CONSENT WHICH HAS BEEN OR WILL BE OBTAINED PRIOR
TO THE TIME AT WHICH IT IS REQUIRED TO BE OBTAINED.
(B)
CAPITALIZATION.
THERE ARE 15,000 SHARES OF
AUTHORIZED STOCK OF PRISM, OF WHICH 1,000 IS ISSUED AND OUTSTANDING.
500 SHARES
OF THE STOCK ARE HELD LEGALLY AND BENEFICIALLY BY BILLIE J. EUSTICE AND 500
SHARES OF THE STOCK ARE HELD LEGALLY AND BENEFICIALLY BY THE GARY L. LITTLE
TRUST.
THERE ARE NO OUTSTANDING RIGHTS, OPTIONS, WARRANTS, CONVERSION RIGHTS
OR AGREEMENTS FOR THE PURCHASE, ISSUANCE, GRANT, SALE, REDEMPTION, ASSIGNMENT,
TRANSFER OR ACQUISITION OF ANY SHARES OF PRISM'S CAPITAL STOCK, OR ANY PROFITS
INTERESTS GRANTED OR OUTSTANDING.
THE STOCK REPRESENTS ALL OF THE ISSUED AND
OUTSTANDING SHARES OF CAPITAL STOCK OF PRISM.
ALL OF THE SHARES OF STOCK ARE
DULY AUTHORIZED, VALIDLY ISSUED, FULLY PAID AND NONASSESSABLE.
PRISM IS THE
SOLE OWNER OF 100% OF THE MEMBERSHIP INTERESTS OF PROVIDENT.
(C)
TITLE TO THE STOCK.
SELLERS HAVE GOOD AND
MARKETABLE TITLE TO THE STOCK, FREE AND CLEAR OF ALL LIENS.
AT THE CLOSING AND
SUBJECT TO DELIVERY BY BUYER OF THOSE ITEMS SET FORTH IN SECTION 3(D)(II) OF
THIS AGREEMENT, BUYER WILL RECEIVE GOOD AND MARKETABLE TITLE TO THE STOCK, FREE
AND CLEAR OF ALL LIENS.
(D)
FINANCIAL STATEMENTS.
SELLERS WILL DELIVER
TO BUYER AS SOON AS REASONABLY PRACTICAL FOLLOWING THE EXECUTION OF THIS
AGREEMENT, PRISM'S UNAUDITED FINANCIAL STATEMENTS (INCLUDING BALANCE SHEETS,
STATEMENTS OF OPERATIONS AND STATEMENTS OF CASH FLOWS) FOR THE ONE YEAR PERIOD
ENDED JUNE 30, 2008 (THE "FINANCIAL STATEMENTS").
THE FINANCIAL STATEMENTS
(A) FAIRLY PRESENT THE ASSETS, LIABILITIES AND FINANCIAL CONDITION AND RESULTS
OF OPERATIONS INDICATED THEREBY FOR THE PERIOD INDICATED THEREON, AND
(B) CONTAIN AND REFLECT ALL NECESSARY ADJUSTMENTS FOR A FAIR REPRESENTATION OF
THE FINANCIAL STATEMENTS AS OF THE DATE AND FOR THE PERIODS COVERED THEREBY.
(E)
OWNERSHIP OF ASSETS.
THE PRINCIPAL ASSET
OF PRISM IS ITS OWNERSHIP OF 100% OF THE MEMBERSHIP INTERESTS OF PROVIDENT, AND
THE SOLE ASSETS OF PROVIDENT ARE (I) ALL OF THE LEASEHOLD INTERESTS COMPRISING
THE TWO MEDICINE CUT BANK SAND UNIT IN PONDERA AND GLACIER COUNTIES, MONTANA
(THE "LEASEHOLD INTERESTS"), AND (II) ALL OF PROVIDENT'S EQUIPMENT, PARTS,
MACHINERY, FIXTURES AND IMPROVEMENTS LOCATED ON THE LEASEHOLD (COLLECTIVELY THE
"UNIT").
ALL FURNITURE FIXTURE AND EQUIPMENT OF PRISM WILL BE DELIVERED TO OR
MADE ACCESSIBLE TO BUYER AT CLOSING.
(F)
TITLE TO LEASEHOLD INTERESTS.
PROVIDENT
HAS GOOD AND MARKETABLE TITLE TO THE LEASEHOLD INTERESTS, FREE OF ALL LIENS,
EXCEPT (I) INCHOATE OPERATORS' LIENS ATTRIBUTABLE TO UNBILLED JOINT ACCOUNT
EXPENDITURES, AND (II) IMPERFECTIONS OF TITLE WHICH DO NOT MATERIALLY INTERFERE
WITH THE USE, OPERATION AND POSSESSION OR MATERIALLY REDUCE THE VALUE OF ANY
PARTICULAR LEASEHOLD INTERESTS OR THE PRODUCTION AND SALE OF HYDROCARBONS FOR
THE ACCOUNT OF PROVIDENT THEREFROM.
(G)
ENVIRONMENTAL AND SAFETY REQUIREMENTS.
TO
SELLERS' KNOWLEDGE, PROVIDENT IS IN MATERIAL COMPLIANCE WITH ALL APPLICABLE
ENVIRONMENTAL AND SAFETY REQUIREMENTS (AS DEFINED BELOW) RELATING TO THE UNIT.
TO SELLERS' KNOWLEDGE, THERE ARE NO OUTSTANDING OR UNADDRESSED AND RESOLVED
WRITTEN COMMUNICATIONS FROM ANY PARTY WITH RESPECT TO