Exhibit
      2.5







**ASSET
      PURCHASE AND SALE AGREEMENT**




**between**




**Plantation
      Operating, LLC**


**as
      "Seller"**




**and**




**EV
      Properties, L.P.**


**as
      "Buyer"**




**Dated
      as of July 17, 2007**





**TABLE
      OF CONTENTS**




PageARTICLE
                I PROPERTIES TO BE SOLD AND PURCHASED
            1Section
                1.1.
            Assets
                Included.
            1Section
                1.2.
            Assets
                Excluded.
            2ARTICLE
                II PURCHASE PRICE
            4Section
                2.1.
            Purchase
                Price.
            4Section
                2.2.
            Accounting
                Adjustments.
            4Section
                2.3.
            Closing
                and Post-Closing Accounting Settlements.
            5Section
                2.4.
            Payment
                of Adjusted Purchase Price.
            6Section
                2.5.
            Allocation
                of Purchase Price.
            6ARTICLE
                III THE CLOSING
            6ARTICLE
                IV REPRESENTATIONS AND WARRANTIES OF SELLER
            7Section
                4.1.
            Organization
                and Existence.
            7Section
                4.2.
            Power
                and Authority.
            7Section
                4.3.
            Valid
                and Binding Agreement.
            7Section
                4.4.
            Non-Contravention.
            7Section
                4.5.
            Approvals.
            8Section
                4.6.
            Pending
                Litigation.
            8Section
                4.7.
            Contracts.
            8Section
                4.8.
            Commitments,
                Abandonments or Proposals.
            8Section
                4.9.
            Production
                Sales Contracts.
            9Section
                4.10.
            Plugging
                and Abandonment.
            9Section
                4.11.
            Permits.
            9Section
                4.12.
            Payment
                of Expenses.
            9Section
                4.13.
            Compliance
                with Laws.
            9Section
                4.14.
            Imbalances;
                Prepayments.
            10Section
                4.15.
            Intellectual
                Property.
            10Section
                4.16.
            Taxes.
            10Section
                4.17.
            Fees
                and Commissions.
            10Section
                4.18.
            Disclaimer
                of Warranties.
            11ARTICLE
                V REPRESENTATIONS AND WARRANTIES OF BUYER
            11Section
                5.1.
            Organization
                and Existence.
            11Section
                5.2.
            Power
                and Authority.
            12Section
                5.3.
            Valid
                and Binding Agreement.
            12Section
                5.4.
            Non-Contravention.
            12Section
                5.5.
            Approvals.
            12Section
                5.6.
            Pending
                Litigation.
            13Section
                5.7.
            Knowledgeable
                Purchaser.
            13Section
                5.8.
            Funds.
            13Section
                5.9.
            Fees
                and Commissions.
            13




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ARTICLE
                VI Certain Covenants of Seller Pending Closing
            13Section
                6.1.
            Access
                to Files.
            13Section
                6.2.
            Conduct
                of Operations.
            13Section
                6.3.
            Restrictions
                on Certain Actions.
            14Section
                6.4.
            Payment
                of Expenses.
            14Section
                6.5.
            Preferential
                Rights and Third Party Consents.
            14ARTICLE
                VII ADDITIONAL PRE-CLOSING AND POST-CLOSING AGREEMENTS OF BOTH
                PARTIES
            15Section
                7.1.
            Reasonable
                Best Efforts.
            15Section
                7.2.
            Notice
                of Litigation.
            15Section
                7.3.
            Notification
                of Certain Matters.
            15Section
                7.4.
            Fees
                and Expenses.
            16Section
                7.5.
            Public
                Announcements.
            16Section
                7.6.
            Casualty
                Loss Prior to Closing.
            16Section
                7.7.
            Governmental
                Bonds.
            16Section
                7.8.
            Assumed
                Obligations.
            17Section
                7.9.
            Operational
                Transition.
            17Section
                7.10.
            Books
                and Records.
            17Section
                7.11.
            Suspended
                Funds.
            17Section
                7.12.
            Letters-in-Lieu.
            17Section
                7.13.
            Logos
                and Names.
            17Section
                7.14.
            Hedges.
            17Section
                7.15.
            Further
                Assurances.
            18ARTICLE
                VIII DUE DILIGENCE EXAMINATION
            18Section
                8.1.
            Title
                Due Diligence Examination.
            18Section
                8.2.
            Environmental
                Due Diligence Examination.
            21Section
                8.3.
            Disputes
                Regarding Title Defects or Environmental Defects.
            24Section
                8.4.
            Adjustments
                to Purchase Price for Defects.
            24Section
                8.5.
            Buyer
                Indemnification.
            25ARTICLE
                IX CONDITIONS PRECEDENT TO THE OBLIGATIONS OF THE PARTIES
            26Section
                9.1.
            Conditions
                Precedent to the Obligations of Buyer.
            26Section
                9.2.
            Conditions
                Precedent to the Obligations of Seller.
            26ARTICLE
                X TERMINATION, AMENDMENT AND WAIVER
            27Section
                10.1.
            Termination.
            27Section
                10.2.
            Effect
                of Termination.
            28Section
                10.3.
            Amendment.
            28Section
                10.4.
            Waiver.
            28ARTICLE
                XI SURVIVAL OF REPRESENTATIONS, WARRANTIES AND COVENANTS;
                INDEMNIFICATION
            28Section
                11.1.
            Survival.
            28Section
                11.2.
            Seller's
                Indemnification Obligations.
            29Section
                11.3.
            Buyer's
                Indemnification Obligations.
            29Section
                11.4.
            Net
                Amounts.
            30Section
                11.5.
            Indemnification
                Proceedings.
            30Section
                11.6.
            Indemnification
                Exclusive Remedy.
            31




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Section
                11.7.
            Limited
                to Actual Damages.
            31Section
                11.8.
            Indemnification
                Despite Negligence.
            31Section
                11.9.
            Post-Closing
                Indemnification Support.
            31ARTICLE
                XII MISCELLANEOUS MATTERS
            32Section
                12.1.
            Notices.
            32Section
                12.2.
            State
                Taxes.
            33Section
                12.3.
            Entire
                Agreement.
            33Section
                12.4.
            Injunctive
                Relief.
            34Section
                12.5.
            Binding
                Effect; Assignment; No Third Party Benefit.
            34Section
                12.6.
            Severability.
            34Section
                12.7.
            Governing
                Law.
            34Section
                12.8.
            Counterparts.
            34Section
                12.9.
            Waiver
                of Consumer Rights.
            34Section
                12.10.
            Further
                Agreements Regarding the Joint Account.
            35ARTICLE
                XIII DEFINITIONS AND REFERENCES
            35Section
                13.1.
            Certain
                Defined Terms.
            35Section
                13.2.
            Certain
                Additional Defined Terms.
            39Section
                13.3.
            References,
                Titles and Construction.
            40




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**ASSET
      PURCHASE AND SALE AGREEMENT**




**THIS
      ASSET PURCHASE AND SALE AGREEMENT** dated
      July 17, 2007, is made by and between Plantation Operating, LLC, a Delaware
      limited liability company (" **Seller** "),
      and
      EV Properties, L.P., a Delaware limited partnership (" **Buyer** ").




RECITALS:




**A.**  Seller
      desires to sell, assign and convey to Buyer, and Buyer desires to purchase
      and
      accept from Seller, certain oil and gas properties and related assets located
      in
      the counties of Lea and Eddy, State of New Mexico, and the counties of Gaines
      and Winkler, State of Texas.




**B.**  Seller
      and Buyer deem it in their mutual best interests to execute and deliver this
      Agreement.




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




**AGREEMENT:**




**ARTICLE
      I**


**Properties
        To Be Sold and Purchased**


**Section
      1.1.**  **Assets
      Included.** Subject
      to Section 1.2 ,
      Seller
      agrees to sell and Buyer agrees to purchase, for the consideration hereinafter
      set forth, and subject to the terms and provisions herein contained, the
      following described properties, rights and interests:




(a)  All
      right, title and interest of Seller in and to the Leases described on Exhibit I attached
      hereto and made a part hereof for all purposes (and any ratifications and/or
      amendments to such Leases, whether or not such ratifications or amendments
      are
      described on such Exhibit I;




(b)  Without
      limitation of the foregoing but subject to Section 1.2 ,
      all
      other right, title and interest (of whatever kind or character, whether legal
      or
      equitable, and whether vested or contingent) of Seller in and to the oil, gas
      and other minerals in and under or that may be produced from the lands described
      in Exhibit I hereto
      or described in any of the Leases described on such Exhibit
      I (including interests in Leases, overriding royalties, production payments and
      net profits interests in such lands or such Leases, and fee mineral interests,
      fee royalty interests and other interests in so far as they cover such lands),
      even though Seller's interest therein may be incorrectly described in, or
      omitted from, such Exhibit
      I ;




(c)  All
      rights, titles and interests of Seller in and to, or otherwise derived from,
      all
      presently existing and valid oil, gas or mineral unitization, pooling, or
      communitization agreements, declarations and/or orders and in and to the
      properties covered and the units created thereby (including all units formed
      under orders, rules, regulations, or other official acts of any federal, state,
      or other authority having jurisdiction, voluntary unitization agreements,
      designations and/or declarations) relating to the properties described in paragraphs (a) and (b) above;









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




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




(f)  All
      of
      Seller's lease files, abstracts and title opinions, production records, well
      files, accounting records (but not including general financial and accounting
      records attributable to Seller or Seller's business), seismic records and
      surveys, gravity maps, electric logs, geological or geophysical data and
      records, and other files, documents and records of every kind and description
      which relate to the properties described above; and




(g)  All
      of
      Seller's rights, title and interests in its office building and premises located
      in Jal, New Mexico, as more particularly described in Exhibit II attached hereto
      and made a part hereof for all purposes, and all furniture, fixtures and
      equipment located thereat, including computers, telephone equipment and other
      similar items of tangible personal property.




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




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




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




(b)  All
      of
      Seller's right, title, and interest in any oil, gas, or mineral Leases,
      overriding royalties, production payments, net profits interests, fee mineral
      interests, fee royalty interests and other interests in oil, gas, and other
      minerals not expressly included in the definition of Oil and Gas Properties and
      all oil, gas or other hydrocarbon production from or attributable to the
      Properties with respect to all periods prior to the Effective Date, all proceeds
      attributable thereto, and all Hydrocarbons that, at the Effective Date, are
      owned by Seller and are in storage or within processing plants;




-2-




(c)  Any
      refund of costs, Taxes or expenses borne by Seller or Seller's predecessors
      in
      title attributable to periods prior to the Effective Date;




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




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




(f)  All
      contracts of insurance or indemnity and all production related
      bonds;




(g)  All
      claims (including insurance claims) and causes of action of Seller against
      one
      or more third parties arising from acts, omission or events occurring prior
      to
      the Effective Date and all claims under any joint interest audit attributable
      to
      any period prior to the Effective Date;




(h)  All
      limited liability company, financial, tax and legal (other than title) books
      and
      records of Seller;




(i)  Any
      geological, geophysical or seismic data, materials or information, including
      maps, interpretations records or other technical information related to or
      based
      upon any such data, materials or information, and any other asset, data,
      materials or information, the transfer of which is restricted or prohibited
      under the terms of any third party license, confidentiality agreement or other
      agreement or the transfer of which would require the payment of a fee or other
      consideration to any third party; provided, however, that if any such data,
      materials or information is transferable upon payment of a fee or other
      consideration, and if Buyer has paid such fee or other consideration prior
      to
      the Closing Date, then such data, materials or information shall be transferred
      to Buyer;




(j)  All
      leases for office premises in The Woodlands, Texas, used by Seller, and all
      furniture, fixtures and equipment located thereat, including computers,
      telephone equipment and other similar items of tangible personal
      property;




(k)  All
      of
      Seller's accounting or other administrative systems, computer software, patents,
      trade secrets, copyrights, names, trademarks, logos and other intellectual
      property;




(l)  All
      documents and instruments of Seller that may be protected by an attorney-client
      privilege (exclusive of title opinions in respect of the Oil and Gas Properties
      and all documents and instruments related to any matters constituting Assumed
      Obligations);




(m)  All
      of
      the other properties, interests and assets described on Exhibit 1.2 ,
      together with any rights, liabilities, or obligations associated with such
      assets;




(n)  The
      Existing Hedges and any gains or losses attributable thereto;




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




-3-




(p)  All
      (i)
      correspondence or other documents or instruments of Seller relating to the
      transactions contemplated hereby, (ii) lists of other prospective purchasers
      of
      Seller or the Properties compiled by Seller, (iii) bids submitted to Seller
      by
      other prospective purchasers of Seller or the Properties, (iv) analyses by
      Seller or any Affiliates thereof submitted by other prospective purchasers
      of
      Seller or the Properties, and (v) correspondence between or among Seller or
      its
      Affiliates or their respective representatives with respect to, or with, any
      other prospective purchasers of Seller or the Properties.




The
      properties and interests specified in the foregoing paragraphs (a) through (p) of this Section 1.2 are
      herein collectively called the " **Excluded
      Assets** ".
      It is
      understood that certain of the Excluded Assets may not be embraced by the term
      "Properties". The fact that certain assets have been expressly excluded in
      not
      intended to suggest that had they not been excluded they would have constituted
      Properties and may not be used to interpret the meaning of any word or phrase
      used in describing the Properties.




**ARTICLE
      II**


**Purchase
      Price**




**Section
      2.1.**  **Purchase
      Price.** **** In
      consideration of the sale of the Properties by Seller to Buyer, Buyer shall
      pay
      to Seller cash in the amount of One Hundred Sixty Million Dollars ($160,000,000)
      (the " **Purchase
      Price** ").
      The
      Purchase Price, as adjusted pursuant to this Article II and the
      other applicable provisions hereof, is herein called the " **Adjusted
      Purchase Price** ".




Section
      2.2.Accounting
      Adjustments.




(a)  Subject
      to Section
      2.2(b) ,
      appropriate adjustments shall be made between Buyer and Seller so
      that:




(i)  all
      expenses (including all drilling costs, all capital expenditures, and all
      overhead charges under applicable operating agreements, and all other overhead
      charges actually charged by third parties) for work done in the operation of
      the
      Properties after the Effective Date will be borne by Buyer, and all proceeds
      (net of applicable production, severance, and similar Taxes) from the sale
      of
      oil, gas or other minerals produced from the Oil and Gas Properties after the
      Effective Date will be received by Buyer, and




(ii)  all
      expenses for work done in the operation of the Properties before the Effective
      Date will be borne by Seller and all proceeds (net of applicable production,
      severance, and similar Taxes) from the sale of oil, gas or other minerals
      produced therefrom before the Effective Date will be received by Seller.




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




(i)  oil
      which
      was produced from the Oil and Gas Properties and which was, on the Effective
      Date, stored in tanks located on the Oil and Gas Properties (or located
      elsewhere but used to store oil produced from the Oil and Gas Properties prior
      to delivery to oil purchasers) and above pipeline connections shall be deemed
      to
      have been produced before the Effective Date,




-4-




(ii)  ad
      valorem Taxes assessed with respect to a period which the Effective Date splits
      shall be prorated based on the number of days in such period which fall on
      each
      side of the Effective Date (with the day on which the Effective Date falls
      being
      counted in the period after the Effective Date), and




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




**Section
      2.3.**  **Closing
      and Post-Closing Accounting Settlements.**




(a)  No
      later
      than five Business Days prior to the Closing Date ,
      Seller
      shall prepare and submit to Buyer a settlement statement setting forth, in
      reasonable detail, Seller’s good faith computation of the adjustments provided
      for in Section 2.2 (which
      computation shall be based on actual amounts (rather than estimated amounts)
      in
      Seller's possession. No later than three business days prior to the Closing
      Date, the parties shall determine, based upon the best information reasonably
      available to them, the amount of the adjustments provided for in Section 2.2 . **** If
      the
      amount of adjustments so determined which would result in a credit to Buyer
      exceed the amount of adjustments so determined which would result in a credit
      to
      Seller, Buyer shall receive a credit, for the amount of such excess, against
      the
      Purchase Price to be paid at Closing, and, if the converse is true, Buyer shall
      pay to Seller, at Closing (in addition to amounts otherwise then owed), the
      amount of such excess. ****




(b)  After
      the
      Closing, Seller shall review the computation of the adjustments provided for
      in Section
      2.2 which
      was made at Closing and shall submit an updated settlement statement to Buyer
      within 90 days after the Closing Date. Seller and Buyer shall thereafter meet
      at
      a mutually agreeable time (but no later than 120 days ****** after
      the
      Closing Date) to (i) review the updated settlement statement submitted by
      Seller, (ii) determine in good faith whether any additional revisions are
      necessary and (iii) make any adjustments by appropriate payments from Seller
      to
      Buyer or from Buyer to Seller. **** Following
      such additional adjustments, no further adjustments to the Purchase Price shall
      be made under this Section 2.3 .




(c)  If
      a
      dispute arises under Section 2.3(b) with
      respect to any additional adjustments (an " **Accounting
      Dispute** ")
      that
      the parties have been unable to resolve, then, at the written request of either
      Seller or Buyer (the " **Request
      Date** "),
      each
      of Seller and Buyer shall nominate and commit one of its senior officers to
      meet
      at a mutually agreed time and place not later than ten days after the Request
      Date to attempt to resolve same. If such senior officers have been unable to
      resolve such Accounting Dispute within a period of 30 days after the Request
      Date, any party shall have the right, by written notice to the other specifying
      in reasonable detail the basis for the Accounting Dispute, to resolve the
      Accounting Dispute by submission thereof to Price Waterhouse Coopers or, if
      Price Waterhouse Coopers declines to accept the engagement contemplated hereby,
      a independent public accounting firm mutually agreeable to the Parties, (Price
      Waterhouse Coopers or such other agreed upon firm, the " **Accounting
      Referee** ").
      The
      scope of the Accounting Referee's engagement shall be limited to the resolution
      of the items described in the notice of the Accounting Dispute given in
      accordance with the foregoing and the corresponding calculation of the
      adjustments pursuant to Section
      2.2 .
      The
      Accounting Referee shall be instructed by the parties to resolve the Accounting
      Dispute as soon as reasonably practicable in light of the circumstances but
      in
      no event in excess of 15 days following the submission of the Accounting Dispute
      to the Accounting Referee. The decision and award of the Accounting Referee
      shall be binding upon the parties as an award under the Federal Arbitration
      Act
      and final and nonappealable to the maximum extent permitted by law, and judgment
      thereon may be entered in a court of competent jurisdiction and enforced by
      any
      party as a final judgment of such court. The fees and expenses of the Accounting
      Referee shall be borne equally by Seller and Buyer.




-5-




**Section
      2.4.**  **Payment
      of Adjusted Purchase Price.** **** **** The
      Adjusted Purchase Price shall be paid to Seller as follows:




(a)  Contemporaneously
      with the execution and delivery of this Agreement, Buyer shall tender to the
      Joint Account cash equal to ten percent (10%) of the Purchase Price (Sixteen
      Million Dollars ($16,000,000)) as a deposit (such amount, together with all
      interest earned thereon, the " **Deposit** ").
      The
      Deposit shall (i) be distributed to Seller and applied against the Adjusted
      Purchase Price owing by Buyer at the Closing pursuant to Section 2.4(b) ,
      (ii) distributed to Seller pursuant to Section 10.2 or
      (iii) returned to Buyer pursuant to Section 10.2 ,
      as
      applicable.




(b)  At
      the
      Closing, Buyer shall pay to Seller cash equal to the Adjusted Purchase Price less the
      Deposit.




(c)  All
      cash
      payments by Buyer pursuant to this Section 2.4 shall be
      made in immediately available funds by confirmed wire transfer to a bank account
      or accounts designated by Seller or the Joint Account Holder, as
      applicable.




(d)  For
      federal income tax purposes, Buyer shall report the interest earned on the
      Deposit if it is applied against the Adjusted Purchase Price or returned to
      Buyer, and Seller shall report such interest if it is distributed to Seller
      pursuant to Section
      10.2 .




**Section
      2.5.**  **Allocation
      of Purchase Price.** On
      or
      before the Closing Date, the Buyer and Seller shall agree in writing as to
      the
      allocation of the Adjusted Purchase Price (plus any fixed liabilities assumed
      by
      the Seller or to which the Properties are subject) among the Properties under
      the methodology required by Section 1060 of the Code. The Buyer and Seller
      shall report the transactions contemplated hereby on all Tax Returns, including,
      but not limited to Form 8594, in a manner consistent with such allocation.
      If,
      contrary to the intent of the parties hereto as expressed in this Section 2.5 ,
      any
      taxing authority makes or proposes an allocation different from the allocation
      determined under this Section 2.5 ,
      Buyer
      and Seller shall cooperate with each other in good faith to contest such taxing
      authority's allocation (or proposed allocation), provided, however, that, after
      consultation with the party adversely affected by such allocation (or proposed
      allocation), the other party hereto may file such protective claims or Tax
      Returns as may be reasonably required to protect its interests.




**ARTICLE
      III**


**THE
      CLOSING**




The
      closing of the transactions contemplated hereby (the " **Closing** ")
      shall
      take place (i) at the offices of Thompson & Knight LLP, Houston, Texas,
      at 10:00 a.m. (local Houston, Texas time) on September 4, 2007, or (ii) at
      such other time or place or on such other date as the parties hereto shall
      agree. The date on which the Closing is required to take place is herein
      referred to as the " **Closing
      Date** ".
      All
      Closing transactions shall be deemed to have occurred
      simultaneously.




-6-




**ARTICLE
      IV**


**Representations
      and Warranties of Seller**




Except
      as
      provided in the Seller Disclosure Schedule, Seller hereby represents and
      warrants to Buyer as follows:




**Section
      4.1.**  **Organization
      and Existence.** Seller
      is
      a limited liability company duly formed and validly existing under the laws
      of
      the State of Delaware.




**Section
      4.2.**  **Power
      and Authority.** Seller
      has all requisite limited liability company power and authority to execute,
      deliver, and perform this Agreement and each other agreement, instrument, or
      document executed or to be executed by Seller in connection with the
      transactions contemplated hereby to which it is a party and to consummate the
      transactions contemplated hereby and thereby. The execution, delivery, and
      performance by Seller of this Agreement and each other agreement, instrument,
      or
      document executed or to be executed by Seller in connection with the
      transactions contemplated hereby to which it is a party, and the consummation
      by
      it of the transactions contemplated hereby and thereby, have been duly
      authorized by all necessary action of Seller.




**Section
      4.3.**  **Valid
      and Binding Agreement.** This
      Agreement has been duly executed and delivered by Seller and constitutes, and
      each other agreement, instrument, or document executed or to be executed by
      Seller in connection with the transactions contemplated hereby to which it
      is a
      party has been, or when executed will be, duly executed and delivered by Seller
      and constitutes, or when executed and delivered will constitute, a valid and
      legally binding obligation of Seller, enforceable against it in accordance
      with
      their respective terms, except that such enforceability may be limited by
      (a) applicable bankruptcy, insolvency, reorganization, moratorium, and
      similar laws affecting creditors' rights generally and (b) equitable
      principles which may limit the availability of certain equitable remedies (such
      as specific performance) in certain instances.




**Section
      4.4.**  **Non-Contravention.** Other
      than requirements (if any) that there be obtained consents to assignment (or
      waivers of preferential rights to purchase) from third parties, neither the
      execution, delivery, and performance by Seller of this Agreement and each other
      agreement, instrument, or document executed or to be executed by Seller in
      connection with the transactions contemplated hereby to which it is a party
      nor
      the consummation by it of the transactions contemplated hereby and thereby
      do
      and will (a) conflict with or result in a violation of Seller's Governing
      Documents, (b) conflict with or result in a violation of any provision of,
      or constitute (with or without the giving of notice or the passage of time
      or
      both) a default under, or give rise (with or without the giving of notice or
      the
      passage of time or both) to any right of termination, cancellation, or
      acceleration under, any bond, debenture, note, mortgage or indenture, or any
      material lease, contract, agreement, or other instrument or obligation to which
      Seller is a party or by which Seller or any of its properties may be bound,
      (c) result in the creation or imposition of any lien or other encumbrance
      upon the properties of Seller, or (d) violate any Applicable Law binding
      upon Seller.




-7-




**Section
      4.5.**  **Approvals.** Other
      than requirements (if any) that there be obtained consents to assignment (or
      waivers of preferential rights to purchase) from third parties and except for
      approvals required to be obtained from governmental entities who are lessors
      under leases forming a part of the Oil and Gas Properties (or who administer
      such leases on behalf of such lessors) which are customarily obtained
      post-closing, to Seller's Knowledge, no consent, approval, order, or
      authorization of, or declaration, filing, or registration with, any court or
      governmental agency or of any third party is required to be obtained or made
      by
      Seller in connection with the execution, delivery, or performance by Seller
      of
      this Agreement, each other agreement, instrument, or document executed or to
      be
      executed by Seller in connection with the transactions contemplated hereby
      to
      which it is a party or the consummation by it of the transactions contemplated
      hereby and thereby.




**Section
      4.6.**  **Pending
      Litigation.** Except
      as
      listed on Section 4.6 of the Seller Disclosure Schedule, t here
      are
      no Proceedings pending or, to Seller's Knowledge, threatened, against or
      affecting Seller or the Properties (including any actions challenging or
      pertaining to Seller's title to any of the Properties), or affecting the
      execution and delivery of this Agreement by Seller or the consummation of the
      transactions contemplated hereby by Seller.




**Section
      4.7.**  **Contracts.**




(a)  The
      Leases, Seller's interests in which comprise parts of the Oil and Gas
      Properties, and all other material contracts and agreements, licenses, Permits
      and easements, rights-of-way and other rights-of-surface use comprising any
      part
      of or otherwise relating to the Properties (such Leases and such material
      contracts, agreements, licenses, Permits, easements, rights-of-way and other
      rights-of-surface use being herein called the " **Basic
      Documents** "),
      are,
      in all material respects, in full force and effect and constitute valid and
      binding obligations of the parties thereto. Seller is not in breach or default
      (and no situation exists which with the passing of time or giving of notice
      would create a breach or default) of its obligations under the Basic Documents,
      and no breach or default by any third party (or situation which with the passage
      of time or giving of notice would create a breach or default) exists. All
      payments (including all delay rentals, royalties, shut-in royalties and valid
      calls for payment or prepayment under operating agreements) owing under Basic
      Documents have been and are being made (timely, and before the same became
      delinquent) by Seller by such third parties).




(b)  Section 4.7
      of the Seller Disclosure Schedule is a list of all material contracts and
      agreements to which any of the Oil and Gas Properties are bound (other than
      the
      Existing Hedges), including (i) joint operating agreements,
      (ii) agreements with any Affiliate of Seller, (iii) any Production
      Sales Contracts, (iv) any agreement of Seller to sell, lease, farmout or
      otherwise dispose of any of its interests in the Oil and Gas Properties other
      than conventional rights of reassignment, (v) gas balancing agreements,
      (vi) exploration agreements, (vii) pooling, unitization or
      communitization agreement, (viii) area of mutual interest agreements, and
      (ix) agreements containing seismic licenses, Permits and other rights to
      geological or geophysical data and information directly or indirectly relating
      to the Oil and Gas Properties.




**Section
      4.8.**  **Commitments,
      Abandonments or Proposals.** Seller
      (i) has incurred no expenses, and has made no commitments to make expenditures
      in connection with the ownership or operation of the Properties after the
      Effective Date, other than routine expenses incurred in the normal operation
      of
      existing wells on the Oil and Gas Properties in accordance with generally
      accepted practices in the oil and gas industry, and (ii) has not abandoned
      any
      wells (or removed any material items of equipment, except those replaced by
      items of materially equal suitability and value) on the Oil and Gas Properties
      since the Effective Date. No proposals are currently outstanding by Seller
      or
      other working interest owners to drill additional wells, or to deepen, plug
      back, or rework existing wells, or to conduct other operations for which consent
      is required under the applicable operating agreement, or to conduct any other
      operations other than normal operation of existing wells on the Oil and Gas
      Properties, or to abandon any wells, on the Oil and Gas Properties.




-8-




**Section
      4.9.**  **Production
      Sales Contracts.** There
      exist no agreements or arrangements for the sale of Hydrocarbons from the Oil
      and Gas Properties (including calls on, or other rights to purchase, production,
      whether or not the same are currently being exercised) other than
      (a) production sales contracts (in this Section, the **** " **Scheduled
      Production Sales Contracts** ")
      disclosed in Section 4.9 of the Seller Disclosure Schedule or
      (b) agreements or arrangements which are cancelable on 90 days notice or
      less without penalty or detriment. Seller is presently receiving a price for
      all
      production from (or attributable to) each Oil and Gas Property covered by a
      Scheduled Production Sales Contract as computed in accordance with the terms
      of
      such contract, and is not having deliveries of gas from any Oil and Gas Property
      subject to a Scheduled Production Sale Contract curtailed substantially below
      such property's delivery capacity.




**Section
      4.10.**  **Plugging
      and Abandonment.** Except
      for wells listed in Section 4.10 of the Seller Disclosure Schedule, there
      are no dry holes, or shut in or otherwise inactive wells, located on the Oil
      and
      Gas Properties or on lands pooled or unitized therewith, except for wells that
      have been plugged and abandoned, and except for wells drilled to depths not
      included within the Oil and Gas Properties or within units in which the Oil
      and
      Gas Properties participate which have never been completed in such
      depths.




**Section
      4.11.**  **Permits.** Seller
      has all Permits necessary or appropriate to own and operate the Properties
      as
      presently being owned and operated, and such Permits are in full force and
      effect (and are transferable to Buyer or are subject to being routinely replaced
      by a license or Permit issued to Buyer as a successor owner of the Properties).
      Seller has not received written notice of any violations in respect of any
      Permits, and there are no violations in respect of any Permit and no one has
      communicated to Seller that there are any violations in respect of any
      Permit.




**Section
      4.12.**  **Payment
      of Expenses.** All
      expenses (including all bills for labor, materials and supplies used or
      furnished for use in connection with the Properties, and all severance,
      production, ad valorem and other similar Taxes) relating to the ownership or
      operation by Seller of the Properties, have been, and are being, paid (timely,
      and before the same become delinquent) by Seller, except such expenses and
      Taxes
      as are disputed in good faith by Seller and for which an adequate accounting
      reserve has been established by Seller. Seller is not delinquent with respect
      to
      its obligations to bear costs and expenses relating to the development and
      operation of the Oil and Gas Properties.




**Section
      4.13.**  **Compliance
      with Laws.** **** The
      ownership and operation of the Properties by Seller have been in compliance
      with
      all Applicable Laws. Notwithstanding the foregoing, this Section
      4.13 does not
      relate to environmental matters (including compliance with Environmental Laws
      or
      matters that would constitute Environmental Defects), it being agreed that
      such
      matters are covered by and dealt with in Article
      VIII exclusively.




-9-




**Section
      4.14.**  **Imbalances;
      Prepayments.** Section
      4.14 of the Seller Disclosure Schedule sets forth all Imbalances as of the
      date
      set forth in such Section with respect to the Oil and Gas Properties. Seller
      is
      not obligated by virtue of a take or pay payment, advance payment or other
      similar payment (other than royalties, overriding royalties and similar
      arrangements reflected in Exhibit
      8.1(c) ),
      to
      deliver Hydrocarbons, or proceeds from the sale thereof, attributable to the
      Oil
      and Gas Properties at some future time without receiving payment therefor at
      or
      after the time of delivery.




**Section
      4.15.**  **Intellectual
      Property.** Seller
      owns or has valid licenses or other rights to use all patents, copyrights,
      trademarks, software, databases, geological data, geophysical data, engineering
      data, maps, interpretations and other technical information used by Seller
      in
      connection with its ownership and operation of the Properties as presently
      conducted, subject to the limitations contained in the agreements governing
      the
      use of the same, which limitations are customary for companies engaged in the
      business of the exploration and production of Hydrocarbons.




**Section
      4.16.**  **Taxes.**




(a)  All
      ad
      valorem and severance Taxes due and payable for the Properties through the
      year
      2006 have been paid.




(b)  With
      respect to all Taxes related to the Properties, (i) all Tax Returns
      relating to the Properties required to be filed on or before the date hereof
      by
      Seller with respect to any Taxes for any period ending on or before the date
      hereof have been timely filed with the appropriate Governmental Entity,
      (ii) such Tax Returns are true and correct in all respects, and
      (iii) all Taxes reported on such Tax Returns have been paid, except those
      being contested in good faith.




(c)  With
      respect to all Taxes related to the Properties (i) there are not currently
      in effect any extension or waiver by Seller of any statute of limitations of
      any
      jurisdiction regarding the assessment or collection of any Tax related to the
      Properties and (ii) there are no administrative Proceedings or lawsuits
      pending against the Properties or Seller with respect to the Properties by
      any
      taxing authority.




(d)  None
      of
      the Properties were bound as of the Effective Date or will be bound at Closing
      by any tax partnership agreement binding upon Seller.




**Section
      4.17.**  **Fees
      and Commissions.** Except
      for the amounts due to Simmons and Company International and Griffis and
      Associates, LLC by Seller in respect of the transactions contemplated hereby,
      no
      broker, investment banker, financial advisor or other Person is entitled to
      any
      broker's, finder's, financial advisor's or other similar fee or commission
      in
      connection with the transactions contemplated by this Agreement based upon
      arrangements made by or on behalf of Seller.




-10-




**Section
      4.18.**  **Disclaimer
      of Warranties.** Other
      than those expressly set out in this Article IV or in
      the Assignment, Seller hereby expressly disclaims any and all representations
      or
      warranties with respect to the Properties or the transactions contemplated
      hereby, and Buyer agrees that the Properties are being sold by Seller "where
      is"
      and "as is", with all faults. Specifically as a part of (but not in limitation
      of) the foregoing, Buyer acknowledges that Seller has not made, and Seller
      hereby expressly disclaims, any representation or warranty (express, implied,
      under common law, by statute or otherwise) as to the title or condition of
      the
      Properties **(INCLUDING
      ANY IMPLIED OR EXPRESS WARRANTY OF MERCHANTABILITY, FITNESS FOR A PARTICULAR
      PURPOSE, OR CONFORMITY TO MODELS OR SAMPLES OF MATERIALS)** . **OTHER
      THAN THOSE EXPRESSLY SET OUT IN THIS** **ARTICLE IV** **,
      SELLER MAKES NO REPRESENTATION OR WARRANTY AS TO (I) THE AMOUNT, VALUE,
      QUALITY, QUANTITY, VOLUME, OR DELIVERABILITY OF ANY OIL, GAS, OR OTHER MINERALS
      OR RESERVES (IF ANY) IN, UNDER, OR ATTRIBUTABLE TO THE PROPERTIES, (II) THE
      PHYSICAL, OPERATING, REGULATORY COMPLIANCE, SAFETY, OR ENVIRONMENTAL CONDITION
      OF THE PROPERTIES, BOTH SURFACE AND SUBSURFACE, INCLUDING MATTERS RELATED TO
      THE
      PRESENCE, RELEASE OR DISPOSAL OF HAZARDOUS MATERIALS, SOLID WASTES, ASBESTOS
      OR
      NATURALLY OCCURRING RADIOACTIVE MATERIALS (** " **NORM** " **),
      OR (III) THE GEOLOGICAL OR ENGINEERING CONDITION OF THE PROPERTIES OR ANY
      VALUE THEREOF. SELLER MAKES NO WARRANTY OR REPRESENTATION, EXPRESS, STATUTORY,
      OR IMPLIED, AS TO (A) THE ACCURACY, COMPLETENESS, OR MATERIALITY OF ANY
      DATA, INFORMATION, OR RECORDS FURNISHED TO BUYER IN CONNECTION WITH THE
      PROPERTIES OR OTHERWISE CONSTITUTING A PORTION OF THE PROPERTIES; (B) THE
      PRESENCE, QUALITY, AND QUANTITY OF HYDROCARBON RESERVES (IF ANY) ATTRIBUTABLE
      TO
      THE PROPERTIES; (C) THE ABILITY OF THE PROPERTIES TO PRODUCE HYDROCARBONS,
      INCLUDING PRODUCTION RATES, DECLINE RATES, AND RECOMPLETION OPPORTUNITIES;
      (D) IMBALANCE OR PAYOUT ACCOUNT INFORMATION, ALLOWABLES, OR OTHER
      REGULATORY MATTERS, (E) THE PRESENT OR FUTURE VALUE OF THE ANTICIPATED
      INCOME, COSTS, OR PROFITS, IF ANY, TO BE DERIVED FROM THE PROPERTIES,
      (F) THE ENVIRONMENTAL CONDITION OF THE PROPERTIES, (G) ANY PROJECTIONS
      AS TO EVENTS THAT COULD OR COULD NOT OCCUR, AND (H) ANY OTHER MATTERS
      CONTAINED IN OR OMITTED FROM ANY INFORMATION OR MATERIAL FURNISHED TO BUYER
      BY
      SELLER OR OTHERWISE CONSTITUTING A PORTION OF THE PROPERTIES. ANY DATA,
      INFORMATION, OR OTHER RECORDS FURNISHED BY SELLER ARE PROVIDED TO BUYER AS
      A
      CONVENIENCE AND BUYER'S RELIANCE ON OR USE OF THE SAME IS AT BUYER'S SOLE
      RISK.**




**ARTICLE
      V**


**Representations
      and Warranties of Buyer**




**Section
      5.1.**  **Organization
      and Existence.** Buyer
      is
      a limited partnership duly organized, legally existing and in good standing
      under the laws of the State of Delaware and is qualified to do business and
      in
      good standing in each of the states in which Oil and Gas Properties are located
      where the laws of such state would require a limited partnership owning the
      Oil
      and Gas Properties located in such state to so qualify. Buyer is also qualified
      to own and operate oil and gas properties with all applicable governmental
      agencies having jurisdiction over the Properties, to the extent such
      qualification is necessary or appropriate or will be necessary or appropriate
      upon consummation of the transactions contemplated hereby.




-11-




**Section
      5.2.**  **Power
      and Authority.** Buyer
      has
      full limited partnership power and authority to execute, deliver, and perform
      this Agreement and each other agreement, instrument, or document executed or
      to
      be executed by Buyer in connection with the transactions contemplated hereby
      to
      which it is a party and to consummate the transactions contemplated hereby
      and
      thereby. The execution, delivery, and performance by Buyer of this Agreement
      and
      each other agreement, instrument, or document executed or to be executed by
      Buyer in connection with the transactions contemplated hereby to which it is
      a
      party, and the consummation by it of the transactions contemplated hereby and
      thereby, have been duly authorized by all necessary limited partnership action
      of Buyer.




**Section
      5.3.**  **Valid
      and Binding Agreement.** This
      Agreement has been duly executed and delivered by Buyer and constitutes, and
      each other agreement, instrument, or document executed or to be executed by
      Buyer in connection with the transactions contemplated hereby to which it is
      a
      party has been, or when executed will be, duly executed and delivered by Buyer
      and constitutes, or when executed and delivered will constitute, a valid and
      legally binding obligation of Buyer, enforceable against it in accordance with
      their respective terms, except that such enforceability may be limited by
      (a) applicable bankruptcy, insolvency, reorganization, moratorium, and
      similar laws affecting creditors' rights generally, and (b) equitable
      principles which may limit the availability of certain equitable remedies (such
      as specific performance) in certain instances.




Section
      5.4.Non-Contravention. The
      execution, delivery, and performance by Buyer of this Agreement and each other
      agreement, instrument, or document executed or to be executed by Buyer in
      connection with the transactions contemplated hereby to which it is a party
      and
      the consummation by it of the transactions contemplated hereby and thereby
      do
      not and will not (i) conflict with or result in a violation of any
      provision of Buyer's Governing Documents, (ii) conflict with or result in a
      violation of any provision of, or constitute (with or without the giving of
      notice or the passage of time or both) a default under, or give rise (with
      or
      without the giving of notice or the passage of time or both) to any right of
      termination, cancellation, or acceleration under, any bond, debenture, note,
      mortgage, indenture, lease, contract, agreement, or other instrument or
      obligation to which Buyer is a party or by which Buyer or any of its properties
      may be bound, (iii) result in the creation or imposition of any lien or
      other encumbrance upon the properties of Buyer, or (iv) violate any
      Applicable Law binding upon Buyer.




**Section
      5.5.**  **Approvals.** Other
      than requirements (if any) that there be obtained consents to assignment (or
      waivers of preferential rights to purchase) from third parties, no consent,
      approval, order, or authorization of, or declaration, filing, or registration
      with, any court or governmental agency or of any third party is required to
      be
      obtained or made by Buyer in connection with the execution, delivery, or
      performance by Buyer of this Agreement and each other agreement, instrument,
      or
      document executed or to be executed by Buyer in connection with the transactions
      contemplated hereby to which it is a party or the consummation by it of the
      transactions contemplated hereby and thereby.




-12-




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




**Section
      5.7.**  **Knowledgeable
      Purchaser.** Buyer
      is
      a knowledgeable purchaser, owner and operator of oil and gas properties, has
      the
      ability to evaluate (and in fact has evaluated) the Properties for purchase.
      Buyer is an "accredited investor," as defined in Regulation D promulgated
      pursuant to the Securities Act, and is acquiring the Properties for its own
      account and not with the intent to make a distribution within the meaning of
      the
      Securities Act (and the rules and regulations pertaining thereto) or a
      distribution thereof in violation of any other applicable securities laws.
      Buyer
      has had access to the Properties, the officers and consultants of Seller, and
      the books, records, and files of Seller relating to the Properties. In making
      the decision to enter into this Agreement and to consummate the transactions
      contemplated hereby, Buyer has relied on its own independent due diligence
      investigation of the Properties and has been advised by and has relied solely
      on
      its own expertise and legal, land, tax, reservoir engineering, and other
      professional counsel concerning this transaction, the Properties and the value
      thereof.




**Section
      5.8.**  **Funds.** **** Buyer
      has, and at the Closing will have, sufficient cash and other sources of
      immediately available funds, as are necessary in order to pay the Adjusted
      Purchase Price to Seller at the Closing and otherwise consummate the
      transactions contemplated hereby.




**Section
      5.9.**  **Fees
      and Commissions.** No
      broker, investment banker, financial advisor or other Person is entitled to
      any
      broker's, finder's, financial advisor's or other similar fee or commission
      in
      connection with the transactions contemplated by this Agreement based upon
      arrangements made by or on behalf of Buyer.




**ARTICLE
      VI**


**Certain
      Covenants of Seller Pending Closing**




**Section
      6.1.**  **Access
      to Files.** Subject
      to the terms of the Confidentiality Agreement and Article
      IX ,
      from
      the date hereof until Closing, Seller will give Buyer, and its attorneys,
      accountants, and other authorized representatives, access at all reasonable
      times to the Properties and to any contract files, lease or other title files,
      production files, well files and other files of Seller pertaining to the
      ownership or operation of the Properties, and Seller will use its Reasonable
      Best Efforts to arrange for Buyer, and its attorneys, accountants, and other
      representatives, to have access to any such files in the office of Seller and
      to
      assist Buyer in obtaining the financial data necessary to prepare its required
      filings with the SEC.




**Section
      6.2.**  **Conduct
      of Operations.** **** From
      the
      date hereof until Closing, Seller will (i) continue the routine operation
      of the Properties in the ordinary course of business; and (ii) operate the
      Properties in compliance with all Applicable Laws and Environmental Laws and
      in
      compliance with all Basic Documents. Without expanding any obligations that
      Seller may have to Buyer, it is expressly agreed that Seller shall never have
      any liability to Buyer which respect to operation of a Property greater than
      that which it might have as the operator to a non-operator under the standard
      of
      care (including any exculpatory clauses) contained in the applicable operating
      agreement (or, in the absence of such an agreement, under the AAPL 610 (1989
      Revision) form Operating Agreement)




-13-




**Section
      6.3.**  **Restrictions
      on Certain Actions.** From
      the
      date hereof until Closing, except as set forth in Seller's development plan
      attached as Section 6.3 of the Seller Disclosure Schedule, Seller will not,
      without Buyer's prior consent in connection with the Properties:




(a)  expend
      any funds, or make any commitments to expend funds (including entering into
      new
      agreements which would obligate Seller to expend funds), or otherwise incur
      any
      other obligations or liabilities, other than to pay expenses or to incur
      liabilities in connection with routine operation of the Properties after the
      Effective Date and except in the event of an emergency requiring immediate
      action to protect life or preserve the Properties;




(b)  except
      where necessary to prevent the termination of a Lease or other material
      agreement governing Seller's interest in the Properties, propose the drilling
      of
      any additional wells, or propose the deepening, plugging back or reworking
      of
      any existing wells, or propose the conducting of any other operations which
      require consent under the applicable operating agreement, or propose the
      conducting of any other operations other than the normal operation of the
      existing wells on the Oil and Gas Properties, or propose the abandonment of
      any
      wells on the Oil and Gas Properties (and Seller agrees that it will advise
      Buyer
      of any such proposals made by third parties and will respond to each such
      proposal made by a third party in the manner requested by Buyer);




(c)  sell,
      transfer or abandon any portion of the Properties other than items of materials,
      supplies, machinery, equipment, improvements or other personal property or
      fixtures forming a part of the Properties (and then only if the same is replaced
      with an item of substantially equal suitability, free of liens and security
      interests, which replacement item will then, for the purposes of this Agreement,
      become part of the Properties); or




(d)  release
      (or permit to terminate), or modify or reduce its rights under, any oil, gas
      or
      mineral lease forming a part of the Oil and Gas Properties, or any other Basic
      Document, or enter into any new agreements which would be Basic Documents,
      or
      modify any existing production sales contracts or enter into any new production
      sales contracts, except contracts terminable by Seller with notice of 60 days
      or
      less.




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




**Section
      6.5.**  **Preferential
      Rights and Third Party Consents.** Seller
      will request, from the appropriate parties (and in accordance with the documents
      creating such rights or requirements), waivers of the preferential rights to
      purchase, or requirements that consent to assignment be obtained, which are
      identified in Section 6.5 of the Seller Disclosure Schedule. Seller shall
      have no obligation hereunder other than to so request such waivers ( i.e. ,
      Seller
      shall have no obligation to assure that such waivers are obtained), and if
      all
      such waivers (or any other waivers of preferential rights to purchase or
      requirements that consent be obtained to assignment, even if the same are not
      listed on such Section 6.5) are not obtained, Buyer may treat any waiver
      which is not obtained as a matter which causes Seller's title to not be
      sufficient to meet the standards set forth in Article VIII (exclusive of the requirements that a Title Defect must have a Title Defect
      Amount attributable thereto in excess of $15,000 and that the aggregate of
      the
      Title Defect Amounts exceeds one percent of the Purchase Price); provided,
      however, that if the unobtained waiver is a waiver of a preferential right
      to
      purchase, and if both Buyer and Seller agree to this treatment of such matter
      (and agree upon an appropriate allocation of the Purchase Price), Seller will
      tender (at the agreed allocated portion of the Purchase Price) the required
      interest in the Property affected by such unwaived preferential right to
      purchase to the holder, or holders, of such right who have elected not to waive
      such preferential right to purchase, and if, and to the extent that, such
      preferential right to purchase is exercised by such party or parties, such
      interest in such Property will be excluded from the transaction contemplated
      hereby and the Purchase Price will be reduced by the amount paid, or to be
      paid,
      by the party exercising such preferential right to purchase (and Seller shall
      collect such amount from such purchaser).




-14-




**ARTICLE
      VII**


**ADDITIONAL
      PRE-CLOSING AND POST-CLOSING AGREEMENTS OF BOTH
      PARTIES**




**Section
      7.1.**  **Reasonable
      Best Efforts.** Each
      party hereto agrees that it will not voluntarily undertake any course of action
      inconsistent with the provisions or intent of this Agreement and will use its
      Reasonable Best Efforts to take, or cause to be taken, all action and to do,
      or
      cause to be done, all things reasonably necessary, proper, or advisable under
      Applicable Law to consummate the transactions contemplated by this Agreement,
      including (i) cooperation in determining whether any consents, approvals,
      orders, authorizations, waivers, declarations, filings, or registrations of
      or
      with any Governmental Entity or third party are required in connection with
      the
      consummation of the transactions contemplated hereby; (ii) Reasonable Best
      Efforts to obtain any such consents approvals, orders, authorizations, and
      waivers and to effect any such declarations, filings, and registrations;
      (iii) Reasonable Best Efforts to cause to be lifted or rescinded any
      injunction or restraining order or other order adversely affecting the ability
      of the parties to consummate the transactions contemplated hereby;
      (iv) Reasonable Best Efforts to defend, and cooperation in defending, all
      Proceedings challenging this Agreement or the consummation of the transactions
      contemplated hereby; and (v) the execution of any additional instruments
      necessary to consummate the transactions contemplated hereby.




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




**Section
      7.3.**  **Notification
      of Certain Matters.** Until
      the
      Closing, Seller shall
      give prompt
      notice to Buyer of: (i) the occurrence or nonoccurrence of any event the
      occurrence or nonoccurrence of which, to Seller's Knowledge, would be likely
      to
      cause any representation or warranty made by Seller in Article IV to be
      untrue or inaccurate at or prior to the Closing and (ii) any failure of Seller to
      comply
      with or satisfy any covenant, condition, or agreement to be complied with or
      satisfied by Seller hereunder
      prior to Closing .
      Until
      the Closing, Buyer shall give prompt notice to Seller of: (i) the
      occurrence or nonoccurrence of any event the occurrence or nonoccurrence of
      which, to Buyer's Knowledge, would be likely to cause any representation or
      warranty contained in Article V to be
      untrue or inaccurate at or prior to the Closing, and (ii) any failure of
      Buyer to comply with or satisfy any covenant, condition, or agreement to be
      complied with or satisfied by Buyer hereunder prior to Closing. The delivery
      of
      any notice pursuant to this Section
      7.3 shall
      not be deemed to (x) modify the representations or warranties hereunder of
      the party delivering such notice, (y) modify the conditions set forth in Article IX ,
      or
      (z) limit or otherwise affect the remedies available hereunder to the party
      receiving such notice.




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




(a)  Except
      as
      otherwise provided herein, (i) all fee and expenses incurred in connection
      with
      this Agreement by Seller will be borne by and paid by Seller
      and (ii) all fees and
      expenses incurred in connection with this Agreement by Buyer will be borne
      by
      and paid by Buyer.




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




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




**Section
      7.6.**  **Casualty
      Loss Prior to Closing.** **** Seller
      shall use its Reasonable Best Efforts to cause Buyer to be named as an
      additional insured during the period between the Effective Date and the Closing
      Date on all of its liability insurance policies covering the Properties. In
      the
      event of damage by fire or other casualty to the Properties after the Effective
      Date and prior to the Closing, then this Agreement shall remain in full force
      and effect, and (unless Buyer and Seller shall otherwise agree) in such
      event:




(a)  as
      to
      each such Property so damaged which is an Oil and Gas Property, then, at Buyer's
      election, either (i) such Property shall be treated as if it had an
      asserted Title Defect associated with it and the procedure provided for in Article VIII shall be
      applicable thereto, or (ii) the Purchase Price will not be adjusted, and if
      Seller should be entitled to make any claims under any insurance policy with
      respect to such damage, Seller shall, at Seller's election, either collect
      (and
      when collected pay over to Buyer), or assign to Buyer, such claims,
      and




(b)  as
      to
      each such Property which is other than an Oil and Gas Property, Seller shall,
      at
      Seller's election, either collect (and when collected pay over to Buyer), or
      assign to Buyer, any and all insurance claims relating to such loss, and Buyer
      shall take title to the Property affected by such loss without reduction of
      the
      Purchase Price.




**Section
      7.7.**  **Governmental
      Bonds.** At
      or
      prior to Closing, Buyer shall deliver to Seller evidence that Buyer has
      completed all action necessary to permit Buyer to post bonds or other security
      immediately following the Closing with all applicable Governmental Entities
      meeting the requirements of such Governmental Entities to own, and where
      appropriate, operate, the Properties.




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




**Section
      7.9.**  **Operational
      Transition.** For
      a
      reasonable period of time after Closing, Buyer and Seller shall cooperate with
      respect to transition activities as to Properties where Buyer succeeds Seller
      as
      operator. Seller agrees to use its Reasonable Best Efforts to cause Buyer to
      be
      named successor operator of any Property where other parties own interests
      in
      the wells located thereon; **HOWEVER,
      IT IS RECOGNIZED THAT NO ASSURANCE CAN BE GIVEN BY SELLER THAT BUYER SHALL
      SUCCEED SELLER AS OPERATOR OF ANY SUCH PROPERTY.**




**Section
      7.10.**  **Books
      and Records.** At
      or
      promptly after Closing, but in no event later than 5 Business Days after the
      Closing, Seller will deliver to Buyer in electronic and hard copy format all
      relating books and records that are a part of the Properties to a location
      designated by Buyer. Buyer will promptly reimburse Seller for all reasonable
      costs of shipping or transporting such books and records. Seller (or its
      Affiliates) shall have the right to have reasonable access during Buyer's
      reasonable and customary business hours to inspect and copy (at Seller's or
      such
      Affiliate's expense) the books and records so delivered under this Section
      7.9 for the
      six-year period commencing on the Closing Date.




Section
      7.11. **Suspended
      Funds.** On
      or
      prior to Closing, Seller shall provide to Buyer a listing showing all proceeds
      from production attributable to the wells which are currently held in suspense
      by Seller (the " **Suspended
      Proceeds** ").
      With
      respect to those Properties for which Buyer will become successor operator
      on
      the Closing Date, Seller shall transfer to Buyer all Suspended Proceeds
      attributable thereto at Closing. With respect to those Properties for which
      Buyer becomes successor operator after the Closing Date, Seller shall transfer
      to Buyer all Suspended Proceeds attributable thereto on the succession date
      or
      as soon as reasonably practicable after such date. Upon receipt of Suspended
      Proceeds pursuant to this Section
      7.11 ,
      Buyer
      shall be responsible for proper distribution of such Suspended Proceeds to
      the
      parties lawfully entitled to them to the extent and only to the extent of such
      Suspended Proceeds.




**Section
      7.12.**  **Letters-in-Lieu.** Either
      at
      or after Closing (provided Buyer has given five Business Days advance request
      for same) Seller shall execute and deliver letters in lieu of transfer orders
      (or similar documentation) in form reasonably acceptable to Buyer and
      Seller.




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




**Section
      7.14.**  **Hedges.**




(a)  Seller
      will (i) cause the termination of the Existing Hedges at or prior to
      Closing and pay (at Seller's sole cost and expense) all amounts owed by Seller
      under the Existing Hedge and (B) cause to be delivered at Closing executed
      releases by the counterparty to the Existing Hedge (in a form satisfactory
      to
      the counterparty and reasonably satisfactory to Buyer) of all Liens existing
      on
      collateral pledged by Seller as security under the Existing Hedges.




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(b)  Subject
      to the provisions of this Section
      7.14(b) ,
      Seller
      covenants and agrees that, upon written request from Buyer during the period
      commencing the date hereof and expiring five Business Days prior to the Closing
      Date (the " **Buyer**  **Hedge
      Period** "),
      Seller will enter into one or more Hedges on terms and with counterparties
      determined by Buyer with respect to a percentage of Seller's forecast production
      from proved producing oil and gas reserves attributable to the Properties as
      determined by Buyer. In connection with the foregoing, Buyer will give
      reasonable advance notice to Seller of any Hedge request made under this Section 7.14(b) during
      the Buyer Hedge Period, and the parties agree to cooperate and act in good
      faith
      in documenting and effecting such Hedge. Buyer agrees to pay promptly all fees,
      costs and expenses incurred by Seller or its Affiliates in performing its
      obligations under this Section 7.14(b) .
      Further, Buyer agrees to indemnify and hold harmless Seller, its Affiliates,
      and
      its and their respective officers, partners, employees and agents from and
      against any claims, losses, damages, suits, proceedings, fees, costs and
      expenses (including attorneys', consultants' and experts' fees and expenses)
      incurred by Seller in connection with any Hedge effected pursuant to this Section
      7.14(b) ,
      including the costs of terminating such Hedge in the event that the transactions
      contemplated by this Agreement are not consummated for any reason.




**Section
      7.15.**  **Further
      Assurances.**  From
      time
      to time following the Closing, at the request of any party hereto and without
      further consideration, the other party or parties hereto shall execute and
      deliver to such requesting party such instruments and documents and take such
      other action (but without incurring any material financial obligation) as such
      requesting party may reasonably request in order to consummate more fully and
      effectively the transactions contemplated hereby.




**ARTICLE
      VIII**


**Due
      Diligence Examination**




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




(a)  From
      the
      date of this Agreement until 5:00 p.m. (local time in Houston, Texas) five
      Business Days prior to the Closing Date (the
      " **Examination
      Period** "), Seller
      shall afford to Buyer and its authorized representatives reasonable access
      during normal business hours to the office, personnel and books and records
      of
      Seller in order
      for Buyer to conduct a title examination as it may in its sole discretion choose
      to conduct with respect to the Oil and Gas Properties in order to determine
      whether Title Defects (as defined below) exist (" **Buyer's
      Title Review** ").
      Such
      books and records shall include all abstracts of title, title opinions, title
      files, ownership maps, lease files, assignments, division orders, operating
      records and agreements, well files, financial and accounting records,
      geological, geophysical and engineering records, in each case insofar as same
      may now be in existence and in the possession of Seller,
      excluding, however, any information that Seller is prohibited from disclosing
      by
      bona fide, third party confidentiality restrictions; provided, that if requested
      by Buyer, Seller shall use its Reasonable Best Efforts to obtain a waiver of
      any
      such restrictions in favor of Buyer. The cost and expense of Buyer's Title
      Review, if any, shall be borne solely by Buyer.




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(b)  If
      Buyer
      discovers any Title Defect affecting any of the Oil and Gas Properties, Buyer
      shall notify Seller prior to the expiration of the Examination Period of such
      alleged Title Defect. To be effective, such notice (" **Title
      Defect Notice** ")
      must
      (i) be in writing, (ii) be received by Seller prior to the expiration
      of the Examination Period, (iii) describe the Title Defect in reasonable
      detail (including any alleged variance in the Net Revenue Interest),
      (iv) identify the specific Oil and Gas Property affected by such Title
      Defect, and (v) include the value of such Title Defect as determined by
      Buyer in good faith. Any matters that may otherwise constitute Title Defects,
      but of which Seller has not been specifically notified by Buyer in accordance
      with the foregoing, shall be deemed to have been waived by Buyer for all
      purposes. Upon the receipt of such effective Title Defect Notice from Buyer,
      Seller shall have the option, in addition to the remedies set forth in Section 8.1(c) (the
      " **Remedies
      for Title Defects** "),
      but
      not the obligation, to attempt to cure such Title Defect at any time prior
      to
      the Closing. The Oil and Gas Property affected by such uncured Title Defect
      shall be a " **Title
      Defect Property** ".




(c)  With
      respect to each Title Defect that is not cured on or before the Closing, the
      Purchase Price shall be reduced, subject to this Article VIII, by the
      Title Defect Amount with respect to such Title Defect Property. The
      " **Title
      Defect Amount** "
      shall
      mean, with respect to a Title Defect Property, the amount by which such Title
      Defect Property is impaired as a result of the existence of one or more Title
      Defects, which amount shall be determined as follows:




(i)  The
      Title
      Defect Amount with respect to a Title Defect Property shall be determined by
      taking into consideration the " **Allocated
      Value** "
      (as set
      forth in Exhibit 8.1(c) attached
      hereto) of the Oil and Gas Property subject to such Title Defect, the portion
      of
      the Oil and Gas Property subject to such Title Defect, and the legal effect
      of
      such Title Defect on the Oil and Gas Property affected thereby; provided,
      however, that: (A) if such Title Defect is in the nature of Seller's Net
      Revenue Interest in an Oil and Gas Property being less than the Net Revenue
      Interest set forth in Exhibit 8.1(c) hereto
      and the Working Interest remains the same, then the Title Defect Amount shall
      equal the Allocated Value for the relevant Oil and Gas Property multiplied
      by
      the percentage reduction in such Net Revenue Interest as a result of such Title
      Defect or (B) if such Title Defect is in the nature of a Lien, then the
      Title Defect Amount shall equal the amount required to fully discharge such
      Lien; and




(ii)  If
      the
      Title Defect results from any matter not described in Section 8.1(c)(i) ,
      the
      Title Defect Amount shall be an amount equal to the difference between the
      value
      of the Title Defect Property affected by such Title Defect with such Title
      Defect and the value of such Title Defect Property without such Title Defect
      (taking into account the portion of the Allocated Value of the Title Defect
      Property).




(d)  As
      used
      in this Section 8.1 :




(i)  " **Defensible
      Title** "
      means,
      as of the date
      of this Agreement and the
      Closing Date (and the period in between), with respect to the Oil and Gas
      Properties, such record title and
      ownership by Seller that:




(A)  entitles
      Seller to receive and retain, without reduction, suspension or termination,
      not
      less than the percentage set forth in Exhibit 8.1(c) as
      Seller's Net Revenue Interest of all Hydrocarbons produced, saved and marketed
      from each Lease comprising such Oil and Gas Property as set forth in Exhibit 8.1(c) ,
      through
      plugging, abandonment and salvage of all wells comprising or included in such
      Oil and Gas Property, and except for changes or adjustments that result from
      the
      establishment of units, changes in existing units (or the participating areas
      therein), or the entry into of pooling or unitization agreements after the
      date
      hereof unless made in breach of the provisions of Section 6.3 ;




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(B)  obligates
      Seller to bear not greater than the percentage set forth in Exhibit 8.1(c) as
      Seller's Working Interest of the costs and expenses relating to the maintenance,
      development and operation of each Lease comprising such Oil and Gas
      Property ,
      through
      plugging, abandonment and salvage of all wells comprising or included in such
      Oil and Gas Property, and except for changes or adjustments that result from
      the
      establishment of units, changes in existing units (or the participating areas
      therein), or the entry into of pooling or unitization agreements after the
      date
      hereof unless made in breach of the provisions of Section 6.3;




(C)  is
      free
      and clear of all Liens, except Permitted Encumbrances ;




(D)  reflects
      that all consents to assignment, notices of assignment or preferential purchase
      rights which are applicable to or must be complied with in connection with
      the
      transaction contemplated by this Agreement, or any prior sale, assignment or
      the
      transfer of such Oil and Gas Property, have been obtained and complied with
      to
      the extent the failure to obtain or comply with the same could render this
      transaction or any such sale, assignment or transfer (or any right or interest
      affected thereby) void or voidable or could result in Buyer or Seller incurring
      any liability .




(ii)  " **Permitted
      Encumbrances** "
      shall
      mean (A) Liens for Taxes which are not yet delinquent or which are being
      contested in good faith and for which adequate reserves have been established;
      (B) normal and customary Liens of co-owners under operating agreements,
      unitization agreements, and pooling orders relating to the Oil and Gas
      Properties, which obligations are not yet due and pursuant to which Seller
      is
      not in default; (C) mechanic's and materialman's Liens relating to the Oil
      and Gas Properties, which obligations are not yet due and pursuant to which
      Seller is not in default; (D) Liens in the ordinary course of business
      consisting of minor defects and irregularities in title or other restrictions
      (whether created by or arising out of joint operating agreements, farm-out
      agreements, leases and assignments, contracts for purchases of Hydrocarbons
      or
      similar agreements, or otherwise in the ordinary course of business) that are
      of
      the nature customarily accepted by prudent purchasers of oil and gas properties
      and do not decrease
      the Net Revenue Interest, increase the Working Interest (without a proportionate
      increase in the Net Revenue Interest) or materially
      affect the value of any property encumbered thereby; (E) all approvals
      required to be obtained from Governmental Entities that are lessors under Leases
      forming a part of the Oil and Gas Properties (or who administer such Leases
      on
      behalf of such lessors) which are customarily obtained post-closing;
      (F) preferential rights to purchase and consent to transfer requirements of
      any Person (to
      the
      extent same
      have
      been complied with in connection with the prior sale, assignment or the transfer
      of such Oil and Gas Property and are not
      triggered by the consummation of the transactions contemplated
      herein) ; (G) Liens
      under the Senior Credit Facility (provided such Liens are released at Closing); (H) Liens under the Existing
      Hedges (provided such Liens are released at Closing); and ( I) conventional
      rights of reassignment normally actuated by an intent to abandon or release
      a
      lease and requiring notice to the holders of such
      rights .




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(iii)  " **Title
      Defect** "
      shall
      mean any particular defect in or failure of Seller's ownership of any Property:
      (A) that causes Seller to not have Defensible Title to such Oil and Gas
      Property, (B) that has attributable thereto a Title Defect Amount in excess
      of
      $15,000 and (C) regarding which a Title Defect Notice has been timely and
      otherwise validly delivered. Notwithstanding any other provision in this
      Agreement to the contrary, the following matters shall not constitute, and
      shall
      not be asserted as, a Title Defect: (A) defects or irregularities arising
      out of lack of corporate authorization unless
      Buyer has a bona fide, independent reason to believe that such lack of corporate
      authorization will result in a claim against Buyer's title; (B) defects or
      irregularities that have been cured or remedied by the applicable
      statutes of limitation or statutes for prescription; (C) defects or
      irregularities in the chain of title consisting of the failure to recite marital
      status in documents or omissions of heirship Proceedings ;
      (D) minor defects or irregularities in title which for a period of five
      years or more have not delayed or prevented Seller (or Seller's predecessor)
      from receiving its Net Revenue Interest share of the proceeds of production
      and
      have not caused Seller to bear a share of expenses and costs greater than its
      Working Interest share from each Lease, unit or Well; and (E) defects or irregularities resulting
      from or related to probate Proceedings or the lack thereof which defects or
      irregularities have been outstanding for five years or more .




(e)  If
      Seller
      and Buyer are unable to reach an agreement as to whether a Title Defect exists
      or, if it does exist, the Title Defect Amount attributable such Title Defect,
      the provisions of Section 8.3 shall be
      applicable.




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




(a)  Buyer
      shall have the right, or the right to cause an environmental consultant
      reasonably acceptable to Seller (" **Buyer's
      Environmental Consultant** "),
      to
      conduct a Phase I environmental assessment of the Properties and to conduct
      any
      further Phase I or other non-invasive environmental assessment of the Properties
      it deems appropriate, to the extent Seller has the authority to grant such
      right
      to Buyer. (" **Buyer's
      Environmental Review** ").
      No
      less than three Business Days prior to the proposed commencement date of Buyer's
      Environmental Review, Buyer shall furnish Seller with an outline of the proposed
      scope of such review, including the locations of such activities. The cost
      and
      expense of Buyer's Environmental Review, if any, shall be borne solely by Buyer.
      No Person, other than Buyer's Environmental Consultant and Buyer's employees
      may
      conduct Buyer's Environmental Review. Seller shall have the right to have
      representatives thereof present to observe Buyer's Environmental Review
      conducted in Seller's offices or on Seller's properties. Buyer agrees to conduct
      Buyer's Environmental Review in a manner so as not to unduly interfere with
      the
      business operations of Seller and in compliance with all Applicable Laws, and
      Buyer shall exercise due care with respect to Seller's properties and their
      condition.




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(b)  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 (the " **Environmental
      Information** "),
      and
      Buyer shall not (and shall cause Buyer's Environmental Consultant, if
      applicable, to not) disclose any Environmental Information to any Governmental
      Entity or other third party without the prior written consent of Seller, unless
      so required by Applicable Law). Prior to the Closing, unless otherwise required
      by Applicable Law, Buyer may use the Environmental Information only in
      connection with the transactions contemplated by this Agreement. If Buyer,
      Buyer's Environmental Consultant, if applicable, or any third party to whom
      Buyer has provided any Environmental Information become legally compelled to
      disclose any of the Environmental Information, Buyer shall provide Seller with
      prompt notice and Seller, at Seller's expense, may file any protective order,
      or
      seek any other remedy, as it deems appropriate under the circumstances. If
      this
      Agreement is terminated prior to the Closing, Buyer shall deliver the
      Environmental Information to Seller, which Environmental Information shall
      become the sole property of Seller. Upon Seller's written request to Buyer,
      Buyer shall provide copies of the Environmental Information to Seller without
      charge.




(c)  If
      Buyer
      or Buyer's Environmental Consultant, if applicable, discovers any Environmental
      Defect (as herein defined) prior to the expiration of the Examination Period,
      Buyer shall notify Seller prior to the expiration of the Examination
      Period **** of
      such
      alleged Environmental Defect. To be effective, such notice (an " **Environmental
      Defect Notice** ")
      must
      (i) be in writing; (ii) be received by Seller prior to the expiration
      of the Examination Period; (iii) describe the Environmental Defect in
      reasonable detail, including (A) the specific Properties affected by or
      associated with such Environmental Defect, (B) if applicable, a site plan
      showing the location of all field notes and the field conditions observed,
      (C) the written conclusion of Buyer's Environmental Consultant, if
      applicable, that an Environmental Defect is believed to exist, which conclusion
      shall be reasonably substantiated by the factual data gathered in Buyer's
      Environmental Review, and (D) if feasible and applicable, a separate,
      reasonably specific citation of the provisions of the Environmental Laws alleged
      to be violated and the related facts that substantiate such violation; (iv)
      describe the procedures recommended to correct, eliminate or pay the
      Environmental Defect, together with any related recommendations from Buyer's
      Environmental Consultant, if applicable; and (v) set forth Buyer's good
      faith estimate of the Environmental Defect Value, including the basis for such
      estimate. Any matters that may otherwise constitute Environmental Defects,
      but
      of which Seller has not been specifically notified by Buyer in accordance with
      the foregoing, together with any environmental matter that does not constitute
      an Environmental Defect, shall be deemed to have been waived by Buyer for
      purposes of this Section 8.2 .
      Upon
      the receipt of such effective notice from Buyer, Seller shall have the option,
      in addition to the remedy set forth in Section 8.4(c) ,
      but not
      the obligation, to attempt to cure such Environmental Defect at any time prior
      to the Closing, at the sole cost and expense of Seller. If Seller and Buyer
      are
      unable to reach an agreement as to whether an Environmental Defect exists or,
      if
      it does exist, the amount of the Environmental Defect Value attributable
      thereto, the provisions of Section 8.3 shall be
      applicable.




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




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(e)  As
      used
      in this Section 8.2 :




(i)  " **Environmental
      Defect** "
      shall
      mean, with respect to any given Property,
      a violation of Environmental Laws in effect as of the date hereof in the
      jurisdiction in which such Property is located, an obligation under
      Environmental Laws to complete immediately or promptly after the Closing any
      corrective action at the Property, or any Environmental Liability arising from
      or attributable to any condition, event, circumstance, activity, practice,
      incident, action, or omission existing or occurring prior to the Closing Date,
      or the use, release, storage, treatment, transportation, or disposal of
      Hazardous Materials prior to the Closing Date, (A) regarding
      which an Environmental Defect Notice has been timely and otherwise validly
      delivered, (B) that has an Environmental Defect Value attributable thereto
      in excess of $50,000, and (C) is not otherwise disclosed in the Executive
      Summary included with that certain report of White Buffalo Environmental
      Services dated as of December 13, 2005, a copy of which has heretofore been
      provided by Seller to Buyer.




(ii)  " **Environmental
      Defect Value** "
      shall
      mean, (A) the
      net present value of the reasonably estimated costs and expenses to correct
      such
      Environmental Defect in the most cost effective manner reasonably available,
      consistent with Environmental Laws, or (B) the net present value of the
      amount of Environmental Liabilities reasonably believed will be incurred or
      required to be paid by Seller with respect thereto. The parties recognize that
      the calculation of an Environmental Defect Value may require the use of
      assumptions and extrapolations; however, it is acknowledged and agreed that
      any
      such assumptions and extrapolations will be consistent with the known factual
      information and reasonable in nature.




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Section
      8.3.Disputes
      Regarding Title Defects or Environmental Defects. If
      Seller
      and Buyer are unable to reach an agreement as to whether a Title Defect or
      an
      Environmental Defect exists, or if it does exist, the Title Defect Amount or
      Environmental Defect Value attributable to such Title Defect or Environmental
      Defect, or disputes relating to Post-Closing Defects pursuant to Section
      8.4(c) (a
      " **Defect
      Dispute** "),
      each
      party shall have the right to submit a Defect Dispute to an independent expert
      (the " **Independent
      Expert** "),
      who
      shall serve as sole arbitrator. The Independent Expert shall be appointed by
      mutual agreement of Seller and Buyer from among candidates (including lawyers)
      with experience and expertise in the area that is the subject of such Defect
      Dispute, and failing such agreement, such Independent Expert for such Defect
      Dispute shall be selected in accordance with the Commercial Arbitration Rules
      of
      the AAA (the " **Rules** ").
      Defect Disputes to be resolved by an Independent Expert shall be resolved in
      accordance with mutually agreed procedures and rules and failing such agreement,
      in accordance with the Rules. The Independent Expert shall be instructed by
      the
      parties to resolve such Defect Dispute as soon as reasonably practicable in
      light of the circumstances. The decision and award of the Independent Expert
      shall be binding upon the parties as an award under the Federal Arbitration
      Act
      and final and nonappealable to the maximum extent permitted by law, and judgment
      thereon may be entered in a court of competent jurisdiction and enforced by
      any
      party as a final judgment of such court.




**Section
      8.4.**  **Adjustments
      to Purchase Price for Defects.**




(a)  Notwithstanding
      anything to the contrary contained in this Agreement, no adjustment of the
      Purchase Price shall be made for Title Defects unless the aggregate of the
      Title
      Defect Amounts, as determined in accordance with this Agreement, equals or
      exceeds one percent of the Purchase Price, in which event the Purchase Price
      shall be adjusted downward by the amount such Title Defect Amounts exceed one
      percent of the Purchase Price in the aggregate.




(b)  Notwithstanding
      anything to the contrary contained in this Agreement, no adjustment of the
      Purchase Price shall be made for Environmental Defects unless the aggregate
      of
      the Environmental Defect Values, as determined in accordance with this
      Agreement, equals or exceeds one percent of the Purchase Price, in which event
      the Purchase Price shall be adjusted downward by the amount such Environmental
      Defect Values exceed one percent of the Purchase Price in the
      aggregate.




(c)  Notwithstanding
      anything herein to the contrary, if Seller is unable to cure a Title Defect
      or
      an Environmental Defect (a " **Post-Closing
      Defect** ")
      on or
      prior to Closing, Seller shall have the option, by notice in writing to Buyer
      on
      or before Closing, to attempt to cure such Post-Closing Defect within the 90-day
      period commencing the Closing Date (the " **Cure
      Period** "). In
      such
      event, the transactions contemplated hereby will close as provided herein,
      but
      an amount equal to the applicable Title Defect Amount or Environmental Defect
      Value to which the Post-Closing Defect pertains shall be deducted from the
      Adjusted Purchase Price otherwise payable at Closing and paid into the Joint
      Account. The amount deposited into the Joint Account with respect to a
      Post-Closing Defect will remain therein until released as provided in Section 8.4(d) .




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(d)  Buyer
      will act in good faith and reasonably cooperate with the Seller after the
      Closing to cure a Post-Closing Defect (provided, that Buyer shall not be
      required to expend any monies in connection therewith and Seller shall conduct
      its curative activities in a manner so as to not unreasonably interfere with
      Buyer's operations). If Seller and Buyer mutually agree that a Post-Closing
      Defect has been cured, then within two Business Days after such determination,
      the amount withheld in the Joint Account with respect thereto (together with
      any
      interest earned thereon) shall be released to Seller. If Seller and Buyer
      mutually agree that a Post-Closing Defect has been partially cured, then Seller
      and Buyer shall mutually determine the portion of the amount retained in the
      Joint Account with respect thereto (together with any interest earned thereon)
      that should be paid to Buyer to compensate it for the uncured portion thereof
      (together with interest earned thereon), and the remaining portion of such
      amount shall be released to Seller (together with any interest earned thereon).
      If Seller and Buyer mutually agree that a Post-Closing Defect has not been
      cured, then within two Business Days after such determination, the amount
      withheld in the Joint Account with respect thereto (together with any interest
      earned thereon) shall be released to Buyer. If, at the end of the Cure Period,
      Seller has been unable to cure a Post-Closing Defect (and there is no dispute
      as
      to whether or not it has been cured), the amount withheld in the Joint Account
      with respect thereto (together with any interest earned thereon) shall be
      released to Buyer. If, at the end of the Cure Period, Seller and Buyer are
      unable to agree whether there has been a satisfactory resolution of a
      Post-Closing Defect, then such disagreement shall be resolved as provided in Section 8.3 .




**Section
      8.5.**  **Buyer
      Indemnification.** **BUYER
      HEREBY INDEMNIFIES AND SHALL DEFEND AND HOLD SELLER, AFFILIATES THEREOF, AND
      ITS
      AND THEIR RESPECTIVE OWNERS, OFFICERS, DIRECTORS, EMPLOYEES, AGENTS,
      REPRESENTATIVES, CONTRACTORS, SUCCESSORS, AND ASSIGNS HARMLESS FROM AND AGAINST
      ANY AND ALL** **OF
      THE FOLLOWING CLAIMS** **ARISING FROM BUYER'S INSPECTING AND OBSERVING THE
      PROPERTIES** **:** **(I)** **CLAIMS** **FOR PERSONAL INJURIES TO OR DEATH OF EMPLOYEES OF BUYER, ITS CONTRACTORS,
      AGENTS, CONSULTANTS, AND REPRESENTATIVES, AND DAMAGE TO THE PROPERTY OF BUYER
      OR
      OTHERS ACTING ON BEHALF OF BUYER, EXCEPT FOR INJURIES OR DEATH CAUSED BY THE
      GROSS NEGLIGENCE OR WILLFUL MISCONDUCT OF SELLER, AFFILIATES THEREOF OR ITS
      OR
      THEIR RESPECTIVE EMPLOYEES, CONTRACTORS, AGENTS, CONSULTANTS, OR
      REPRESENTATIVES; AND (II)** **CLAIMS** **FOR PERSONAL INJURIES TO OR DEATH OF EMPLOYEES OF SELLER OR THIRD PARTIES,
      AND
      DAMAGE TO THE PROPERTY OF SELLER OR THIRD PARTIES, TO THE EXTENT CAUSED BY
      THE
      NEGLIGENCE, GROSS NEGLIGENCE, OR WILLFUL MISCONDUCT OF BUYER.** **TO
      THE EXTENT PROVIDED ABOVE,** **THE
      FOREGOING INDEMNITY INCLUDES, AND THE PARTIES INTEND IT TO INCLUDE, AN
      INDEMNIFICATION OF THE INDEMNIFIED PARTIES FROM AND AGAINST CLAIMS ARISING
      OUT
      OF OR RESULTING, IN WHOLE OR PART, FROM THE CONDITION OF THE PROPERTY OR THE
      SOLE, JOINT, COMPARATIVE, OR CONCURRENT NEGLIGENCE OR STRICT LIABILITY OF ANY
      OF
      THE INDEMNIFIED PARTIES.** **THE PARTIES HERETO AGREE THAT THE FOREGOING COMPLIES WITH THE EXPRESS NEGLIGENCE
      RULE AND IS CONSPICUOUS.**




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**ARTICLE
      IX**


**Conditions
      Precedent to the Obligations of the Parties**




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




(a)  Each
      of
      the representations and warranties of Seller contained in Article IV shall be
      true and correct as of the date made and (having been deemed to have been made
      again on and as of the Closing Date in the same language) shall be true and
      correct on and as of the Closing Date, except (i) to the extent that any
      such representation or warranty is made as of a specified date, in which case
      such representation or warranty shall have been true and correct in all material
      respects (or, to the extent that such representations or warranties are
      qualified by materiality, in all respects) as of such specified date,
      (ii) as affected by transactions contemplated or permitted by this
      Agreement, and (iii) any such inaccuracies or breaches which, individually
      or in the aggregate, would not reasonably be expected to result in Buyer's
      Losses in excess of $5,000,000.




(b)  Seller
      shall have performed and complied in all material respects with (or compliance
      therewith shall have been waived by Buyer) each and every covenant, agreement
      and condition required by this Agreement to be performed or complied with by
      Seller prior to or at the Closing.




(c)  Seller
      shall have delivered a certificate executed by the president or chief executive
      officer of Seller dated the Closing Date, representing and certifying in such
      detail as Buyer may reasonably request that the conditions set forth in subsections (a) and (b) above
      have been fulfilled.




(d)  No
      Proceeding (excluding any Proceeding initiated by Buyer or any of its
      affiliates) shall, on the Closing Date, be pending or threatened before any
      Governmental Entity seeking to restrain, prohibit, or obtain damages or other
      relief in connection with the consummation of the transactions contemplated
      by
      this Agreement.




(e)  Buyer
      shall have received a release of Liens with respect to the Properties, executed
      in recordable form by the Senior Lender, and in form and substance agreeable
      to
      Buyer.




(f)  Buyer
      shall have received an assignment of the Properties executed and delivered
      by
      Seller, which assignment shall be substantially in the form of the instrument
      attached hereto as Exhibit 9.1(f) in all
      material respects (the " **Assignment** ").




(g)  Buyer
      shall have received a certificate of non-foreign status in form, date and
      content reasonably acceptable to Buyer, executed and delivered by Seller
      pursuant to Section 1445 of the Code and the regulations promulgated
      thereunder.




(h)  Buyer
      shall have received all other agreements, instruments and documents which are
      required by other terms of this Agreement to be executed or delivered by Seller
      or any other party to Buyer prior to or in connection with the
      Closing.




**Section
      9.2.**  **Conditions
      Precedent to the Obligations of Seller.** The
      obligations of Seller under this Agreement are subject to each of the following
      conditions being met:




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




(b)  Buyer
      shall have performed and complied in all material respects with (or compliance
      therewith shall have been waived by Seller) each and every covenant, agreement
      and condition required by this Agreement to be performed or complied with by
      Buyer prior to or at the Closing.




(c)  No
      Proceeding (excluding any Proceeding initiated by Seller or any of its
      affiliates) shall, on the Closing Date, be pending or threatened before any
      Governmental Entity seeking to restrain, prohibit, or obtain damages or other
      relief in connection with the consummation of the transactions contemplated
      by
      this Agreement.




(d)  Seller
      shall have received all other agreements, instruments and documents which are
      required by other terms of this Agreement to be executed or delivered by Buyer
      or any other party to Seller prior to or in connection with the
      Closing.




(e)  Seller
      shall have received an instrument evidencing the assumption by Buyer of the
      Assumed Obligations, in form and substance agreeable to Seller.




**ARTICLE
      X**


**Termination,
      Amendment and Waiver**




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




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




(b)  by
      either
      Seller or Buyer, if:




(i)  the
      Closing shall not have occurred on or before 5:00 p.m., local Houston, Texas
      time, on October 1, 2007, unless such failure to close shall be due to a breach
      of this Agreement by the party seeking to terminate this Agreement pursuant
      to
      this clause (i) ;
      or




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




(c)  by
      Buyer
      or Seller, if the aggregate amount of the Title Defect Amounts and the
      Environmental Defect Values exceeds fifteen percent of the Purchase Price;
      or





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




(e)  by
      Buyer,
      if (i) there shall be a breach of any representation and warranty of Seller
      contained in Article
      IV ,
      other
      than any such breaches which, individually or in the aggregate, would not
      reasonably be expected to result in Buyer's Losses in excess of $5,000,000
      or
      (ii) there shall be a material breach by Seller of any of its covenants and
      agreements contained in this Agreement, which breach, in the case of clause (i) or clause
      (ii) ,
      is not
      capable of being cured or, if it is capable of being cured, has not been cured
      by the 10 th Business
      Day following written notice to Seller from Buyer of such breach.




**Section
      10.2.**  **Effect
      of Termination.** In
      the
      event of the termination of this Agreement pursuant to Section 10.1 by
      Seller, on the one hand, or Buyer, on the other, written notice thereof shall
      forthwith be given to the other party or parties specifying the provision hereof
      pursuant to which such termination is made, and this Agreement shall become
      void
      and have no effect, except that the agreements contained in this Article X ,
      in Sections 7.4 , 7.5 and 8.5 and in Articles XII and XIII **** shall
      survive the termination hereof. Nothing contained in this Section
      10.2 shall
      relieve any party from liability for damages actually incurred as a result
      of
      any breach of this Agreement. If this Agreement is terminated by Seller pursuant
      to (i) Section 10.1(b)(i) (and
      Buyer is in material breach of this Agreement) or (ii) Section 10.1(d) ,
      Seller
      shall be entitled to the Deposit. If this Agreement is terminated under Section 10.1 for any
      other reason, the Deposit shall be
      returned to Buyer.




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




**Section
      10.4.**  **Waiver.** Seller ,
      on the
      one hand, or Buyer, on the other, may: (i) waive any inaccuracies in the
      representations and warranties of the other contained herein or in any document,
      certificate, or writing delivered pursuant hereto, or (ii) waive compliance
      by the other with any of the other's agreements or fulfillment of any conditions
      to its own obligations contained herein. Any agreement on the part of a party
      hereto to any such waiver shall be valid only if set forth in an instrument
      in
      writing signed by or on behalf of such party. No failure or delay by a party
      hereto in exercising any right, power, or privilege hereunder shall operate
      as a
      waiver thereof nor shall any single or partial exercise thereof preclude any
      other or further exercise thereof or the exercise of any other right, power,
      or
      privilege.




**ARTICLE
      XI**


Survival
      of Representations, Warranties and Covenants;Indemnification




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




(a)  The
      representations and warranties of the parties hereto contained in this Agreement
      shall terminate at Closing except that the representations made by Seller
      pursuant to Sections
      4.1 , 4.2 , 4.3 , 4.4 , 4.5 ,
      and 4.17 ,
      and the
      representations and warranties made by Buyer shall survive the Closing and
      shall
      remain in effect thereafter for the period that an Indemnified Party is entitled
      to indemnification based on a breach of such representation or warranty
      contained in this Article
      XI .





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




**Section
      11.2.**  **Seller's
      Indemnification Obligations.** Seller
      shall, on the date of Closing, agree (and, upon delivery to Buyer of the
      Assignment, shall be deemed to have agreed), subject to the limitations and
      procedures contained in this Article XI, following the Closing, to
      indemnify and hold Buyer, its Affiliates and its and their respective successors
      and permitted assigns and all of their respective stockholders, partners,
      members, managers, directors, officers, employees, agents and representatives
      harmless from and against any and all claims, obligations, actions, liabilities,
      damages or expenses (collectively, "**Buyer's
      Losses**"):




(a)  resulting
      from any a breach of the representations made by Seller in Sections
      4.1 , 4.2 , 4.3 , 4.4 , 4.5 , 4.17 or in
      any certificate delivered at Closing; or




(b)  relating
      to the Retained Obligations.




Seller's
      indemnification obligations for Buyer's Losses under this Section
      11.2 shall
      expire on the one-year anniversary of the Closing Date (the " **Survival
      Date** "),
      except as follows:




(i)  Buyer's
      Losses for which a notice is received by Seller as provided in this Agreement
      prior to such date; and




(ii)  Buyer's
      Losses relating to those items referenced in clauses
      (i) , (ii) ,
      and (iii) of the
      Retained Obligations.




**Section
      11.3.**  **Buyer's
      Indemnification Obligations.** Buyer
      shall, on the date of Closing, agree (and, upon delivery to Buyer of the
      Assignment, shall be deemed to have agreed), subject to the limitations and
      procedures contained in this Article XI, following the Closing, to
      indemnify and hold Seller, its Affiliates and its and their respective
      successors and permitted assigns and all of their respective stockholders,
      partners, members, managers, directors, officer, employees, agents and
      representatives harmless from and against any and all claims, obligations,
      actions, liabilities, damages, costs or expenses, (collectively,
      "**Seller's Losses**"):




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





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(b)  relating
      to the Assumed Obligations;




provided,
      however, that Buyer's indemnification obligations for Seller's Losses under Section
      11.3(a) shall
      expire on the Survival Date, except for Seller's Losses for which a notice
      is
      received by Buyer as provided in this Agreement prior to such date; and further
      provided, however, provided, that Buyer's indemnification obligations for
      Seller's Losses under Section 11.3(b) shall
      not expire but shall remain in effect until such Assumed Obligations are fully
      satisfied.




**Section
      11.4.**  **Net
      Amounts.** Any
      amounts recoverable by any party pursuant to this Article XI with
      respect to any Buyer's Losses or Seller's Losses, as the case may be, shall
      be
      increased by any net tax costs to the Indemnified Party (Taxes incurred with
      respect to any indemnity payment less tax benefits resulting from the
      circumstances serving as the basis for such Buyer's Loss or Seller's Loss,
      as
      the case may be) and shall be decreased by (i) any net tax benefit to the
      Indemnified Party (tax benefits less Taxes incurred, as calculated above),
      and
      (ii) insurance proceeds or other amounts relating to such Buyer's Loss or
      Seller's Loss, as the case may be, paid to such Indemnified Party by any Person
      (other than any Affiliate of such Indemnified Party) not a party to this
      Agreement.




**Section
      11.5.**  **Indemnification
      Proceedings** . In the
      event that any claim or demand for which a party (an " **Indemnifying
      Party** "),
      would
      be liable to the another party under Section 11.2 or
Section 11.3 (an " **Indemnified
      Party** ")
      is
      asserted against or sought to be collected from an Indemnified Party by a third
      party, the Indemnified Party shall with reasonable promptness notify the
      Indemnifying Party of such claim or demand, but the failure so to notify the
      Indemnifying Party shall not relieve the Indemnifying Party of its obligations
      under this Article XI, except to the extent the Indemnifying Party
      demonstrates that the defense of such claim or demand is materially prejudiced
      thereby. The Indemnifying Party shall have 30 days from receipt of the above
      notice from the Indemnified Party (in this Section 11.5, the "Notice
      Period") to notify the Indemnified Party whether or not the Indemnifying Party
      desires, at the Indemnifying Party's sole cost and expense, to defend the
      Indemnified Party against such claim or demand; provided, that the Indemnified
      Party is hereby authorized prior to and during the Notice Period to file any
      motion, answer or other pleading that it shall deem necessary or appropriate
      to
      protect its interests or those of the Indemnifying Party and not prejudicial
      to
      the Indemnifying Party. If the Indemnifying Party elects to assume the defense
      of any such claim or demand, the Indemnified Party shall have the right to
      employ separate counsel at its own expense and to participate in the defense
      thereof. If the Indemnifying Party elects not to assume the defense of such
      claim or demand (or fails to give notice to the Indemnified Party during the
      Notice Period), the Indemnified Party shall be entitled to assume the defense
      of
      such claim or demand with counsel of its own choice, at the expense of the
      Indemnifying Party. If the claim or demand is asserted against both the
      Indemnifying Party and the Indemnified Party and based on the advice of counsel
      reasonably satisfactory to the Indemnifying Party it is determined that there
      is
      a conflict of interest which renders it inappropriate for the same counsel
      to
      represent both the Indemnifying Party and the Indemnified Party, the
      Indemnifying Party shall be responsible for paying separate counsel for the
      Indemnified Party; provided, however, that the Indemnifying Party shall not
      be
      responsible for paying for more than one separate firm of attorneys to represent
      all of the Indemnified Parties, regardless of the number of Indemnified Parties.
      If the Indemnifying Party elects to assume the defense of such claim or demand,
      (i) no compromise or settlement thereof may be effected by the Indemnifying
      Party without the Indemnified Party's written consent (which shall not be
      unreasonably withheld) unless the sole relief provided is monetary damages
      that
      are paid in full by the Indemnifying Party and (ii) the Indemnifying Party
      shall have no liability with respect to any compromise or settlement thereof
      effected without its written consent (which shall not be unreasonably
      withheld).





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**Section
      11.6.**  **Indemnification
      Exclusive Remedy.** Indemnification pursuant to the provisions of this Article XI shall
      be the exclusive remedy of the parties hereto for any misrepresentation or
      breach of any warranty, covenant or agreement contained in this Agreement or
      in
      any closing document executed and delivered pursuant to the provisions hereof
      or
      thereof, or any other claim arising out of the transactions contemplated by
      this
      Agreement.




**Section
      11.7.**  **Limited
      to Actual Damages.** **** The
      indemnification obligations of the parties pursuant to this
Article XI shall be limited to actual Buyer's Losses or Seller's
      Losses, as the case may be, and shall not include incidental, consequential,
      indirect, punitive, or exemplary damages, provided that any incidental,
      consequential, indirect, punitive, or exemplary damages recovered by a third
      party (including a Governmental Entity ,
      but
      excluding any Affiliate of any party )
      against
      a party entitled to indemnity pursuant to this Article XI shall be included
      in the damages recoverable under such indemnity.




**Section
      11.8.**  **Indemnification
      Despite Negligence****.** **It
      is the express intention of the parties hereto that each party to be indemnified
      pursuant to this Article XI shall be indemnified and held harmless from and
      against all Buyer's Losses or Seller's Losses, as the case may be, as to which
      indemnity is provided for under this Article XI, notwithstanding that any
      such damages arise out of or result from the ordinary, strict, sole, or
      contributory negligence of such party and regardless of whether any other party
      (including the other parties to this Agreement) is or is not also negligent;
      provided, however, nothing herein is intended or shall be construed as requiring
      indemnification by one part for the gross negligence or willful misconduct
      of
      the other party. The parties hereto acknowledge that the foregoing complies
      with
      the express negligence rule and is conspicuous.**




**Section
      11.9.**  **Post-Closing
      Indemnification Support** .




(a)  Subject
      to the terms and conditions set forth in Section 11.9(b), Buyer shall cause
      Five Million Dollars ($5,000,000) of the Adjusted Purchase Price (such amount,
      together with any interest or proceeds earned thereon, the " **Indemnification
      Support Deposit** ")
      to be
      deposited on the Closing Date in the Joint Account.




(b)  The
      Indemnification Support Deposit will be utilized solely to satisfy any
      indemnification obligations of Seller as described in Section 11.2 and
      shall, subject to Section 11.9(c) ,
      have a
      term of one-year commencing on the Closing Date (the " **Indemnification
      Support Term** ").




(c)  If
      Buyer
      asserts a claim against the Indemnification Support Deposit under Article XI and
      Seller does not dispute such claim, Buyer shall be entitled to indemnification
      by Seller in accordance with Section
      11.2 ,
      including the right to receive from the Indemnification Support Deposit funds
      in
      an amount equal to the amount of Buyer's Losses for which Buyer is entitled
      under Article
      XI .
      If,
      however, Seller disputes such claim, Buyer shall receive the undisputed portion
      thereof, if any, but shall not be entitled to receive any such disputed portion
      thereof from the Indemnification Support Deposit with respect to such claim
      prior to resolution of such dispute in accordance with this Agreement and,
      if
      such dispute extends beyond the expiration of the Indemnification Support Term,
      the Indemnification Support Term will be automatically extended as provided
      in subsection
      (d) below.





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(d)  Provided
      the indemnification obligations (including the obligation to pay Buyer's Losses)
      of Seller to Buyer relating to all claims for indemnification under Article
      XI notified
      to Seller hereunder prior to the expiration of the Indemnification Support
      Term
      have been satisfied and no dispute then exists as to any claim for
      indemnification notified by Buyer to Seller hereunder prior to the expiration
      of
      the Indemnification Support Term, the remaining Indemnification Support Deposit
      will be released to Seller on the first Business Day immediately following
      the
      expiration of the Indemnification Support Term. To the extent there exists
      a
      claim for indemnification that has been notified by Buyer to Seller hereunder,
      but not satisfied in full in accordance herewith prior to the expiration of
      the
      Indemnification Support Term, an amount equal to the maximum possible amount
      of
      such claim or claims reasonably believed to be due or likely to be due hereunder
      by the parties hereto (or, in the event of a dispute between the parties with
      respect thereto, the higher of the two estimates) will be withheld from such
      remaining Indemnification Support Deposit and will continue to be held in the
      Joint Account until such claim or claims have been fully resolved.




(e)  Notwithstanding
      anything else herein to the contrary, in no event shall Sellers' indemnification
      obligations under (i) Section
      11.2(a) **** and
      (ii) Section
      11.2(b) ,
      with
      respect to the items described in clauses
      (iii), (iv) and (v) of the
      Retained Obligations, exceed $5,000,000 in the aggregate .




**ARTICLE
      XII**


**Miscellaneous
      Matters**




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




If
      to
      Seller:




Plantation
      Operating, LLC


2203
      Timberloch, Suite 229


The
      Woodlands, Texas 77380


Attention:
      Bill J. Walls and Thomas C. Meneley


Fax
      No.:
      (281) 298-2333





-32-





With
      ,
      prior to Closing, a copy to (which shall not constitute notice to
      Seller):




Thompson
      & Knight LLP


333
      Clay
      Street, Suite 3300


Houston,
      Texas 77002


Attention:
      Michael K. Pierce
      and Holly M. Anderson


Fax
      No.:
      Pierce — (832) 397-8049 and Anderson — (832) 397-8101




and




EnCap
      Investments, L.P.


1100
      Louisiana Street, Suite 3150


Houston,
      Texas 77002


Attention:
      Jason M. DeLorenzo


Fax
      No:
      (713) 659-6130




If
      to
      Buyer:




EV
      Properties, L.P .


1001
      Fannin, Suite 800


Houston,
      Texas 77002


Attention:
      Ms. Kathryn S. McAskie


Fax
      No.:
      (713) 659-3556




With,
      prior to Closing, a copy to (which shall not constitute notice to
      Buyer):




Haynes
      and Boone, LLP


1221
      McKinney, Suite 2100


Houston,
      Texas 77010


Attention:
      Ms. Fabené J. Welch


Fax
      No.:
      (713) 236-5578




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




**Section
      12.2.**  **State
      Taxes.** Buyer
      agrees to bear the burden of the New Mexico Gross Receipts Tax and any Transfer
      Taxes (including related penalty, interest or legal costs) due as a result
      of
      the sale of the Properties under this Agreement and shall indemnify and hold
      Seller and its affiliates, and its and their directors, officers, employees,
      attorneys, contractors and agents harmless, for any and all such taxes
      (including related penalty, interest or legal costs). Seller and Buyer agree
      to
      cooperate with each other in demonstrating that the requirements for any
      exemption from such taxes have been met.




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




-33-





**Section
      12.4.**  **Injunctive
      Relief.** The
      parties hereto acknowledge and agree that irreparable damage would occur in
      the
      event any of the provisions of this Agreement were not performed in accordance
      with their specific terms or were otherwise breached. It is accordingly agreed
      that the parties shall be entitled to an injunction or injunctions to prevent
      breaches of the provisions of this Agreement, and shall be entitled to enforce
      specifically the provisions of this Agreement, in any court of the United States
      or any state thereof having jurisdiction, in addition to any other remedy to
      which the parties may be entitled under this Agreement or at law or in
      equity.




**Section
      12.5.**  **Binding
      Effect; Assignment; No Third Party Benefit.** This
      Agreement shall be binding upon and inure to the benefit of the parties hereto
      and their respective heirs, legal representatives, successors, and permitted
      assigns. Except as otherwise expressly provided in this Agreement, neither
      this
      Agreement nor any of the rights, interests, or obligations hereunder shall
      be
      assigned by any of the parties hereto without the prior written consent of
      the
      other parties. Except as provided in Section 8.5 and Article XI ,
      nothing
      in this Agreement, express or implied, is intended to or shall confer upon
      any
      Person other than the parties hereto, and their respective heirs, legal
      representatives, successors, and permitted assigns, any rights, benefits, or
      remedies of any nature whatsoever under or by reason of this
      Agreement.




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




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




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




**Section
      12.9.**  **WAIVER
      OF CONSUMER RIGHTS.** **BUYER HEREBY WAIVES ITS RIGHTS UNDER THE TEXAS DECEPTIVE TRADE
      PRACTICES-CONSUMER PROTECTION ACT, SECTION 17.41 ET SEQ., BUSINESS AND
      COMMERCE CODE, A LAW THAT GIVES CONSUMERS SPECIAL RIGHTS AND PROTECTIONS, AND
      ANY SIMILAR LAW IN ANY OTHER STATE TO THE EXTENT SUCH ACT OR SIMILAR LAW WOULD
      OTHERWISE APPLY. AFTER CONSULTATION WITH AN ATTORNEY OF BUYER'S OWN SELECTION,
      BUYER VOLUNTARILY CONSENTS TO THIS WAIVER.**





-34-




**Section
      12.10.**  **Further** **Agreements Regarding the Joint Account.** Without
      limiting its covenants and agreements regarding the Joint Account hereunder
      (including Sections
      8.4(d), 10.2 and 11.9 ),
      if,
      under the terms and provisions of this Agreement, funds held in the Joint
      Account are required to be disbursed therefrom and paid to Buyer or Seller,
      as
      applicable (such payee, the " **Required
      Payee** "),
      (i)
      Buyer covenants and agrees that it will cause the Authorized Buyer
      Representative to execute such instructions and to take such other reasonable
      actions, in the name and on behalf Buyer, to implement the terms hereof and
      to
      cause such funds to be disbursed and paid to the Required Payee, and (ii) Seller
      covenants and agrees that it will cause the Authorized Seller Representative
      to
      execute such instructions and to take such other reasonable actions, in the
      name
      and on behalf Seller, to implement the terms hereof and to cause such funds
      to
      be disbursed and paid to the Required Payee.




**ARTICLE
      XIII**


**Definitions
      and References**




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




" **AAA** "
      means
      the American Arbitration Association.




" **Authorized
      Buyer Representative** "
      means
      any of (i) Michael E. Mercer or (ii) any other individual designated in a
      writing from Buyer to the Joint Account Holder and Seller.




" **Authorized
      Seller Representative** "
      means
      (i) Bill J. Walls or (ii) any other individual designated in a writing from
      Seller to the Joint Account Holder and Buyer.




" **Affiliate** "
      means
      any Person directly or indirectly controlling, controlled by or under common
      control with a Person.




" **Agreement** "
      means
      this Asset Purchase and Sale Agreement, as hereafter amended or modified in
      accordance with the terms hereof.




" **Applicable
      Law** "
      means
      any statute, law, principle of common law, rule, regulation, judgment, order,
      ordinance, requirement, code, writ, injunction, or decree of any Governmental
      Entity, exclusive of Environmental Laws.




" **Assumed
      Obligations** "
      means
      (i) the obligation to (x) plug and abandon or remove and dispose of
      all wells, platforms, structures, flow lines, pipelines and other equipment,
      hits and holding ponds now or hereafter located on the Oil and Gas Properties,
      (y) cap and bury all flow lines and other pipelines now or hereafter
      located on the Oil and Gas Properties, and (z) remedy all Environmental
      Liabilities with respect to the Properties, including any actual or potential
      NORM contamination or chloride or other contamination of groundwater;
      (ii) all obligations and liabilities arising from or in connection with any
      Imbalances, whether before, on or after the Effective Date; and
      (iii) without limiting the foregoing, all costs, obligations, and
      liabilities that arise under or otherwise relate to the Properties, whether
      before, on or after the Effective Date; provided, that Assumed Obligations
      does
      not mean or include Seller's obligations and liabilities with respect to the
      Retained Obligations.





-35-





" **Business
      Day** "
      means a
      day other than a Saturday, Sunday or day on which commercial banks in
      the State of Texas are authorized or required to be closed for
      business.




" **Code** "
      means
      the Internal Revenue Code of 1986, or any comparable successor statute thereto,
      as amended .




" **Confidentiality
      Agreement** "
      means
      that certain Confidentiality Agreement by and between Seller and Buyer dated
      June 11, 2007.




" **Dollars** " **or** " **$** "
      means
      U.S. Dollars.




" **Effective
      Date** "
      means
      7:00 a.m., local time at the location of the Properties, on July 1,
      2007.




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




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




" **Existing
      Hedges** "
      mean
      any Hedges affecting the Properties on the date hereof.




" **Governing
      Documents** "
      means,
      when used with respect to an entity, the documents governing the formation
      and
      operation of such entity, including (i) in the instance of a corporation,
      the articles or incorporation and bylaws of such corporation, (ii) in the
      instance of a partnership, the partnership agreement, and (iii) in the
      instance of a limited liability company, the certificate of formation and
      limited liability company agreement.




" **Governmental
      Entity** "
      means
      any court or tribunal in any jurisdiction (domestic or foreign) or any federal,
      state, county, municipal or other governmental or quasi-governmental body,
      agency, authority, department, board, commission, bureau or
      instrumentality.







-36-





" **Hazardous
      Materials** "
      means
      (i) any substance or material that is listed, defined or otherwise
      designated as a "hazardous substance" under Section 101(14) of CERCLA,
      (ii) any petroleum or petroleum products, (iii) radioactive materials,
      urea formaldehyde, asbestos and PCBs and (iv) any other chemical substance
      or waste that is regulated by any Governmental Entity under any Environmental
      Law.




" **Hedge** "
      means any
      future derivative, swap, collar, put, call, cap, option or other contract that
      is intended to benefit from, relate to, or reduce or eliminate the risk of
      fluctuations in interest rates, basis risk or the price of commodities,
      including Hydrocarbons.




" **Hydrocarbons** "
      means
      oil, gas, other liquid or gaseous hydrocarbons, or any of them or any combination thereof ,
      and all
      products and substances extracted, separated, processed and produced
      therefrom .




" **Imbalances** "
      means gas
      production, pipeline, storage, processing or other imbalance attributable to
      substances produced from the Oil and Gas Properties.




" **Joint
      Account** "
      means
      one or more (as determined by Buyer and Seller) interest bearing accounts to
      be
      established and maintained with the Joint Account Holder, which account shall
      require the signatures of both (i) an Authorized Buyer Representative and (ii)
      an Authorized Seller Representative in order to transfer therefrom any of the
      funds held therein.




" **Joint
      Account Holder** "
      means
      (i) Bank of Texas, N.A., Houston, Texas, (ii) such other bank as shall be
      mutually agreed upon by Buyer and Seller in writing or (iii) any successor
      to
      the bank referenced in either clause
      (i) or clause
      (ii) .




" **Knowledge** "
      of
      Seller (or similar references to Seller's knowledge) means all information
      of
      which either Bill J. Walls, Thomas C. Meneley, Donald P. Dotson, Sean P. Keenan
      and Donald A. Adams, the officers of Seller, or William Pilkington, field
      superintendent, has actual knowledge or should have as a result of the normal
      performance of such individual's duties and responsibilities as an officer
      or
      field superintendent (as applicable) in the ordinary course.




" **Leases** "
      means
      oil, gas or mineral leases, leasehold estates, operating rights and other rights
      authorizing the owner thereof to explore or drill for and produce Hydrocarbons
      and other minerals, contractual rights to acquire any such of the foregoing
      interest, which have been earned by performance, and fee mineral, royalty and
      overriding royalty interest ,
      net
      profits interest, production payments and other interest payable out of
      Hydrocarbon production ,
      in each
      case, in which Seller has an interest.




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




" **Net
      Revenue Interest** "
      means
      an interest (expressed as a percentage or decimal fraction) in and to all
      Hydrocarbons produced and saved from or attributable to an Oil and Gas
      Property.




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





-37-





" **Person** "
      means
      any individual, corporation, partnership, joint venture, association,
      joint-stock company, trust, enterprise, unincorporated organization, or
      Governmental Entity.




" **Proceedings** "
      means
      all proceedings, actions, claims, suits, investigations, and inquiries by or
      before any arbitrator or Governmental Entity.




" **Reasonable
      Best Efforts** "
      means a
      party's reasonable best efforts in accordance with reasonable commercial practic e.




" **Retained
      Obligations** "
      means
      Seller's obligations and liabilities (i) under the Senior Credit Facility or
      any
      amounts that may be due and owing Seller's officers, employees or owners, (ii)
      with respect to the Excluded Assets, (iii) with respect to the Rice Operating
      Company New Mexico Taxation and Revenue Department Tax Audit described in
      Section 4.6 of the Seller Disclosure Schedule for all periods prior to the
      Effective Date, (iv) with respect to the Cooper Lawsuit described in Section
      4.6
      of the Seller Disclosure Schedule and (v) with respect to royalties, taxes
      and
      contractual monetary obligations attributable to the Properties for all periods
      prior to the Effective Date.




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




" **Seller
      Disclosure Schedule** "
      shall
      mean a schedule delivered by Seller to Buyer on the date hereof which sets
      forth
      additional information regarding the representations and warranties of Seller
      contained herein and information called for hereby.




" **Senior
      Credit Facility** "
      means
      that certain credit facility dated December 15, 2005, by and between Seller
      and
      Bank Paribas.




" **Senior
      Lender** "
      means
      the lenders party to the Senior Credit Facility.




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




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




" **Transfer**  **Taxes** " shall
      mean any real property transfer, stamp, documentary, recording, registration,
      conveyance, stock transfer, intangible property transfer, personal property
      transfer, gross receipts, registration, duty, securities transactions or similar
      fees or taxes or governmental charges other than sales tax (together with any
      interest or penalty, addition to tax or additional amount imposed) as levied
      by
      any governmental body in connection with the transaction contemplated by this
      Agreement, including without limitation, any payments made in lieu of such
      taxes
      or governmental charges which become payable in connection with the transaction
      contemplated by this Agreement.





-38-





" **Working
      Interest** "
      means
      the percentage of costs and expenses attributable to the maintenance,
      development and operation of an Oil and Gas Property.




**Section
      13.2.**  **Certain
      Additional Defined Terms.** In
      addition to such terms as are defined in the preamble to this Agreement and
      in Section 13.1 ,
      the
      following terms are used in this Agreement as defined in the Articles or
      Sections set forth opposite such terms:




**Defined
                Term**
            **Reference**Accounting
                Dispute
            Section
                2.3(c)Accounting
                Referee
            Section
                2.3(c)Adjusted
                Purchase Price
            Section
                2.1Allocated
                Value
            Section
                8.1(c)(i)Assignment
            Section
                9.1(f)Basic
                Documents
            Section
                4.7Buyer
                Hedge Period
            Section
                7.14(b)Buyer's
                Environmental Consultant
            Section
                8.2(a)Buyer's
                Environmental Review
            Section
                8.2(a)Buyer's
                Losses
            Section
                11.2Buyer's
                Title Review
            Section
                8.1(a)Closing
            Article
                IIIClosing
                Date
            Article
                IIICure
                Period
            Section
                8.4(c)Defect
                Dispute
            Section
                8.3Defects
                Escrow
            Section
                8.4(c)Defects
                Escrow Agent
            Section
                8.4(c)Defects
                Escrow Agreement
            Section
                8.4(c)Defensible
                Title
            Section
                8.1(d)(i)Deposit
            Section
                2.4(c)Environmental
                Defect
            Section
                8.2(e)(i)Environmental
                Defect Notice
            Section
                8.2(c)Environmental
                Defect Value
            Section
                8.2(e)(ii)Environmental
                Information
            Section
                8.2(b)Examination
                Period
            Section
                8.1(a)Excluded
                Assets
            Section
                1.2Indemnification
                Support Deposit
            Section
                11.9(a)Indemnification
                Support Term
            Section
                11.9(b)Indemnified
                Party
            Section
                11.5Indemnifying
                Party
            Section
                11.5Independent
                Expert
            Section
                8.3Notice
                Period
            Section
                11.5Oil
                and Gas Properties
            Section
                1.1Permitted
                Encumbrances
            Section
                8.1(d)(ii)Post-Closing
                Defect
            Section
                8.4(c)Properties
            Section
                1.1Purchase
                Price
            Section
                2.1Remedies
                for Title Defects
            Section
                8.1(b)Request
                Date
            Section
                2.3(c)Required
                Payee
            Section
                12.11





-39-





**Defined
                Term**
            **Reference**Rules
            Section
                8.3Scheduled
                Production Sales Contracts
            Section
                4.9Seller's
                Losses
            Section
                11.3Suspended
                Proceeds
            Section
                7.11Survival
                Date
            Section
                11.2Title
                Defect
            Section
                8.1(d)(iii)Title
                Defect Amount
            Section
                8.1(c)Title
                Defect Notice
            Section
                8.1(b)Title
                Defect Property
            Section
                8.1(b)




**Section
      13.3.**  **References,
      Titles and Construction.**




(a)  All
      references in this Agreement to articles, sections, subsections and other
      subdivisions refer to corresponding articles, sections, subsections and other
      subdivisions of this Agreement unless expressly provided otherwise.




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




(c)  The
      words
      "this Agreement", "this instrument", "herein", "hereof", "hereby", "hereunder"
      and words of similar import refer to this Agreement as a whole and not to any
      particular subdivision unless expressly so limited.




(d)  Words
      in
      the singular form shall be construed to include the plural and vice  versa ,
      unless
      the context otherwise requires. Pronouns in masculine, feminine and neuter
      genders shall be construed to include any other gender.




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




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




(g)  The
      word
      "or" is not intended to be exclusive and the word "includes" and its derivatives
      means "includes, but is not limited to" and corresponding derivative
      expressions.




(h)  No
      consideration shall be given to the fact or presumption that one party had
      a
      greater or lesser hand in drafting this Agreement.




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




(j)  Exhibits I , 1.2 , 8.1(c) and 9.1(f) are
      attached hereto. Seller covenants and agrees to furnish Buyer Exhibit II
      to
      this Agreement (in a form reasonably acceptable to Buyer) within five Business
      Days after the date hereof. Each such Exhibit is incorporated herein by
      reference for all purposes and references to this Agreement shall also include
      such Exhibit unless the context in which used shall otherwise
      require.




[REMAINDER
      OF PAGE INTENTIONALLY LEFT
      BLANK]





-40-




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




**SELLER:****PLANTATION
              OPERATING, LLC**By:
            /s/
                Thomas C. MeneleyName:
            Thomas
                C. MeneleyTitle:
            PresidentandBy:
            /s/
                Bill J. WallsName:
            Bill
                J. WallsTitle:
            CEO
                and Secretary**BUYER:****EV
                PROPERTIES, L.P.,****a
                Delaware limited partnership**By:
            EV
                Properties GP, LLC,Its
                general partnerBy:
            EV
                Energy Partners, L.P.,Its
                sole memberBy:
            EV
                Energy GP, L.P.,Its
                general partnerBy:
            EV
                Management, LLC,Its
                general partnerBy:
            /s/
                Kathryn S. McAskieName:
            Kathryn
                S. McAskieTitle:
            Senior Vice President of Acquisitions And Divestitures




**SIGNATURE
      PAGE TO ASSET PURCHASE AND SALE AGREEMENT**











EXHIBIT
      I











EXHIBIT
      1.2











EXHIBIT
      8.1( c)











EXHIBIT
      9.1( f )


FORM
      OF
      ASSIGNMENT




NOTICE
      OF
      CONFIDENTIALITY RIGHTS: IF YOU ARE A NATURAL PERSON, YOU MAY REMOVE OR STRIKE
      ANY OF THE FOLLOWING INFORMATION FROM THIS INSTRUMENT BEFORE IT IS FILED FOR
      RECORD IN THE PUBLIC RECORDS: YOUR SOCIAL SECURITY NUMBER OR YOUR DRIVER'S
      LICENSE NUMBER.





ASSIGNMENT
      AND BILL OF SALE




Plantation
      Petroleum Operating, LLC (herein called "Grantor"), for Ten Dollars and other
      good and valuable consideration (the receipt and sufficiency of which are hereby
      acknowledge), does hereby GRANT, BARGAIN, SELL, CONVEY, ASSIGN, TRANSFER, SET
      OVER, AND DELIVER unto _____________ (herein called "Grantee"), whose address
      is **__________________________,** the
      following described properties, rights and interests:





(a)  All
      rights, titles and interest of Grantor in and to oil, gas and/or mineral leases
      described on Exhibit A hereto (and any ratifications and/or amendments to such
      leases, whether or not such ratifications or amendments are described on such
      Exhibit A), insofar as such leases (and such ratifications and amendments)
      cover
      the lands and depths described on Exhibit A; and





(b)  All
      other
      right, title and interest (of whatever kind or character, whether legal or
      equitable, and whether vested or contingent) of Assignor in and to the oil,
      gas
      and other minerals in and under or that may be produced from the lands described
      in Exhibit A hereto or described in any of the Leases described on such
      Exhibit A (including interests in Leases, overriding royalties, production
      payments and net profits interests in such lands or such Leases, and fee mineral
      interests, fee royalty interests and other interests in so far as they cover
      such lands), even though Assignor's interest therein may be incorrectly
      described in, or omitted from, such Exhibit A;





(c)  All
      rights, titles and interests of Grantor in and to, or otherwise derived from,
      all presently existing and valid oil, gas or mineral unitization, pooling,
      or
      communitization agreements, declarations and/or orders and in and to the
      properties covered and the units created thereby (including all units formed
      under orders, rules, regulations, or other official acts of any federal, state,
      or other authority having jurisdiction, voluntary unitization agreements,
      designations and/or declarations) relating to the properties described in
      paragraphs (a) and (b) above; and





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





(e)  All
      rights, titles and interests of Grantor in and to all materials, supplies,
      machinery, equipment, improvements and other personal property and fixtures
      (including all wells, wellhead equipment, pumping units, flowlines, tanks,
      buildings, injection facilities, saltwater disposal facilities, compression
      facilities, gathering systems, and other equipment), and all easements,
      rights-of-way, surface leases and other surface rights, all permits and
      licenses, and all other appurtenances being used or held for use in connection
      with, or otherwise related to, the exploration, development, operation or
      maintenance of any of the properties described in paragraphs (a), (b), (c)
      and (d) above, or the treatment, storage, transportation or marketing of
      production therefrom (or allocated thereto);











(f)  All
      of
      Grantor's lease files, abstracts and title opinions, production records, well
      files, and accounting records (but not including general financial and
      accounting records attributable to Grantor or Grantor's business) seismic
      records and surveys, gravity maps, electric logs, geological or geophysical
      data
      and records, and other files , documents and records of every kind and
      description which relate to the properties described above; and





(g)  All
      rights, titles and interest of Grantor in and to that certain office building
      and premises located in Jal, New Mexico as more particularly described in
      Exhibit B hereto and all furniture and equipment located thereat, including
      computers, telephone equipment and other similar items of tangible personal
      property.





(h)  The
      properties, rights and interests specified in the foregoing paragraphs (a),
      (b),
      (c), (d), (e), (f) and (g) exclusive of the properties, rights and interests
      excluded below, are herein sometimes collectively called the "Subject
      Properties."





(i)  The
      Subject Properties do not include, and there is hereby expressly excepted and
      excluded therefrom and reserved to Grantor, all other assets, properties, and
      business of Grantor, including the following:





(1)  All
      trade
      credits attributable to the Subject Properties with respect to all periods
      prior
      to the Effective Date (as hereinafter defined);





(2)  All
      of
      Grantor's right, title, and interest in any oil, gas, or mineral leases,
      overriding royalties, production payments, net profits interests, fee mineral
      interests, fee royalty interests and other interests in oil, gas, and other
      minerals not expressly included in Subject Properties and all oil, gas or other
      hydrocarbon production from or attributable to the Subject Properties with
      respect to all periods prior to the Effective Date, all proceeds attributable
      thereto, and all hydrocarbons that, at the Effective Date, are owned by Grantor
      and are in storage or within processing plants;





(3)  Any
      refund of costs, taxes or expenses borne by Grantor or Grantor's predecessors
      in
      title attributable to periods prior to the Effective Date;





(4)  Any
      and
      all proceeds from the settlements of contract disputes with purchasers of
      hydrocarbons from the Subject Properties, including settlement of take-or-pay
      disputes, insofar as said proceeds are attributable to periods of time prior
      to
      the Effective Date;




(5)  Any
      and
      all proceeds from settlements with regard to reclassification of gas produced
      from the Subject Properties, insofar as said proceeds are attributable to
      periods of time prior to the Effective Date;





(6)  All
      claims (including insurance claims) and causes of action of Grantor against
      one
      or more third parties arising from acts, omission or events occurring prior
      to
      the Effective Date and all claims under any joint interest audit attributable
      to
      any period prior to the Effective Date;











(7)  All
      limited liability company, financial, tax and legal (other than title) books
      and
      records of Grantor;





(8)  Any
      geological, geophysical or seismic data, materials or information, including
      maps, interpretations records or other technical information related to or
      based
      upon any such data, materials or information, and any other asset, data,
      materials or information, the transfer of which is restricted or prohibited
      under the terms of any third party license, confidentiality agreement or other
      agreement or the transfer of which would require the payment of a fee or other
      consideration to any third party;





(9)  All
      leases for office premises in The Woodlands, Texas used by Grantor, and all
      furniture, fixtures and equipment located thereat, including computers,
      telephone equipment and other similar items of tangible personal
      property;





(10)  All
      of
      Grantor's accounting or other administrative systems, computer software,
      patents, trade secrets, copyrights, names, trademarks, logos and other
      intellectual property;





(11)  All
      documents and instruments of Grantor that may be protected by an attorney-client
      privilege (exclusive of title opinions in respect of the Subject Properties);





(12)  All
      of
      the other assets described on Exhibit 1.2, together with any rights,
      liabilities, or obligations associated with such assets;





(13)  All
      hedging transactions affecting the Subject Properties as of the date of the
      Purchase Agreement (as hereinafter defined) and any gains or losses attributable
      thereto; and





(14)  All
      (i)
      correspondence or other documents or instruments of Grantor relating to the
      transactions contemplated hereby, (ii) lists of other prospective purchasers
      of
      Grantor or the Subject Properties compiled by Grantor, (iii) bids submitted
      to
      Grantor by other prospective purchasers of Grantor or the Subject Properties,
      (iv) analyses by Grantor or any Affiliates thereof submitted by other
      prospective purchasers of Grantor or the Subject Properties, and (v)
      correspondence between or among Grantor or its affiliates or their respective
      representatives with respect to, or with, any other prospective purchasers
      of
      Grantor or the Subject Properties.





(j)  This
      Assignment shall become effective at 7:00 a.m., local time, at the location
      of
      the Subject Properties, on July 1, 2007, referred to in this Assignment as
      the
      "Effective Date".





TO
      HAVE
      AND TO HOLD the Subject Properties unto Grantee, and its successors and assigns,
      forever.











**GRANTOR
      AGREES TO WARRANT AND FOREVER DEFEND TITLE TO THE SUBJECT PROPERTIES UNTO
      GRANTEE AND ITS SUCCESSORS AND ASSIGNS, AGAINST THE CLAIMS AND DEMANDS OF ALL
      PERSONS CLAIMING, OR TO CLAIM THE SAME, OR ANY PART THEREOF BY, THROUGH OR
      UNDER
      GRANTOR, BUT NOT OTHERWISE. THE EXPRESS WARRANTY OF TITLE SET FORTH ABOVE IS
      EXCLUSIVE, AND IN LIEU OF ALL OTHER REPRESENTATIONS AND WARRANTIES, EXPRESS,
      IMPLIED, STATUTORY OR OTHERWISE, AND GRANTOR EXPRESSLY DISCLAIMS ANY AND ALL
      SUCH OTHER REPRESENTATIONS AND WARRANTIES. WITHOUT LIMITATION OF THE FOREGOING,
      THE SUBJECT PROPERTIES ARE CONVEYED PURSUANT HERETO WITHOUT ANY WARRANTY OR
      REPRESENTATION WHETHER EXPRESS, IMPLIED, STATUTORY OR OTHERWISE, RELATING TO
      THE
      CONDITION, QUANTITY, QUALITY, FITNESS FOR A PARTICULAR PURPOSE, CONFORMITY
      TO
      THE MODELS OR SAMPLES OF MATERIALS OR MERCHANTABILITY OF ANY EQUIPMENT OR ITS
      FITNESS FOR ANY PURPOSE, AND, EXCEPT AS PROVIDED OTHERWISE IN THE FIRST SENTENCE
      OF THIS PARAGRAPH, WITHOUT ANY OTHER EXPRESS, IMPLIED, STATUTORY OR OTHER
      WARRANTY OR REPRESENTATION WHATSOEVER. GRANTEE HAS INSPECTED, OR WAIVED
      GRANTEE'S RIGHT TO INSPECT, THE SUBJECT PROPERTIES FOR ALL PURPOSES AND
      SATISFIED ITSELF AS TO THEIR PHYSICAL AND ENVIRONMENTAL CONDITION, BOTH SURFACE
      AND SUBSURFACE, INCLUDING BUT NOT LIMITED TO CONDITIONS SPECIFICALLY RELATED
      TO
      THE PRESENCE, RELEASE OR DISPOSAL OF HAZARDOUS SUBSTANCES, SOLID WASTES OR
      NATURALLY OCCURRING RADIOACTIVE MATERIALS ("NORM"). GRANTEE IS RELYING SOLELY
      UPON ITS OWN INSPECTION OF THE SUBJECT PROPERTIES, AND GRANTEE SHALL ACCEPT
      ALL
      OF THE SAME IN THEIR "AS IS, WHERE IS" CONDITION. ALSO WITHOUT LIMITATION OF
      THE
      FOREGOING, GRANTOR MAKES NO WARRANTY OR REPRESENTATION, EXPRESS, IMPLIED,
      STATUTORY OR OTHERWISE, AS TO THE ACCURACY OR COMPLETENESS OF ANY DATA, REPORTS,
      RECORDS, PROJECTIONS, INFORMATION OR MATERIALS NOW, HERETOFORE OR HEREAFTER
      FURNISHED OR MADE AVAILABLE TO GRANTEE IN CONNECTION WITH THIS ASSIGNMENT
      INCLUDING, WITHOUT LIMITATION, RELATIVE TO PRICING ASSUMPTIONS, OR QUALITY
      OR
      QUANTITY OF HYDROCARBON RESERVES (IF ANY) ATTRIBUTABLE TO THE SUBJECT PROPERTIES
      OR THE ABILITY OR POTENTIAL OF THE SUBJECT PROPERTIES TO PRODUCE HYDROCARBONS
      OR
      THE ENVIRONMENTAL CONDITION OF THE SUBJECT PROPERTIES OR ANY OTHER MATTERS
      CONTAINED IN THE MATERIALS FURNISHED OR MADE AVAILABLE TO GRANTEE BY GRANTOR
      OR
      BY GRANTOR'S AGENTS OR REPRESENTATIVES. ANY AND ALL SUCH DATA, RECORDS, REPORTS,
      PROJECTIONS, INFORMATION AND OTHER MATERIALS (WRITTEN OR ORAL) FURNISHED BY
      GRANTOR OR OTHERWISE MADE AVAILABLE OR DISCLOSED TO GRANTEE ARE PROVIDED AS
      A
      CONVENIENCE AND SHALL NOT CREATE OR GIVE RISE TO ANY LIABILITY OF OR AGAINST
      GRANTOR AND ANY RELIANCE ON OR USE OF THE SAME SHALL BE AT GRANTEE'S SOLE RISK
      TO THE MAXIMUM EXTENT PERMITTED BY LAW.**





By
      acceptance of this Assignment, Grantee has agreed (i) to assume, and to timely
      pay and perform, certain duties, obligations and liabilities relating to the
      ownership and/or operation of the Subject Properties regardless of whether
      the
      same accrued or otherwise arose before or after the effective date hereof and
      (ii) to indemnify and hold Grantor, its affiliates, and its and their
      respective directors, officers, employees, attorneys, contractors and agents
      harmless from and against any and all claims, actions, causes of action,
      liabilities, damages, losses, costs or expenses (including, without limitation,
      court costs and attorneys' fees) of any kind or character arising out of or
      otherwise relating to said assumed obligations as more particularly described
      in
      the Purchase Agreement.





This
      Assignment is made subject to that certain Agreement of Sale and Purchase
      between Grantor and Grantee dated July ____, 2007 (the "Purchase Agreement").
      Such Agreement contains certain representations, warranties, covenants,
      indemnities and agreements between the parties, some of which may survive the
      delivery of this Assignment, as more particular provided for therein, but third
      parties may conclusively rely on this Assignment to vest title to the Subject
      Properties in Grantee.





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











This
      Assignment is being executed in several counterparts all of which are identical,
      except that, to facilitate recordation, certain counterparts hereof may contain
      only that portion of Exhibit A which contains specific descriptions of
      properties located in the recording jurisdiction in which the particular
      counterpart is to be recorded. All of such counterparts together shall
      constitute one and the same instrument. Complete copies of this Assignment
      containing the entire Exhibit A have been recorded in  County,  and
      retained by Grantor and Grantee.





IN
      WITNESS WHEREOF this Assignment has been executed by the parties hereto on
      the
      dates of their respective acknowledgments effective as to runs of oil and
      deliveries of gas, and for all other purposes, as of 7:00 a.m. local time at
      the
      locations of the Subject Properties, respectively, on July 1, 2007.





"GRANTOR"PLANTATION
                OPERATING, LLCBy:Name:Title:"GRANTEE"By:Name:Title:





**[acknowledgments]**