leases (the "Leases") of that portion of the T.E. Lane gas unit which totals 80
acres and includes the T.E. Lane No. 1 test well, API No. 42-161-31482 (the
"Carve Out Area") located in Freestone County, Texas and the Buyer hereby agrees
to pay the Seller a purchase price of $10.00 on the date of such Assignment. The
Working Interest is in addition to the 10% working interest assigned by the
Seller to the Buyer in an agreement dated October 22, 2003.
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1.2 The assigned Working Interest is that portion of the Seller's right, title
and interest in the Leases described on Exhibit "A", attached to this Agreement
which encompass the Carve Out Area.
1.3 The Working Interest additionally includes, on a proportionate basis:
(a) the rights, benefits and responsibilities of the Seller in all contracts and
agreements regarding the Leases such as wells, equipment, interests and other
personal property used with the production, gathering, storing, measuring,
treating, operating, maintaining, or marketing of oil and gas production from
any or all of the Leases; and
(b) the Seller's contracts and agreements involving and related to the Leases
including without limitation, unit agreements, operating agreements, and
farm-out and farm-in agreements.
2. REPRESENTATIONS AND WARRANTIES
2.1 THIS AGREEMENT IS EXECUTED WITHOUT ANY WARRANTY OF TITLE, EITHER EXPRESSED
OR IMPLIED (EXCEPT AS EXPRESSLY PROVIDED BELOW) AND IS FURTHER MADE WITHOUT ANY
EXPRESSED OR IMPLIED WARRANTY OR REPRESENTATION AS TO THE MERCHANTABILITY OF ANY
OF THE LEASES OR PROPERTY(IES) OR THEIR FITNESS FOR ANY PURPOSE, AND WITHOUT ANY
OTHER EXPRESS OR IMPLIED WARRANTY OR REPRESENTATION WHATSOEVER. IT IS UNDERSTOOD
AND AGREED THAT BUYER HAS INSPECTED THE LEASES OR PROPERTY(IES) FOR ALL
PURPOSES, INCLUDING WITHOUT LIMITATION FOR THE PURPOSE OF DETECTING THE PRESENCE
OF NATURALLY OCCURRING RADIOACTIVE MATERIAL (HEREINAFTER REFERRED TO AS "NORM")
AND MAN MADE MATERIAL FIBERS (HEREINAFTER REFERRED TO AS "MMMF") AND SATISFIED
ITSELF AS TO THEIR PHYSICAL AND ENVIRONMENTAL CONDITION, BOTH SURFACE AND
SUBSURFACE, INCLUDING BUT NOT LIMITED TO CONDITIONS RELATED TO THE PRESENCE,
RELEASE, OR DISPOSAL OF HAZARDOUS SUBSTANCES, AND THAT BUYER IS RELYING SOLELY
UPON THE RESULTS OF SUCH CONDITION. SELLER DISCLAIMS ALL LIABILITY ARISING IN
CONNECTION WITH THE PRESENCE OF NORM AND MMMF ON THE LEASES OR PROPERTY(IES) AND
IF TESTS HAVE BEEN CONDUCTED BY SELLER FOR THE PRESENCE OF NORM OR MMMF, SELLER
DISCLAIMS ANY WARRANTY RESPECTING THE ACCURACY OF SUCH TESTS OR RESULTS. BUYER
EXPRESSLY WAIVES THE PROVISIONS OF CHAPTER XVII, SUBCHAPTER E, SECTION 17.41
THROUGH 17.63, INCLUSIVE (OTHER THAN SECTION 17.55A WHICH IS NOT WAIVED),
VERNON'S TEXAS CODE ANNOTATED, BUSINESS AND COMMERCE CODE (THE "DECEPTIVE TRADE
PRACTICES ACT") AND ACKNOWLEDGES CONVEYANCE AND ACKNOWLEDGES THAT THIS WAIVER
HAS BEEN BROUGHT TO THE ATTENTION OF BUYER AND EXPLAINED IN DETAIL AND THAT
BUYER HAS VOLUNTARILY AND KNOWINGLY CONSENTED TO THIS WAIVER OR WARRANTY OF
FITNESS. BUYER HAS INSPECTED THE
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INTERESTS AND THE RECORDS PERTAINING THERETO TO ITS SATISFACTION AND ACCEPTS
SAME "AS IS".
3. ROYALTIES ON PRODUCTION
3.1 The Buyer acknowledges and understands that the T.E.