability Act (“CERCLA”), petroleum,
including any fraction thereof,” and “natural gas, natural liquids, liquefied
natural gas, or synthetic gas usable for fuel” as those terms are used in
Section 101 of CERCLA, any “solid or hazardous waste” as those terms are defined
or used in the Resource Conservation and Recovery Act, and any wastes regulated
by applicable rules of the Railroad Commission of Texas.  The term
also includes naturally occurring radioactive material (“NORM”) concentrated,
disposed of, released or present on, resulting from, or in association with
Hydrocarbon activities.

     

    “Environmental
Condition” means: (a) any event or condition (including, without
limitation, any Release) with respect to air, land, soil, surface, subsurface
strata, surface water, ground water, or sediment that causes the Assets to
become subject to (or their owner or operator to have Liability or be
potentially liable for) any removal, remediation, or response action under, or
not be in compliance with, any Environmental Law or any Permit pursuant to any
Environmental Law; (b) the existence of any written or oral Claim pending or
threatened that reasonably may be expected to subject the Assets or the owner or
the operator of the Assets to liability in favor of any Governmental Authority
as the result of the alleged violation by such owner or operator or any other
Person of any Environmental Law as it pertains to the Assets or the existence of
any event or condition on the Assets described in this definition; (c) the
failure of the Assets to be in compliance, or the owner or operator of the
Assets to comply, in each case in all material respects with all applicable
Environmental Laws with respect to the Assets; (d) the failure of the owner or
operator of the Assets to obtain or maintain in full force and effect any Permit
required under applicable Environmental Laws with respect to the Assets; or (e)
any event or condition described in the preceding clauses (a), (b), (c), or (d) that results, or
could reasonably be expected to result, in Liability to any Governmental
Authority for any removal, remediation, or response action, or any other Person
for injury to or death of any Person, Persons, or other living thing, or damage,
loss, or destruction of property located on the Assets.  An event or
circumstance that results in the inaccuracy or breach of the representations and
warranties contained in Section 3.3(j) or
Section 3.3(k)
(insofar only as such representation and warranty relates to environmental
matters) shall constitute an Environmental Condition.  The term
“Environmental Condition” includes, without limitation, any release, disposal,
spilling, leaking, pouring, emission, emptying, discharge, injection, escape,
transmission, leaching, or dumping (collectively, a “Release”), or any
threatened Release, of any Environmental Contaminants from, or related in any
way to the use, ownership, or operation of, the Assets that has not been
remedied in accordance with all applicable Environmental Laws. Notwithstanding
the preceding terms of this definition, in no event shall any of the foregoing
items constitute an “Environmental Condition” for purposes of Section 5.3 unless
the Remediation Estimate calculated therefor as provided herein equals or
exceeds $25,000.00.

     

    “Environmental Laws”
means all applicable Laws (including, without limitation, the Comprehensive
Environmental Response, Compensation, and Liability Act, the Resource
Conservation and Recovery Act, and the Oil Pollution Act of 1990, the Texas
Solid Waste Disposal Act, and applicable rules of the Texas Railroad Commission
relating to the management or disposal of oilfield waste, in each case as
amended from time to time) relating to the protection of the public health,
welfare, and environment, worker protection, emergency planning, and/or a
community’s right to know, including, without limitation, those Laws relating to
the storage, handling, and use of chemicals and other hazardous materials, those
relating to the Release, generation, processing, treatment, storage,
transportation, disposal, or other management of waste materials of any kind,
those relating to the protection of environmentally sensitive areas, and
employee health and safety.

     

    
      
        
        

      

      
        Exhibit B
- iii

        
          

        

      

      
        
        

      

    

     

    “ERISA” means the
Employee Retirement Income Security Act of 1974, as amended and in effect from
time to time and the regulations promulgated by the United States Department of
Labor thereunder.

     

    “ERISA Affiliate”
means, with respect to the Company, any other Person that, together with the
Company, would be treated as a single employer under Section 414 of the Code and
relevant regulations promulgated by the United States Treasury
Department.

     

    “Escrow Agent” means
Amegy Bank N.A.

     

    “Exchange Act” means
the Securities Exchange Act of 1934, as amended.

     

    “Financial Statements”
means the consolidated balance sheets of the Company and the Merged Subsidiary,
as of December 31, 2007, 2006, and 2005, and the related consolidated statements
of operations, stockholder’s equity and cash flows for the years ended December
31, 2007, 2006, and 2005, and the period from May 1, 2004, to December 31, 2004,
as audited by Montgomery Coscia Greilich LLP, Certified Public Accountants (the
“Company’s
Auditors”), including in each case the notes thereto, together with the
reports thereon of the Company’s Auditors.

     

    “GAAP” means generally
accepted accounting principles for financial reporting in the United Sates, as
recognized by the U.S. Financial Accounting Standards Board (or any generally
recognized successor), applied on a basis consistent with the basis on which the
Financial Statement were prepared.

     

    “Governmental
Authority” means any governmental or quasi-governmental federal, state,
provincial, county, city, or other political subdivision of the United States,
any foreign country, or any department, bureau, agency, commission, court, or
other statutory or regulatory body or instrumentality thereof.

     

    “Hedging Transaction” means
any futures, hedge, swap, collar, put, call, floor, cap, option, or other
Contract of the Company that is intended to benefit from, relate to, or reduce
or eliminate the risk of fluctuations in the price of commodities, including
Hydrocarbons, interest rates, currencies, or securities.

     

    “Imbalance” means any
imbalance between (a) the quantity of Hydrocarbons produced from any Well and
allocated to a Person from time to time and the share of such production to
which such Person is actually entitled by virtue of its ownership interest in
such Well, (b) the quantity of Hydrocarbons produced from or allocable to any
Well delivered, and the quantity of such Hydrocarbons received, in each case for
gathering, transportation, or storage for the account of a Person, (c) the
quantity of Hydrocarbons produced from or allocable to any Well delivered for
processing or refining, and the quantity of products or residue Hydrocarbons
redelivered, in each case for the account of a Person, and (d) other similar
types of Hydrocarbon-related imbalances attributable to the Wells.

     

    “Indemnity Group”
means, for either Party, the Affiliates, officers, directors, managers, members,
partners, employees, agents, and representatives of the relevant Party and, or,
its Affiliates.

     

    “Knowledge” means (a)
with respect to Buyer, the actual knowledge of the current directors and
officers of Buyer, and (b) with respect to Seller and the Company, the
actual knowledge of the current directors and officers of Seller and the
Company.

     

    “Laws” means all
constitutions, laws, statutes, ordinances, rules, regulations, orders, and
decrees of the United States, any foreign country, and any local, state,
provincial, or federal political subdivision or agency thereof, as well as all
judgments, decrees, orders, and decisions of courts having the effect of law in
each such jurisdiction, including, without limitation, all Environmental
Laws.

     

    “Liabilities” means,
for purposes of this Agreement, any and all losses, judgments, damages,
liabilities, injuries, costs, expenses, interest, penalties, Taxes, fines,
obligations, and deficiencies.  As used herein, the term “Liabilities”
includes, without limitation, reasonable attorneys’ fees and other costs and
expenses of any Party receiving indemnification hereunder incident to the
investigation and defense of any Claim that results in litigation, or the
settlement of any Claim, or the enforcement by any Party receiving
indemnification hereunder of the relevant provisions of Article
XI.

     

    
      
        
        

      

      
        Exhibit B
- iv

        
          

        

      

      
        
        

      

    

     

    “Lien” means any
mortgage, deed of trust, pledge, security interest, encumbrance, lien, or charge
of any kind (including any agreement to grant any of the foregoing), any
conditional sale or title retention agreement, any lease in the nature thereof,
or the filing of or agreement to give any financing statement under the Uniform
Commercial Code of any jurisdiction.

     

    “Material Adverse
Effect” means (a) when used with respect to the Company, a result or
consequence that (i) would materially adversely affect the financial condition,
results of operations, or business of the Company, taken as a whole, or the
aggregate value of the Assets, (ii) would materially impair the ability of the
Company to own, hold, develop and operate the Assets, or (iii) would impair the
ability of the Company to perform its obligations hereunder or consummate the
transactions contemplated hereby or prevent or materially delay the performance
of this Agreement, excluding, however, changes resulting from commodity price
movements, normal oilfield operating, drilling and producing occurrences or
changes resulting from general economic conditions that may impact the energy
industry as a whole, and (b) when used with respect to Buyer, a result or
consequence that would materially adversely affect its ability to perform its
obligations hereunder or consummate the transactions contemplated hereby or
prevent or materially delay the performance of this Agreement, excluding,
however, changes resulting from commodity price movements, normal oilfield
operating, drilling and producing occurrences or changes resulting from general
economic conditions that may impact the energy industry as a whole.

     

    “Merged Subsidiary”
means Voyager South Texas Holdings, L.L.C., a Texas limited liability
company.

     

    “Natural Gas Partners”
means Natural Gas Partners VII, L.P., a Delaware limited
partnership.

     

    “Net Revenue Interest”
means, with respect to each Lease and Well, the interest in and to all
Hydrocarbons produced and saved from or attributable to the Lease(s) on which
such Well is located, after giving effect to all valid royalties, overriding
royalties, production payments, net profits interests, carried interests,
reversionary interests, and other similar interests constituting burdens upon,
measured by, or payable out of Hydrocarbons produced and saved from or
attributable to such Lease(s) and Wells.

     

    “Parties” means,
collectively, Seller, the Company, and Buyer.

     

    “Permitted
Encumbrances” means:

     

    (a) preferential
rights to purchase any Asset (including, without limitation, any Contract),
required non-governmental, third Person consents to assignment, and similar
agreements (i) the operation of which is not triggered by the transactions
contemplated in this Agreement, or (ii) if triggered by the transactions
contemplated herein, with respect to which, prior to the Closing, (A) waivers or
consents are obtained from the appropriate Persons, or (B) the appropriate time
period for asserting such rights has expired without an exercise of such
right;

     

    (b) required
non-governmental, third Person consents to assignment, regardless of whether the
operation of such consents is triggered by the transactions contemplated herein,
if such consent is of a type customarily obtained subsequent to a sale or
conveyance, and the failure to obtain such consent would not have a Material
Adverse Effect on the business or operations of the Company or the use or value
of the Assets;

     

    (c) Liens for
Taxes or assessments not yet delinquent or, if delinquent, those Taxes or
assessments that are being contested in good faith by proceedings diligently
conducted in the normal course of business;

     

    (d) all
rights to consent by, required notices to, filings with, or other actions by
Governmental Authorities in connection with the sale or conveyance of the
Assets, regardless of whether the operation of such consents is triggered by the
transactions contemplated herein, if the same are customarily obtained, given,
or made subsequent to such sale or conveyance;

     

    
      
        
        

      

      
        Exhibit V
- v

        
          

        

      

      
        
        

      

    

     

    (e) the
Leases, the Contracts, the Permits, and the Real Property
Interests;

     

    (f) all
easements, rights-of-way, servitudes, permits, licenses, surface leases, and
other rights to use the surface (in addition to the Real Property Interests)
affecting or pertaining to the Assets, but that are not included in the Assets
and do not interfere materially with the ownership, operation, value, or use of
the Assets;

     

    (g) lessor’s
royalties, overriding royalties, division orders, production payments, net
profits interests, carried interests, rights to recoupment, unitization,
pooling, proration, and spacing designations, orders, and agreements,
reversionary interests, and similar burdens, if the net cumulative effect
thereof does not operate to cause the Company to receive less than the Net
Revenue Interest set forth on Exhibit A-2 of all
Hydrocarbons produced, saved, and marketed from any Lease or Well or bear and
pay more than the Working Interest shown on Exhibit A-2 of all
costs and expenses of operations in respect of such Lease or Well without a
proportionate increase in the associated Net Revenue Interest;

     

    (h) any
operator’s or other inchoate or undetermined Lien or charge, whether statutory
or contractual, constituting or securing the payment of expenses which were or
will be incurred in the ordinary course of business and incidental to the
maintenance, development, production, or operation of any Asset, to the extent
the same secure amounts not yet due and payable or that are being contested in
good faith by proceedings diligently conducted in the normal course of
business;

     

    (i) any Lien
created under the terms of any Lease, Real Property Interest, or Contract to
secure the performance of the obligations of the Company (or its successors in
interest) thereunder;

     

    (j) conventional
rights of reassignment;

     

    (k) the
rights reserved to, vested in, or imposed by any Governmental Authority to
control, regulate, or monitor the Assets in any manner, and all applicable
Laws;

     

    (l) Defects
and Environmental Conditions waived in writing by Buyer or which are deemed
waived pursuant to this Agreement;

     

    (m) any
matters set forth in the Schedules to this Agreement; and

     

    (n) all other
Liens, charges, encumbrances, contracts, agreements, instruments, obligations,
and irregularities affecting any Asset that in the aggregate are not such as to
(i) interfere materially with the ownership, operation, value, or use of
such Asset for the purposes for which it is held; (ii) prevent the Company
from receiving any proceeds from the sale of any Hydrocarbons; or
(iii) cause the Company (A) to receive less than the Net Revenue
Interest set forth on Exhibit A-2 of all
Hydrocarbons produced, saved, and marketed from any Lease or Well, or
(B) bear and pay more than the Working Interest shown on Exhibit A-2 of all
costs and expenses of operations in respect of such Lease or Well without a
proportionate increase in the associated Net Revenue Interest.

     

    “Person” means any
individual, corporation, limited liability company, partnership, trust,
unincorporated organization, Governmental Authority, or any other form of
entity.

     

    “Punitive Consents”
means any third Person consent to assignment required to be obtained prior to
the transfer of an Asset that provides that, if such consent is not obtained
prior to the relevant transfer, (a) such transfer will be void or voidable, (b)
the Lease, Real Property Interest, or Contract burdened by such consent
requirement will be terminated or become terminable, or (c) the Company will
become liable for an express monetary penalty.

     

    “Reimbursement
Agreement” means the Reimbursement Agreement dated May 21, 2004, among
the Company and Natural Gas Partners.

     

    
      
        
        

      

      
        Exhibit B
- vi

        
          

        

      

      
        
        

      

    

     

    “Registration Rights
Agreement” means the Registration Rights Agreement between Seller and
Buyer on the terms set forth in Exhibit B hereto,
with such additional terms and conditions as are customary in registration
rights agreements and reasonably satisfactory to both Parties.

     

    “Remediation Estimate”
means, with respect to an Environmental Condition, the share allocable to the
owner of the Assets of the estimated cost (inclusive of Liabilities to
Governmental Authorities and other Persons reasonably anticipated to be incurred
by the Company and the other co-owners of the affected Lease, Well, Real
Property Interest, or Personal Property as the result of such Environmental
Condition), determined by Buyer in good faith, to remediate the relevant
Environmental Condition in accordance with applicable Environmental
Laws.

     

    “Retained Liabilities”
means, collectively: (a) all indebtedness of the Company described in Section 6.11, to the
extent such indebtedness is not discharged, or the Liens securing the same are
not released or terminated in full, in either case prior to the Closing as
required by Section
6.11; (b) any Claims and Liabilities arising out of the gross negligence,
willful misconduct, or fraudulent conduct of Seller or the Company; (c) all
Liabilities of the Company or the Merged Subsidiary relating to the plugging and
abandonment of wells located on the “Garza Lease”, which was sold by the Merged
Subsidiary in January 2007 as part of the like-kind exchange transaction
referred to in Note 3 of the auditors’ notes accompanying the 2007 Year End
Balance Sheet; (d) all Taxes for which Seller is responsible under Section 10.1; and (e)
all costs and expenses incurred by Seller or the Company in connection with the
transactions contemplated herein, including, without limitation, expenses
incurred by Seller or the Company in connection with the cure or remediation of
Defects or Environmental Conditions pursuant to Section
5.3.

     

    “Securities Act” means
the Securities Act of 1933, as amended.

     

    “SEC” means the
Securities Exchange Commission or any successor Governmental
Authority.

     

    “Subscription and
Contribution Agreement” means the Subscription and Contribution Agreement
dated May 21, 2004, among Seller, Natural Gas Partners, et al.

     

    “Tax” or “Taxes” means any tax
(including any income tax; capital gains tax; value-added tax; ad valorem, real
property, personal property, and other tax not based on income, sales,
production, receipts, or similar factors; production, severance, sales, excise,
and other tax attributable to Hydrocarbon production or revenues from
Hydrocarbons; Transfer Taxes; gift tax; or estate tax), levy, assessment,
tariff, duty (including any customs duty), deficiency, or other fee, and any
related charge or amount (including any fine, penalty, interest, or addition to
tax), imposed, assessed, or collected by a foreign, federal, state, or local
taxing authority or payable pursuant to any tax-sharing agreement or any other
contract relating to the sharing or payment of any such tax, levy, assessment,
tariff, duty, deficiency, or fee.

     

    “Tax Return” means any
return (including any information return), report, statement, schedule, notice,
form, or other document or information filed with or submitted to, or required
to be filed with or submitted to, any foreign, federal, state, or local taxing
authority in connection with the determination, assessment, collection, or
payment of any Tax or in connection with the administration, implementation, or
enforcement of or compliance with any legal requirement relating to any
Tax.

     

    “2008 First Quarter Balance
Sheet” means the unaudited consolidated balance sheet of the Company for
the period from January 1, 2008, through March 31, 2008, to be prepared by
Seller and the Company pursuant to Section
6.14.

     

    “2008 First Quarter Unaudited
Financial Statements” means the 2008 First Quarter Balance Sheet and the
related consolidated statement of operations, stockholders equity, and cash
flows as at March 31, 2008, to be prepared by Seller and the Company pursuant to
Section
6.14.

     

    “2007 Year End Balance
Sheet” means the audited consolidated balance sheet of the Company as at
December 31, 2007, included in the Financial Statements.

     

    
      
        
        

      

      
        Exhibit B
- vii

        
          

        

      

      
        
        

      

    

    “Voting and Transfer
Restriction Agreement” means the Voting and Transfer Restriction
Agreement dated May 21, 2004, among Seller, Natural Gas Partners, et al.

     

    “Working Capital”
means the difference, whether
positive or negative, determined as of March 31, 2008, using the financial
information and data contained in the 2008 First Quarter Balance Sheet, obtained
by subtracting
the current liabilities of the Company identified in the pro forma balance sheet
attached hereto as Schedule 9.1 as
“Working Capital Liabilities” from the current
assets of the Company identified in Schedule 9.1 as
“Working Capital Assets”, calculated in each case in accordance with GAAP
consistently applied, adjusted by and using the methodologies set forth in Schedule
9.1.

     

    “Working Interest”
means, with respect to each Lease or Well, the interest of the Company that is
burdened with the obligation to bear and pay costs of operations on or in
respect of such Lease or Well.

     


    
      
        
          


           

        

         


      

      
        Exhibit B
- viii