Document:

Registration Rights Agreement

 Exhibit 10.3 
 Execution Version 
 HARRAH’S OPERATING COMPANY, INC. 
 $214,800,000 10.0% Second-Priority Senior Secured Notes due 2015 
 $847,621,000 10.0% Second-Priority Senior Secured Notes due 2018 
 REGISTRATION RIGHTS AGREEMENT 

December 24, 2008 
 Citigroup Global Markets Inc.

 as Lead Dealer Manager 
 Banc of America
Securities LLC 
 as Joint Dealer Manager 
 c/o
Citigroup Global Markets Inc. 
 388 Greenwich Street, 4th Floor 
 New York, New York 10013 
 Ladies and Gentlemen: 
 Harrah’s Operating Company, Inc., a corporation organized under the laws of Delaware (the “Company”), proposes to participate in Exchange Offers with you (the “Dealer Managers”)
in connection with $214,800,000 aggregate principal amount of its 10.0% Second-Priority Senior Secured Notes due 2015 (the “2015 Notes”) and $847,621,000 aggregate principal amount of its 10.0% Second-Priority Senior Secured Notes
due 2018 (the “2018 Notes” and, together with the 2015 Notes, the “Notes”), upon the terms set forth in the Dealer Manager Agreement between you, the Company and Harrah’s Entertainment, Inc., a corporation
organized under the laws of Delaware (the “Parent Guarantor”) dated November 14, 2008 (the “Dealer Manager Agreement”) relating to the exchange offer for the Notes and the related guarantee (as described below)
(the “Private Placement”). Pursuant to the Dealer Manager Agreement, the Company and Parent Guarantor agree with you for your benefit and the benefit of the holders from time to time of the Securities (as defined below) (each a
“Holder” and, collectively, the “Holders”), as follows: 
 The Notes will be unconditionally guaranteed
(the “Guarantee”) on a second-priority senior secured basis by Parent Guarantor. The Notes, together with the Guarantee, are referred to herein as the “Securities.” 
 1. Definitions. Capitalized terms used herein without definition shall have their respective meanings set forth in the Dealer Manager Agreement.
As used in this Agreement, the following capitalized defined terms shall have the following meanings: 
 “2015 Notes” shall
have the meaning ascribed to it in the preamble. 

 “2018 Notes” shall have the meaning ascribed to it in the preamble. 
 “Additional Interest” shall have the meaning ascribed to it in Section 8 hereof. 
 “Affiliate” shall have the meaning specified in Rule 405 under the Securities Act and the terms “controlling” and
“controlled” shall have meanings correlative thereto. 
 “broker-dealer” shall mean any broker or dealer
registered as such under the Exchange Act. 
 “Business Day” shall mean any day other than a Saturday, a Sunday or a legal
holiday or a day on which banking institutions or trust companies are authorized or obligated by law to close in New York City. 
 “Closing Date” shall mean the date of the first issuance of the Securities. 
 “Commission” shall
mean the Securities and Exchange Commission. 
 “Company” shall have the meaning ascribed to it in the preamble. 

“Dealer Manager Agreement” shall have the meaning ascribed to it in the preamble. 
 “Dealer Managers” shall have the meaning ascribed to it in the preamble. 
 “Deferral Period” shall have the meaning ascribed to it in Section 4(k)(ii) hereof. 
 “Exchange Act” shall mean the Securities Exchange Act of 1934, as amended, and the rules and regulations of the Commission promulgated
thereunder. 
 “Exchange Offer Registration Period” shall mean the one-year period following the consummation of the
Registered Exchange Offer, exclusive of any period during which any stop order shall be in effect suspending the effectiveness of the Exchange Offer Registration Statement. 
 “Exchange Offer Registration Statement” shall mean a registration statement of the Company on an appropriate form under the Securities
Act with respect to the Registered Exchange Offer, all amendments and supplements to such registration statement, including post-effective amendments thereto, in each case including the Prospectus contained therein, all exhibits thereto and all
material incorporated by reference therein. 
 “Exchanging Dealer” shall mean any Holder (which may include any Dealer
Manager) that is a broker-dealer and elects to exchange for New Securities any Securities that it acquired for its own account as a result of market-making activities or other trading activities (but not directly from the Company or any Affiliate of
the Company) for New Securities. 
 “FINRA Rules” shall mean the Conduct Rules and the By-Laws of the Financial Industry
Regulatory Authority, Inc. 
  

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 “Freely Tradable Security” shall mean any security at any time of determination if at
such time of determination such security (i) may be sold to the public pursuant to Rule 144 under the Securities Act by a person that is not an “affiliate” (as defined in Rule 144 under the Securities Act) of the Company where no
conditions of Rule 144 under the Securities Act are then applicable (other than the holding period requirement in paragraph (d) of Rule 144 under the Securities Act so long as such holding period requirement is satisfied at such time of
determination) and (ii) does not bear any restrictive legends relating to the Securities Act. 
 “Guarantee” shall have
the meaning ascribed to it in the preamble. 
 “Holder” shall have the meaning ascribed to it in the preamble. 

“Indenture” shall mean the Indenture relating to the Securities, dated as of December 24, 2008, among the Company, Parent
Guarantor and U.S. Bank National Association, as trustee, as the same may be amended from time to time in accordance with the terms thereof. 
 “Inspector” shall have the meaning ascribed to it in Section 4(q)(ii) hereof. 
 “Losses”
shall have the meaning ascribed to it in Section 6(d) hereof. 
 “Majority Holders” shall mean, on any date, Holders of
a majority of the aggregate principal amount of each of the 2015 Notes and the 2018 Notes registered under a Registration Statement. 
 “Managing Underwriters” shall mean the investment banker or investment bankers and manager or managers that administer an underwritten offering, if any, under a Registration Statement. 
 “New Securities” shall mean debt securities of the Company and the Guarantee by Parent Guarantor, in each case, identical in all
material respects to the Notes and the related Guarantee (except that the transfer restrictions shall be modified or eliminated, as appropriate) to be issued under the Indenture in connection with sales or exchanges effected pursuant to this
Agreement. 
 “Notes” shall have the meaning ascribed to it in the preamble. 
 “Offering Memorandum” shall mean the offering memorandum, dated November 14, 2008, as supplemented, relating to the exchange offer
for the Notes, including any and all exhibits thereto and any information incorporated by reference therein. 
 “Parent
Guarantor” shall have the meaning ascribed to it in the preamble. 
 “Private Placement” shall have the meaning
ascribed to it in the preamble. 
 “Prospectus” shall mean the prospectus included in any Registration Statement (including,
without limitation, a prospectus that discloses information previously omitted from a prospectus filed as part of an effective registration statement in reliance upon Rule 430A under the Securities Act), as amended or supplemented by any prospectus
supplement, with respect to 

  

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the terms of the offering of any portion of the Securities or the New Securities covered by such Registration Statement, and all amendments and supplements
thereto, including any and all exhibits thereto and any information incorporated by reference therein. 
 “Registered Exchange
Offer” shall mean the proposed offer of the Company and Parent Guarantor to issue and deliver to the Holders of the Securities that are not prohibited by any law or policy of the Commission from participating in such offer, in exchange for
the Securities, a like aggregate principal amount of the New Securities. 
 “Registrable Securities” shall mean
(i) Securities other than those that have been (A) registered under a Registration Statement and exchanged or disposed of in accordance therewith or (B) sold to the public pursuant to Rule 144 under the Securities Act or any successor
rule or regulation thereto that may be adopted by the Commission and (ii) any New Securities resale of which by the Holder thereof requires compliance with the prospectus delivery requirements of the Securities Act. 
 “Registration Default” shall have the meaning ascribed to it in Section 8 hereof. 
 “Registration Statement” shall mean any Exchange Offer Registration Statement or Shelf Registration Statement that covers any of the
Securities or the New Securities pursuant to the provisions of this Agreement, any amendments and supplements to such registration statement, including post-effective amendments (in each case including the Prospectus contained therein), all exhibits
thereto and all material incorporated by reference therein. 
 “Securities” shall have the meaning ascribed to it in the
preamble. 
 “Securities Act” shall mean the Securities Act of 1933, as amended, and the rules and regulations of the
Commission promulgated thereunder. 
 “Shelf Registration” shall mean a registration effected pursuant to Section 3
hereof. 
 “Shelf Registration Period” shall have the meaning ascribed to it in Section 3(b)(ii) hereof. 
 “Shelf Registration Statement” shall mean a “shelf” registration statement of the Company pursuant to the provisions of
Section 3 hereof which covers some or all of the Securities or New Securities, as applicable, on an appropriate form under Rule 415 under the Securities Act, or any similar rule that may be adopted by the Commission, amendments and
supplements to such registration statement, including post-effective amendments, in each case including the Prospectus contained therein, all exhibits thereto and all material incorporated by reference therein. 
 “Trustee” shall mean the trustee with respect to the Securities under the Indenture. 
 “Trust Indenture Act” shall mean the Trust Indenture Act of 1939, as amended, and the rules and regulations of the Commission
promulgated thereunder. 
  

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 “Underwriter” shall mean any underwriter of Securities in connection with an offering
thereof under a Shelf Registration Statement. 
 2. Registered Exchange Offer. (a) The Company and Parent Guarantor shall use
their commercially reasonable efforts to prepare and file with the Commission the Exchange Offer Registration Statement with respect to the Registered Exchange Offer. The Company and Parent Guarantor shall use their commercially reasonable efforts
to cause the Exchange Offer Registration Statement to become effective within 365 days of the Closing Date; provided, however, that the Company and Parent Guarantor shall not be required to consummate such Exchange Offer Registration Statement if
the Securities are Freely Tradable Securities. 
 (b) If an Exchange Offer Registration Statement is filed and declared effective pursuant to
Section 2(a) above, upon the effectiveness of the Exchange Offer Registration Statement, the Company and Parent Guarantor shall promptly commence the Registered Exchange Offer, it being the objective of such Registered Exchange Offer to enable
each Holder electing to exchange Securities for New Securities (assuming that such Holder is not an Affiliate of the Company or Parent Guarantor, acquires the New Securities in the ordinary course of such Holder’s business, has no arrangements
with any person to participate in the distribution of the New Securities and is not prohibited by any law or policy of the Commission from participating in the Registered Exchange Offer) to trade such New Securities from and after their receipt
without any limitations or restrictions under the Securities Act and without material restrictions under the securities laws of a substantial proportion of the several states of the United States. 
 (c) In connection with the Registered Exchange Offer, if an Exchange Offer Registration Statement is required to be filed and declared effective pursuant
to Section 2(a) above, the Company and Parent Guarantor shall: 
 (i) mail or cause to be mailed to each Holder a copy of
the Prospectus forming part of the Exchange Offer Registration Statement, together with an appropriate letter of transmittal and related documents; 
 (ii) keep the Registered Exchange Offer open for not less than 20 Business Days after the date notice thereof is mailed to the Holders (or, in each case, longer if required by applicable law); 
 (iii) use their commercially reasonable efforts to keep the Exchange Offer Registration Statement continuously effective under the
Securities Act, supplemented and amended as required, to ensure that it is available for sales of New Securities by Exchanging Dealers during the Exchange Offer Registration Period; 
 (iv) utilize the services of a depositary for the Registered Exchange Offer with an address in the Borough of Manhattan in New York City,
which may be the Trustee or an Affiliate of the Trustee; 
 (v) permit Holders to withdraw tendered Securities at any time
prior to the close of business, New York time, on the last Business Day on which the Registered Exchange Offer is open; 
  

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 (vi) prior to effectiveness of the Exchange Offer Registration Statement, provide a
supplemental letter to the Commission (A) stating that the Company and Parent Guarantor are conducting the Registered Exchange Offer in reliance on the position of the Commission in Exxon Capital Holdings Corporation (pub. avail.
May 13, 1988), Morgan Stanley and Co., Inc. (pub. avail. June 5, 1991); and (B) including a representation that the Company and Parent Guarantor have not entered into any arrangement or understanding with any person to
distribute the New Securities to be received in the Registered Exchange Offer and that, to the best knowledge of the Company and Parent Guarantor, each Holder participating in the Registered Exchange Offer is acquiring the New Securities in the
ordinary course of business and has no arrangement or understanding with any person to participate in the distribution of the New Securities; and 
 (vii) comply in all respects with all applicable laws. 
 (d) As soon as practicable after the close of the
Registered Exchange Offer, the Company and Parent Guarantor shall: 
 (i) accept for exchange all Securities tendered and not
validly withdrawn pursuant to the Registered Exchange Offer; 
 (ii) deliver to the Trustee for cancellation in accordance
with Section 4(s) all Securities so accepted for exchange; and 
 (iii) cause the Trustee promptly to authenticate and
deliver to each Holder of Securities a principal amount of New Securities equal to the principal amount of the Securities of such Holder so accepted for exchange. 
 (e) Each Holder hereby acknowledges and agrees that any broker-dealer and any such Holder using the Registered Exchange Offer to participate in a distribution of the New Securities (x) could not under Commission
policy as in effect on the date of this Agreement rely on the position of the Commission in Exxon Capital Holdings Corporation (pub. avail. May 13, 1988) and Morgan Stanley and Co., Inc. (pub. avail. June 5, 1991), as
interpreted in the Commission’s letter to Shearman & Sterling dated July 2, 1993 and similar no-action letters; and (y) must comply with the registration and prospectus delivery requirements of the Securities Act in
connection with any secondary resale transaction, which must be covered by an effective registration statement containing the selling security holder information required by Item 507 or 508, as applicable, of Regulation S-K under the Securities
Act if the resales are of New Securities obtained by such Holder in exchange for Securities acquired by such Holder directly from the Company, Parent Guarantor or their respective Affiliates. Accordingly, each Holder participating in the Registered
Exchange Offer shall be required to represent to the Company and Parent Guarantor that, at the time of the consummation of the Registered Exchange Offer: 
 (i) any New Securities to be received by such Holder will be acquired in the ordinary course of business; 
 (ii) such Holder will have no arrangement or understanding with any person to participate in the distribution of the Securities or the New Securities within the meaning of the Securities Act; and 
  

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 (iii) such Holder is not an Affiliate of the Company or Parent Guarantor. 
 (f) If any Dealer Manager determines that it is not eligible to participate in the Registered Exchange Offer with respect to the exchange of Securities
constituting any portion of an unsold allotment, at the request of such Dealer Manager, the Company and Parent Guarantor shall issue and deliver to such Dealer Manager or the person purchasing New Securities registered under a Shelf Registration
Statement as contemplated by Section 3 hereof from such Dealer Manager, in exchange for such Securities, a like principal amount of New Securities. The Company and Parent Guarantor shall use their commercially reasonable efforts to cause the
CUSIP Service Bureau to issue the same CUSIP number for such New Securities as for New Securities issued pursuant to the Registered Exchange Offer. 
 3. Shelf Registration. (a) If any of the Securities are not Freely Tradable Securities by the 365th calendar day after the Closing Date and either (i) due to any change in law or applicable interpretations thereof by the
Commission’s staff, the Company and Parent Guarantor determine upon advice of their outside counsel that they are not permitted to effect the Registered Exchange Offer as contemplated by Section 2 hereof; (ii) for any other reason the
Registered Exchange Offer is not consummated within 365 days of the date hereof; (iii) any Dealer Manager so requests with respect to Securities that are not eligible to be exchanged for New Securities in the Registered Exchange Offer and that
are held by it following consummation of the Registered Exchange Offer; (iv) any Holder (other than a Dealer Manager) is not eligible to participate in the Registered Exchange Offer; or (v) in the case of any Dealer Manager that
participates in the Registered Exchange Offer or acquires New Securities pursuant to Section 2(f) hereof, such Dealer Manager does not receive Freely Tradable Securities in exchange for Securities constituting any portion of an unsold allotment
(it being understood that (x) the requirement that a Dealer Manager deliver a Prospectus containing the information required by Item 507 or 508 of Regulation S-K under the Securities Act in connection with sales of New Securities acquired
in exchange for such Securities shall result in such New Securities being not Freely Tradeable Securities; and (y) the requirement that an Exchanging Dealer deliver a Prospectus in connection with sales of New Securities acquired in the
Registered Exchange Offer in exchange for Securities acquired as a result of market-making activities or other trading activities shall not result in such New Securities being not “freely tradeable”), the Company and Parent Guarantor shall
effect a Shelf Registration Statement in accordance with subsection (b) below. 
 (b) If a Shelf Registration Statement is required to
be filed and declared effective pursuant to this Section 3, (i) the Company and Parent Guarantor shall as promptly as practicable (but in no event more than 180 days after so required or requested pursuant to this Section 3), file the
Shelf Registration Statement with the Commission and shall use their commercially reasonable efforts to cause the Shelf Registration Statement to be declared effective under the Securities Act within 365 days after so required or requested by the
Holders thereof from time to time in accordance with the methods of distribution elected by such Holders and set forth in such Shelf Registration Statement; provided, however, that no Holder (other than a Dealer Manager) shall be entitled to have
the Securities held by it covered by such Shelf Registration Statement unless such Holder agrees in writing to be bound by all of the provisions of this Agreement applicable to such Holder; and provided further, that with respect to New Securities
received by a Dealer Manager in exchange for Securities constituting any portion of an unsold allotment, the Company and Parent Guarantor may, if permitted by current interpretations by the Commission’s 

  

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staff, file a post-effective amendment to the Exchange Offer Registration Statement containing the information required by Item 507 or 508 of Regulation
S-K, as applicable, in satisfaction of their obligations under this subsection with respect thereto, and any such Exchange Offer Registration Statement, as so amended, shall be referred to herein as, and governed by the provisions herein applicable
to, a Shelf Registration Statement. 
 (ii) The Company and Parent Guarantor shall use their best efforts to keep the Shelf
Registration Statement continuously effective, supplemented and amended as required by the Securities Act, in order to permit the Prospectus forming part thereof to be usable by Holders for a period (the “Shelf Registration Period”)
from the date the Shelf Registration Statement is declared effective by the Commission until (A) the expiration of the one-year period referred to in Rule 144 under the Securities Act applicable to securities held by non-affiliates under the
Securities Act or (B) the date upon which all the Securities or New Securities, as applicable, covered by the Shelf Registration Statement have been sold pursuant to the Shelf Registration Statement. The Company and Parent Guarantor shall be
deemed not to have used their best efforts to keep the Shelf Registration Statement effective during the Shelf Registration Period if they voluntarily take any action that would result in Holders of Securities covered thereby not being able to offer
and sell such Securities at any time during the Shelf Registration Period, unless such action is (x) required by applicable law or otherwise undertaken by the Company and Parent Guarantor in good faith and for valid business reasons (not
including avoidance of the Company’s and Parent Guarantor’s obligations hereunder), including the acquisition or divestiture of assets, and (y) permitted pursuant to Section 4(k)(ii) hereof. 
 (iii) The Company and Parent Guarantor shall cause the Shelf Registration Statement and the related Prospectus and any amendment or
supplement thereto, as of the effective date of the Shelf Registration Statement or such amendment or supplement, (A) to comply in all material respects with the applicable requirements of the Securities Act; and (B) not to contain any
untrue statement of a material fact or omit to state a material fact required to be stated therein or necessary in order to make the statements therein (in the case of the Prospectus, in the light of the circumstances under which they were made) not
misleading. 
 4. Additional Registration Procedures. In connection with any Shelf Registration Statement and, to the extent
applicable, any Exchange Offer Registration Statement, the following provisions shall apply. 
 (a) The Company and Parent Guarantor shall:

 (i) furnish to each of the Dealer Managers and to counsel for the Holders, not less than five Business Days prior to the
filing thereof with the Commission, a copy of any Exchange Offer Registration Statement and any Shelf Registration Statement, and each amendment thereof and each amendment or supplement, if any, to the Prospectus included therein (including all
documents incorporated by reference therein after the initial filing) and shall use their commercially reasonable efforts to reflect in each such document, when so filed with the Commission, such comments as the Dealer Managers reasonably propose;

  

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 (ii) include the information set forth in Annex A hereto on the facing page of the
Exchange Offer Registration Statement, in Annex B hereto in the forepart of the Exchange Offer Registration Statement in a section setting forth details of the Exchange Offer, in Annex C hereto in the underwriting or plan of distribution section of
the Prospectus contained in the Exchange Offer Registration Statement, and in Annex D hereto in the letter of transmittal delivered pursuant to the Registered Exchange Offer; 
 (iii) if requested by a Dealer Manager, include the information required by Item 507 or 508 of Regulation S-K, as applicable, in the
Prospectus contained in the Exchange Offer Registration Statement; and 
 (iv) in the case of a Shelf Registration Statement,
include the names of the Holders that propose to sell Securities pursuant to the Shelf Registration Statement as selling security holders. 
 (b) The Company and Parent Guarantor shall use their commercially reasonable efforts to ensure that: 
 (i) any
Registration Statement and any amendment thereto and any Prospectus forming part thereof and any amendment or supplement thereto complies in all material respects with the Securities Act; and 
 (ii) any Registration Statement and any amendment thereto does not, when it becomes effective, contain an untrue statement of a material
fact or omit to state a material fact required to be stated therein or necessary to make the statements therein not misleading. 
 (c) The
Company and Parent Guarantor shall advise counsel for the Dealer Managers, the Holders of Securities covered by any Shelf Registration Statement and any Exchanging Dealer under any Exchange Offer Registration Statement that has provided in writing
to the Company and Parent Guarantor a telephone or facsimile number and address for notices, and, if requested by any Dealer Manager or any such Holder or Exchanging Dealer, shall confirm such advice in writing (which notice pursuant to clauses
(ii)-(v) hereof shall be accompanied by an instruction to suspend the use of the Prospectus until the Company and Parent Guarantor shall have remedied the basis for such suspension): 
 (i) when a Registration Statement and any amendment thereto has been filed with the Commission and when the Registration Statement or any
post-effective amendment thereto has become effective; 
 (ii) of any request by the Commission after the effective date for
any amendment or supplement to the Registration Statement or the Prospectus or for additional information; 
 (iii) of the
issuance by the Commission of any stop order suspending the effectiveness of the Registration Statement or the institution of any proceeding for that purpose; 
  

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 (iv) of the receipt by the Company or Parent Guarantor of any notification with respect
to the suspension of the qualification of the securities included therein for sale in any jurisdiction or the institution of any proceeding for such purpose; and 
 (v) of the happening of any event that requires any change in the Registration Statement or the Prospectus so that, as of such date, they
(A) do not contain any untrue statement of a material fact and (B) do not omit to state a material fact required to be stated therein or necessary to make the statements therein (in the case of the Prospectus, in the light of the
circumstances under which they were made) not misleading. 
 (d) The Company and Parent Guarantor shall use their commercially reasonable
efforts to obtain the withdrawal of any order suspending the effectiveness of any Registration Statement or the qualification of the securities therein for sale in any jurisdiction. 
 (e) The Company and Parent Guarantor shall furnish to each Holder of Securities covered by any Shelf Registration Statement, without charge, at least one
copy of such Shelf Registration Statement and any post-effective amendment thereto, including all material incorporated therein by reference, and, if the Holder so requests in writing, all exhibits thereto (including exhibits incorporated by
reference therein). 
 (f) The Company and Parent Guarantor shall, during the Shelf Registration Period, deliver to each Holder of Securities
covered by any Shelf Registration Statement, without charge, as many copies of the Prospectus (including the preliminary prospectus) included in such Shelf Registration Statement and any amendment or supplement thereto as such Holder may reasonably
request. The Company and Parent Guarantor consent to the use of the Prospectus or any amendment or supplement thereto by each of the selling Holders of Securities in connection with the offering and sale of the Securities covered by the Prospectus,
or any amendment or supplement thereto, included in the Shelf Registration Statement. 
 (g) The Company and Parent Guarantor shall furnish
to each Exchanging Dealer which so requests, without charge, at least one (1) conformed copy of the Exchange Offer Registration Statement and any post-effective amendment thereto, including all material incorporated by reference therein, and,
if the Exchanging Dealer so requests in writing, all exhibits thereto (including exhibits incorporated by reference therein). 
 (h) The
Company and Parent Guarantor shall promptly deliver to each Dealer Manager, each Exchanging Dealer and each other person required to deliver a Prospectus during the Exchange Offer Registration Period, without charge, as many copies of the Prospectus
included in such Exchange Offer Registration Statement and any amendment or supplement thereto as any such person may reasonably request. The Company and Parent Guarantor consent to the use of the Prospectus or any amendment or supplement thereto by
any Dealer Manager, any Exchanging Dealer and any such other person that may be required to deliver a Prospectus following the Registered Exchange Offer in connection with the offering and sale of the New Securities covered by the Prospectus, or any
amendment or supplement thereto, included in the Exchange Offer Registration Statement. 
  

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 (i) Prior to the Registered Exchange Offer or any other offering of Securities pursuant to any
Registration Statement, the Company and Parent Guarantor shall arrange, if necessary, for the qualification of the Securities or the New Securities for sale under the laws of such jurisdictions as any Holder shall reasonably request and shall
maintain such qualification in effect so long as required; provided that in no event shall the Company and Parent Guarantor be obligated (A) to qualify to do business in any jurisdiction where they are not then so qualified or to take any
action that would subject them to service of process in suits, other than those arising out of the Private Placement, the Registered Exchange Offer or any offering pursuant to a Shelf Registration Statement, in any such jurisdiction where they are
not then so subject or (B) to subject itself to taxation in excess of a nominal amount in respect of doing business in such jurisdiction. 
 (j) The Company shall cooperate with the Holders of Securities to facilitate the timely preparation and delivery of certificates representing New Securities or Securities to be issued or sold pursuant to any Registration Statement free of
any restrictive legends and in such denominations and registered in such names as Holders may request in writing at least three (3) Business Days prior to the closing date of any sales of New Securities. 
 (k) (i) Upon the occurrence of any event contemplated by subsections (c)(ii) through (v) above, the Company and Parent Guarantor shall promptly
(or within the time period provided for by clause (ii) hereof, if applicable) prepare a post-effective amendment to the applicable Registration Statement or an amendment or supplement to the related Prospectus or file any other required
document so that, as thereafter delivered to Holders of the securities included therein, the Prospectus will not include an untrue statement of a material fact or omit to state any material fact required to be stated therein or necessary to make the
statements therein, in the light of the circumstances under which they were made, not misleading. In such circumstances, the period of effectiveness of the Exchange Offer Registration Statement provided for in Section 2 shall be extended by the
number of days from and including the date of the giving of a notice of suspension pursuant to Section 4(c) to and including the date when the Dealer Managers, the Holders of the Securities and any known Exchanging Dealer shall have received
such amended or supplemented Prospectus pursuant to this Section. 
 (ii) Upon the occurrence or existence of any pending
corporate development or any other material event that, in the reasonable judgment of the Company and Parent Guarantor, makes it appropriate to suspend the availability of a Shelf Registration Statement and the related Prospectus, the Company and
Parent Guarantor shall give notice (without notice of the nature or details of such events) to the Holders that the availability of the Shelf Registration is suspended and, upon actual receipt of any such notice, each Holder agrees not to sell any
Registrable Securities pursuant to the Shelf Registration until such Holder’s receipt of copies of the supplemented or amended Prospectus provided for in Section 3(i) hereof, or until it is advised in writing by the Company and Parent
Guarantor that the Prospectus may be used, and has received copies of any additional or supplemental filings that are incorporated or deemed incorporated by reference in such Prospectus. The period during which the availability of the Shelf
Registration and any Prospectus is suspended (the “Deferral Period”) (A) shall not exceed 60 consecutive days, (B) shall not occur more than three (3) times during any calendar year and (C) shall extend the
number of days the Shelf Registration or any Prospectus is available by an amount equal to the Deferral Period. 
  

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 (l) Not later than the effective date of any Registration Statement, the Company and Parent Guarantor
shall provide a CUSIP number for the Securities or the New Securities, as the case may be, registered under such Registration Statement and provide the Trustee with printed certificates for such Securities or New Securities, in a form eligible for
deposit with The Depository Trust Company. 
 (m) The Company and Parent Guarantor shall comply in all material respects with all applicable
rules and regulations of the Commission and shall make generally available to their security holders an earnings statement satisfying the provisions of Section 11(a) of the Securities Act as soon as practicable after the effective date of the
applicable Registration Statement and in any event no later than 45 days after the end of a 12-month period (or 90 days, if such period is a fiscal year) beginning with the first month of the Company’s first fiscal quarter commencing after the
effective date of the applicable Registration Statement. 
 (n) [Reserved]. 
 (o) The Company and Parent Guarantor may require each Holder of securities to be sold pursuant to any Shelf Registration Statement to furnish to the
Company and Parent Guarantor such information regarding the Holder and the distribution of such securities as the Company and Parent Guarantor may from time to time reasonably require for inclusion in such Registration Statement. The Company and
Parent Guarantor may exclude from such Shelf Registration Statement the Securities of any Holder that fails to furnish such information within a reasonable time after receiving such request. 
 (p) In the case of any Shelf Registration Statement, upon the request of the Majority Holders, the Company and Parent Guarantor shall enter into
customary agreements (including, if requested, an underwriting agreement in customary form) and take all other appropriate actions if any, as the Majority Holders shall reasonably request in order to expedite or facilitate the registration or the
disposition of the Securities, and in connection therewith, if an underwriting agreement is entered into, cause the same to contain indemnification provisions and procedures no less favorable than those set forth in Section 6 hereof.

 (q) In the case of any Shelf Registration Statement, the Company and Parent Guarantor shall: 
 (i) make reasonably available for inspection at a location where they are normally kept and during normal business hours by the Majority
Holders of Securities to be registered thereunder, any underwriter participating in any disposition pursuant to such Registration Statement, and any attorney, accountant or other agent retained by the Holders or any such underwriter all relevant
financial and other records and pertinent corporate documents of the Company and its subsidiaries; 
 (ii) use their
commercially reasonable efforts to cause the Company’s officers, directors, employees, accountants and auditors to supply all relevant information reasonably requested by the Holders or any such underwriter, attorney, accountant or agent

  

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(each, an “Inspector”) in connection with any such Registration Statement as is customary for similar due diligence examinations;
provided, however, that such Inspector shall first agree in writing with the Company and Parent Guarantor that any information that is reasonably and in good faith designated by the Company and Parent Guarantor in writing as
confidential at the time of delivery of such information shall be kept confidential by such Inspector, unless (1) disclosure of such information is required by court or administrative order or is necessary to respond to inquiries of regulatory
authorities, (2) disclosure of such information is required by law (including any disclosure requirements pursuant to federal securities laws in connection with the filing of such Registration Statement or the use of any Prospectus),
(3) such information becomes generally available to the public other than as a result of a disclosure or failure to safeguard such information by such person or (4) such information becomes available to such Inspector from a source other
than the Company or Parent Guarantor and such source is not known, after due inquiry, by the relevant Holder to be bound by a confidentiality agreement or is not otherwise under a duty of trust to the Company or Parent Guarantor; 
 (iii) make such representations and warranties to the Holders of Securities registered thereunder and the underwriters, if any, in form,
substance and scope as are customarily made by issuers to underwriters in primary underwritten offerings and covering matters including, but not limited to, those set forth in the Dealer Manager Agreement; 
 (iv) obtain opinions of counsel to the Company and updates thereof (which counsel and opinions (in form, scope and substance) shall be
reasonably satisfactory to the Managing Underwriters, if any) addressed to each selling Holder and the underwriters, if any, covering such matters as are customarily covered in opinions requested in underwritten offerings and such other matters as
may be reasonably requested by such Holders and underwriters; 
 (v) obtain “comfort” letters and updates thereof
from the independent certified public accountants of the Company (and, if necessary, any other independent certified public accountants of any subsidiary of the Company or of any business acquired by the Company or any Guarantor for which financial
statements and financial data are, or are required to be, included in the Registration Statement), addressed to each selling Holder of Securities registered thereunder and the underwriters, if any, in customary form and covering matters of the type
customarily covered in “comfort” letters in connection with primary underwritten offerings; and 
 (vi) deliver such
documents and certificates as may be reasonably requested by the Majority Holders or the Managing Underwriters, if any, including those to evidence compliance with Section 4(k) and with any customary conditions contained in the underwriting
agreement or other agreement entered into by the Company. 
 The actions set forth in clauses (iii), (iv), (v) and (vi) of this paragraph
(q) shall be performed at (A) the effectiveness of such Registration Statement and each post-effective amendment thereto; and (B) each closing under any underwriting or similar agreement as and to the extent required thereunder.

  

 -13- 

 (r) If a Registered Exchange Offer is to be consummated, upon delivery of the Securities by Holders to
the Company (or to such other person as directed by the Company) in exchange for the New Securities, the Company and Parent Guarantor shall mark, or caused to be marked, on the Securities so exchanged that such Securities are being cancelled in
exchange for the New Securities. In no event shall the Securities be marked as paid or otherwise satisfied. 
 (s) The Company and Parent
Guarantor shall use their best efforts if the Securities have been rated prior to the initial sale of such Securities, to confirm such ratings will apply to the Securities or the New Securities, as the case may be, covered by a Registration
Statement. 
 (t) In the event that any broker-dealer shall underwrite any Securities or participate as a member of an underwriting syndicate
or selling group or “assist in the distribution” (within the meaning of FINRA Rules) thereof, whether as a Holder of such Securities or as an underwriter, a placement or sales agent or a broker or dealer in respect thereof, or otherwise,
the Company and Parent Guarantor shall assist such broker-dealer in complying with the FINRA Rules. 
 (u) The Company and Parent Guarantor
shall use their commercially reasonable efforts to take all other steps necessary to effect the registration of the Securities or the New Securities, as the case may be, covered by a Registration Statement. 
 5. Registration Expenses. The Company and Parent Guarantor shall bear all expenses incurred in connection with the performance of their
obligations under Sections 2, 3 and 4 hereof and, in the event of any Shelf Registration Statement, will reimburse the Holders for the reasonable fees and disbursements of one firm or counsel (which shall initially be Cahill Gordon &
Reindel LLP, but which may be another nationally recognized law firm experienced in securities matters designated by the Majority Holders) to act as counsel for the Holders in connection therewith, and, in the case of any Exchange
Offer Registration Statement, will reimburse the Dealer Managers for the reasonable fees and disbursements of counsel acting in connection therewith in each case which counsel shall be approved by the Issuers (such approval not to be unreasonably
withheld). Each Holder shall pay all expenses of its counsel other than as set forth in the preceding sentence, underwriting discounts and commissions and transfer taxes, if any, relating to the sale or disposition of such Holder’s Securities
or New Securities. 
 6. Indemnification and Contribution. (a) The Company and Parent Guarantor agree to indemnify and hold
harmless each Holder of Securities or New Securities, as the case may be, covered by any Registration Statement, each Dealer Manager and, with respect to any Prospectus delivery as contemplated in Section 4(h) hereof, each Exchanging Dealer,
the directors, officers, employees, Affiliates and agents of each such Holder, Dealer Manager or Exchanging Dealer and each person who controls any such Holder, Dealer Manager or Exchanging Dealer within the meaning of either the Securities Act or
the Exchange Act against any and all losses, claims, damages or liabilities, joint or several, to which they or any of them may become subject under the Securities Act, the Exchange Act or other federal or state statutory law or regulation, at
common law or otherwise, insofar as such losses, claims, damages or liabilities (or actions in respect thereof) arise out of or are based upon any untrue statement or alleged untrue statement of a material fact contained in the Registration
Statement as originally filed or in any amendment thereof, or in any preliminary Prospectus or the Prospectus, or in any amendment 

  

 -14- 

 
thereof or supplement thereto, or arise out of or are based upon the omission or alleged omission to state therein a material fact required to be stated
therein or necessary to make the statements therein (in the case of any preliminary Prospectus or the Prospectus, in the light of the circumstances under which they were made) not misleading, and agree to reimburse each such indemnified party, as
incurred, for any legal or other expenses reasonably incurred by it in connection with investigating or defending any such loss, claim, damage, liability or action; provided, however, that the Company and Parent Guarantor will not be
liable in any such case to the extent that any such loss, claim, damage or liability arises out of or is based upon any such untrue statement or alleged untrue statement or omission or alleged omission made therein in reliance upon and in conformity
with written information furnished to the Company and Parent Guarantor by or on behalf of the party claiming indemnification specifically for inclusion therein. This indemnity agreement shall be in addition to any liability that the Company and
Parent Guarantor may otherwise have. 
 The Company and Parent Guarantor also agree to indemnify as provided in this Section 6(a) or
contribute as provided in Section 6(d) hereof to Losses of each underwriter, if any, of Securities or New Securities, as the case may be, registered under a Shelf Registration Statement, their directors, officers, employees, Affiliates or
agents and each person who controls such underwriter on substantially the same basis as that of the indemnification of the Dealer Managers and the selling Holders provided in this Section 6(a) and shall, if requested by any Holder, enter into
an underwriting agreement reflecting such agreement, as provided in Section 4(p) hereof. 
 (b) Each Holder of securities covered by a
Registration Statement (including each Dealer Manager that is a Holder, in such capacity) severally and not jointly agrees to indemnify and hold harmless the Company and Parent Guarantor, each of their respective directors and officers who sign such
Registration Statement and each person who controls the Company or any Guarantor within the meaning of either the Securities Act or the Exchange Act, to the same extent as the foregoing indemnity from the Company and Parent Guarantor to each such
Holder, but only with reference to written information relating to such Holder furnished to the Company and Parent Guarantor by or on behalf of such Holder specifically for inclusion in the documents referred to in the foregoing indemnity. This
indemnity agreement will be in addition to any liability that any such Holder may otherwise have. 
 (c) Promptly after receipt by an
indemnified party under this Section 6 or notice of the commencement of any action, such indemnified party will, if a claim in respect thereof is to be made against the indemnifying party under this Section, notify the indemnifying party in
writing of the commencement thereof; but the failure so to notify the indemnifying party (i) will not relieve it from liability under paragraph (a) or (b) above unless and to the extent it did not otherwise learn of such action and
such failure results in the forfeiture by the indemnifying party of substantial rights and defenses; and (ii) will not, in any event, relieve the indemnifying party from any obligations to any indemnified party other than the indemnification
obligation provided in paragraph (a) or (b) above. The indemnifying party shall be entitled to appoint counsel (including local counsel) of the indemnifying party’s choice at the indemnifying party’s expense to represent the
indemnified party in any action for which indemnification is sought (in which case the indemnifying party shall not thereafter be responsible for the fees and expenses of any separate counsel, other than local counsel if not appointed by the
indemnifying party, retained by the indemnified party or parties except as set forth below); provided, however, that 

  

 -15- 

 
such counsel shall be satisfactory to the indemnified party. Notwithstanding the indemnifying party’s election to appoint counsel (including local
counsel) to represent the indemnified party in an action, the indemnified party shall have the right to employ separate counsel (including local counsel), and the indemnifying party shall bear the reasonable fees, costs and expenses of such separate
counsel if (i) the use of counsel chosen by the indemnifying party to represent the indemnified party would present such counsel with a conflict of interest (based on the advice of counsel to the indemnified person); (ii) the actual or
potential defendants in, or targets of, any such action include both the indemnified party and the indemnifying party and the indemnified party shall have reasonably concluded (based on the advice of counsel to the indemnified person) that there may
be legal defenses available to it and/or other indemnified parties that are different from or additional to those available to the indemnifying party; (iii) the indemnifying party shall not have employed counsel reasonably satisfactory to the
indemnified party to represent the indemnified party within a reasonable time after notice of the institution of such action; or (iv) the indemnifying party shall authorize the indemnified party to employ separate counsel at the expense of the
indemnifying party. An indemnifying party will not, without the prior written consent of the indemnified parties, settle or compromise or consent to the entry of any judgment with respect to any pending or threatened claim, action, suit or
proceeding in respect of which indemnification or contribution may be sought hereunder (whether or not the indemnified parties are actual or potential parties to such claim or action) unless such settlement, compromise or consent is consented to by
the indemnitying party, as applicable (which consent shall not be unreasonably witheld) and includes an unconditional release of each indemnified party from all liability arising out of such claim, action, suit or proceeding. 
 (d) In the event that the indemnity provided in paragraph (a) or (b) of this Section is unavailable to or insufficient to hold harmless an
indemnified party for any reason, then each applicable indemnifying party shall have a joint and several obligation to contribute to the aggregate losses, claims, damages and liabilities (including legal or other expenses reasonably incurred in
connection with investigating or defending any loss, claim, liability, damage or action) (collectively “Losses”) (other than by virtue of the failure of an indemnified party to notify the indemnifying party of its right to
indemnification pursuant to paragraph (a) or (b) of this Section 8, where such failure materially prejudices the indemnifying party (through the forfeiture of substantial rights or defenses)), each indemnifying party, in order to
provide for just and equitable contribution, shall contribute to the amount paid or payable by such indemnified party as a result of such Losses, in such proportion as is appropriate to reflect the relative benefits received by such indemnifying
party, on the one hand, and such indemnified party, on the other hand, from the Private Placement and the Registration Statement which resulted in such Losses; provided, however, that in no case shall any Dealer Manager be responsible,
in the aggregate, for any amount in excess of the purchase discount or commission applicable to such Security, or in the case of a New Security, applicable to the Security that was exchangeable into such New Security, as set forth in the Offering
Memorandum, nor shall any underwriter be responsible for any amount in excess of the underwriting discount or commission applicable to the securities purchased by such underwriter under the Registration Statement which resulted in such Losses. If
the allocation provided by the immediately preceding sentence is unavailable for any reason, the indemnifying party and the indemnified party shall contribute in such proportion as is appropriate to reflect not only such relative benefits but also
the relative fault of such indemnifying party, on the one hand, and such indemnified party, on the other hand, in connection with the statements or omissions which resulted in such Losses as well as any other relevant equitable 

  

 -16- 

 
considerations. Benefits received by the Company shall be deemed to be equal to the aggregate principal amount of Notes issued in the Private Placement as
set forth in the Offering Memorandum. Benefits received by the Dealer Managers shall be deemed to be equal to the total fees received in the Private Placement, and benefits received by any other Holders shall be deemed to be equal to the value of
receiving Securities or New Securities, as applicable, registered under the Securities Act. Benefits received by any underwriter shall be deemed to be equal to the total underwriting discounts and commissions, as set forth on the cover page of the
Prospectus forming a part of the Registration Statement which resulted in such Losses. Relative fault shall be determined by reference to, among other things, whether any untrue or any alleged untrue statement of a material fact or omission or
alleged omission to state a material fact relates to information provided by the indemnifying party, on the one hand, or by the indemnified party, on the other hand, the intent of the parties and their relative knowledge, access to information and
opportunity to correct or prevent such untrue statement or omission. The parties agree that it would not be just and equitable if contribution were determined by pro rata allocation (even if the Holders were treated as one entity for such purpose)
or any other method of allocation which does not take account of the equitable considerations referred to above. Notwithstanding the provisions of this paragraph (d), no person guilty of fraudulent misrepresentation (within the meaning of
Section 11(f) of the Securities Act) shall be entitled to contribution from any person who was not guilty of such fraudulent misrepresentation. For purposes of this Section, each person who controls a Holder within the meaning of either the
Securities Act or the Exchange Act and each director, officer, employee and agent of such Holder shall have the same rights to contribution as such Holder, and each person who controls the Company or any Guarantor within the meaning of either the
Securities Act or the Exchange Act, each officer of the Company or any Guarantor who shall have signed the Registration Statement and each director of the Company or any Guarantor shall have the same rights to contribution as the Company and Parent
Guarantor, subject in each case to the applicable terms and conditions of this paragraph (d). 
 (e) The provisions of this Section will
remain in full force and effect, regardless of any investigation made by or on behalf of any Holder or the Company and Parent Guarantor or any of the indemnified persons referred to in this Section 6, and will survive the sale by a Holder of
securities covered by a Registration Statement. 
 7. Underwritten Registrations. (a) If any of the Securities or New Securities,
as the case may be, covered by any Shelf Registration Statement are to be sold in an underwritten offering, the Managing Underwriters shall be selected by the Majority Holders, subject to the consent of the Issuers (which shall not be unreasonably
withheld), and the Holders of Securities or New Securities covered by such Shelf Registration Statement shall be responsible for all underwriting commissions and discounts. 
 (b) No person may participate in any underwritten offering pursuant to any Shelf Registration Statement, unless such person (i) agrees to sell such
person’s Securities or New Securities, as the case may be, on the basis reasonably provided in any underwriting arrangements approved by the persons entitled hereunder to approve such arrangements; and (ii) completes and executes all
questionnaires, powers of attorney, indemnities, underwriting agreements and other documents reasonably required under the terms of such underwriting arrangements. 
  

 -17- 

 8. Registration Defaults. If any of the Securities are not Freely Tradable Securities by the 365th
calendar day after the Closing Date and either: 
 (a) any Registration Statement required by this Agreement is not declared
effective on or prior to the date by which commercially reasonable efforts are to be used to cause such effectiveness under this Agreement; 
 (b) on or prior to the 395th day after the Closing Date, the Company and Parent Guarantor have not exchanged New Securities for all Securities tendered in accordance with the terms of a Registered Exchange Offer; or

 (c) any Registration Statement required by this Agreement has been declared effective but ceases to be effective at any
time at which it is required to be effective under this Agreement 
 (each such event referred to in (a) - (c), a “Registration Default”),
the interest rate on the Securities will be increased by (i) 0.25% per annum for the first 90-day period immediately following the occurrence of the first Registration Default and (ii) an additional 0.25% per annum with respect to
each subsequent 90-day period until such Registration Defaults have been cured or the Securities become Freely Tradable Securities up to a maximum increase of 1.00% per annum (such increased interest, the “Additional
Interest”). 
 9. No Inconsistent Agreements. The Company and Parent Guarantor have not entered into, and agrees not to enter
into, any agreement with respect to its securities that is inconsistent with the rights granted to the Holders herein or that otherwise conflicts with the provisions hereof. 
 10. Amendments and Waivers. The provisions of this Agreement may not be amended, qualified, modified or supplemented, and waivers or consents to
departures from the provisions hereof may not be given, unless the Company and Parent Guarantor have obtained (A) in the case of the 2015 Notes, the written consent of the Holders of a majority of the aggregate principal amount of 2015 Notes
outstanding and (B) in the case of the 2018 Notes, the written consent of the Holders of a majority of the aggregate principal amount of 2018 Notes outstanding; provided that, in each case, with respect to any matter that directly or
indirectly affects the rights of any Dealer Manager hereunder, the Company and Parent Guarantor shall obtain the written consent of each such Dealer Manager against which such amendment, qualification, supplement, waiver or consent is to be
effective; provided, further, that no amendment, qualification, supplement, waiver or consent with respect to Section 8 hereof shall be effective as against any Holder of Registered Securities unless consented to in writing by
such Holder; and provided, further, that the provisions of this Article 10 may not be amended, qualified, modified or supplemented, and waivers or consents to departures from the provisions hereof may not be given, unless the Company
and Parent Guarantor have obtained the written consent of the Dealer Managers and each Holder. Notwithstanding the foregoing (except the foregoing provisos), a waiver or consent to departure from the provisions hereof with respect to a matter that
relates exclusively to the rights of Holders whose Securities or New Securities, as the case may be, are being sold pursuant to a Registration Statement and that does not directly or indirectly affect the rights of other Holders may be given by the
Majority Holders, determined on the basis of Securities or New Securities, as the case may be, being sold rather than registered under such Registration Statement. 
  

 -18- 

 11. Notices. All notices and other communications provided for or permitted hereunder shall be
made in writing by hand-delivery, first-class mail, telex, telecopier or air courier guaranteeing overnight delivery: 
 (a)
if to a Holder, at the most current address given by such holder to the Company in accordance with the provisions of this Section 11, which address initially is, with respect to each Holder, the address of such Holder maintained by the
Registrar under the Indenture; 
 (b) if to the Dealer Managers, initially at the address or addresses set forth in the Dealer
Manager Agreement; and 
 (c) if to the Company, initially at its address set forth in the Dealer Manager Agreement.

 All such notices and communications shall be deemed to have been duly given when received. 
 The Dealer Managers or the Company by notice to the other parties may designate additional or different addresses for subsequent notices or
communications. 
 12. Remedies. Each Holder, in addition to being entitled to exercise all rights provided to it herein, in the
Indenture or in the Dealer Manager Agreement or granted by law, including recovery of liquidated or other damages, will be entitled to specific performance of its rights under this Agreement. The Company and Parent Guarantor agree that monetary
damages would not be adequate compensation for any loss incurred by reason of a breach by them of the provisions of this Agreement and hereby agree to waive in any action for specific performance the defense that a remedy at law would be adequate.

 13. Successors. This Agreement shall inure to the benefit of and be binding upon the parties hereto, their respective successors
and assigns, including, without the need for an express assignment or any consent by the Company and Parent Guarantor thereto, subsequent Holders of Securities and the New Securities, and the indemnified persons referred to in Section 6 hereof.
The Company and Parent Guarantor hereby agree to extend the benefits of this Agreement to any Holder of Securities and the New Securities, and any such Holder may specifically enforce the provisions of this Agreement as if an original party hereto.

 14. Counterparts. This Agreement may be signed in one or more counterparts, each of which shall constitute an original and all of
which together shall constitute one and the same agreement. 
 15. Headings. The section headings used herein are for convenience only
and shall not affect the construction hereof. 
  

 -19- 

 16. Applicable Law. This Agreement shall be governed by and construed in accordance with the laws
of the State of New York applicable to contracts made and to be performed in the State of New York. The parties hereto each hereby waive any right to trial by jury in any action, proceeding or counterclaim arising out of or relating to this
Agreement. 
 17. Severability. In the event that any one of more of the provisions contained herein, or the application thereof in
any circumstances, is held invalid, illegal or unenforceable in any respect for any reason, the validity, legality and enforceability of any such provision in every other respect and of the remaining provisions hereof shall not be in any way
impaired or affected thereby, it being intended that all of the rights and privileges of the parties shall be enforceable to the fullest extent permitted by law. 
 18. Securities Held by the Company, etc. Whenever the consent or approval of Holders of a specified percentage of principal amount of Securities or New Securities is required hereunder, Securities or New
Securities, as applicable, held by the Company or its Affiliates (other than subsequent Holders of Securities or New Securities if such subsequent Holders are deemed to be Affiliates solely by reason of their holdings of such Securities or New
Securities) shall not be counted in determining whether such consent or approval was given by the Holders of such required percentage. 
  

 -20- 

 If the foregoing is in accordance with your understanding of our agreement, please sign and return to us
the enclosed duplicate hereof, whereupon this letter and your acceptance shall represent a binding agreement between the Company, Parent Guarantor and the several Dealer Managers. 
  

					
	Very truly yours,
	
	HARRAH’S OPERATING COMPANY, INC.
		
	By:	 	/s/ Jonathan S. Halkyard
		 	Name:	 	Jonathan S. Halkyard
		 	Title:	 	 Senior Vice President
 CFO &
Treasurer

  

					
	HARRAH’S ENTERTAINMENT, INC.
		
	By:	 	/s/ Jonathan S. Halkyard
		 	Name:	 	Jonathan S. Halkyard
		 	Title:	 	 Senior Vice President
 CFO &
Treasurer

  

 -21- 

			
	The foregoing Agreement is hereby confirmed and accepted as of the date first above written.
	
	 Citigroup Global Markets Inc.
 as Lead Dealer Manager

	 Banc of America Securities LLC
 as Joint Dealer Manager

	
	By: Citigroup Global Markets Inc.
		
	By:	 	/s/ Stephen Cheeseman
	Name:	 	Stephen Cheeseman
	Title:	 	Managing Director

  

 -22- 

 ANNEX A 
 Each broker-dealer that receives new securities for its own account pursuant to the Exchange Offer must acknowledge that it will deliver a prospectus in connection with any resale of such new securities. The Letter of
Transmittal states that by so acknowledging and by delivering a prospectus, a broker-dealer will not be deemed to admit that it is an “underwriter” within the meaning of the Securities Act. This prospectus, as it may be amended or
supplemented from time to time, may be used by a broker-dealer in connection with resales of new securities received in exchange for securities where such securities were acquired by such broker-dealer as a result of market-making activities or
other trading activities. The company has agreed that, starting on the expiration date and ending on the close of business one year after the expiration date, it will make this prospectus available to any broker-dealer for use in connection with any
such resale. See “Plan of Distribution”. 
  

 A-1 

 ANNEX B 
 Each broker-dealer that receives new securities for its own account in exchange for securities, where such securities were acquired by such broker-dealer as a result of market-making activities or other trading
activities, must acknowledge that it will deliver a prospectus in connection with any resale of such new securities. See “Plan of Distribution”. 
  

 B-1 

 ANNEX C 
 PLAN OF DISTRIBUTION 
 Each broker-dealer that receives new securities for its own account pursuant
to the Exchange Offer must acknowledge that it will deliver a prospectus in connection with any resale of such new securities. This prospectus, as it may be amended or supplemented from time to time, may be used by a broker-dealer in connection with
resales of new securities received in exchange for securities where such securities were acquired as a result of market-making activities or other trading activities. The company has agreed that, starting on the expiration date and ending on the
close of business one year after the expiration date, it will make this prospectus, as amended or supplemented, available to any broker-dealer for use in connection with any such resale. In addition, until
                    ,             , all dealers effecting transactions in
the new securities may be required to deliver a prospectus. 
 The company will not receive any proceeds from any sale of new securities by
brokers-dealers. New securities received by broker-dealers for their own account pursuant to the Exchange Offer may be sold from time to time in one or more transactions in the over-the-counter market, in negotiated transactions, through the writing
of options on the new securities or a combination of such methods of resale, at market prices prevailing at the time of resale, at prices related to such prevailing market prices or negotiated prices. Any such resale may be made directly to
purchasers or to or through brokers or dealers who may receive compensation in the form of commissions or concessions from any such broker-dealer and/or the purchasers of any such new securities. Any broker-dealer that resales new securities that
were received by it for its own account pursuant to the Exchange Offer and any broker or dealer that participates in a distribution of such new securities may be deemed to be an “underwriter” within the meaning of the Securities Act and
any profit of any such resale of new securities and any commissions or concessions received by any such persons may be deemed to be underwriting compensation under the Securities Act. The Letter of Transmittal states that by acknowledging that it
will deliver and by delivering a prospectus, a broker-dealer will not be deemed to admit that it is an “underwriter” within the meaning of the Securities Act. 
 For a period of one year after the expiration date, the company will promptly send additional copies of this prospectus and any amendment or supplement to this prospectus to any broker-dealer that requests such
documents in the Letter of Transmittal. The company has agreed to pay all expenses incident to the Exchange Offer (including the expenses of one counsel for the holder of the securities) other than commissions or concessions of any brokers or
dealers and will indemnify the holders of the securities (including any broker-dealers) against certain liabilities, including liabilities under the Securities Act. 
 [If applicable, add information required by Regulation S-K Items 507 and/or 508.] 
  

 C-1 

 ANNEX D 
 Rider A 
 PLEASE FILL IN YOUR NAME AND ADDRESS BELOW IF YOU ARE A BROKER-DEALER AND WISH TO RECEIVE 10 ADDITIONAL COPIES OF THE PROSPECTUS
AND 10 COPIES OF ANY AMENDMENTS OR SUPPLEMENTS THERETO. 
  

			
	Name:	 	 
	Address:	 	 
		 	 

 Rider B 
 If
the undersigned is not a broker-dealer, the undersigned represents that it acquired the New Securities in the ordinary course of its business, it is not engaged in, and does not intend to engage in, a distribution of New Securities and it has no
arrangements or understandings with any person to participate in a distribution of the New Securities. If the undersigned is a broker-dealer that will receive New Securities for its own account in exchange for Securities, it acknowledges that it
will deliver a prospectus in connection with any resale of such New Securities; however, by so acknowledging and by delivering a prospectus, the undersigned will not be deemed to admit that it is an “underwriter” within the meaning of the
Securities Act. 
  

 D-1Purchase Agreement

 Exhibit 10.1 
 Execution 
 Version 
 PURCHASE AGREEMENT 
 BY AND BETWEEN 
 REX ENERGY I, LLC 
 AS SELLER 
 AND 
 ADVENTURE EXPLORATION
PARTNERS, LLC 
 AS BUYER 
 DECEMBER 23, 2008 

 TABLE OF CONTENTS 
  

					
	 	  	 	  	Page
	 ARTICLE I
	  	DEFINITIONS	  	1
	 ARTICLE II
	  	PURCHASE AND SALE	  	8
			
	 2.1.
	  	Purchase and Sale	  	8
	 2.2.
	  	Purchase Price	  	8
	 2.3.
	  	The Deposit	  	8
	 2.4.
	  	Adjustments to Purchase Price	  	9
	 2.5.
	  	Determination of Purchase Price	  	11
			
	 ARTICLE III
	  	REPRESENTATIONS AND WARRANTIES OF SELLER	  	13
			
	 3.1.
	  	Organization	  	13
	 3.2.
	  	Authorization	  	13
	 3.3.
	  	No Violation or Conflict	  	13
	 3.4.
	  	Title	  	13
	 3.5.
	  	Contracts	  	14
	 3.6.
	  	Lease Provisions	  	15
	 3.7.
	  	Compliance with Law	  	15
	 3.8.
	  	Litigation	  	16
	 3.9.
	  	Taxes	  	16
	 3.10.
	  	Environmental Matters	  	16
	 3.11.
	  	Broker’s Fees	  	16
			
	 ARTICLE IV
	  	REPRESENTATIONS AND WARRANTIES OF BUYER	  	16
			
	 4.1.
	  	Organization	  	16
	 4.2.
	  	Authorization	  	16
	 4.3.
	  	No Violation or Conflict	  	17
	 4.4.
	  	No Reliance	  	17
	 4.5.
	  	Financing	  	17
	 4.6.
	  	Broker’s Fees	  	18
			
	 ARTICLE V
	  	COVENANTS	  	18
			
	 5.1.
	  	Conduct of Business	  	18
	 5.2.
	  	Buyer’s Access to Information	  	18
	 5.3.
	  	Further Assurances	  	18
	 5.4.
	  	Filings	  	18
	 5.5.
	  	Publicity	  	19
	 5.6.
	  	Casualty	  	19
	 5.7.
	  	Hedges	  	19
			
	 ARTICLE VI
	  	CONDITIONS PRECEDENT TO CONSUMMATION OF THE CLOSING; CLOSING	  	19
			
	 6.1.
	  	Conditions Precedent to Each Party’s Obligations to Close	  	19
	 6.2.
	  	Conditions Precedent to Obligations of Buyer	  	20
	 6.3.
	  	Conditions Precedent to Obligations of Seller	  	20

  

 -i- 

 TABLE OF CONTENTS 
 (continued) 
  

					
	 	  	 	  	Page
	 6.4.
	  	The Closing	  	21
			
	 ARTICLE VII
	  	ADDITIONAL COVENANTS	  	22
			
	 7.1.
	  	Seller’s Access to Books and Records	  	22
	 7.2.
	  	Tax Matters	  	22
	 7.3.
	  	Surety Bonds; Letters of Credit	  	22
	 7.4.
	  	Consents and Preferential Rights	  	23
			
	 ARTICLE VIII
	  	INDEMNIFICATION	  	23
			
	 8.1.
	  	Indemnification of Buyer	  	23
	 8.2.
	  	Indemnification of Seller	  	24
	 8.3.
	  	Survival	  	24
	 8.4.
	  	Notice	  	24
	 8.5.
	  	Defense of Claims	  	25
	 8.6.
	  	Exclusive Monetary Remedy	  	26
	 8.7.
	  	Limitation on Damages	  	26
	 8.8.
	  	Title Defects	  	26
	 8.9.
	  	Disclaimer of Other Representations and Warranties	  	26
			
	 ARTICLE IX
	  	TERMINATION	  	27
			
	 9.1.
	  	Termination	  	27
	 9.2.
	  	Effect of Termination	  	28
			
	 ARTICLE X
	  	MISCELLANEOUS	  	28
			
	 10.1.
	  	Entire Agreement	  	28
	 10.2.
	  	Expenses	  	29
	 10.3.
	  	Governing Law	  	29
	 10.4.
	  	Assignment	  	29
	 10.5.
	  	Notices	  	29
	 10.6.
	  	Counterparts; Headings	  	30
	 10.7.
	  	Specific Performance	  	30
	 10.8.
	  	Interpretation	  	30
	 10.9.
	  	Severability	  	31
	 10.10.
	  	No Third-Party Reliance	  	31
	 10.11.
	  	Like-Kind Exchange	  	31
	 10.12.
	  	Amendment; Waiver	  	31

  

 -ii- 

 EXHIBITS 
  

			
	Exhibit A	 	Procedure for Claiming Title Defects and Adjusting the Purchase Price
	Exhibit B	 	Form of Assignment, Conveyance and Bill of Sale
	Exhibit C	 	Form of Assumption Agreement
	Exhibit D	 	Form of FIRPTA Affidavit
	Exhibit E	 	Buyer’s Schedule of Allocated Values

 SCHEDULES 
  

			
	 Schedule 2.1(a)
	 	Excluded Assets
	 Schedule 2.4(a)(v)
	 	Oil in Tanks
	 Schedule 2.4(b)(iii)
	 	Accrued Suspense Funds
	 Schedule 3.3
	 	Violations or Conflicts
	 Schedule 3.4(a)
	 	Leased Personal Property
	 Schedule 3.4(b)
	 	Leases and Wells
	 Schedule 3.5(a)
	 	Property Agreements
	 Schedule 3.5(b)
	 	Matters relating to Property Agreements
	 Schedule 3.6
	 	Unpaid Rentals, Royalties, Overriding Royalty Interests and Other Payments
	 Schedule 3.7
	 	Compliance with Law
	 Schedule 3.8
	 	Litigation
	 Schedule 3.10
	 	Environmental Matters
	 Schedule 5.1
	 	Capital Expenditures
	 Schedule 5.7
	 	Hedges
	 Schedule 7.3
	 	Seller’s Surety Bonds and Letters of Credit

  

 -iii- 

 PURCHASE AGREEMENT 
 This Purchase Agreement (this “Agreement”) is made as of December 23, 2008 by and between Rex Energy I, LLC, a Delaware limited liability company (“Seller”), and Adventure
Exploration Partners, LLC, a Delaware limited liability company (“Buyer”). 
 RECITALS 
 A. Seller owns an interest in certain oil and gas leases and wells located in Lea, Eddy and Roosevelt Counties, New Mexico and in Terrell, Midland, Upton, Glasscock,
Loving, Grimes, Reagan, Winkler and Concho Counties, Texas and assets related thereto. 
 B. Seller desires to sell and Buyer desires to acquire the Assets
(as defined herein) on the terms and subject to the conditions set forth in this Agreement. 
 AGREEMENT 
 The parties, in consideration of the premises and of the mutual representations, warranties, covenants, conditions and agreements set forth herein and intending to be
bound, agree as set forth below: 
 ARTICLE I 
 DEFINITIONS 
 When used in this Agreement, the following terms shall have the meanings specified: 

“Action” means any action, claim, suit, litigation, arbitration or governmental investigation. 
 “Agreement” means this Agreement, together with the Exhibits and Schedules attached hereto, as the same may be amended from time to time
in accordance with the terms hereof. 
 “Allocated Value” means the monetary amount for each Lease or Well set forth on
Exhibit E as determined by Buyer and agreed upon by Seller for purposes of determining Title Defect Amounts and Environmental Defect Amounts. 
 “Assets” means the following: 
 (a) the Property Agreements, including,
without limitation, the Leases; 
 (b) the Personal Property; 
 (c) the Production; 
 (d) the Books and Records; and 
  

 1 

 (e) all other mineral and real property rights, titles and interests of any nature that
Seller owns in and to all lands covered by the Leases (including but not limited to rights to bonus, rentals, royalties, executive rights, and reversionary rights). 
 “Assignment” means the Assignment, Conveyance and Bill of Sale in the form of Exhibit B attached hereto. The Assignment may be executed in multiple counterparts for recording in the various
jurisdictions where the Assets are located. 
 “Assumed Liabilities” means: 
 (a) any liability or obligation arising out of or resulting from performance due on or after the Effective Time under any Property
Agreement, including the Leases; 
 (b) any liability or obligation for Taxes arising from and attributable to ownership and
operations after the Effective Time; 
 (c) any liability or obligation for properly plugging and abandoning all of the Wells
and restoring the surface areas associated with the Wells in accordance and compliance with the rules and regulations of Governmental Authorities having jurisdiction and the terms of the Leases; 
 (d) any liability or obligation relating to the accrued suspense funds as of the Closing Date, but only to the extent such suspended funds
have been transferred to Buyer; 
 (e) any liability or losses attributable to a Title Defect for which the Purchase Price is
decreased pursuant to Section 2.4(b)(iv); and 
 (f) except for any right to a Purchase Price adjustment or as it
may constitute a breach of the representation set forth in Section 3.10, any matter relating to the environmental condition of the Properties. 
 “Assumption Agreement” means the Assumption Agreement concerning the Assumed Liabilities, in the form of Exhibit C attached hereto. 
 “Books and Records” means, in whatever form or media expressed, all books, records, files or copies thereof, in Seller’s possession
relating directly to the Assets, including geological, plats, surveys, maps, cross-sections, production records, electric logs, cuttings, cores, core data, pressure data, decline and production curves, well files and all related matters, division of
interest records, division orders, lease files, title opinions, abstracts, lease operating statements and all other accounting information, marketing reports, statements, gas balancing information and all other marketing information, all geophysical
and seismic records except to the extent that the transfer of such geophysical or seismic records would violate existing licensing or other contractual restrictions on such transfer, but excluding all Tax Returns. 
 “Business Day” means any day other than (a) Saturday or Sunday; or (b) a day on which commercial banks in New York, New York
are closed. 
  

 2 

 “Buyer” has the meaning given in the opening paragraph. 
 “Closing” means the purchase and sale of the Assets and the assignment and assumption of the Assumed Liabilities as contemplated this
Agreement and the documents related hereto. 
 “Closing Date” means the first Business Day following the date that the last
of the conditions to Closing set forth in Section 6.1, 6.2, and 6.3 are fulfilled or waived (to the extent waivable); or such other date as the parties may mutually agree in writing. 
 “Closing Purchase Price” has the meaning given in Section 2.2 below. 
 “Code” means the Internal Revenue Code of 1986 and the regulations promulgated thereunder, as amended. 
 “Deposit” has the meaning given in Section 2.3 below. 
 “Easements” means all rights of way, easements, surface leases and other rights of surface use held by Seller related to the Assets.

 “Effective Time” for all purposes of this Agreement shall mean 12:01 a.m. Central Time on the first day of October, 2008.

 “Environmental Defect” means: 
 (a) any violation of, or condition or circumstance giving rise to liability under, any Environmental Law on any Asset, or which arises
from the ownership, record keeping, construction, maintenance, repair or operation thereof; or 
 (b) any condition or
circumstance with respect to any Asset or the ownership, record keeping, construction, maintenance, repair or operation thereof, which could (without notice or the lapse of time or both) result in or give rise to, an Environmental Defect; and

 (c) in either of case (a) or (b), that is reasonably expected to reduce the value of the affected Asset by more than
$10,000, result in a civil penalty or fine of more than $10,000 or require more than $10,000 to cure or otherwise remediate. 
 “Environmental Defect Amount” means, with respect to a Property affected by an Environmental Defect, the reduction in the Allocated Value of an Asset as a result of the existence of one or more Environmental Defects.

 “Environmental Defect Mechanism” means the procedure whereby the Purchase Price is adjusted to compensate for variations
in the Allocated Value caused by Environmental Defects. The Environmental Defect Mechanism is set forth in Exhibit A. 
 “Environmental Laws” means any and all Laws, relating to public health, or to pollution or protection of the environment (including, without limitation, ambient air, surface water, groundwater, land surface or subsurface
strata) including, without limitation, the Clean Air Act, the Comprehensive Environmental Response Compensation and Liability Act (“CERCLA”), the 

  

 3 

 
Resource Conservation and Recovery Act of 1976 (“RCRA”), the Toxic Substances Control Act (“TSCA”), the Clean Water Act,
the Safe Drinking Water Act, the Hazardous Materials Transportation Act (“HMTA”), the Oil Pollution Act of 1990, all as amended, and any state Laws implementing or analogous to the foregoing federal Laws, and all other Laws relating
to or regulating emissions, discharges, releases, or cleanup of pollutants, contaminants, chemicals, polychlorinated biphenyls (“PCBs”), oil and gas exploration and production wastes, brine, solid wastes, or toxic or Hazardous
Substances or wastes. 
 “Excluded Assets” means: 
 (a) the oil and gas leases excluded due to title or environmental issues; 
 (b) a copy of the Books and Records; 
 (c) any hedges or other derivatives related to the Assets other than the hedges set forth on Schedule 5.7; and 
 (d) any other assets held by Seller or its affiliates as identified on Schedule 2.1(a), including assets held by Seller in Hardin County, Texas. 
 “Governmental Authority” means any federal, state, provincial, municipal, local or other governmental department, commission, board,
bureau, agency or instrumentality, or any court, in each case whether of the United States, any of its possessions or territories, or of any foreign nation. 
 “Hazardous Substances” means any substance or material which, if present in the environment would, under applicable Law, require assessment, remediation, or corrective action including, without
limitation, chemicals, pollutants, contaminants, wastes, toxic substances, petroleum and petroleum products which are classified as hazardous, toxic, radioactive, dangerous, or otherwise regulated by, or form the basis for liability under, any
Environmental Laws including but not limited to any polluting substances, hazardous wastes under RCRA, hazardous substances under CERCLA, toxic substances under TSCA, hazardous materials under HMTA, or comparable materials or classification under
any other Environmental Laws. 
 “Knowledge of Seller” means the actual knowledge of the following employees of Seller:
(a) Benjamin W. Hulburt, (b) Joe N. Clement, (c) William L. Ottaviani, (d) Cecil Pearce, (e) Tim Morris, or (f) Christopher K. Hulburt. 
 “Laws” means any federal, state, local or other law or governmental requirement of any kind, and the rules, regulations and orders promulgated thereunder, including principles of common law and duties
existing thereunder, all of the foregoing as in effect on the date hereof. 
 “Lease” (individually) and
“Leases” (collectively) means the oil, gas, and/or mineral leases (including federal leases) owned by Seller in Lea, Eddy and Roosevelt Counties, New Mexico and Terrell, Midland, Upton, Glasscock, Loving, Grimes, Reagan, Winkler and
Concho Counties, Texas, including, but not limited to leaseholds, record title and operating rights, royalty or overriding royalty interests owned by Seller in such leases. Schedule 3.4(b) sets forth a list of the Leases, together with a
description of Seller’s Net Revenue Interest and Working Interest therein, and a list of the Wells associated with such Leases. 
  

 4 

 “Lease Burdens” means the royalties, overriding royalties, production payments, net
profit interests, and all similar interests burdening the Leases or production therefrom, that are legally binding and enforceable at law or in equity. 
 “Liabilities” means any direct or indirect losses, damages, debts, obligations or liabilities of any nature, whether absolute, accrued, contingent, liquidated or otherwise, and whether due or to
become due, asserted or unasserted, known or unknown. 
 “Losses” has the meaning given in Section 8.1.

 “Material Adverse Effect” or “Material Adverse Change” means a material adverse effect on or change in
(or any development that is reasonably likely to have a material adverse effect on or change in) the Assets, other than any change, circumstance or effect (a) relating to the economy, securities markets or financial markets, including the
credit markets, in general, (b) affecting the oil and gas or energy industry generally, such as fluctuations in the price of oil or gas, or (c) resulting from the execution or performance of this Agreement or the announcement thereof.

 “Net Revenue Interest” means the decimal ownership of the lessee in production from a Lease, after deducting all
applicable Lease Burdens. 
 “Permits” means all written permits, licenses and governmental authorizations, registrations
and approvals required, as of the date hereof, for the conduct of Seller’s business. 
 “Permitted Encumbrances” means:
(a) liens, charges, encumbrances, contracts, agreements, instruments, obligations, defects and irregularities of title and restrictions of right or interest of any nature affecting any Lease that will be discharged at Closing;
(b) lessors’ royalties, overriding royalties, and similar burdens that do not operate to reduce the Net Revenue Interest of Seller in any Lease; (c) contingent future obligations under any joint operating agreement, farm-out
agreement, or similar agreement whereby an operator or other party with an interest in such agreement may earn, or otherwise become entitled to, an interest in any Lease or Well that do not reduce the Net Revenue Interest of the Leases to less than
the applicable Net Revenue Interest set forth in Schedule 3.4(b) and do not obligate Seller to bear costs and expenses relating to the maintenance, development and operation of any of the Leases in an amount greater than the applicable
Working Interest set forth in Schedule 3.4(b); (d) division orders and sales contracts relating to hydrocarbons that are terminable, without material penalty, upon no more than 90 days notice to the purchaser under such division orders
or sales contract (subject to applicable governmental regulations); (e) all rights to consent by, required notices to, and filings with or other actions by Governmental Authorities, if any, in connection with the change of ownership or control
of an interest in any Lease; (f) any required third-party consent to change of ownership or control of the Leases or similar agreements to the extent consent is obtained prior to Closing; (g) materialmen’s, mechanics’,
repairmen’s, employees’, contractors’, operators’, tax and other similar liens or charges arising pursuant to operations or in the ordinary course of business incidental to construction, maintenance, or operation of the Leases
(i) if they have not been filed pursuant to Law and the opportunity to do so has expired, or (ii) if filed, 

  

 5 

 
payment is being withheld as provided by Law and the withheld payment is transferred to Buyer at Closing, or (iii) if their validity is being contested
in good faith by appropriate action and Seller executes and delivers at Closing an indemnification agreement agreeing to hold Buyer harmless therefrom; or (iv) if due and payable, now or in the future, provision has been made by Seller for the
payment thereof; (h) easements in respect of surface operations, pipelines, or the like and easements on, over or in respect of the Leases that are not such as to interfere materially with the operation or use of the Leases; (i) all other
inchoate liens, charges, encumbrances, contracts, agreements, instruments, obligations, defects and irregularities, including Title Defects, affecting any of the Leases that individually or in the aggregate are customary in the industry and do not
interfere materially with the operation, value or use of any of the Leases, and which do not reduce the Net Revenue Interest of the Leases to less than the applicable Net Revenue Interest set forth in Schedule 3.4(b) and do not obligate
Seller to bear costs and expenses relating to the maintenance, development and operation of any of the Leases in an amount greater than the applicable Working Interest set forth in Schedule 3.4(b); (j) all applicable Laws, rules and
orders of any Governmental Authority; and (k) inchoate liens for Taxes not due and payable before the Closing Date. 
 “Person” means an individual, partnership, corporation, business trust, limited liability company, limited liability partnership, joint stock company, trust, unincorporated association, joint venture or other entity or a
Governmental Authority. 
 “Personal Property” means all of Seller’s interest in all of the tangible personal property,
fixtures and improvements now and as of the Effective Time on, appurtenant to or used solely in connection with the Assets or with the production, treatment, storage, sale or disposal of hydrocarbons, water or other minerals or substances produced
from the Leases, including, without limitation, all Wells, wellhead equipment, fixtures, casing and tubing, all production, storage, treating, compression, dehydration, delivering, salt water disposal and pipeline fixtures, and other facilities of
every kind, character and description, used or usable solely in connection with the production, treatment, storage, delivery, sale or disposal of hydrocarbons, water or other minerals or substances produced from the Assets. 
 “Production” means all of Seller’s right, title and interest in the oil, gas, casinghead gas, condensate, distillate and other
liquid and gaseous hydrocarbons produced from the Leases, products refined and manufactured therefrom and the accounts and proceeds from the sale thereof to the extent the Production has been produced, or accrued, or is held on the Leases or in the
tanks from and after the Effective Time. 
 “Properties” means the lands associated with and subject to the Leases, to the
extent, and only to the extent, that Seller has made use of such lands in connection with the exploration or drilling for, or production of, hydrocarbons under the terms of the Leases. 
 “Property Agreements” means the Leases, pooling and unitization agreements, hydrocarbon purchase and sale contracts, leases, permits,
rights-of-way, easements, servitudes, licenses, farmouts, options, surface leases, surface fee interests, orders and other contracts or agreements: (i) to the extent relating to any Well or to the other Assets; or (ii) to the extent
relating to the production, storage, treatment, transportation, processing, sale or disposal of hydrocarbons, water or other minerals or substances produced therefrom or attributable thereto, identified on Schedule 3.5(a). 
  

 6 

 “Purchase Price” means the amount specified in Section 2.2 hereof.

 “Referral Firm” has the meaning given in Section 2.5(c)(ii). 
 “Retained Liabilities” means all liabilities and obligations of Seller, whether such liabilities or obligations relate to payment,
performance or otherwise, other than the Assumed Liabilities. 
 “Seller” has the meaning given in the opening paragraph.

 “Taxes” means any and all taxes, levies, imposts, duties, assessments, charges and withholdings imposed or required to be
collected by or paid over to any Governmental Authority. 
 “Tax Returns” means any report, return, information statement,
payee statement or other information required to be provided to any Governmental Authority, with respect to Taxes imposed on Seller. 
 “Title Defect” means any condition (other than a Permitted Encumbrance) that now or in the future: (A) reduces Seller’s Net Revenue Interest in any of the Leases to less than the amount as shown on Schedule
3.4(b) for each Lease; (B) increases Seller’s Working Interest as set forth on Schedule 3.4(b) for each Lease (other than increases that would result in the Net Revenue Interest in such Lease or Well being proportionately
increased); or (C) imposes, on any of the Leases any lien, charge, encumbrance, claim, easement, servitude, right, burden or defect that is not a Permitted Encumbrance hereunder. It is expressly understood that Permitted Encumbrances and
production imbalances do not constitute Title Defects. 
 “Title Defect Amount” means, with respect to a Property affected
by a Title Defect, the reduction in the Allocated Value of an Asset as a result of the Existence of one or more Title Defects. 
 “Title Defect Mechanism” means the procedure whereby the Purchase Price is adjusted to compensate for variations in the Allocated Values caused by Title Defects. The Title Defect Mechanism is set forth in Exhibit A.

 “Wells” means any of the oil or gas wells specifically identified on Schedules 3.4(b). 
 “Working Interest” means that interest that bears a share of all costs and expenses proportionate to the interest owned, associated with
the exploration, development and operation of a Lease and the Wells associated therewith, that the owner of a Lease is required to bear and pay by reason of such ownership, expressed as a decimal. 
  

 7 

 ARTICLE II 
 PURCHASE AND SALE 
 2.1. Purchase and Sale. 
 (a) At Closing, Seller shall sell, assign, convey, transfer and deliver to Buyer, and Buyer shall purchase and accept from Seller, all of
Seller’s right, title and interest in and to the Assets; provided, however, the Excluded Assets, as set forth on Schedule 2.1(a) will not be conveyed or purchased hereunder, but will be excluded from this transaction. 

(b) At Closing, Buyer shall assume and become obligated to pay, perform, or otherwise discharge the Assumed Liabilities. 
 (c) Notwithstanding anything herein to the contrary, Buyer shall not acquire any right or interest in any properties of Seller other than
the Assets or in any proceeds of production produced and sold from the Assets prior to the Effective Time or in any payments due Seller for production from the Assets prior to the Effective Time. 
 2.2. Purchase Price. The purchase price for the Assets will be $18,000,000, adjusted as provided in this Article II (as so adjusted, being
herein called the “Purchase Price”). At Closing, the Purchase Price as adjusted pursuant to Section 2.4 and Section 2.5(a) and (b) (the “Closing Purchase Price”) shall be paid by Buyer
to Seller in cash by wire transfer of immediately available funds. 
 2.3. The Deposit. 
 (a) Promptly upon the due execution of this Agreement by Buyer and Seller, Buyer shall pay to Seller the sum of $1,800,000 of immediately
available funds by wire transfer to an interest bearing account designated by Seller (the “Deposit”). If Closing occurs, the Deposit and all interest accrued shall be applied to reduce the Purchase Price. If Closing does not
occur, the Deposit and all interest accrued shall be applied as provided in Section 2.3(d) of this Agreement. 
 (b) Seller hereby agrees that it shall hold, invest and disburse the Deposit only in accordance with the terms and conditions of this Agreement. The account designated by Seller for the Deposit in Section 2.3(a) above shall be
an interest bearing account held by KeyBank. Seller hereby agrees that the Deposit shall be held at all times until disbursement in the account designated by Seller in Section 2.3(a) above, and that Seller shall at no time commingle any
of its funds with the Deposit or withdraw all or any portion of the Deposit except as provided under the terms and conditions of this Agreement. Any and all accrued interest or gains shall be deemed to be part of Deposit and will be paid to the
party receiving the Deposit as and when distribution is made therefrom, the parties specifically acknowledging that in the event that the Closing of the transactions contemplated by this Agreements occurs, any such accrued interest shall be applied
with the Deposit as a credit toward payment of the Purchase Price by Buyer. Seller hereby agrees to provide Buyer with written notification of its intention to withdraw all or any portion of the Deposit at least five (5) Business Days before
any such withdrawal, unless withdrawal occurs after Closing. 
  

 8 

 (c) At all times prior to the Closing, the Deposit shall, without any notice, demand,
presentment or protest of any kind (each of which is waived by Seller), automatically and immediately become due and payable to Buyer upon the occurrence of any one or more of the following events: (i) Seller is adjudicated as bankrupt,
(ii) Seller commences any bankruptcy or insolvency proceeding under the federal bankruptcy code or otherwise which is not rescinded within sixty (60) days, (iii) the making by Seller of a general assignment for the benefit of
creditors, or (iv) the appointment of a receiver or trustee in bankruptcy of Seller or for any of Seller’s assets which is not rescinded within sixty (60) days. Seller agrees to immediately return the Deposit to Buyer upon the
occurrence of any of the events specified in the preceding sentence. 
 (d) In the event that (i) the parties terminate
this Agreement pursuant to Section 9.1(a), (ii) Buyer or Seller terminate this Agreement pursuant to Sections 9.1(d), 9.1(e)or Section 9.1(f) or (iii) Buyer terminates this Agreement pursuant to
Section 9.1(c), Seller shall promptly return to Buyer the Deposit. 
 (e) In the event that Seller terminates this
Agreement pursuant to Section 9.1(b), Seller shall retain the Deposit as liquidated damages in lieu of all claims and causes of action it might otherwise have or claim. 
 (f) If (i) Buyer is not in material breach of any of its representations, warranties, covenants or other agreements in this Agreement
and (ii) Buyer is ready, willing and able to complete the Closing as described herein on the Closing Date, but Seller nonetheless refuses to complete the Closing, then Buyer may elect to terminate this Agreement and Seller will pay Buyer
$1,000,000 (in addition to the return of the Deposit) as liquidated damages in lieu of all claims and causes of action it might otherwise have or claim. 
 2.4. Adjustments to Purchase Price. 
 (a) To determine the Closing Purchase Price, the
Purchase Price shall be increased by the following amounts: 
 (i) the amount of all (1) ad valorem, property or similar
Taxes paid by Seller and relating to the Assets for periods from and after the Effective Time, calculated in a similar fashion as set forth in Section 2.4(b)(i), and (2) any other expenses paid by Seller and relating to the Assets
for periods from and after the Effective Time and properly incurred under Section 5.1; 
 (ii) a monthly general
administration fee in the amount of $25,000 per month for each month from the Effective Date until the Closing; provided that such fee shall be prorated for any partial month between the Effective Date and the Closing based on the number of days in
such month; 
  

 9 

 (iii) the aggregate amount of any and all operating costs paid by Seller, not in
violation of Section 5.1, that relate to the Assets for periods from and after the Effective Time (excluding amounts for which the Purchase Price is increased pursuant to Section 2.4(a)(i) above), including, but not limited to,
lease operating expenses, transportation and marketing expenses, lease payments, severance Taxes and producing overhead rates; 
 (iv) the aggregate amount of any and all capital expenditures actually made by Seller or on Seller’s behalf, not in violation of Section 5.1, that relate to the Assets for periods from and after the Effective Time;

 (v) an amount of money equal to the value of oil or condensate held on the Leases in the tanks above the load
line, as measured and recorded by Seller in the ordinary course of business as of September 30, 2008 (as set forth on Schedule 2.4(a)(v)) at a price per barrel of oil or condensate of $60.00 (decreased by the amount of
severance taxes, royalties and other burdens attributable to such oil or condensate); 
 (vi) an amount of money equal to any
payment made by Seller prior to the Closing pursuant to the expiration of any of the hedges set forth on Schedule 5.7; and 
 (vii) any other amount agreed upon by the parties in writing. 
 (b) To determine the Closing Purchase Price, the
Purchase Price shall be decreased, without duplication, by the following amounts: 
 (i) the amount of all of Seller’s
unpaid ad valorem, production, severance, property or similar Taxes relating to the Assets, to the extent that such unpaid Taxes relate to periods of time before the Effective Time (to the extent that any such amount has not been finally determined
by Closing or any other date of determination, such amount will be estimated based upon the best information then reasonably available to the parties). Such Taxes with respect to a period which the Effective Time splits shall be prorated based on
the number of days in such period which fall on each side of the Effective Time; provided, however, to the extent that such Taxes are computed based on the production from the Assets, such Taxes shall be prorated between the parties based on
the period in which such production which is the basis for such calculation occurs, in the same manner as the parties are entitled to receive (or be credited with) such production pursuant to the terms hereof; 
 (ii) amounts equal to all revenues (net of royalty, overriding royalty payments and similar such payments) collected by Seller that are
attributable to production of oil or gas from the Assets (but not taking into account any hedges) and from the disposal of salt water and relating to periods of time from and after the Effective Time; 
  

 10 

 (iii) an amount equal to the amount of accrued suspense funds as of the Closing Date
(such amount to be determined by Seller by updating the amount of accrued suspense funds as of November 30, 2008 set forth on Schedule 2.4(b)(iii) to reflect the amount of accrued suspense funds as of the Closing Date; 
 (iv) an amount, calculated in accordance with the procedures of Exhibit A for Title Defects and Environmental Defects, equal to the
agreed value of any Title Defect or Environmental Defect that is asserted prior to Closing, agreed to by Seller, and remains uncured by Seller at Closing; provided that Title Defects or Environmental Defects for which there is no agreement
prior to Closing shall be addressed in accordance with procedures of Exhibit A; 
 (v) an amount of money equal to the
Allocated Value of any Leases or Wells set forth on Schedule 3.4(b) that are removed from the purchase and sale under this Agreement by reason of the exercise of a preferential right to purchase by the holder of such right prior to Closing;

 (vi) an amount of money equal to any payment received by Seller prior to the Closing pursuant to the expiration of any of
the hedges set forth on Schedule 5.7; and 
 (vii) any other amount agreed upon by the parties in writing. 

2.5. Determination of Purchase Price. 
 (a) The Closing Purchase Price shall be determined by adding to or subtracting from the Purchase Price, as applicable, each adjustment to be made to the Purchase Price at Closing pursuant to Sections 2.3 and
2.4, as proposed by Seller and not disputed by Buyer in accordance with this Section 2.5. 
 (b) Seller shall
prepare and deliver to Buyer at least five Business Days before the Closing Date a statement (the “Preliminary Settlement Statement”) setting forth Seller’s good faith estimate of each adjustment (including the calculation
thereof) to be made in accordance with Sections 2.3 and 2.4. Buyer may dispute in good faith Seller’s estimate of the amount of such adjustments by delivery to Seller by written notice thereof within two Business Days after receipt of
such estimate. Buyer and Seller shall use commercially reasonable efforts to resolve any such dispute in writing prior to Closing. If any such disputed amounts are not resolved by mutual written agreement of Buyer and Seller prior to Closing,
(i) such disputed amounts shall be resolved in accordance with Section 2.5(c)(i) and (ii) Closing shall occur with payment of the Closing Purchase Price less the amount of such disputed item or items (but only to the extent of
dispute); provided, however, that Title Defects and Environmental Defects shall be addressed as set forth in Section 2.4(b)(iv). 
 (c) After Closing, and regardless of whether Seller or Buyer proposed or disputed such adjustments pursuant to Section 2.5(b), the Closing Purchase Price shall be subject to further adjustment
pursuant to this Section 2.5(c). 
  

 11 

 (i) On or before the 90th day after Closing, Seller shall prepare and deliver to Buyer, a
statement (the “Final Settlement Statement”) setting forth Seller’s calculation of the final adjustments described in Sections 2.3 and 2.4 and showing the calculation of such adjustments, including any items that may
have been disputed by the parties but unresolved prior to Closing in accordance with Section 2.4(b). Within 30 days after receipt of the Final Settlement Statement, Buyer shall deliver to Seller a written report containing any changes
that Buyer proposes be made to the Final Settlement Statement and the reasons for those changes. The parties shall attempt to agree to the amounts due pursuant to such adjustments, including any amounts disputed under Section 2.5(b) and
not resolved prior to Closing, no later than 30 days after Buyer’s receipt of the Final Settlement Statement. The date upon which such agreement is reached shall be herein called the “Final Settlement Date”. Within five
Business Days from the Final Settlement Date, the party owing any undisputed amount for additional adjustments shall wire such amount in cash, in immediately available funds to the other party. 
 (ii) If Seller and Buyer are unable to agree upon the Final Settlement Statement by the 30th day after Buyer’s receipt of same, KPMG
LLP (or, if such firm is unable or unwilling to act, such other nationally recognized independent public accounting firm as shall be agreed upon by Buyer and Seller in writing) (the “Referral Firm”) shall review the Final Settlement
Statement and the records relating to the Leases and determine the final adjustments, other than adjustments determined under the mechanism regarding Title Defects and Environmental Defects set forth in Exhibit A. With respect to any matters
under this Agreement to be resolved by the Referral Firm, neither the Referral Firm nor any Person employed by the Referral Firm will interpret the provisions of this Agreement unless otherwise agreed by Seller and Buyer in writing. With respect to
any matters for which interpretation of this Agreement is required, and for which Buyer and Seller cannot agree on such interpretation, such matter shall be submitted to arbitration in a similar manner as set forth in Exhibit A, paragraph 8
regarding Title Defect and Environmental Defect disputes and the Referral Firm shall decide all other matters specified in this Section 2.5(c)(ii) and subsequently determine the matters for which interpretation was required, based upon
the results of said determination after same has become final. The decision of the Referral Firm shall be binding on Buyer and Seller, and the fees and expenses of the Referral Firm shall be borne one-half each by Buyer and Seller. The Referral Firm
shall deliver its final calculation of the Purchase Price in writing to Buyer and Seller as soon as is practicable, and the parties shall pay and receive the final adjustment amount by wire transfer of cash in immediately available funds, no later
than the 5th business day following the paying party’s receipt from the Referral Firm of the final Purchase Price determination (notwithstanding any ongoing dispute, if any, regarding Title Defects. 
 (iii) The parties will, and will cause their representatives to, reasonably cooperate and assist in the preparation of the Final
Settlement Statement and the conduct of the reviews and audits referred to in this Section 2.5, including but not limited to making available books, records and personnel as necessary or appropriate. 
  

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 ARTICLE III 
 REPRESENTATIONS AND WARRANTIES OF SELLER 
 Seller hereby represents and warrants to Buyer that: 
 3.1. Organization. Seller is duly organized, validly existing and in good standing under the laws of the State of Delaware. Seller has full power
and authority to conduct its business as it is now being conducted and to own the Assets (or to lease those Assets leased by it). Seller is duly qualified to do business as a foreign limited liability company and is in good standing under the laws
of each state or other jurisdiction in which either the ownership or use of the Assets owned or used by it, or the nature of the activities conducted by it related to the Assets, requires such qualification. 
 3.2. Authorization. The execution, delivery and performance of this Agreement have been authorized by all necessary action on the part of Seller,
and no further actions on the part of Seller are necessary to authorize the execution, delivery and performance of this Agreement or the consummation of the transactions contemplated hereby. This Agreement, and all of the other documents or
instruments required to be executed and delivered by Seller at Closing have been, or at Closing will be, duly executed and delivered by Seller and (assuming the due authorization, execution and delivery hereof and thereof by Buyer) are valid and
binding obligations of Seller, enforceable against Seller in accordance with their terms (except to the extent that enforcement may be affected by applicable bankruptcy, reorganization, insolvency and similar Laws affecting creditors’ rights
and remedies generally and by general principles of equity (regardless of whether enforcement is sought at law or in equity)). 
 3.3. No
Violation or Conflict. Except as set forth on Schedule 3.3, the execution, delivery and performance of this Agreement and all of the other documents and instruments contemplated hereby to which Seller is a party does not and will not
(a) conflict with, violate or breach any Laws, judgment, order or decree binding on Seller, the limited liability company agreement of Seller, or any material contract to which Seller is a party or by which it is bound, (b) give any party
to any of the Property Agreements to which Seller is a party or by which they are bound any right of termination, breach, cancellation, acceleration or modification thereunder or (c) require the approval, consent or authorization of, or prior
notice to, filing with or registration with any Governmental Authority except as would not, in any case, have a Material Adverse Effect on Seller or the ability of Seller to consummate the transfers contemplated by this Agreement. 
 3.4. Title. 
 (a)
Seller owns or leases, subject to its rights and the rights of third parties under joint operating agreements where applicable, all Personal Property currently used with and which is reasonably sufficient to operate, in the ordinary course of
business, the Assets of which Seller is the operator of record; provided, as to Personal Property currently used with Assets of which Seller is not the operator of record, Seller only represents and warrants that it has an interest in such Personal
Property 

  

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commensurate with its working interest. Schedule 3.4(a) contains a list of all leased Personal Property used in connection with the Assets of which
Seller is the operator of record and, except as set forth on Schedule 3.4(a), all of said leases are assignable. Subject to ordinary wear and tear and to scheduled or necessary repairs in the ordinary course of business, all material items of
Personal Property appurtenant to or used in connection with Assets of which Seller is the operator of record are in reasonably good and serviceable condition and repair and there are no necessary material repairs, improvements, restoration or other
service work necessary to make any of such assets serviceable. Seller owns or leases such Personal Property appurtenant to or used in connection with Assets of which Seller is the operator of record free and clear of any claim, lien, right, or
encumbrance, except for Permitted Encumbrances. 
 (b) Set forth on Schedule 3.4(b) is a true, correct and complete
description of each of the Leases and a list of the Wells located on the lands associated with and subject to the Leases, together with a description of Seller’s Net Revenue Interest and Working Interest therein. 
 (c) Seller owns all rights of way and surface damage agreements associated therewith that are currently used with and which are reasonably
sufficient for the operation of the Assets or the production, treatment, storage, sale or disposal of hydrocarbons, water or other minerals or substances produced from the Leases, and, to the Knowledge of Seller, all of same are assignable.

 3.5. Contracts. 
 (a) Schedule 3.5(a) lists the material Property Agreements other than the Leases. Prior to the date hereof, Seller has made available to Buyer true and correct copies of all Property Agreements. Except as set
forth on Schedule 3.5(a) (i) each Property Agreement is a valid and binding agreement of Seller, enforceable in accordance with its terms, except as may be limited by bankruptcy, insolvency, reorganization, or other laws affecting
creditors’ rights generally or equitable principles; (ii) Seller has performed, and, to the Knowledge of Seller, each other party has performed, each material term, covenant and condition of each of the material Property Agreements to
which Seller is a party that is to be performed by Seller or such other party at or before the date hereof; (iii) no event has occurred that would, with the passage of time or compliance with any applicable notice requirements or both,
constitute a default by Seller or, to the Knowledge of Seller, any other party, under any of the material Property Agreements to which Seller is a party, except for such defaults that individually or in the aggregate are not reasonably expected to
have a Material Adverse Effect on any of the Property Agreements; and (iv) Seller does not intend, and Seller has not received written notice that any other party to a material Property Agreement intends, to cancel or terminate any of such
Property Agreements. 
 (b) Except as set forth on Schedule 3.5(b) there are no on-going renegotiations of, or attempts
to renegotiate, any amounts paid or payable to Seller under any of the Property Agreements and no party has made written demand for such renegotiations. 

  

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Except as set forth on Schedule 3.5(b), there are no commissions due (or to become due) to any broker or other party as a result of the purchase or
sale of hydrocarbons under any of the Property Agreements. Except as set forth on Schedule 3.5(b) Seller has not, with respect to the Property Agreements: (i) become overproduced as to any Asset so as to have a balancing obligation
relative thereto, nor has it otherwise received any quantity of natural gas or liquids, condensate or crude oil to be paid for thereafter other than in the normal cycle of billing; or (ii) received prepayments, advance payments or loans which
will require the performance of services or provision of natural gas or liquids, condensate or crude oil under such Property Agreements on or after the Effective Time without being currently paid therefore other than in the normal cycle of billing.
Except as set forth on Schedule 3.5(b), Seller is not obligated, by virtue of prepayment arrangement, make up right under production sales contract containing a “take or pay” or similar provision, gas balancing agreement, production
payment or any other arrangement to deliver hydrocarbons, or proceeds from the sale thereof, attributable to the Leases at some future time without then or thereafter receiving the full contract price therefore. Except as set forth on Schedule
3.5(b) or in any Property Agreement, there is no call upon, option to purchase or similar right to obtain hydrocarbons from the Leases in favor of any Person other than pursuant to renewal rights or automatic renewal provisions contained in
existing contracts for the sale for hydrocarbons. 
 3.6. Lease Provisions. All Leases are in force and effect and are maintained by
their terms. Accurate and timely payment of delay rentals have been made to maintain in force and effect all Leases within the primary term on which drilling operations were not timely commenced. All other Leases are validly preserved beyond the
primary term by production in paying quantities or the accurate and timely payment of shut-in royalty payments or otherwise. Except as set forth on Schedule 3.6, all rentals, royalties, overriding royalty interests and other payments due
under each of the Leases have been timely and accurately paid, except amounts that are being held in suspense as a result of title issues in circumstances that do not provide any third party a right to terminate any such Lease. Schedule
2.4(b)(iii) lists the accrued suspense funds as of November 30, 2008. 
 3.7. Compliance with Law. Except as set forth on
Schedule 3.7: 
 (a) All filings and notices relating to the Leases, or the ownership or operation thereof, required to
be made by Seller with all Governmental Authorities have been made by or on behalf of Seller other than filings or notices for which the failure to provide is not, individually or in the aggregate, reasonably expected to have a Material Adverse
Effect on Seller. Seller is not in violation of any Law with respect to the Assets, except for such violations as are not, individually or in the aggregate, reasonably expected to have a Material Adverse Effect on the Leases as a whole. 

(b) Seller holds all of the Permits necessary for the operation of Seller’s business as currently conducted, other than Permits
for which the failure to hold is not, individually or in the aggregate, reasonably expected to have a Material Adverse Effect on Seller. There are no proceedings pending or, to the Knowledge of Seller, threatened that are reasonably expected to
result in the revocation, cancellation, suspension or modification of any material Permits. There are no proceedings pending or, to the Knowledge of Seller, threatened (i) with respect to any alleged failure to have all Permits required in
connection with the 

  

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operation of Seller’s business as currently conducted, or (ii) with respect to any valid requirement to plug or abandon any Well in which Seller
owns an interest or that is located on any of the Leases. 
 3.8. Litigation. Except as set forth on Schedule 3.8 or
Schedule 3.10, there is no claim, legal action, suit, litigation, arbitration, dispute or investigation, judicial, administrative or otherwise, or any order, decree or judgment, now pending or in effect, or, to the Knowledge of Seller,
threatened or contemplated, that, if adversely determined, would have a Material Adverse Effect on the Assets or the transactions contemplated by this Agreement. 
 3.9. Taxes. There are no liens for Taxes on the Assets, except for Taxes not yet due, and (subject to Section 7.2(a)) there is no unpaid Tax payable by Seller for which Buyer would become liable by
reason of purchasing the Assets hereunder. Seller has filed or will file all Tax Returns required to be filed by Seller in connection with its ownership or operation of the Assets. None of the joint operating agreements covering the Assets to which
Seller is a party are treated as a partnership for income tax purposes. None of the Assets is held in an arrangement treated as a partnership for income tax purposes. 
 3.10. Environmental Matters. As to the Properties, there are no pending or, to the Knowledge of Seller, threatened (a) lawsuits, (b) notices of violation or notices of deficiency, (c) civil or
criminal penalties, or (d) other unresolved orders based on any noncompliance with Environmental Laws. Seller also represents and warrants that there are no Environmental Defects existing on any of the Properties that would, individually or in
the aggregate, cost Seller in excess of $180,000 to cure, except as disclosed in Schedule 3.10. THIS SECTION 3.10 CONSTITUTES SELLER’S SOLE REPRESENTATION AND WARRANTY WITH RESPECT TO ENVIRONMENTAL LAWS. 
 3.11. Broker’s Fees. Seller has incurred no obligation or liability, contingent or otherwise, for broker’s or finder’s fees in
respect of the matters provided for in this Agreement for which Buyer or Buyer’s affiliates will be responsible. 
 ARTICLE IV

 REPRESENTATIONS AND WARRANTIES OF BUYER 
 Buyer hereby represents and warrants to Seller: 
 4.1. Organization. Buyer is a limited liability
company, duly formed, validly existing and in good standing under the laws of the State of Delaware. Buyer is duly qualified as a foreign limited liability company in good standing in each jurisdiction in which the conduct of its business requires
such qualification, except where the failure to be so qualified would not prevent, materially delay or affect consummation of the transactions contemplated hereby. 
 4.2. Authorization. Buyer has full power and authority to execute, deliver and perform this Agreement and each agreement or instrument (to which it is a party) executed in connection herewith or delivered
pursuant hereto and to consummate the transactions 

  

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contemplated hereby. Buyer’s execution, delivery and performance of this Agreement and all agreements and instruments executed in connection herewith or
delivered pursuant hereto and the transactions contemplated hereby have been duly authorized by all requisite action. This Agreement and all agreements or instruments executed by Buyer in connection herewith or delivered by Buyer pursuant hereto
have been or will be duly executed and delivered by Buyer, and this Agreement and all agreements and instruments executed by Buyer in connection herewith or delivered by Buyer pursuant hereto constitute and will constitute the legal, valid and
binding obligations of Buyer, enforceable in accordance with their respective terms (except to the extent that enforcement may be affected by applicable bankruptcy, reorganization, insolvency and similar laws affecting creditors’ rights and
remedies generally and by general principles of equity (regardless of whether enforcement is sought at law or in equity)). 
 4.3. No
Violation or Conflict. The execution, delivery and performance by Buyer of this Agreement and each agreement or instrument executed in connection herewith or delivered pursuant hereto and the consummation of the transactions contemplated herein
will not, with or without the giving of notice or the passage of time, or both, (a) conflict with, or result in a violation or breach of, or a default, right to accelerate or loss of rights under, or result in the creation of any Lien under or
pursuant to, any provision of Buyer’s articles of incorporation or bylaws (or equivalent governing documents) or any Laws, or any finding, order, judgment, writ, injunction or decree to which Buyer is a party or by which Buyer or its assets may
be bound or affected; or (b) require the approval, consent or authorization of, or prior notice to, filing with or registration with, any Governmental Authority, or any other Person. 
 4.4. No Reliance. With respect to the transactions contemplated hereby, Buyer acknowledges that it (a) has been granted access to all the
Books and Records and materials to conduct all necessary due diligence, and (b) has been afforded the opportunity to ask questions of, and receive answers from, Seller and its representatives. Buyer acknowledges that it has not relied on any
oral or written statements, representations, warranties, or assurances from Seller or its officers, directors, employees, agents, or consultants, except those set forth in this Agreement. Buyer is sophisticated in the evaluation, purchase, ownership
and operation of oil and gas properties and related facilities. In making its decision to enter into this Agreement and to consummate the transaction contemplated herein, subject to the express representations of Seller set forth in this Agreement,
Buyer (a) has relied or shall rely solely on its own independent investigation and evaluation of the Assets and the express provisions of this Agreement and (b) has satisfied or shall satisfy itself as to the environmental and physical
condition of and contractual arrangements affecting the Assets. Buyer has no knowledge of any fact that results in the breach of any representation, warranty or covenant of Seller given hereunder. 
 4.5. Financing. 
 (a)
Buyer has, and will have at Closing, unencumbered cash sufficient to fully satisfy its obligations to pay the Purchase Price to Seller, as and when due. 
  

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 (b) Buyer has sufficient financial resources to fulfill the surety bonding requirements
of the States of Texas and New Mexico in connection with the Leases. 
 4.6. Broker’s Fees. Buyer has incurred no obligation or
liability, contingent or otherwise, for broker’s or finder’s fees in respect of the matters provided for in this Agreement for which Seller or Seller’s affiliates will be responsible. 
 ARTICLE V 
 COVENANTS

 5.1. Conduct of Business. Except as provided in this Agreement, until the earlier of Closing or the termination of this
Agreement in accordance with its terms, Seller will use commercially reasonable efforts to maintain Seller’s interest in the Assets consistent with past practices and will pay lease revenue burdens, pay Taxes, and file all reports and other
documents, and renew all permits, as due consistent with past practices. Other than capital expenditures for the various projects set forth on Schedule 5.1, Seller has not, from and since the Effective Time, and will not undertake any capital
expenditures in excess of $50,000 or any contractual commitment in excess of thirty (30) days without the approval of Buyer, except in instances that could, in the opinion of Seller, result in material damage or injury to Persons, property or
any of the Assets. 
 5.2. Buyer’s Access to Information. At Buyer’s sole cost and expense, Buyer and its authorized agents,
officers and representatives shall have reasonable access to the Assets, including the Books and Records, in order to conduct such examinations and investigations of the Assets as Buyer deems necessary; provided, however, that such
examinations and investigations: (a) shall be conducted during the normal business hours of Seller, (b) shall not unreasonably interfere with the operations and activities of Seller, and (c) shall be subject to the prior written
approval of Seller, which approval will not be unreasonably withheld. 
 5.3. Further Assurances. Each of the parties hereto hereby
agrees (a) to use commercially reasonable efforts to obtain, any and all approvals of Governmental Authorities and third party consents, approvals, notations and authorizations required in connection with the consummation of the transactions
contemplated by this Agreement, and (b) to take all such other commercially reasonable actions as are necessary or advisable in order to cause the conditions set forth herein to be satisfied. Seller further agrees to fully cooperate and
exercise reasonable, good faith efforts to accommodate Buyer’s efforts to succeed Seller as operator of Seller-operated Assets. 
 5.4.
Filings. Promptly after the execution of this Agreement, the parties shall prepare and make or cause to be made any required filings, submissions and notifications under the Laws of any domestic or foreign jurisdiction to the extent that such
filings are necessary to consummate the transactions contemplated hereby (including to obtain the consents and approvals, contemplated by Section 5.3). Each party will furnish to the other party such necessary information and reasonable
assistance as such other party may reasonably request in connection with the foregoing. 
  

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 5.5. Publicity. All general notices, releases, statements and communications to suppliers,
distributors and customers of Seller or Buyer and to the general public and the press relating to the transactions contemplated by this Agreement shall be made only at such times and in such manner as may be agreed upon in advance by Seller and
Buyer; provided, however, that any party hereto or its affiliates shall be entitled to make a public announcement if, upon the advice of its legal counsel, such announcement is required to comply with Laws or any listing agreement with any
national securities exchange and if, to the extent practicable, it gives prior notice to the other party hereto of its intention to make such public announcement and provides the opportunity to review the content of such disclosure. 
 5.6. Casualty. Seller will maintain until Closing all existing insurance, at its sole cost and expense. If any material portion of any Asset shall
be damaged or destroyed by fire or other casualty before the Closing, either party may, at its option, and upon written notice prior to Closing to the other party, elect to exclude such Asset from this Agreement. In the event that the Asset to be
excluded pursuant to this Section 5.6 is the entirety of a Lease, the Purchase Price shall be reduced by the Allocated Value of the Lease or Well to be excluded. In the event that the Asset sought to be excluded is less than the entirety
of a Lease, the Purchase Price shall be reduced by an amount mutually agreed to in writing. If neither party elects to delete such Asset from this Agreement, Seller shall pay the deductible due under any insurance policy or policies insuring the
same and deliver to Buyer, at Closing, any insurance proceeds actually received by it by reason of such casualty, and assign to Buyer all of its right, title and interest in any claim under any applicable insurance policies in respect of such
casualty. 
 5.7. Hedges. Prior to the Closing, Seller will execute and enter into the hedges as set forth and described on
Schedule 5.7 and take all reasonable actions to assign ownership of the hedges to Buyer at the Closing. Prior to the Closing, Buyer will establish all necessary accounts and take all other actions necessary to enable Buyer to assume ownership
of the hedges at the Closing and to release Seller from all of its obligations pursuant to the hedges. 
 ARTICLE VI 

CONDITIONS PRECEDENT TO CONSUMMATION OF THE CLOSING; CLOSING 
 6.1. Conditions Precedent to Each Party’s Obligations to Close. The respective obligations of each party to consummate the transactions
contemplated by this Agreement on the Closing Date are subject to the satisfaction or waiver at or prior to the Closing of the following conditions precedent: 
 (a) no order, decree or injunction shall have been enacted, entered, promulgated or enforced by any Governmental Authority that prohibits
the consummation of the transactions contemplated by this Agreement; provided, however, that the parties hereto shall use their commercially reasonable efforts to have any such order, decree or injunction vacated or reversed; and 

(b) all consents, authorizations, orders, permits and approvals for (or registrations, declarations or filings with) any Governmental
Authority required in connection with the execution, delivery and performance of this Agreement and the 

  

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transactions contemplated hereby shall have been obtained or made, and except where the failure to have obtained or made any such consent, authorization,
order, approval, filing or registration may not reasonably be expected to have a Material Adverse Effect on Buyer or Seller following the Closing Date. 
 6.2. Conditions Precedent to Obligations of Buyer. The obligation of Buyer to consummate the transactions contemplated by this Agreement on the Closing Date is subject to the satisfaction or waiver at or prior
to the Closing of the following conditions precedent: 
 (a) the representations and warranties of Seller contained in
Article III shall be true and correct in all material respects (when read without exception for materiality or Material Adverse Effect) at and as of the Closing Date with the same force and effect as if those representations and warranties
had been made at and as of such time (with such exceptions, if any, necessary to give effect to events or transactions expressly permitted herein); 
 (b) Seller shall have performed, in all material respects, all obligations and complied with all covenants contained herein that are necessary to be performed or complied with by it at or before Closing; 

(c) Seller shall have (i) entered into the hedges set forth on Schedule 5.7 and (ii) taken all reasonable actions to
assign the hedges to Buyer, such assignment to be effective at the Closing; and 
 (d) Seller shall have delivered, or caused
to be delivered, to Buyer at Closing, all closing deliveries described in Section 6.4(a). 
 6.3. Conditions Precedent to
Obligations of Seller. The obligation of Seller to consummate the transactions contemplated by this Agreement on the Closing Date is subject to the satisfaction or waiver at or prior to the Closing of the following conditions precedent:

 (a) the representations and warranties of Buyer contained in Article IV shall be true and correct in all material
respects (when read without exception for materiality or Material Adverse Effect) at and as of the Closing Date with the same force and effect as if those representations and warranties had been made at and as of such time (with such exceptions, if
any, necessary to give effect to events or transactions expressly permitted herein); 
 (b) Buyer shall have performed, in all
material respects, all obligations and complied with all covenants contemplated herein that are necessary to be performed or complied with by it at or before Closing; 
 (c) Buyer shall have (i) established all necessary accounts and taken all other actions necessary to enable Buyer to assume ownership
of the hedges set forth on Schedule 5.7 at the Closing and to release Seller from all of its obligations pursuant to the hedges and (ii) assumed ownership of the hedges at the Closing. 
  

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 (d) Buyer shall have delivered, or caused to be delivered, to Seller at Closing, the
closing deliveries described in Section 6.4(b). 
 6.4. The Closing. The following provisions shall be applicable with respect
to the Closing: 
 (a) At Closing, Seller shall, as a condition precedent to Buyer’s obligations hereunder: 

(i) execute and deliver the Assignment and the Assumption Agreements to Buyer; 
 (ii) deliver a certificate of Seller, signed by an authorized officer of Seller, certifying that the conditions set forth in
Section 6.2 have been satisfied; 
 (iii) execute and deliver a FIRPTA Affidavit in the form attached as
Exhibit D; 
 (iv) execute and deliver to Buyer letters in lieu of transfer or division orders; 
 (v) execute and deliver to Buyer any other forms required by any Governmental Authority relating to the assignment of the Assets and
relating to the assumption of operations by Buyer; 
 (vi) execute and deliver to Buyer Assignments of Record Title and
Transfers of Operating Rights on Bureau of Land Management forms 3003-3 and 3000-3a, as applicable; 
 (vii) deliver to Buyer
such of the original Books and Records as Seller determines to be feasible and thereafter deliver the remainder of the original Books and Records to Buyer as soon after Closing as is reasonably practicable; and 
 (viii) deliver possession of the Assets to Buyer. 
 (b) At Closing, and as a condition precedent to Seller’s obligations hereunder, Buyer shall: 
 (i) pay to Seller in cash in immediate available funds the Closing Purchase Price by wire transfer to a bank to be designated by Seller in
writing; 
 (ii) execute and deliver the Assumption Agreement to Seller; 
 (iii) deliver a certificate of Buyer, signed by an authorized officer of Buyer, certifying that the conditions set forth in
Section 6.3 have been satisfied; and 
  

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 (iv) execute and deliver to Seller any and all other instruments, documents and other
items reasonably necessary to effectuate the terms of this Agreement, as may be reasonably requested by Seller. 
 ARTICLE VII 

 ADDITIONAL COVENANTS 
 7.1. Seller’s Access to Books and Records. At its expense, Seller and its affiliates and its and their authorized agents, officers and representatives shall have reasonable access after the Closing Date to the Books and Records
for any reasonable business purpose; provided, however, that such access by Seller and its affiliates, and its and their authorized agents, officers and representatives (a) shall be conducted during the normal business hours of Buyer,
and (b) shall not unreasonably interfere with the operations and activities of Buyer. Buyer shall cooperate in all reasonable respects with Seller’s review of such information, including, without limitation, retaining all such information
until Seller has notified Buyer in writing that all tax years (including any portion of a tax year) prior to and including the Closing Date have been closed or for seven years, whichever is longer. 
 7.2. Tax Matters. 
 (a) Buyer shall be responsible, and agrees to hold harmless and indemnify the Seller Indemnified Parties, for any and all sales, transfer, recordation, or similar Taxes payable by virtue of the transactions contemplated by this Agreement.
Buyer and Seller shall cooperate to timely prepare and file all Tax Returns relating to the Assets. The parties will use IRS form 8594 to report the transaction. 
 (b) Seller shall be responsible, and agrees to hold harmless and indemnify the Buyer Indemnified Parties, for all oil and gas production,
severance, ad valorem and other similar Taxes with respect to the Assets for periods (or any portion thereof) or production prior to the Effective Time, in each case to the extent not taken into account under Section 2.4(b). Buyer shall
be responsible, and agrees to hold harmless and indemnify the Seller Indemnified Parties, for all oil and gas production, severance, ad valorem and other similar Taxes with respect to the Assets for periods (or any portion thereof) or production
after the Effective Time, in each case to the extent not taken into account under Section 2.4(a) but including the items described in Section 2.4(b). 
 (c) The parties agree to cooperate with each other as reasonably required after the Closing Date in connection with audits and other
proceedings with respect to any Taxes relating to the Assets. 
 (d) Notwithstanding any other provision of this Agreement,
the covenants and obligations set forth in this Section 7.2 shall survive until, and any claim for indemnification with respect thereto must be made prior to, the expiration of the applicable statute of limitations with respect to the
underlying Tax claim (including any valid extensions). 
 7.3. Surety Bonds; Letters of Credit. Buyer shall have surety bonds or
letters of credit in place, if and as required, prior to or immediately following the Closing Date sufficient to replace Seller’s surety bonds or letters of credit set forth on Schedule 7.3. 

  

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Buyer shall release or cause Seller’s surety bonds or letters of credit to be released in full as soon as reasonably practicable following the Closing
Date and will notify Seller in writing when such surety bonds or letters of credit are released. 
 7.4. Consents and Preferential
Rights. Any consents other than consents customarily obtained after Closing (such as, for example, consents to assign federal leases) arising under any of the Property Agreements and unresolved at Closing (either by time constraints or by
refusal to consent), shall be considered agreed-upon Title Defects under Exhibit A, until satisfied. If on the Closing Date, the holder of a preferential right has not indicated whether or not it will exercise its right and the time period
within which it must timely respond has not lapsed, then the parties shall proceed to Closing on those Assets affected by the preferential right and Buyer shall assume responsibility for conveying the Assets to the holder of the preferential right
should it timely exercise, in return for payment by the holder to Buyer of the Allocated Value of the affected Assets. 
 ARTICLE VIII

 INDEMNIFICATION 
 8.1. Indemnification of Buyer. Seller will indemnify, defend and hold Buyer and its affiliates and their respective directors, managers, officers, employees, owners, members and agents (collectively, the “Buyer Indemnified
Parties”) harmless from any and all Liabilities, obligations, claims, contingencies, damages, costs and expenses, including all court costs, litigation expenses and reasonable attorneys’ fees (collectively, “Losses”)
that any Buyer Indemnified Party may suffer or incur as a result of or relating to: 
 (a) the breach of any representation or
warranty made by Seller in this Agreement or pursuant hereto or any allegation by a third party that, if true, would constitute such a breach; 
 (b) the breach of any covenant or agreement made by Seller in this Agreement or pursuant hereto or any allegation by a third party that, if true, would constitute such a breach; or 
 (c) any Liability of Seller, known or unknown, other than the Assumed Liabilities, including any Litigation or other third person claims
relating to or arising from ownership of the Assets and/or from the activities and operations of Seller’s business with respect to any period (or portion thereof) occurring on or prior to the Closing; 
 provided, that except with respect to (i) the breach or the alleged breach of the representations and warranties set forth in Section 3.2
(Authorization) or (ii) any fraud or intentional or criminal misconduct by Seller in connection with this Agreement, the documents executed in connection herewith or the transactions contemplated hereby, for which no such limitation shall
apply, the maximum aggregate liability for which the Buyer Indemnified Parties will be entitled to indemnification under this Section 8.1 shall be $3,000,000, which includes (1) one-hundred percent (100%) of the aggregate Losses up to
$1,000,000 and (2) fifty percent (50%) of the aggregate Losses greater than $1,000,000 up to $5,000,000. 
  

 23 

 8.2. Indemnification of Seller. Buyer will indemnify, defend and hold Seller and its affiliates
and their respective directors, managers, officers, employees, owners, members and agents (collectively, the “Seller Indemnified Parties”) harmless from any and all Losses that any Seller Indemnified Party may suffer or incur as a
result of or relating to: 
 (a) the breach of any representation or warranty made by Buyer in this Agreement or pursuant
hereto or any allegation by a third party that, if true, would constitute such a breach; 
 (b) the breach of any covenant or
agreement made by Buyer in this Agreement or pursuant hereto or any allegation by a third party that, if true, would constitute such a breach; or 
 (c) the failure of Buyer to perform and discharge in full, in a due and timely manner, the Assumed Liabilities; 
 provided, that except with respect to (i) the breach or the alleged breach of the representations and warranties set forth in Section 4.2 (Authorization); or (ii) any fraud or intentional or criminal misconduct
by Buyer in connection with this Agreement, the documents executed in connection herewith or the transactions contemplated hereby, for which no such limitation shall apply, the maximum aggregate liability for which the Seller Indemnified Parties
will be entitled to indemnification under this Section 8.2 shall be $3,000,000, which includes (1) one-hundred percent (100%) of the aggregate Losses up to $1,000,000 and (2) fifty percent (50%) of the aggregate Losses
greater than $1,000,000 up to $5,000,000. 
 8.3. Survival. The representations and warranties of Seller and Buyer made in or pursuant
to this Agreement will survive the execution and delivery of this Agreement and the consummation of the transactions contemplated hereby until the one-year anniversary of the Closing Date; provided that any claim for indemnification will
survive until such claim is finally resolved if Buyer notifies Seller, or if Seller notifies Buyer, as applicable, of such claim in reasonable detail prior to the date which is the one-year anniversary of the Closing Date. Without limiting the
foregoing, no claim for indemnification pursuant to Section 8.1(a) or Section 8.2(a) based on the breach or alleged breach of a representation or warranty may be asserted after the date on which such representation or
warranty expires hereunder. The covenants and agreements of Seller and Buyer made in or pursuant to this Agreement will survive the execution and delivery of this Agreement and the consummation of the transactions contemplated hereby indefinitely.

 8.4. Notice. Any party entitled to receive indemnification under this Article VIII (the “Indemnified
Party”) agrees to give prompt written notice to the party required to provide such indemnification (the “Indemnifying Party”) promptly after becoming aware of the occurrence of any indemnifiable Loss or the assertion of any
claim or the commencement of any action or proceeding in respect of which such a Loss may reasonably be expected to occur (a “Claim”), but the Indemnified Party’s failure to give such notice will not affect the obligations of
the Indemnifying Party under this Article VIII except to the extent that the Indemnifying Party is 

  

 24 

 
materially prejudiced thereby. Such written notice will include a reference to the event or events forming the basis of such Loss or Claim and the amount
involved, unless such amount is uncertain or contingent, in which event the Indemnified Party will give a later written notice when the amount becomes fixed. 
 8.5. Defense of Claims. 
 (a) The Indemnifying Party may elect to assume and control
the defense of any Claim, including the employment of counsel reasonably satisfactory to the Indemnified Party and the payment of expenses related thereto, if: (i) the Indemnifying Party acknowledges its obligation to indemnify the Indemnified
Party for any Losses resulting from such Claim; and (ii) the Claim does not seek to impose any Liability on the Indemnified Party other than money damages. 
 (b) If the conditions of Section 8.5(a) are satisfied and the Indemnifying Party elects to assume and control the defense of a
Claim, then: (i) the Indemnifying Party will not be liable for any settlement of such Claim effected without its consent, which consent will not be unreasonably withheld; (ii) the Indemnifying Party may settle such Claim without the
consent of the Indemnified Party only if (A) all monetary damages payable in respect of the Claim are paid by the Indemnifying Party, (B) the Indemnified Party receives a full, complete and unconditional release in respect of the Claim
without any admission or finding of obligation, liability, fault or guilt (criminal or otherwise) with respect to the Claim, and (C) no injunctive, extraordinary, equitable or other relief of any kind is imposed on the Indemnified Party or any
of its Affiliates; (iii) the Indemnifying Party may otherwise settle such Claim only with the consent of the Indemnified Party, which consent will not unreasonably be withheld or delayed; and (iv) the Indemnified Party may employ separate
counsel and participate in the defense thereof, but the Indemnified Party will be responsible for the fees and expenses of such counsel unless: (1) the Indemnifying Party has failed to adequately assume and actively conduct the defense of such
Claim or to employ counsel with respect thereto; or (2) in the reasonable opinion of the Indemnified Party, a conflict of interest exists between the interests of the Indemnified Party and the Indemnifying Party that requires representation by
separate counsel, in which case the fees and expenses of such separate counsel will be paid by the Indemnifying Party. 
 (c)
If the conditions of Section 8.5(a) are not satisfied, the Indemnified Party may assume the exclusive right to defend, compromise or settle such Claim, but the Indemnifying Party will not be bound by any determination of a Claim so
defended or any compromise or settlement effected without its consent (which may not be unreasonably withheld); provided, that the Indemnified Party will not be required to obtain any consent of the Indemnifying Party to the determination of
such Claim (and will not prejudice its right to be indemnified with respect to such Claim by settling such Claim) if the Indemnifying Party is asserting that it has no obligation to indemnify the Indemnified Party in respect of such claim.

  

 25 

 8.6. Exclusive Monetary Remedy. The sole and exclusive monetary remedy for any Indemnified Party
against any Indemnifying Party for any breach of any representation, warranty, agreement or covenant of such Indemnifying Party under this Agreement (including the covenants regarding Assumed Liabilities) shall be indemnification pursuant to this
Article VIII, except in the case of fraud or willful misconduct by the Indemnifying Party. Without limiting the foregoing, the exercise by an Indemnified Party of its right to indemnification under Article VIII shall not affect the
right of such Indemnified Party to seek an injunction or other equitable relief with respect to the matter giving rise to such exercise. 
 8.7. Limitation on Damages. No Indemnified Party will be entitled to indemnification pursuant to Section 8.1 or Section 8.2 for punitive damages, or for lost profits (except where such lost profits constitute
direct damages, such as Losses resulting from a breach of Section 8.1), consequential, exemplary, special or similar damages, provided, however, that this provision shall not limit an Indemnified Party’s right to
indemnification under Section 8.1 or Section 8.2 to recover Losses that arise as the result of a third-party claim against the Indemnified Party for, lost profits, consequential, special or similar actual damages. 

8.8. Title Defects. Buyer’s sole and exclusive remedy with respect to Title Defects or Losses arising thereunder, shall be as provided in
Exhibit A. 
 8.9. Disclaimer of Other Representations and Warranties. 
 (a) The express representations and warranties of Seller contained in this Agreement are exclusive and are in lieu of all other
representations and warranties, express, implied, or statutory. EXCEPT FOR THE EXPRESS REPRESENTATIONS, WARRANTIES, COVENANTS AND AGREEMENTS OF SELLER SET FORTH IN THIS AGREEMENT AND THE ASSIGNMENT, SELLER HAS NOT MADE, AND SELLER HEREBY
EXPRESSLY DISCLAIMS AND NEGATES, AND BUYER HEREBY EXPRESSLY WAIVES, ANY REPRESENTATION OR WARRANTY, EXPRESS, IMPLIED, AT COMMON LAW, BY STATUTE OR OTHERWISE RELATING TO (A) PRODUCTION RATES, RECOMPLETION OPPORTUNITIES, DECLINE RATES, GAS
BALANCING INFORMATION OR THE QUALITY, QUANTITY, OR VOLUME OF THE RESERVES OF HYDROCARBONS, IF ANY, ATTRIBUTABLE TO THE ASSETS, (B) THE ACCURACY, COMPLETENESS OR MATERIALITY OF ANY INFORMATION, DATA OR OTHER MATERIALS (WRITTEN OR ORAL) NOW,
HERETOFORE OR HEREAFTER FURNISHED TO BUYER BY OR ON BEHALF OF SELLER, (C) THE ENVIRONMENTAL CONDITION OF THE PROPERTIES, (D) ANY IMPLIED OR EXPRESS WARRANTY OF MERCHANTABILITY, (E) ANY IMPLIED OR EXPRESS WARRANTY OF FITNESS FOR A
PARTICULAR PURPOSE, (F) ANY IMPLIED OR EXPRESS WARRANTY OF CONFORMITY TO MODELS OR SAMPLES OF MATERIALS, (G) ANY RIGHTS OF PURCHASERS UNDER APPROPRIATE STATUTES TO CLAIM DIMINUTION OF CONSIDERATION, AND (H) ANY AND ALL IMPLIED
WARRANTIES EXISTING UNDER APPLICABLE LAW; IT BEING THE EXPRESS INTENTION OF BOTH BUYER AND SELLER THAT SUBJECT TO AND WITHOUT LIMITING SELLER’S EXPRESS REPRESENTATION AND WARRANTIES 

  

 26 

 
CONTAINED HEREIN, THE PERSONAL PROPERTY, EQUIPMENT AND FIXTURES INCLUDED WITHIN THE PROPERTIES ARE TO BE CONVEYED TO BUYER IN THEIR PRESENT CONDITION AND
STATE OF REPAIR, AND THAT BUYER HAS MADE OR CAUSED TO BE MADE SUCH INSPECTIONS AS BUYER DEEMS APPROPRIATE. SELLER AND BUYER AGREE THAT, TO THE EXTENT REQUIRED BY APPLICABLE LAW TO BE EFFECTIVE, THE DISCLAIMERS OF CERTAIN WARRANTIES CONTAINED IN THIS
SECTION ARE “CONSPICUOUS” DISCLAIMERS FOR THE PURPOSES OF ANY APPLICABLE LAW, RULE OR ORDER. 
 (b) Buyer
acknowledges that the Properties have been used for exploration, development, production, handling, transporting and/or processing of oil and gas and that there may be petroleum, produced water, wastes, or other materials located on or under the
Properties or associated with the premises. Some equipment and sites included in the Properties may contain asbestos, Hazardous Substances, or naturally occurring radioactive material (“NORM”). NORM may affix or attach itself to the
inside of wells, materials, and equipment as scale, or in other forms; the wells, materials, and equipment located on the Properties or included in the Properties may contain NORM and other materials or Hazardous Substances; and NORM-containing
material and other materials or Hazardous Substances may have been buried, come in contact with the soil or water, or otherwise been disposed of on the Properties. Special procedures may be required for the remediation, removal, transportation, or
disposal of materials, asbestos, Hazardous Substances, and NORM from the Properties. Buyer will assume all liability for the assessment, remediation, removal, transportation, and disposal of these materials and associated activities and will conduct
these activities in accordance with all applicable Laws, including applicable Environmental Laws. 
 (c) Buyer understands
that operation of the Leases is subject to requirements of the Governmental Authorities having jurisdiction. It will be the obligation of Buyer to ensure that, as of the Closing, or as soon thereafter as reasonably practicable, Buyer will meet the
qualifications of the Governmental Authorities having jurisdiction, in order to become record operator of the Leases. 
 ARTICLE IX

 TERMINATION 
 9.1. Termination. This Agreement may be terminated and the transactions contemplated by this Agreement may be abandoned at any time, prior to the Closing only as follows: 
 (a) by mutual written consent of Buyer and Seller; 
 (b) by Seller if there shall have been a material breach of any of the covenants or agreements or any of the representations or warranties
set forth in this Agreement on the part of Buyer, which breach would prevent Buyer from performing its obligations under this Agreement and which is not cured within 5 days following written notice to Buyer, or which breach, by its 

  

 27 

 
nature or timing, cannot be cured prior to February 27, 2009; provided that Seller shall not have the right to terminate this Agreement pursuant to this
Section 9.1(b) if it is then in material breach of any of representations, warranties, covenants or other agreements hereunder; 
 (c) by Buyer if there shall have been a material breach of any of the covenants or agreements or any of the representations or warranties set forth in this Agreement on the part of Seller, which breach would prevent
Seller from performing its obligations under this Agreement and which is not cured within 5 days following written notice to Seller, or which breach, by its nature or timing, cannot be cured prior to February 27, 2009; provided that Buyer shall
not have the right to terminate this Agreement pursuant to this Section 9.1(c) if it is then in material breach of any of representations, warranties, covenants or other agreements hereunder; 
 (d) by Buyer or Seller if the Closing shall not have occurred on or before February 27, 2009 (provided that the right to
terminate this Agreement under this Section 9.1(d) shall not be available to any party whose breach of this Agreement or failure to fulfill any obligation under or pursuant to this Agreement has been the cause, directly or indirectly of,
or has resulted in, the failure of the Closing to occur on or before such date); 
 (e) by Buyer or Seller, if any court of
competent jurisdiction of any Governmental Authority shall have issued an order, decree or ruling or taken any other action restraining, enjoining or otherwise prohibiting the transactions contemplated hereby and such order, decree, ruling or other
action shall have become final and non-appealable; 
 (f) by Buyer or Seller, if the aggregate of the Title Defect Values and
Environmental Defect Values asserted by Buyer total more than 10% of the Purchase Price; or 
 (g) by Buyer pursuant to
Section 2.3(f). 
 9.2. Effect of Termination. If this Agreement is terminated pursuant to Section 9.1 and the
transactions contemplated by this Agreement are not consummated, all further obligations of the parties under or pursuant to this Agreement shall terminate without further liability of either party to the other; provided,
however, the obligations contained in this Section 9.2 and Sections 2.3(d), 2.3(e), 2.3(f), and 10.2 of this Agreement shall survive any such termination. 
 ARTICLE X 
 MISCELLANEOUS

 10.1. Entire Agreement. This Agreement and the documents referred to herein and to be delivered pursuant hereto constitute
the entire agreement between the parties pertaining to the subject matter hereof, and supersede all prior and contemporaneous agreements, understandings, negotiations and discussions of the parties, whether oral or written, and there are no
warranties, representations or other agreements between the parties in connection with the subject matter hereof, except as specifically set forth herein or therein. 
  

 28 

 10.2. Expenses. 
 (a) Whether or not the transactions contemplated by this Agreement are consummated, each of the parties hereto shall pay the fees and
expenses of their respective counsel, investment bankers, financial advisors, accountants and other experts and the other expenses incident to the negotiation and preparation of this Agreement and consummation of the transactions contemplated
hereby. 
 (b) Buyer shall be solely responsible for all filings and recording of assignments and other documents which
transfer any of the Assets to Buyer or which designate Buyer as the operator of the Assets and for all fees connected with such filing or recording. Upon request, Buyer shall advise Seller of the pertinent recording data. Seller shall not be
responsible for any loss to Buyer because of Buyer’s failure to file or record any such documents correctly or promptly. 
 10.3.
Governing Law. This Agreement shall be governed by, and construed in accordance with, the laws of the State of Texas, without reference to the principles of conflicts of laws or any other principle that could result in the application of the
laws of any other jurisdiction, except for matters concerning real property located in the State of New Mexico, including oil and gas interests, which matters will be governed by, and construed in accordance with, the laws of the State of New
Mexico, without reference to the principles of conflicts of laws or any other principle that could result in the application of the laws of any other jurisdiction. EACH OF THE PARTIES CONSENTS TO THE EXCLUSIVE JURISDICTION OF ANY STATE OR FEDERAL
COURT LOCATED IN HARRIS COUNTY, TEXAS, AND IRREVOCABLY AGREES THAT ALL ACTIONS OR PROCEEDINGS ARISING OUT OF OR RELATING TO THIS AGREEMENT MUST BE LITIGATED IN SUCH COURTS. EACH OF THE PARTIES ACCEPTS THE EXCLUSIVE JURISDICTION OF THE AFORESAID
COURTS AND WAIVES ANY DEFENSE OF FORUM NON CONVENIENS, AND IRREVOCABLY AGREES TO BE BOUND BY ANY JUDGMENT RENDERED THEREBY IN CONNECTION WITH THIS AGREEMENT. 
 10.4. Assignment. Neither this Agreement nor any of the rights, interests or obligations hereunder may be assigned or delegated by Seller or Buyer without the prior written consent of Buyer or Seller, as
applicable, and any purported assignment or delegation in violation hereof will be null and void; except that a party may assign its rights and obligations under this Agreement to any affiliate, but no such assignment shall relieve the assigning
party of its obligations hereunder and such assigning party shall cause its assignee to perform its obligations under this Agreement and shall be responsible for any failure of such assignee to comply with any representation, warranty, covenant or
other provision of this Agreement. 
 10.5. Notices. All communications, notices and disclosures required or permitted by this
Agreement shall be in writing and shall be deemed to have been given when delivered personally or by messenger or by overnight delivery service, or when mailed by registered or certified United States mail, postage prepaid, return receipt requested,
or when received via telecopy, telex or other 

  

 29 

 
electronic transmission, in all cases addressed to the Person for whom it is intended at his address set forth below or to such other address as a party
shall have designated by notice in writing to the other party in the manner provided by this Section 10.5: 
  

			
		
	 If to Seller:
	  	 Rex Energy I, LLC
 Windmere Centre
 476 Rolling Ridge Dr., Suite 300
 State College, PA 16801
 Attention: Christopher K. Hulburt
 Telecopy: 814-278-7286

		
	 With a copy to:
	  	 Fulbright & Jaworski L.L.P.
 1301 McKinney, Suite
5100
 Houston, TX 77010-3095
 Attention: Charles
Strauss
 Telecopy: 713-651-5246

		
	 If to Buyer:
	  	 Adventure Exploration Partners, LLC
 500 W. Texas Street,
Suite 1000
 Midland, TX 79701
 Attention: Paul L. Lucas,
President
 Telecopy: 432-684-1106

		
	 With a copy to:
	  	 Davis, Gerald & Cremer, P.C.
 400 W. Illinois St.,
Suite 1400
 Midland, TX 79701
 Attention: Marc Skeen

Telecopy: 432-687-1735

 10.6. Counterparts; Headings. This Agreement may be executed in several counterparts, each
of which shall be deemed an original, but such counterparts shall together constitute but one and the same Agreement. The Table of Contents and Article and Section headings in this Agreement are inserted for convenience of reference only and shall
not constitute a part hereof. 
 10.7. Specific Performance. The parties hereto agree that irreparable damage would occur in the event
any of the provisions of this Agreement were not performed in accordance with the terms hereof and that the parties shall be entitled to specific performance of the terms hereof, in addition to any other remedy at law or equity. 
 10.8. Interpretation. Unless the context requires otherwise, all words used in this Agreement in the singular number shall extend to and include
the plural, all words in the plural number shall extend to and include the singular and all words in any gender shall extend to and include all genders. All references to contracts, agreements, leases or other understandings or arrangements shall
refer to oral as well as written matters. The term “include” or any derivative of such term does not mean that the items following such term are the only types of such items. 
  

 30 

 10.9. Severability. If any provision, clause or part of this Agreement, or the application thereof
under certain circumstances, is held invalid, the remainder of this Agreement, or the application of such provision, clause or part under other circumstances, shall not be affected thereby. 
 10.10. No Third-Party Reliance. No third party is entitled to rely on any of the representations, warranties and agreements contained in this
Agreement, and Seller and Buyer assume no liability to any third party because of any reliance on the representations, warranties and agreements of Seller and Buyer contained in this Agreement. 
 10.11. Like-Kind Exchange. In the event Seller so elects at any time prior to Closing, Buyer agrees to cooperate, as and to the extent reasonably
requested by Seller, in connection with the transactions contemplated herein to make such modifications as may be necessary to qualify such transactions, in whole or in part, as a “like-kind” exchange pursuant to Section 1031 of the
Code. Seller shall have the right at any time prior to Closing to assign all or a portion of its rights under this Agreement to a “Qualified Intermediary” (as that term is defined in Treasury Regulations § 1.1031(k)-1(g)(4)) in
order to accomplish the transaction in a manner that will comply, either in whole or in part, with the requirements of a like-kind exchange pursuant to Section 1031 of the Code. Seller and Buyer acknowledge and agree that any assignment of this
Agreement (or any rights hereunder) to a Qualified Intermediary shall not release Seller from any of its respective liabilities and obligations hereunder. Neither party represents to the other that any particular Tax treatment will be obtained by
reason of the transactions contemplated by this Section 10.11. 
 10.12. Amendment; Waiver. This Agreement may not be
amended except by an instrument in writing signed by all of the parties. At any time prior to the Closing, the parties may (a) extend the time for the performance of any of the obligations or other acts of the other parties hereto,
(b) waive any inaccuracies in the representations and warranties contained herein or in any document, certificate or writing delivered pursuant hereto, or (c) waive compliance with any of the covenants, agreements or conditions contained
herein. Any agreement on the part of any party to any such extension or waiver shall be valid only if set forth in an instrument in writing signed on behalf of such party. 
 [SIGNATURE PAGE FOLLOWS] 
  

 31 

 IN WITNESS WHEREOF, the parties have caused this Purchase Agreement to be duly executed as of the day and
year first above written. 
  

			
	SELLER:
	
	REX ENERGY I, LLC
		
	By:	 	 /s/ Benjamin W. Hulburt

	Name:	 	Benjamin W. Hulburt
	Title:	 	President and Chief Executive Officer
	
	BUYER:
	
	ADVENTURE EXPLORATION PARTNERS, LLC
		
	By:	 	 /s/ Paul L. Lucas

	Name:	 	Paul L. Lucas
	Title:	 	President

 EXHIBIT A 
 PROCEDURE FOR CLAIMING TITLE AND ENVIRONMENTAL DEFECTS 
 AND ADJUSTING THE PURCHASE PRICE

 1. Title and Environmental Procedure. From the date of this Agreement
until 5:00 p.m. Central time on the 75th day following the first Business Day following the date of this Agreement (the “Examination
Period”), Seller will afford to Buyer and its representatives reasonable access during normal business hours to the offices, personnel and books and records of Seller in order for Buyer to conduct a title examination and environmental
examination as it may in its sole discretion choose to conduct with respect to the Assets in order to determine whether Title Defects or Environmental Defects exist. 
 2. Accessible Information; Expenses; Confidential Information; Indemnification. Buyer and its representatives may examine 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, engineering and environmental records, in each case insofar as the same may now be in existence and in the
possession of Seller, provided, however, that Seller may withhold access to (a) all legally privileged documents other than title opinions and (b) information that Seller is prohibited from disclosing by third party confidentiality
restrictions; provided further that Seller will use its reasonable efforts to obtain a waiver of any such restrictions in favor of Buyer. The cost and expense of Buyer’s review of the title to the Assets and environmental conditions on the
Assets will be borne solely by Buyer. Buyer will not contact any of the customers or suppliers of Seller or its Working Interest co-owners, operators, lessors or surface interest owners, in connection with the transactions contemplated hereby,
whether in person or by telephone, e-mail, mail or other means of communication, without the specific prior written authorization of Seller, which consent will not be unreasonably withheld. Buyer will indemnify and hold harmless Seller and its
officers, directors, agents, representatives, employees, successors, and assigns against any damages arising from or in connection with Buyer’s due diligence examination of title to the Assets or the environmental conditions of the Assets;
provided, however, that damages, for this purpose only, shall not include damages to the extent resulting solely from the discovery by Buyer or its representatives of any pre-existing condition. 
 3. Notice of Asserted Title Defects or Environmental Defects. If Buyer discovers any Title Defect or Environmental Defect affecting any of the
Assets, Buyer may, as a predicate to receiving a Purchase Price adjustment, notify Seller of such alleged Title Defect or Environmental Defect prior to the expiration of the Examination Period, provided, that such allegation is made in good
faith. To be effective, such notice (“Title Defect Notice” or “Environmental Defect Notice”, respectively) must 
  

	 	(a)	be in writing, 

  

	 	(b)	be received by Seller prior to the expiration of the Examination Period, 

  

	 	(c)	describe the Title Defect or Environmental Defect in reasonable detail including the basis therefore (including any alleged variance in the Net Revenue Interest or Working Interest
of any alleged Title Defect) and any supporting documents, 

  

 A - 1 

	 	(d)	identify the specific Assets to which such Title Defect or Environmental Defect relates, and 

  

	 	(e)	include the value of such Title Defect or Environmental Defect as determined by Buyer in good faith. 

 Notwithstanding anything to the contrary herein, at the end of the Examination Period, any matters that may otherwise constitute a Title Defect or
Environmental Defect, but of which Seller has not been specifically notified by Buyer in accordance with the foregoing, will be deemed to have been waived by Buyer for all purposes; provided that, with respect to defects other than Title Defects,
such waiver shall not limit or affect the existence or survival of representations and warranties. 
 4. Cure. Upon the receipt of an
effective Title Defect Notice or Environmental Defect Notice from Buyer, Seller will have the option, but not the obligation, to attempt to cure such Title Defect or Environmental Defect during the Cure Period (as hereinafter defined) at
Seller’s sole cost and expense. A Property affected by such Title Defect or Environmental Defect will be referred to as a “Title Defect Property” or “Environmental Defect Property”, respectively. 
 5. Defensible Title. As used in this Exhibit A, “Defensible Title” means, as of the date of this Agreement and the Closing
Date, with respect to the Leases described on Schedule 3.4(b), such record title and ownership by Seller that: 
  

	 	(a)	entitles Seller to receive and retain from such Lease, without reduction, suspension or termination, not less than the percentage set forth on Schedule 3.4(b) as the Net
Revenue Interest of all hydrocarbons produced, saved and marketed from such Lease; 

  

	 	(b)	obligates Seller to bear a percentage of the costs and expenses relating to the maintenance, development and operation of such Lease that is not more than the Working Interest set
forth for such Lease on Schedule 3.4(b), (unless such increase is accompanied by a proportionate increase in the Net Revenue Interest applicable to such Lease); 

  

	 	(c)	is free and clear of all encumbrances except Permitted Encumbrances; and 

  

	 	(d)	would generally be accepted in the industry without objection. 

 6. Title Defect Amount; Environmental Defect Amount. “Title Defect Amount” or “Environmental Defect Amount” means, with respect to a Title Defect Property or Environmental Defect Property, as
applicable, the reduction, in the Allocated Value (as set forth on Exhibit E, of an Asset as a result of the existence of one or more Title Defects or Environmental Defects, respectively, which amount will be determined as follows:

  

	 	(a)	 The Title Defect Amount with respect to a Title Defect Property will be determined by taking into consideration the Allocated Value of the Title Defect Property
affected by such Title Defect (or if the Title Defect Property does not have a 

  

 A - 2 

	 	 
specific Allocated Value, then the Allocated Value thereof will be derived from the Allocated Value of the Lease or Well associated therewith), the portion
of the Title Defect Property subject to such Title Defect, and the legal effect of such Title Defect on the Title Defect Property affected thereby; provided, however, that: 

  

	 	(i)	if such Title Defect is in the nature of the Net Revenue Interest in a Lease being less than the Net Revenue Interest set forth on Schedule 3.4(b) with respect thereto and
the corresponding Working Interest remains the same, then the Title Defect Amount will be the Allocated Value for the relevant Lease multiplied by the percentage reduction in such Net Revenue Interest as a result of such Title Defect;

  

	 	(ii)	if such Title Defect is in the nature of an Encumbrance, then the Title Defect Amount will be the amount required to fully discharge such Encumbrance; and 

 

	 	(iii)	if the Title Defect results from any matter not described in sub-paragraph (i) or sub-paragraph (ii) above, the Title Defect Amount will be an amount equal
to the difference between the value of the Title Defect Property with such Title Defect and the value of such Title Defect Property without such Title Defect (taking into account the Allocated Value of the Title Defect Property). A Title Defect
Amount may not exceed the Allocated Value of the Title Defect Property. 

  

	 	(b)	Notwithstanding the foregoing, any matters that would otherwise constitute a Title Defect will not be a Title Defect if it is not reasonably likely to affect the market value to
Buyer of the affected Asset based on the standards and practices of reasonably prudent operators of oil and gas wells in the Permian Basin. 

  

	 	(c)	The Environmental Defect Amount with respect to an Environmental Defect Property will be determined by taking into consideration the Allocated Value of the Environmental Defect
Property affected by such Environmental Defect (or if the Environmental Defect Property does not have a specific Allocated Value, then the Allocated Value thereof will be derived from the Allocated Value of the Lease or Well associated therewith),
the portion of the Environmental Defect Property subject to such Environmental Defect, and the decrease in value of such Environmental Defect Property resulting from such Environmental Defect, the amount of the civil penalty or fine assessed (or
likely to be assessed) for such violation where the Environmental Defect is a violation of Environmental Law, or the cost to cure or otherwise remediate the Environmental Defect on such Environmental Defect Property, as applicable; provided the
Environmental Defect Amount, for purposes of calculating a Purchase Price adjustment, may not exceed the Allocated Value of the Environmental Defect Property. 

  

 A - 3 

 7. Procedures for Title Defects and Environmental Defects. 
  

	 	(a)	If Seller and Buyer agree that a Title Defect or Environmental Defect exists and if prior to the Closing Date, Seller has been unable to cure such Title Defect or Environmental
Defect (and there is no dispute as to whether or not it has been cured), and Buyer and Seller agree that Seller will not be able to cure such Title Defect or Environmental Defect within 60 days after the expiration of the Examination Period (the
“Cure Period”), then the Purchase Price will be reduced by the Title Defect Amount or Environmental Defect Amount, with respect to such Title Defect Property or Environmental Defect Property (taking into account the results of any
curative efforts made by or on behalf of Seller with respect to such Title Defect Property or Environmental Defect Property). 

  

	 	(b)	If Seller and Buyer are unable to reach an agreement at any time as to whether a Title Defect or Environmental Defect exists or, if it does exist, whether it has been cured or the
amount of the Title Defect Amount or Environmental Defect Amount attributable to such Title Defect or Environmental Defect, then dispute resolution procedures may be initiated by Seller or Buyer under Section 8 of this Exhibit A
promptly following the inability to reach an agreement. 

  

	 	(c)	Buyer will act in good faith and reasonably cooperate with Seller after the Closing to cure any Title Defects or Environmental Defects that have not been cured or resolved pursuant
to Section 7(a) of this Exhibit A. If, at the end of the Cure Period, Seller has been unable to cure a Title Defect or Environmental Defect (and there is no dispute as to whether or not it has been cured), Seller will pay Buyer,
within 30 days, the Title Defect Amount or Environmental Defect Amount with respect to such Title Defect or Environmental Defect (taking into account the value of the results of any curative efforts made by or on behalf of Seller with respect to
such Title Defect or Environmental Defect). 

  

	 	(d)	Notwithstanding anything to the contrary contained herein, Seller will have the option, but not the obligation, within 60 days after the resolution of any dispute as to any Title
Defect Property or Environmental Defect Property as to which the Title Defect Amount or Environmental Defect Amount exceeds fifty percent (50%) of the Allocated Value, to retain any Title Defect Property or Environmental Defect Property or to
cause to be assigned any Title Defect Property or Environmental Defect Property to Buyer and the Purchase Price will be adjusted as set forth in Section 7(a) of this Exhibit A. If Seller exercises its option to retain any
Title Defect Property or Environmental Defect Property, then Buyer will transfer such Title Defect Property or Environmental Defect Property to Seller, and Seller will pay Buyer an amount equal to the Allocated Value of such Title Defect Property or
Environmental Defect Property. 

  

	 	(e)	 Notwithstanding any election by Seller to cause any Title Defect Property or Environmental Defect Property meeting the fifty percent (50%) threshold to be
assigned to Buyer pursuant to subsection (d) immediately above, Buyer will have the option, but not the obligation, within 10 days after receipt of notice of a Seller election pursuant to subsection (d) 

  

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immediately above, to elect to remove any Title Defect Property or Environmental Defect Property meeting the fifty percent (50%) from this Agreement
and, if applicable, convey such Title Defect Property or Environmental Defect Property to Seller, if same had previously been conveyed to Buyer, with the Purchase Price being adjusted as set forth in Section 7(a) of this Exhibit
A. 

 8. Arbitration. 
  

	 	(a)	In the event of any dispute with respect to this Exhibit A, the parties hereto agree to make reasonable efforts to come to a mutually acceptable resolution of such dispute
among themselves prior to the involvement of any third-party intermediary. If any party hereto elects to submit any dispute to arbitration as specifically provided in this Section 8, then such party will notify the other party in
writing. Within 15 days following such notice, Seller and Buyer agree to jointly select an arbitrator. For disputes regarding Title Defects or Title Defect Amounts, the arbitrator will be an experienced oil and gas attorney, familiar by training and
experience with U.S. oil and gas legal and business matters including titles and oil and gas transactions. This person will be the sole arbitrator (the “Title Defect Arbitrator”) to hear and decide all existing disputes regarding
asserted Title Defects and Title Defect Amounts. For disputes regarding Environmental Defects or Environmental Defect Amounts, the arbitrator will be an experienced environmental attorney, familiar by training and experience with U.S. environmental
legal and business matters in the oil and gas industry. This person will be the sole arbitrator (the “Environmental Defect Arbitrator”) to hear and decide all existing disputes regarding asserted Environmental Defects and
Environmental Defect Amounts. If Seller and Buyer are unable to agree on the Title Defect Arbitrator or Environmental Defect Arbitrator within the 15 day period, any Party hereto may apply to a court in the State of Texas, regarding asserted Title
Defects and Title Defect Amounts or Environmental Defects and Environmental Defect Amounts for the selection of a Title Defect Arbitrator or Environmental Defect Arbitrator, respectively, with the qualifications set forth in this paragraph.

  

	 	(b)	 Any arbitration hearing, if one is desired by the Title Defect Arbitrator or Environmental Defect Arbitrator, will be held in Harris County, Texas, or such other
location acceptable to both parties and the Title Defect Arbitrator or Environmental Defect Arbitrator. The Parties may mutually elect to conduct the proceeding by written submissions from Seller and Buyer with exhibits, including interrogatories,
supplemented with appearances by Buyer and Seller as the Title Defect Arbitrator or Environmental Defect Arbitrator may desire. The arbitration proceeding, subject only to the terms hereof, will be conducted informally and expeditiously (the
intention of the parties being that the Arbitration shall allow only that minimum discovery determined by the Arbitrator to be reasonably necessary to protect the integrity of the process) and in such a manner as to result in a good faith resolution
as soon as reasonably possible under the circumstances. The decision of the Title Defect Arbitrator or Environmental Defect Arbitrator with respect to such remaining disputed matters will be 

  

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reduced to writing and binding on the parties. Judgment upon the award(s) rendered by the Title Defect Arbitrator or Environmental Defect Arbitrator may be
entered and execution had in any court of competent jurisdiction, or application may be made to such court for a judicial acceptance of the award and an order of enforcement. Seller and Buyer will bear their own legal fees and other costs incurred
in presenting their respective cases. The charges and expenses of the Title Defect Arbitrator or Environmental Defect Arbitrator will be shared equally by the parties. 

  

	 	(c)	The arbitration will commence as soon as possible after the Title Defect Arbitrator or Environmental Defect Arbitrator is selected in accordance with the provisions of this
Section 8 of this Exhibit A. In fulfilling his or her duties with respect to determining the amount of a Title Defect Amount or Environmental Defect Amount, the Title Defect Arbitrator or Environmental Defect Arbitrator, as
applicable, may consider such matters as, in the opinion of the Title Defect Arbitrator or Environmental Defect Arbitrator, are necessary or helpful to make a proper valuation; however, the Title Defect Arbitrator or Environmental Defect Arbitrator
will be bound by those factors set forth in Section 6(a) and Section 6(c) of this Exhibit A. Furthermore, the Title Defect Arbitrator or Environmental Defect Arbitrator may consult with and engage disinterested third
parties to advise the Title Defect Arbitrator or Environmental Defect Arbitrator including, without limitation, geologists, geophysicists, petroleum engineers, title and oil and gas lawyers, accountants and consultants, and the fees and expenses of
such third parties will be considered to be charges and expenses of the Title Defect Arbitrator or Environmental Defect Arbitrator. The sole remedy in any arbitration award will be resolution of alleged Title Defects and Title Defect Amounts or
Environmental Defects and Environmental Defect Amounts and neither the Title Defect Arbitrator nor the Environmental Defect Arbitrator will award any other remedy, including, without limitation, equitable relief, actual damages, consequential,
exemplary or punitive damages, attorneys’ fees or interest reflecting the time value of money. 

  

	 	(d)	Any replacement Title Defect Arbitrator or Environmental Defect Arbitrator, should one become necessary, will be selected in accordance with the procedure provided above for the
initial selection of the Title Defect Arbitrator or Environmental Defect Arbitrator. 

  

	 	(e)	As to any determination of amounts owing under the terms of this Section 8 of this Exhibit A, no lawsuit based on such claimed amounts owing will be commenced by
either Buyer or Seller, other than to compel arbitration proceedings or enforce the award of the Title Defect Arbitrator or Environmental Defect Arbitrator. 

  

	 	(f)	All privileges under state and federal law, including attorney-client and work-product privileges, will be preserved and protected to the same extent that such privileges would be
protected in a federal or state court proceeding applying state or federal law, as the case may be. 

  

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 9. Uncured Title Defects and Environmental Defects. If any dispute resolution procedures initiated
pursuant to Section 8 of this Exhibit A are finally resolved after Closing, then within 91 days after the date of the final resolution of any such arbitration of any alleged Title Defect or Environmental Defect hereunder (as set
forth in Section 8 of this Exhibit A), Seller will, subject to Seller’s rights to retain property provided by Section 7(d) of this Exhibit A), pay Buyer an amount, if any, equal to such final resolution of
such Title Defect or Environmental Defect. 
  

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