Document:

exv10w1

 

EXHIBIT 10.1

SECOND AMENDMENT OF EMPLOYMENT AGREEMENT

     This
Amendment is entered into as of April 28, 2006, by and between United Surgical Partners
International, Inc., a Delaware corporation (“USPI”), and Donald E. Steen, with reference to the
following facts:

RECITALS

     A. The parties hereto have entered into that certain Employment Agreement, dated as of
November 15, 2002 as amended on February 18, 2004 (the “Agreement”), pursuant to which Mr. Steen is
the Chairman of the Board of USPI. The capitalized terms used in this Amendment and not otherwise
defined herein shall have the meanings given to them in the Agreement.

     B. After consultation with the board of directors of USPI (the “Board”), Mr. Steen and USPI
have mutually agreed to make certain changes to the Agreement.

     THEREFORE, the parties hereto agree as follows:

AGREEMENT

     1. Amendment of Agreement. The Agreement is amended to provide that Mr. Steen shall
devote such portion of his business time to the Company’s affairs as he and the Board deem
necessary to fulfill his duties.

     2. Ratification. Except as expressly amended herein, the terms and provisions of the
Agreement are hereby ratified and confirmed and shall remain in full force and effect, including
without limitation the office services and other benefits described in Section 4 of the Agreement.

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     IN WITNESS WHEREOF, the undersigned have executed this Amendment as of the date first above
written.

	 	 	 	 	 	 	 
	 	 	UNITED SURGICAL PARTNERS INTERNATIONAL, INC.	 	 
	 
	 	 	 	 	 	 
	 

	 	By	 	/s/ Paul B. Queally	 	 
	 

	 	 	 	 

Paul B. Queally
	 	 
	 

	 	 	 	Chairman, Options and Compensation Committee	 	 
	 
	 	 	 	 	 	 
	 

	 	 	 	/s/ Donald E. Steen	 	 
	 	 	 	 	 
	 

	 	 	 	Donald E. Steen	 	 

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EXHIBIT 10.1

MEMBERSHIP INTEREST

PURCHASE AND SALE AGREEMENT

by and among

the various parties listed herein

as “Sellers,”

Chief Midstream Holdings LLC

as the “Company,”

Chief Holdings LLC

as “Chief Holdings,”

Chief Resources LLC

as “Sellers’ Representative,”

and

Crosstex Energy Services, L.P.

as “Buyer”

Dated May 1, 2006

 

 

TABLE OF CONTENTS

	 	 	 	 	 
	 	 	Page	 
	ARTICLE I TERMS OF THE TRANSACTION
	 	 	1	 
	Section 1.1. Agreement to Purchase and Sell Interests
	 	 	1	 
	Section 1.2. Purchase Price
	 	 	1	 
	Section 1.3. Potential Adjustments to the Purchase Price
	 	 	1	 
	Section 1.4. Payment of the Adjusted Purchase Price
	 	 	3	 
	Section 1.5. Midstream Reorganization
	 	 	3	 
	 
	 	 	 	 
	ARTICLE II CLOSING
	 	 	3	 
	 
	 	 	 	 
	ARTICLE III REPRESENTATIONS AND WARRANTIES OF SELLERS AND SELLERS’ REPRESENTATIVE
	 	 	3	 
	Section 3.1. Title to Interests
	 	 	3	 
	Section 3.2. Organization and Standing
	 	 	4	 
	Section 3.3. Authority
	 	 	4	 
	Section 3.4. Non-Contravention
	 	 	4	 
	Section 3.5. Approvals
	 	 	4	 
	Section 3.6. Pending Litigation
	 	 	4	 
	 
	 	 	 	 
	ARTICLE IV REPRESENTATIONS AND WARRANTIES OF THE COMPANY
	 	 	5	 
	Section 4.1. Organization
	 	 	5	 
	Section 4.2. Governing Documents
	 	 	5	 
	Section 4.3. Capital Structure
	 	 	5	 
	Section 4.4. Power and Authority
	 	 	5	 
	Section 4.5. Valid and Binding Agreement
	 	 	6	 
	Section 4.6. Non-Contravention
	 	 	6	 
	Section 4.7. Approvals
	 	 	6	 
	Section 4.8. Subsidiaries
	 	 	6	 
	Section 4.9. Financial Statements
	 	 	7	 
	Section 4.10. Undisclosed Liabilities
	 	 	8	 
	Section 4.11. Pending Litigation
	 	 	8	 
	Section 4.12. Compliance with Laws
	 	 	8	 
	Section 4.13. Taxes
	 	 	9	 
	Section 4.14. Contracts
	 	 	10	 
	Section 4.15. Gas Regulatory Matters
	 	 	10	 
	Section 4.16. Intentionally Omitted
	 	 	11	 
	Section 4.17. Gas Contracts
	 	 	11	 
	Section 4.18. Pipeline and Plant
	 	 	11	 
	Section 4.19. Gas Imbalances
	 	 	11	 
	Section 4.20. Environmental Matters
	 	 	11	 
	Section 4.21. Insurance
	 	 	12	 
	Section 4.22. Employee Related Matters
	 	 	12	 
	Section 4.23. Brokers
	 	 	13	 

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	 	 	Page	 
	Section 4.24. Regulatory Filings
	 	 	13	 
	Section 4.25. Intellectual Property
	 	 	13	 
	Section 4.26. Properties
	 	 	13	 
	 
	 	 	 	 
	ARTICLE V
DISCLAIMER
	 	 	14	 
	 
	 	 	 	 
	ARTICLE
VI REPRESENTATIONS AND WARRANTIES OF BUYER
	 	 	14	 
	Section 6.1. Organization
	 	 	14	 
	Section 6.2. Power and Authority
	 	 	15	 
	Section 6.3. Valid and Binding Agreement
	 	 	15	 
	Section 6.4. Non-Contravention
	 	 	15	 
	Section 6.5. Approvals
	 	 	15	 
	Section 6.6. Proceedings
	 	 	15	 
	Section 6.7. Financing
	 	 	16	 
	Section 6.8. Investment Experience
	 	 	16	 
	Section 6.9. Restricted Securities
	 	 	16	 
	Section 6.10. Accredited Investor; Investment Intent
	 	 	16	 
	Section 6.11. Independent Evaluation
	 	 	16	 
	Section 6.12. Brokers
	 	 	16	 
	 
	 	 	 	 
	ARTICLE
VII CONDUCT OF SELLERS AND THE COMPANY PENDING CLOSING
	 	 	16	 
	Section 7.1. Conduct and Preservation of Business
	 	 	16	 
	Section 7.2. Restrictions on Certain Actions
	 	 	17	 
	 
	 	 	 	 
	ARTICLE
VIII ADDITIONAL AGREEMENTS OF THE PARTIES
	 	 	19	 
	Section 8.1. Access
	 	 	19	 
	Section 8.2. Confidentiality Agreement
	 	 	19	 
	Section 8.3. Reasonable Best Efforts
	 	 	19	 
	Section 8.4. Notice of Litigation
	 	 	20	 
	Section 8.5. Notification of Certain Matters
	 	 	20	 
	Section 8.6. Resignation of Officers and Directors
	 	 	21	 
	Section 8.7. Employee Matters
	 	 	21	 
	Section 8.8. Taxes
	 	 	21	 
	Section 8.9. Fees and Expenses
	 	 	22	 
	Section 8.10. Public Announcements
	 	 	22	 
	Section 8.11. Credit Facilities; Midstream Reorganization
	 	 	23	 
	Section 8.12. Books and Records
	 	 	23	 
	Section 8.13. Rights to Name
	 	 	23	 
	Section 8.14. Amendment to the Company’s Articles
	 	 	24	 
	Section 8.15. Excluded Assets
	 	 	24	 
	Section 8.16. HSR Filing
	 	 	24	 
	Section 8.17. Relationship Among Sellers
	 	 	24	 
	Section 8.18. Certain Consents by Sellers and Rees-Jones
	 	 	25	 
	Section 8.19. SEC Required Financial Statements
	 	 	25	 
	 
	 	 	 	 
	ARTICLE IX BUYER’S DUE DILIGENCE EXAMINATION
	 	 	26	 
	Section 9.1. Due Diligence Examination
	 	 	26	 

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	 	 	Page	 
	Section 9.2. Adjustments to Purchase Price
	 	 	28	 
	Section 9.3. Buyer Indemnification
	 	 	29	 
	 
	 	 	 	 
	ARTICLE X CONDITIONS TO OBLIGATIONS OF THE PARTIES
	 	 	29	 
	Section 10.1. Conditions to Obligations of Sellers and the Company
	 	 	29	 
	Section 10.2. Conditions to Obligations of Buyer
	 	 	30	 
	 
	 	 	 	 
	ARTICLE XI TERMINATION, AMENDMENT AND WAIVER
	 	 	32	 
	Section 11.1. Termination
	 	 	32	 
	Section 11.2. Effect of Termination
	 	 	33	 
	Section 11.3. Amendment
	 	 	33	 
	Section 11.4. Waiver
	 	 	33	 
	 
	 	 	 	 
	ARTICLE XII SURVIVAL OF REPRESENTATIONS, WARRANTIES AND COVENANTS; INDEMNIFICATION
	 	 	33	 
	Section 12.1. Survival
	 	 	33	 
	Section 12.2. Indemnification by Sellers
	 	 	34	 
	Section 12.3. Indemnification by Sellers’ Representative
	 	 	34	 
	Section 12.4. Indemnification by Buyer
	 	 	34	 
	Section 12.5. Indemnification Proceedings
	 	 	35	 
	Section 12.6. Exclusivity
	 	 	35	 
	Section 12.7. Limits on Indemnification; Tax Treatment
	 	 	36	 
	Section 12.8. Limited to Actual Damages
	 	 	36	 
	Section 12.9. Indemnification Despite Negligence
	 	 	36	 
	Section 12.10. Post-Closing Escrow
	 	 	37	 
	 
	 	 	 	 
	ARTICLE XIII MISCELLANEOUS
	 	 	38	 
	Section 13.1. Dispute Resolution
	 	 	38	 
	Section 13.2. Notices
	 	 	40	 
	Section 13.3. Entire Agreement
	 	 	42	 
	Section 13.4. Binding Effect; Assignment; No Third Party Benefit
	 	 	42	 
	Section 13.5. Severability
	 	 	43	 
	Section 13.6. GOVERNING LAW
	 	 	43	 
	Section 13.7. Further Assurances
	 	 	43	 
	Section 13.8. Counterparts
	 	 	43	 
	Section 13.9. Injunctive Relief
	 	 	43	 
	Section 13.10. Schedules
	 	 	43	 
	Section 13.11. Time of Essence
	 	 	44	 
	 
	 	 	 	 
	ARTICLE XIV DEFINITIONS AND REFERENCES
	 	 	44	 
	Section 14.1. Certain Defined Terms
	 	 	44	 
	Section 14.2. Certain Additional Defined Terms
	 	 	49	 
	Section 14.3. References and Construction
	 	 	50	 

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SCHEDULES TO AGREEMENT

Schedule 1 — List of Sellers

Company Disclosure Schedules:

a. 3.1 — Seller’s Interest

b. 4.6 — Non-contravention

c. 4.7 — Approvals

d. 4.8 — Subsidiaries

e. 4.9— Financial Statements

f. 4.11— Pending Litigation

g. 4.13 — Taxes

h. 4.14 — Company Contracts

i. 4.19 — Pipeline Gas Imbalances

j. 4.20 — Environmental Matters

k. 4.21 — Insurance

l. 4.22(a) — Employee Related Matters

m. 4.22(b) — Employee Related Matters (Severance Obligations)

n. 4.22(d) — Employee Related Matters (Plans)

o. 7.2(a) — Capital Improvements and Expenditures

p. 8.15 — Excluded Assets

EXHIBITS TO AGREEMENT

Exhibit 8.6 — Form of Release

Exhibit 9.1(c) — Allocated Values

Exhibit 9.1(d) — Calculation of Working Interest and Net Revenue Interest in Horizontal Wells

Exhibit 10.1(h) — Transition Services Agreement

Exhibit 10.2(f) — Form of Membership Assignment by Sellers

Exhibit 10.2(n) — Form of Non-Compete Agreements

Exhibit 14.1 — Gas Contracts

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MEMBERSHIP INTEREST PURCHASE AND SALE AGREEMENT

     THIS MEMBERSHIP INTEREST PURCHASE AND SALE AGREEMENT dated as of May 1, 2006, is made by and
among the Persons listed in Schedule I attached hereto (individually called a “Seller” and
collectively called “Sellers”), Chief Midstream Holdings LLC, a Texas limited liability company
(the “Company” or “Chief Midstream Holdings”), Chief Holdings LLC, a Texas limited liability
company (“Chief Holdings”), Chief Resources LLC, a Texas limited liability company (“Sellers’
Representative”), and Crosstex Energy Services, L.P., a Delaware limited partnership (“Buyer”).

RECITALS:

     (A) Chief Holdings desires to execute this Agreement for the purposes of making certain
representations and warranties regarding the Subsidiaries and certain covenants and agreements
regarding the Midstream Reorganization.

     (B) Sellers are the owners of all of the membership interests of the Company (the
“Interests”).

     (C) Sellers desire to sell the Interests to Buyer, and Buyer desires to purchase the Interests
from Sellers, on the terms and conditions set forth herein.

     (D) The Company desires to join in the execution of this Agreement for the purpose of
evidencing its consent to the consummation of the foregoing transaction and for the purpose of
making certain representations and warranties to, and covenants and agreements with, Buyer.

AGREEMENT:

     NOW, THEREFORE, in consideration of the foregoing Recitals and the mutual covenants and
agreements contained herein, Sellers, the Company, Sellers’ Representative and Buyer do hereby
agree as follows:

ARTICLE I

TERMS OF THE TRANSACTION

     Section 1.1. Agreement to Purchase and Sell Interests. Sellers agree to sell and Buyer
agrees to purchase, for the consideration hereinafter set forth and subject to the terms and
provisions herein, the Interests.

     Section 1.2. Purchase Price. In consideration of the sale of the Interests to Buyer, Buyer
shall pay to Sellers an aggregate cash purchase price of $480,000,000 (the “Purchase Price”). The
Purchase Price as adjusted pursuant to Section 1.3 is herein called the “Adjusted Purchase
Price”.

     Section 1.3. Potential Adjustments to the Purchase Price.

     (a) The Purchase Price shall be increased by the amount, if any, of revenues received by the
Company (and, prior to the Midstream Reorganization, Chief Holdings) and the

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Subsidiaries on or
after January 1, 2006 attributable to the Excluded Assets and which are not reflected in the 2005
Financial Statements.

     (b) The Purchase Price shall be decreased by the amounts listed below in this Section
1.3(b):

     (i) an amount, if any, of expenses (other than general and administrative expenses),
including capital expenditures, paid or incurred by Chief Holdings, the Company and the
Subsidiaries on or after January 1, 2006 attributable to the Excluded Assets and which are
not reflected in the 2005 Financial Statements, and an amount equal to $10,000 per month for
each calendar month since December 31, 2005 and a prorated portion of such amount for the
portion of any partial calendar month;

     (ii) the amount, if any, of the decrease to the Purchase Price as provided in
Section 9.2; and

     (iii) the amount of the Subsidiaries’ negative working capital as of December 31, 2005, if
any, as determined in accordance with GAAP.

     (c) No later than 5 Business Days prior to the Closing Date, the Company shall prepare and
submit to Buyer a statement setting forth, in reasonable detail, the Company’s computation of the
adjustments to the Purchase Price described in Section 1.3(a) and Section 1.3(b),
as applicable. The Company shall furnish to Buyer, together with such computation, copies of
back-up and other supporting information that reasonably supports such computation. If Buyer
disputes the Company’s computation, it shall notify the Company within 2 Business Days of receipt
of the Company’s statement and shall set forth, in reasonable detail, the reasons for such
objections and Buyer’s computation of the above referenced adjustments to the Purchase Price. If
Buyer fails to give notice of objection within such 2 Business Day period, then the Company,
Sellers and Buyer shall be deemed to have accepted the Company’s statement. If Buyer does timely
dispute the Company’s computation, Buyer and the Company shall endeavor in good faith to resolve
any disputed matters prior to Closing. If Buyer and the Company are unable to so resolve any
disputed matters prior to Closing, (i) at Closing, the Adjusted Purchase Price at Closing shall be
based on the Company’s computation, (ii) the dispute resolution provisions of Section 13.1
shall be available post-Closing, and (iii) any disputed amounts shall be immediately placed in
escrow in accordance with the terms of a mutually acceptable escrow agreement.

     (d) After the Closing (but in any event within 90 days of the Closing Date), Sellers’
Representative and Buyer shall meet at a mutually agreeable time to review the calculation of the
Adjusted Purchase Price made at Closing and determine in good faith whether any additional
revisions to such amount are necessary. If, based on such review, Sellers’ Representative and
Buyer determine that the Adjusted Purchase Price was inaccurate (the amount, as so redetermined
under this Section 1.3(d), being called the “Post-Closing Adjusted Purchase Price”) as
reflected in a statement to be prepared by Sellers’ Representative (“Final Settlement
Statement”) then, within three Business Days after such determination (i) Buyer shall tender
to Sellers cash equal to the

2

 

aggregate positive excess of the Post-Closing Adjusted Purchase Price
over the Adjusted Purchase Price or (ii) each Seller shall, in proportion to such Seller’s pro rata
share of the Adjusted Purchase Price received by it or him, tender to Buyer cash equal to the
aggregate positive excess of the Adjusted Purchase Price over the Post-Closing Adjusted Purchase
Price. If Buyer and Sellers’ Representative are unable to resolve any dispute regarding any
determination of the Post-Closing Adjusted Purchase Price, the dispute resolution provisions of
Section 13.1 shall apply. The obligation of each Seller under this Section 1.3
shall be several in nature (and not joint or joint and several) and shall be based on such Seller’s
pro rata share of the Adjusted Purchase Price received by it or him.

     Section 1.4. Payment of the Adjusted Purchase Price. The Adjusted Purchase Price shall be
paid to Sellers as follows:

     (a) At the Closing, Buyer shall pay to Sellers’ Representative, on behalf of Sellers, the
Adjusted Purchase Price, less $18,250,000 (the “Escrow
Deposit”) in immediately available funds by
confirmed wire transfer to a bank account or accounts designated by Sellers’ Representative.

     (b) At the Closing, Buyer shall deposit the Escrow Deposit with the Escrow Agent in accordance
with Section 12.10 by wire transfer of immediately available funds to an account designated
by the Escrow Agent.

     Section 1.5. Midstream Reorganization. Prior to the date hereof, Sellers have formed Chief
Midstream Holdings and prior to the Closing (i) Chief Holdings will assign all of the membership
and partnership interests in the Subsidiaries to Sellers, and (iii) Sellers will contribute all of
such membership and partnership interests in the Subsidiaries to Chief Midstream Holdings (the
“Midstream Reorganization”).

ARTICLE II

CLOSING

     The closing of the transactions contemplated hereby (the “Closing”) shall take place (i) at
the offices of Thompson & Knight LLP, Dallas, Texas, at 10:00 a.m. (local Dallas, Texas time) on
June 29, 2006, provided, that Chief Midstream Holdings may extend this date up to August 31, 2006
upon written notice to Buyer to the extent necessary to comply with Section 8.19, or (ii)
at such other time or place or on such other date as the parties hereto shall agree. The date on
which the Closing is required to take place is herein referred to as the “Closing Date.” All
Closing transactions shall be deemed to have occurred simultaneously.

ARTICLE III

REPRESENTATIONS AND WARRANTIES OF SELLERS AND SELLERS’ REPRESENTATIVE

     Each Seller and Sellers’ Representative severally represents to Buyer that as of the date
hereof and as of the Closing, only with respect to itself and not regarding any other Seller or (as
to any Seller) Sellers’ Representative, to Buyer:

     Section 3.1. Title to Interests. Such Seller is the record and beneficial owner of, and
upon consummation of the transactions contemplated hereby Buyer will acquire good, valid, and
marketable title to, Seller’s Interest (which interest is described in Section 3.1 of the
Company Disclosure Schedule), free and clear of all Liens, other than (i) those that may arise by
virtue of

3

 

any actions taken by or on behalf of Buyer or its affiliates, (ii) restrictions on
transfer that may be imposed by federal or state securities laws, (iii) restrictions on transfer
that are cancelled as of the Closing or (iv) Liens to be released at Closing.

     Section 3.2. Organization and Standing. If such party is not a natural person, then such
party is duly organized, validly existing and, if applicable, in good standing under the laws of
the state or other jurisdiction of its formation.

     Section 3.3. Authority. Such party has all requisite power and authority to execute,
deliver, and perform this Agreement and to consummate the transactions contemplated hereby. This
Agreement has been duly executed and delivered by such party and constitutes, and each other
agreement, instrument, or document executed or to be executed by such party in connection with the
transactions contemplated hereby has been, or when executed will be, duly executed and delivered by
such party and constitutes, or when executed and delivered will constitute, a valid and legally
binding obligation of such party, enforceable against such party in accordance with their
respective terms, except as such enforceability may be limited by bankruptcy, insolvency,
moratorium or other similar laws affecting or relating to the enforcement of creditors’ rights
generally and the application of general principles of equity (regardless of whether that
enforceability is considered in a proceeding at law or in equity).

     Section 3.4. Non-Contravention. Neither the execution, delivery, and performance by such
party of this Agreement and each other agreement, instrument, or document executed or to be
executed by such party in connection with the transactions contemplated hereby to which such party
is a party nor the consummation by such party of the transactions contemplated hereby and thereby
(i) do or will conflict with or result in a violation of any provision of, or constitute (with or
without the giving of notice or the passage of time or both) a default under, or give rise (with or
without the giving of notice or the passage of time or both) to any right of termination,
cancellation, or acceleration under, any bond, debenture, note, mortgage or indenture, or any
contract, agreement, or other instrument or obligation to which such party is a party or by which
such party or any of such party’s properties may be bound, or (ii) violate any Applicable Law
binding upon such party.

     Section 3.5. Approvals. Except in connection with the HSR Act or as provided in
Section 8.19, no consent, approval, order, or authorization of, or declaration, filing, or
registration with, any Governmental Entity or of any third party is required to be obtained or made
by such party in connection with the execution, delivery, or performance by such party of this
Agreement, each other agreement,
instrument, or document executed or to be executed by such party in connection with the
transactions contemplated hereby to which such party is a party or the consummation by such party
of the transactions contemplated hereby and thereby.

     Section 3.6. Pending Litigation. There are no Proceedings pending or, to such party’s
Knowledge, threatened, in which such party is or may be a party affecting the execution and
delivery of this Agreement by such party or the consummation of the transactions contemplated
hereby by such party.

4

 

ARTICLE IV

REPRESENTATIONS AND WARRANTIES OF THE COMPANY

     Except as provided in the Company Disclosure Schedule, the Company hereby represents and
warrants to Buyer that as of the date hereof and as of the Closing (provided, however, that for
purposes of this Article IV, until the completion of the Midstream Reorganization,
references to the Company shall also include Chief Holdings):

     Section 4.1. Organization. The Company is duly organized, validly existing and in good
standing under the laws of the State of Texas and has all requisite limited liability company power
and authority to carry on its business as now being conducted. The Company is duly qualified or
licensed to do business and in good standing in each jurisdiction in which the nature of its
business or the ownership or leasing of its properties makes such qualification or licensing
necessary. No Proceedings to dissolve the Company are pending or, to the Knowledge of the Company,
threatened.

     Section 4.2. Governing Documents. The Company has made available to Buyer accurate and
complete copies of (i) the Governing Documents of the Company and each of the Subsidiaries, as
amended through the date hereof, and (ii) the minutes of all meetings of the respective board of
managers (or other similar governing body) of the Company and the Subsidiaries, any committees of
such boards or other bodies, and the members, shareholders or other equity holders of the Company
and the Subsidiaries (and all consents in lieu of such meetings). Such Governing Documents,
minutes, and consents accurately reflect the equity ownership of the Company and the Subsidiaries
and all actions taken by the board of managers, other governing body, committees, and equity
owners.

     Section 4.3. Capital Structure. No membership interests or other equity of the Company are
subject to, nor have any been issued in violation of, preemptive or similar rights. Except for the
Interests and the rights created by this Agreement or in connection with the Credit Facilities or
the VPP, there are outstanding or in existence (i) no membership interests or other equity or debt
securities of the Company, (ii) no securities of the Company convertible into or exchangeable for
membership interests or other voting securities of the Company, (iii) no options or other rights to
acquire from the Company, and no obligation of the Company to issue or sell, any membership
interests or other voting securities of the Company or any securities of the Company convertible
into or exchangeable for such membership interests or voting securities, and (iv) no equity
equivalents, interests in the
ownership or earnings, or other similar rights of or with respect to the Company. Except as
reflected in the Financial Statements, there are no outstanding obligations of the Company to
repurchase, redeem, or otherwise acquire any of the foregoing shares, securities, options, equity
equivalents, interests, or rights.

     Section 4.4. Power and Authority. The Company has all requisite limited liability company
power and authority to execute, deliver, and perform this Agreement and each other agreement,
instrument, or document executed or to be executed by the Company in connection with the
transactions contemplated hereby to which it is a party and to consummate the transactions
contemplated hereby and thereby. The Company has all requisite limited liability company power and
authority to conduct its business generally in the manner that it is currently being conducted.
The execution, delivery, and performance by the Company of this Agreement and each other agreement,
instrument, or document executed or to be executed by the Company

5

 

in connection with the transactions contemplated hereby
to which it is a party, and the consummation by it of the transactions contemplated hereby and
thereby, have been duly authorized by all necessary action of the Company.

     Section 4.5. Valid and Binding Agreement. This Agreement has been duly executed and
delivered by the Company and constitutes, and each other agreement, instrument, or document
executed or to be executed by the Company in connection with the transactions contemplated hereby
to which it is a party has been, or when executed will be, duly executed and delivered by the
Company, and constitutes, or when executed and delivered will constitute, a valid and legally
binding obligation of the Company, enforceable against it in accordance with their respective
terms, except as such enforceability may be limited by bankruptcy, insolvency, moratorium or other
similar laws affecting or relating to the enforcement of creditors’ rights generally and the
application of general principles of equity (regardless of whether that enforceability is
considered in a proceeding at law or in equity).

     Section 4.6. Non-Contravention. Except as set forth in Section 4.6 of the Company
Disclosure Schedule or as customarily obtained following Closing, neither the execution, delivery,
and performance by the Company or Sellers of this Agreement and each other agreement, instrument,
or document executed or to be executed by the Company or any Seller in connection with the
transactions contemplated hereby to which any of them is a party nor the consummation by any of
them of the transactions contemplated hereby and thereby do and will (i) conflict with or result in
a violation of any provision of the Company’s Governing Documents, (ii) conflict with or result in
a violation of any provision of, or constitute (with or without the giving of notice or the passage
of time or both) a material default under, or give rise (with or without the giving of notice or
the passage of time or both) to any right of termination, cancellation, or acceleration under, any
bond, debenture, note, mortgage or indenture, or any contract, agreement, or other instrument or
obligation to which the Company or any Subsidiary is a party or by which the Company, any
Subsidiary or any of the Company’s or any Subsidiary’s Midstream Assets may be bound, (iii) result
in the creation or imposition of any Lien on any of the Midstream Assets, or (iv) result in a
material violation of any Applicable Law binding upon the Company or any of the Subsidiaries.

     Section 4.7. Approvals. Except as set forth in Section 4.7 of the Company
Disclosure Schedule or as customarily obtained following Closing, no material consent, waiver,
notice, preferential right to purchase waiver, approval, order, or authorization of, or
declaration, filing, or registration with, any Governmental Entity or of any third party is
required to be obtained or made by the Company or any Subsidiary in connection with the execution,
delivery, or performance by the Company of this Agreement, each other agreement, instrument, or
document executed or to be executed by the Company or any Subsidiary in connection with the
transactions contemplated hereby to which they are a party or the consummation by them of the
transactions contemplated hereby and thereby.

     Section 4.8. Subsidiaries.

     (a) Other than any Excluded Assets, the Company does not own, directly or indirectly, any
capital stock of, or other equity interest in, any corporation or have any direct or indirect
equity or ownership interest in any other Person, other than, from and after the date of the
Midstream Reorganization, the Subsidiaries, but excluding the Upstream Subsidiaries.

6

 

Section
4.8 of the Company Disclosure Schedule lists each Subsidiary, the jurisdiction of formation of
each Subsidiary, and the outstanding equity interests of each Subsidiary. Each Subsidiary is duly
formed, validly existing, and in good standing under the laws of the jurisdiction of its
incorporation or formation. Each Subsidiary is duly qualified or licensed to do business as a
foreign entity and is in good standing in each of the jurisdictions in which the nature of its
business or the ownership or leasing of its properties makes such qualification or licensing
necessary. Each Subsidiary has all requisite power and authority to carry on its business as now
being conducted. No Proceedings to dissolve any Subsidiary are pending, or to the Knowledge of the
Company, threatened.

     (b) All the outstanding equity interests of each Subsidiary are, as of the date hereof, owned
directly or indirectly by Chief Holdings and from and after the Midstream Reorganization will be
owned directly or indirectly by the Company, free and clear of all Liens. No equity interests of
any Subsidiary are subject to, nor have any been issued in violation of, preemptive or similar
rights.

     (c) Except as set forth in Section 4.8 of the Company Disclosure Schedule, there are
outstanding (i) no shares of capital stock or other voting securities of any Subsidiary, (ii) no
securities of Chief Midstream Holdings or any Subsidiary convertible into or exchangeable for
shares of capital stock or other voting securities of Chief Midstream Holdings or any Subsidiary,
(iii) no options or other rights to acquire from the Company or any Subsidiary, and no obligation
of Chief Midstream Holdings or any Subsidiary to issue or sell, any shares of capital stock or
other voting securities of Chief Midstream Holdings or any Subsidiary or any securities convertible
into or exchangeable for such capital stock or voting securities, and (iv) no equity equivalents,
interests in the ownership or earnings, or other similar rights of or with respect to Chief
Midstream Holdings or any Subsidiary. There are no outstanding obligations of the Company or any
Subsidiary to repurchase, redeem, or otherwise acquire any of the foregoing shares, securities,
options, equity equivalents, interests, or rights.

     Section 4.9. Financial Statements.

     (a) Section 4.9 of the Company Disclosure Schedule sets forth accurate and complete
copies of (i) Chief Holdings’ audited consolidated balance sheet as of December 31, 2005 and the
related audited statements of income, members’ equity and cash flows for the year then ended, and
the notes and schedules thereto, together with the unqualified report thereon of KBA Group LLP,
independent certified public accountants (the “2005 Financial Statements”), (ii) Chief Holdings’
unaudited consolidated balance sheet as of March 31, 2006 and the related statements of income,
members’ equity and cash flows for the period then ended (the “Interim Financial Statements,” and
together with the 2005 Financial Statements, the “Financial Statements”). The Financial Statements
(x) have been prepared from the books and records of the Company and its consolidated Subsidiaries
in accordance with GAAP applied on a consistent basis throughout the periods involved, and (y)
fairly present in all material respects the financial position of the Company and its consolidated
Subsidiaries as of the respective dates thereof and the results of operations and cash flows for
the periods indicated; provided that, in the case of the Interim Financial Statements, such Interim
Financial Statements are subject to normal recurring year-end adjustments and do not include
footnotes.

7

 

     (b) Section 4.9 of the Company Disclosure Schedule also sets forth accurate and
complete copies of (i) the unaudited combined balance sheet of the Subsidiaries as of December 31,
2005 and the related unaudited statements of income, members’ equity and cash flows for the year
then ended (the “Midstream 2005 Financial Statements”) and (ii) the unaudited combined balance
sheet of the Subsidiaries as of March 31, 2006 and the related unaudited statements of income,
members’ equity and cash flows for the period then ended (the “Midstream Interim Financial
Statements,” together with the Midstream 2005 Financial Statements, the “Midstream Financial
Statements”). The Midstream Financial Statements (x) have been prepared from the books and records
of the Subsidiaries, and (y) fairly present in all material respects the financial position of the
Subsidiaries as of the respective dates thereof and the results of operations and cash flows for
the periods indicated; provided that the Midstream Financial Statements are subject to normal
recurring year-end adjustments and do not include footnotes.

     Section 4.10. Undisclosed Liabilities. Except (i) as and to the extent set forth in the
2005 Midstream Financial Statements, (ii) for liabilities described or contemplated in the notes
accompanying the Financial Statements, (iii) for matters of the type not disclosed in the Financial
Statements but which are disclosed or contemplated elsewhere in this Agreement or in the Company
Disclosure Schedule, (iv) for material liabilities arising since December 31, 2005 in the ordinary
course of business consistent with past practice, (v) for liabilities arising under executory
contracts entered into in the ordinary course of business (none of which is a material liability
for breach of contract), and (vi) for other liabilities, which in the aggregate are not material,
neither the Company nor any Subsidiary has any liabilities or obligations, whether accrued,
absolute, secured, unsecured, contingent or otherwise, that are or would be required by GAAP and
consistent with historical practices with respect to the Midstream Assets to be reflected in the
2005 Financial Statements.

     Section 4.11. Pending Litigation. Except as set forth in Section 4.11 of the
Company Disclosure Schedule, there are no material Proceedings pending or, to the Company’s
Knowledge, threatened, against or affecting, the Company, any Subsidiary or any of the Midstream
Assets. There are no Proceedings pending or, to the Company’s Knowledge, threatened, in which the
Company is or may be a party affecting
the execution and delivery of this Agreement by the Company or the consummation of the transactions
contemplated hereby by the Company.

     Section 4.12. Compliance with Laws.

     (a) The Company and the Subsidiaries are in material compliance with all Applicable Laws.
Neither the Company nor any Subsidiary has received any notice from any Governmental Entity or any
other Person that either the Company or such Subsidiary is in material violation of, or has
materially violated, any Applicable Laws. The Company and each Subsidiary has in effect all
material federal, state and local governmental Permits reasonably necessary for it to own, lease or
operate the Midstream Assets and to carry on its business as now conducted, and there has occurred
no material default under any such Permit. Neither the execution and delivery of this Agreement by
Sellers or the Company nor the consummation by Sellers or the Company of the transactions
contemplated hereby will result in a material violation or material breach of, or constitute (with
or without due notice or lapse of time or both) a default (or give rise to a right of termination
or cancellation) of any material Permit. Notwithstanding the foregoing, this

8

 

Section 4.12
does not relate to Taxes or environmental matters, which are the subject of Section 4.13
and Section 4.20, respectively.

     (b) The Permits grant all material licenses and permits of Governmental Entities that are
necessary to own, operate and maintain the Properties as presently being owned, operated and
maintained, and the Permits are in full force and effect (and are transferable to Buyer).

     Section 4.13. Taxes. Except as disclosed in Section 4.13 of the Company Disclosure
Schedule:

     (a) the Company and each Subsidiary has duly filed all federal, state, local, and foreign Tax
Returns required to be filed by or with respect to it or its operations with the IRS or other
applicable Taxing authority, and all such Tax Returns were correct and complete in all material
respects. No extensions with respect to such Tax Returns have been requested or granted;

     (b) the Company and each Subsidiary has paid, or adequately reserved against in the Financial
Statements, all Taxes due, or claimed by any Taxing authority to be due, from or with respect to it
(whether or not shown on any Tax Return), except Taxes that are being contested in good faith by
appropriate legal Proceedings and for which adequate reserves have been set aside as disclosed in
Section 4.13 of the Company Disclosure Schedule;

     (c) to the Company’s Knowledge, there has been no issue raised or adjustment proposed (and
none is pending) by the IRS or any other Taxing authority in connection with any Tax Returns of the
Company or any Subsidiary;

     (d) the Company and each Subsidiary has made all deposits required with respect to Taxes;

     (e) no waiver or extension of any statute of limitations as to any federal, state, local, or
foreign Tax matter has been given by or requested from the Company or any Subsidiary;

     (f) neither the Company nor any Subsidiary has been a corporation or has elected to be treated
as a corporation for tax purposes;

     (g) neither the Company nor any Subsidiary is a party to any Tax allocation or sharing
agreement. Neither the Company nor any Subsidiary (A) has been a member of an affiliated group
filing a consolidated federal income tax return or (B) has any liability for Taxes of any Person
(other than the Company or the Subsidiaries) under Treasury Regulation Section 1.1502-6 (or any
similar provision of State or local law) as a transferee or successor, by contract, or otherwise;

     (h) except with respect to the VPP, neither the Company nor any Subsidiary will be required to
include any item of income for any taxable period ending after the Closing Date as a result of any
prepaid amount received on or prior to the Closing Date; and

     (i) none of Sellers is a “foreign person” within the meaning of Section 1445 of the Code.

9

 

     For purposes of this Section, a Tax is due (and must therefore either be paid or adequately
reserved against in the Financial Statements) only on the last date payment of such Tax can be made
without interest or penalties, whether such payment is due in respect of estimated Taxes,
withholding Taxes, required Tax credits, or any other Tax.

     Section 4.14. Contracts.

     (a) Section 4.14 of the Company Disclosure Schedule sets forth a complete and accurate
list of all agreements material to Chief Midstream Holdings’ or any Subsidiary’s business or their
ownership or operation of the Midstream Assets to which Chief Midstream Holdings or any Subsidiary
is a party or bound or by which any of their properties or assets are subject, as of the date of
this Agreement (and true and correct copies have been provided to Buyer), including (with each of
the following listed agreements being considered material): (i) any contract covering compensation
and employment or service of any officer, employee or consultant or relating to any loan from Chief
Midstream Holdings or any Subsidiary to an officer, director or Affiliate; (ii) any indenture,
mortgage, loan, credit or similar contract under which Chief Midstream Holdings or any Subsidiary
has borrowed any money or issued any note, bond, indenture or other evidence of indebtedness for
borrowed money, sold and leased back assets or guaranteed indebtedness for others (including Hedge
or other similar contracts); (iii) any guarantee by Chief Midstream Holdings or any Subsidiary of
any obligation of another or any Hedge; (iv) any agreement under which Chief Midstream Holdings or
any Subsidiary has granted any individual or entity any registration rights (including demand and
piggyback registration rights); (v) any agreement respecting any partnership, joint venture, or,
with respect to the Interests or any equity interests in any Subsidiary, any option, put or call,
or right of first refusal; (vi) any agreement involving payments by or to Chief Midstream Holdings
or a Subsidiary in excess of $250,000 in any 12 month period; (vii) the Governing Documents of
Chief Midstream Holdings and each Subsidiary; (viii) any non-competition agreements or other
agreements or obligations which purport to limit in any respect the manner in which, or the
localities in which, the business of Chief Midstream Holdings or any Subsidiary is conducted; (ix)
any contract with a Seller or any Affiliate of a Seller which will survive the Closing; (x) any
plan, contract or arrangement providing for bonuses, pensions, deferred compensation, retirement
plan payments, profit sharing, incentive pay or any other employee right or benefit; (xi) the Gas
Contracts; and (xii) any agreement of indemnification, surety or guarantee outside the ordinary
course of business (collectively the “Company Contracts”).

     (b) All Company Contracts, Permits and Easements comprising part of the Midstream Assets (the
Company Contracts, Gas Contracts, Permits and Easements being herein
called “Basic Documents”) are
valid and binding, in full force and effect, and, to the Company’s Knowledge, enforceable against
the parties thereto in accordance with their respective terms, except as such enforceability may be
limited by bankruptcy, insolvency, moratorium or other similar laws affecting or relating to the
enforcement of creditors’ rights generally and the application of general principles of equity
(regardless of whether that enforceability is considered in a proceeding at law or in equity). No
event has occurred, which after notice or lapse of time, or both, would constitute a material
default by the Company (or Subsidiary if applicable) under any Basic Document), or to the Company’s
Knowledge, any other party to any Basic Documents.

     Section 4.15. Gas Regulatory Matters. The only pipelines and related facilities owned by
the Company or the Subsidiaries are production, gathering and transmission pipelines used in

10

 

connection with oil and gas properties owned by the Company, Affiliates of the Company or third
party producers under one or more of the Gas Contracts. None of the Company or the Subsidiaries is
a “natural-gas company” under the Natural Gas Act of 1938 (“NGA”), and the Pipeline has never been
used in a manner that would require certification, under the NGA or subject the Pipeline to the
jurisdiction of the Federal Energy Regulatory Commission. Eagle Mountain Pipeline Company, L.P. is
a gas utility under Section 121.001 and Section 101.003(7) of the Texas Utilities Code. Neither
the Company nor any Subsidiary provides transportation or storage services pursuant to Section
311(a) of the Natural Gas Policy Act of 1978 (“NGPA”).

     Section 4.16. Intentionally Omitted.

     Section 4.17. Gas Contracts. None of the Gas Contracts obligates the Company or any
Subsidiary to take or pay for any oil, gas or other minerals.

     Section 4.18. Pipeline and Plant. To the Company’s Knowledge, (i) the Pipeline and the
Plant have been owned, constructed, maintained and operated in a good and workmanlike manner in
accordance with customary practices in the oil and gas industry and all Applicable Laws and
Environmental Laws, and have been in continuous operation since they were placed into service,
except for temporary cessations
for the performance of maintenance, repair, replacement, modification, improvement or expansion,
and (ii) the existing condition of the Pipeline and the Plant make each suitable, in accordance
with customary practices in the oil and gas industry and all Applicable Laws and Environmental
Laws, for use for purposes that it is currently being used.

     Section 4.19. Gas Imbalances. Except for the gas imbalances reflected on Section
4.19 of the Company Disclosure Schedule and for normal and customary gathering, transportation
or processing imbalances occurring after the date hereof, there do not exist any gas imbalances (a)
under any Gas Contracts with third parties providing for the gathering, transportation or
processing of gas owned or controlled by such third parties and (b) for which Chief Midstream
Holdings or any Subsidiary has received a quantity of gas prior to the date of this Agreement for
which Chief Midstream Holdings or any Subsidiary will have a duty to deliver an equivalent quantity
of gas after the Closing.

     Section 4.20. Environmental Matters. Except as set forth in Section 4.20 of the
Company Disclosure Schedule:

     (a) The Company and the Subsidiaries are in material compliance with all applicable
Environmental Laws. Neither the Company nor any Subsidiary has received any order, notice or other
communication from any Governmental Entity or Person that either the Company or such Subsidiary is
in material violation of, or has materially violated, any applicable Environmental Law. The
Company and each Subsidiary has in effect all material federal, state and local governmental
environmental Permits reasonably necessary for it to construct, own, lease or operate the
Properties and to carry on its business as now conducted, and there has occurred no material
default under any such Permit.

     (b) The Permits grant all material licenses and permits of Governmental Entities that are
necessary to own, operate and maintain the Midstream Assets as presently being owned, operated and
maintained, and the Permits are in full force and effect (and are transferable to

11

 

Buyer). Neither
the execution and delivery of this Agreement by Sellers or the Company nor the consummation by
Sellers or the Company of the transactions contemplated hereby will result in a material violation
or material breach of, or constitute (with or without due notice or lapse of time or both) a
default (or give rise to a right of termination or cancellation) of any material environmental
Permit.

     (c) For purposes of this Section 4.20, “Environmental Liabilities” means any cost,
damages, expense, liability, obligation or other responsibility arising from or under any
Environmental Law and consisting of or relating to:

     (i) any environmental conditions or pollution (including on-site or off-site
contamination and regulation of chemical substances or products);

     (ii) fines, penalties, judgments, awards, settlements, legal fees, or administrative
Proceedings, damages, losses, claims, demands and response action, investigative, remedial,
or inspection costs and expenses arising under Environmental Law; or

     (iii) any other compliance, corrective, investigative or remedial measures required
under Environmental Law.

     (d) The terms “remedial,” and “response action” include the types of activities covered by the
United States Comprehensive Environmental Response, Compensation and Liability Act, 42 U.S.C. §
9601 et seq., as amended (“CERCLA”).

     Section 4.21. Insurance. Section 4.21 of the Company Disclosure Schedule is a list
of all policies of insurance owned or held by Affiliates of the Company or any Subsidiary. To the
Company’s Knowledge, such policies are in full force and effect, satisfy in all respects all
material requirements of Applicable Laws and any agreements to which Affiliates of the Company or
any Subsidiary are a party, and provide insurance coverage which is generally customary for
entities of similar size engaged in the Company’s line of business.

     Section 4.22. Employee Related Matters.

     (a) Section 4.22(a) of the Company Disclosure Schedule sets forth a list of: (i) all
managers, directors and officers of Chief Midstream Holdings and each Subsidiary; (ii) the name and
dates of employment by Affiliates of the Company or a Subsidiary of each employee (and who will be
transferred to Sellers’ Representative pursuant to Section 8.7), agent and consultant of
the Company and the Subsidiaries as of the date hereof whose annual rate of compensation in the
current fiscal year will equal or exceed $100,000 and (iii) each employee of Affiliates of the
Company or a Subsidiary who devotes substantial attention to the operation of the Midstream Assets.

     (b) Except as described in Section 4.22(b) of the Company Disclosure Schedule, the
consummation of the transactions contemplated by this Agreement will not result in the incurring of
any severance pay obligations to any person employed by the Company or any Subsidiary.

     (c) There are no collective bargaining agreements or other similar agreements, arrangements or
understandings, written or oral, with employees as a group to or by which the

12

 

Company or any
Subsidiary is a party or is bound. No employees of the Company are represented by any labor
organization, collective bargaining representative, or group of employees.

     (d) Except as listed in Section 4.22(d) of the Company Disclosure Schedule, neither
Chief Midstream Holdings nor any Subsidiary has and maintains any pension, profit sharing, deferred
compensation, incentive compensation or other similar plan, program or arrangement for the benefit
of any former or current employees of the Company or any Subsidiary.

     Section 4.23. Brokers. Except for the amounts due Petrie Parkman & Co., no broker,
investment banker, financial advisor or other Person is entitled to any broker’s, finder’s,
financial advisor’s or other similar fee or commission in connection with the transactions
contemplated by this Agreement based upon arrangements made by or on behalf of the Company.

     Section 4.24. Regulatory Filings. All material filings and notices related to the
Midstream Assets or the ownership, use or operation thereof, required to be made with all
applicable state and federal agencies (the “Regulatory Agencies”), including the Texas Railroad
Commission and the Federal Energy Regulatory Commission, have been made. Chief Holdings has
delivered to the Buyer true and complete copies of any currently effective reports, tariffs and
rate schedules relating to the Midstream Assets filed with the Regulatory Agencies, and such
reports, tariffs and rate schedules are true and correct now and at Closing in all material
respects and were prepared in substantial conformity with applicable regulations and were filed in
the appropriate offices.

     Section 4.25. Intellectual Property. To the Company’s Knowledge, the Company and the
Subsidiaries either own or have (or at Closing will have) valid licenses or other rights to use all
patents, copyrights, trademarks, software, databases, engineering data, maps, interpretations and
other technical information used in their businesses as presently conducted, subject to the
limitations contained in the agreements governing the use of the same, which limitations are
customary for companies engaged in the business of the exploration, production, transportation,
gathering, processing, treating, conditioning and sale of Hydrocarbons.

     Section 4.26. Properties.

     (a) The Company has not received any written notice of any adverse claim to the title to any
material asset included within the Midstream Assets or with respect to any lease under which any
material asset included within the Midstream Assets are held by it, and to Sellers’ Knowledge,
there are no existing facts or circumstances that could give rise to such claims. As of the date
of this Agreement, there has been no actual or, to Sellers’ Knowledge, threatened taking (whether
permanent, temporary, whole or partial) of any part of the Midstream Assets by reason of
condemnation or, to Sellers’ Knowledge, the threat of condemnation.

     (b) The Midstream Assets constitute all of the material assets, rights and properties,
tangible or intangible, real or personal, which are used in connection with the operation of the
business of Chief Midstream Holdings and the Subsidiaries consistent with past practice and as
currently operated. Except as specified in Section 4.26 of the Company Disclosure
Schedule, there are no consents or preferential or similar restrictions or rights to purchase the
Interests.

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ARTICLE V

DISCLAIMER

     EXCEPT AS SET FORTH IN THIS AGREEMENT, SELLERS WILL CONVEY TO BUYER THE INTERESTS WITHOUT ANY
EXPRESS, STATUTORY, OR IMPLIED WARRANTY OR REPRESENTATION OF ANY KIND FROM ANY OF THE SELLERS, THE
COMPANY, CHIEF HOLDINGS, SELLERS’ REPRESENTATIVE OR
ANY OF THEIR RESPECTIVE AFFILIATES, INCLUDING WARRANTIES OR REPRESENTATIONS RELATING TO (I)
THE COMPANY, CHIEF HOLDINGS, SELLERS’ REPRESENTATIVE OR ANY SUBSIDIARY, (II) TITLE OF THE COMPANY,
CHIEF HOLDINGS OR ANY SUBSIDIARY IN AND TO THE MIDSTREAM ASSETS, (III) THE CONDITION OF THE
MIDSTREAM ASSETS, (IV) ANY IMPLIED OR EXPRESS WARRANTY OF MERCHANTABILITY OF THE MIDSTREAM ASSETS,
(V) ANY IMPLIED OR EXPRESS WARRANTY OF THE FITNESS OF THE MIDSTREAM ASSETS FOR A PARTICULAR
PURPOSE, (VI) ANY IMPLIED OR EXPRESS WARRANTY OF CONFORMITY TO MODELS OR SAMPLES OF MATERIALS,
(VII) ANY AND ALL OTHER IMPLIED WARRANTIES EXISTING UNDER APPLICABLE LAW NOW OR HEREAFTER IN
EFFECT, OR (VIII) ANY IMPLIED OR EXPRESS WARRANTY REGARDING COMPLIANCE WITH ANY APPLICABLE
ENVIRONMENTAL LAWS, THE RELEASE OF MATERIALS INTO THE ENVIRONMENT, OR PROTECTION OF THE ENVIRONMENT
OR HEALTH. EXCEPT AS EXPRESSLY SET FORTH IN THIS AGREEMENT, IN PURCHASING THE INTERESTS BUYER
ACCEPTS THE MIDSTREAM ASSETS “AS IS,” “WHERE IS,” AND “WITH ALL FAULTS” AND IN THEIR PRESENT
CONDITION AND STATE OF REPAIR. WITHOUT LIMITING THE GENERALITY OF THE FOREGOING, EXCEPT AS SET
FORTH IN THIS AGREEMENT, NONE OF THE SELLERS NOR SELLERS’ REPRESENTATIVE NOR CHIEF HOLDINGS NOR THE
COMPANY MAKES ANY REPRESENTATION OR WARRANTY AS TO (A) THE PHYSICAL, OPERATING, REGULATORY
COMPLIANCE, SAFETY, OR ENVIRONMENTAL CONDITION OF THE MIDSTREAM ASSETS OR (B) THE ACCURACY,
COMPLETENESS, OR MATERIALITY OF ANY DATA, INFORMATION, OR RECORDS FURNISHED TO BUYER IN CONNECTION
WITH THE COMPANY OR THE MIDSTREAM ASSETS. BUYER ACKNOWLEDGES AND AGREES TO THE FOREGOING AND
THAT THE FOREGOING DISCLAIMER IS “CONSPICUOUS.”

ARTICLE VI

REPRESENTATIONS AND WARRANTIES OF BUYER

     Buyer represents to Sellers and the Company as of the date hereof and as of the Closing that:

     Section 6.1. Organization. Buyer is a limited partnership validly existing and in good
standing under the laws of the State of Delaware and has requisite power and authority to carry on
its business as now being conducted. Buyer is duly qualified or licensed to do business and in
good standing in each jurisdiction in which the nature of its business or the ownership or leasing
of its properties makes such qualification or licensing necessary, except in such jurisdictions

14

 

where the failure to be so duly qualified or licensed and in good standing would not prevent or
materially delay the consummation of the transactions contemplated by this Agreement.

     Section 6.2. Power and Authority. Buyer has all requisite power and authority to execute, deliver, and perform this Agreement and
each other agreement, instrument, or document executed or to be executed by Buyer in connection
with the transactions contemplated hereby to which it is a party and to consummate the transactions
contemplated hereby and thereby. The execution, delivery, and performance by Buyer of this
Agreement and each other agreement, instrument, or document executed or to be executed by Buyer in
connection with the transactions contemplated hereby to which it is a party, and the consummation
by it of the transactions contemplated hereby and thereby, have been duly authorized by all
necessary action of Buyer.

     Section 6.3. Valid and Binding Agreement. This Agreement has been duly executed and
delivered by Buyer and constitutes, and each other agreement, instrument, or document executed or
to be executed by Buyer in connection with the transactions contemplated hereby to which it is a
party has been, or when executed will be, duly executed and delivered by Buyer, and constitutes, or
when executed and delivered will constitute, a valid and legally binding obligation of Buyer,
enforceable against it in accordance with their respective terms, except as such enforceability may
be limited by bankruptcy, insolvency, moratorium or other similar laws affecting or relating to the
enforcement of creditors’ rights generally and the application of general principles of equity
(regardless of whether that enforceability is considered in a proceeding at law or in equity).

     Section 6.4. Non-Contravention. Neither the execution, delivery, and performance by Buyer
of this Agreement and each other agreement, instrument, or document executed or to be executed by
Buyer in connection with the transactions contemplated hereby to which it is a party nor the
consummation by it of the transactions contemplated hereby and thereby do and will (i) conflict
with or result in a violation of any provision of Buyer’s Governing Documents, (ii) conflict with
or result in a violation of any provision of, or constitute (with or without the giving of notice
or the passage of time or both) a default under, or give rise (with or without the giving of notice
or the passage of time or both) to any right of termination, cancellation, or acceleration under,
any bond, debenture, note, mortgage or indenture, or any contract, agreement, or other instrument
or obligation to which Buyer is a party or by which Buyer or any of Buyer’s properties may be
bound, or (iii) violate any Applicable Law binding upon Buyer.

     Section 6.5. Approvals. Except in connection with the HSR Act, no consent, approval,
order, or authorization of, or declaration, filing, or registration with, any Governmental Entity
or of any third party is required to be obtained or made by Buyer in connection with the execution,
delivery, or performance by Buyer of this Agreement, each other agreement, instrument, or document
executed or to be executed by Buyer in connection with the transactions contemplated hereby to
which it is a party or the consummation by it of the transactions contemplated hereby and thereby.

     Section 6.6. Proceedings. There are no Proceedings pending or, to Buyer’s Knowledge, threatened, in which Buyer is or may
be a party affecting the execution and delivery of this Agreement by Buyer or the consummation of
the transactions contemplated hereby by Buyer.

15

 

     Section 6.7. Financing. Buyer has access to, and at the Closing will have, such funds as
are necessary for the consummation by it of the transactions contemplated hereby.

     Section 6.8. Investment Experience. Buyer acknowledges that it can bear the economic risk
of its investment in the Interests, and has such knowledge and experience in financial and business
matters that it is capable of evaluating the merits and risks of an investment in the Interests.

     Section 6.9. Restricted Securities. Buyer understands that the Interests will not have
been registered pursuant to the Securities Act or any applicable state securities laws, that the
Interests will be characterized as “restricted securities” under federal securities laws, and that
under such laws and applicable regulations the Interests cannot be sold or otherwise disposed of
without registration under the Securities Act or an exemption therefrom.

     Section 6.10. Accredited Investor; Investment Intent. Buyer is an accredited investor as
defined in Regulation D under the Securities Act. Buyer is acquiring the Interests for its own
account for investment and not with a view to, or for sale or other disposition in connection with,
any distribution of all or any part thereof, except in compliance with applicable federal and state
securities laws.

     Section 6.11. Independent Evaluation. Buyer is an experienced and knowledgeable investor
in the oil and gas business and the business of owning and operating midstream natural gas assets.
Buyer has had access to the Midstream Assets, the officers, consultants and other representatives
of the Company and the Subsidiaries, and the books, records, and files of the Company and the
Subsidiaries relating to the Midstream Assets. In making the decision to enter into this Agreement
and to consummate the transactions contemplated hereby, Buyer has relied on (i) the basis of its
own independent due diligence investigation of the Midstream Assets, and (ii) the representations
and warranties made by Sellers, Sellers’ Representative and the Company in Articles III and
IV, respectively, and has been advised by and has relied solely on its own expertise and
legal, land, tax, reservoir engineering, and other professional counsel concerning this
transaction, the Midstream Assets, and the value thereof.

     Section 6.12. Brokers. No broker, investment banker, financial advisor or other Person is
entitled to any broker’s, finder’s, financial advisor’s or other similar fee or commission in
connection with the transactions
contemplated by this Agreement based upon arrangements made by or on behalf of Buyer which the
Company, any Seller or Sellers’ Representative may be obligated to pay.

ARTICLE VII

CONDUCT OF SELLERS AND THE COMPANY PENDING CLOSING

     Each Seller and the Company, and until the Midstream Reorganization, Chief Holdings, covenants
and agrees with Buyer as follows:

     Section 7.1. Conduct and Preservation of Business. Except as expressly provided in this
Agreement, during the period from December 31, 2005 to the Closing, the Company and the
Subsidiaries have conducted and shall each conduct its operations according to its ordinary course
of business consistent with past practice and in compliance with all Applicable Laws.

16

 

Without
expanding any obligations which the Company and the Subsidiaries may have to Buyer, it is expressly
agreed that the Company and the Subsidiaries shall be deemed to have conducted their respective
operations in the ordinary course of business if they have conducted their operations as a
reasonable prudent operator consistent with past practice.

     Section 7.2. Restrictions on Certain Actions. Without limiting the generality of the
foregoing, and except as otherwise expressly provided in this Agreement, including the actions
referenced in Sections 1.5 and 8.15 (including as to the formation and organization
of Sellers’ Representative), during the period from December 31, 2005 to the Closing, neither the
Company nor any Subsidiary has taken or shall take, consent to or allow, nor shall any Seller cause
or allow the Company or any Subsidiary to take or consent to, any of the following actions, without
the prior written consent of Buyer:

     (a) amend the applicable Governing Documents;

     (b) issue, sell, or deliver (whether through the issuance or granting of options, warrants,
commitments, subscriptions, rights to purchase, or otherwise) any membership or partnership
interests of any class or any other securities or equity equivalents in the Company or any
Subsidiary;

     (c) except for the discharge of obligations reflected in the Financial Statements or the sale
or other disposition of the Excluded Assets pursuant to Section 8.15 (i) declare, set
aside, or pay any dividend or other distribution (whether in cash, stock, or property or any
combination thereof) in respect of its membership or partnership interests; (ii) repurchase,
redeem, or otherwise acquire any of its securities or any securities of any Subsidiary; or (iii)
adopt a plan of complete or partial liquidation or resolutions providing for or authorizing a
liquidation, dissolution, merger, consolidation, conversion, restructuring, recapitalization, or
other reorganization of the Company or such Subsidiary;

     (d) (i) except for Permitted Indebtedness, create, incur, guarantee, or assume any
indebtedness for borrowed money or otherwise become liable or responsible for the obligations of
any other Person; (ii) make any loans, advances, or capital contributions to, or investments in,
any other Person; (iii) pledge or otherwise encumber shares of membership interests, partnership
interests or other equity securities of the Company or any Subsidiary; or (iv) mortgage or
pledge any of its assets, tangible or intangible, or create or suffer to exist any Lien thereupon
(except (A) in connection with Permitted Indebtedness or otherwise in connection with the Credit
Facilities, which Liens shall be released at or before Closing, or (B) for statutory Liens for
amounts not yet due or not yet delinquent);

     (e) except for the Retention Bonus Plan which shall be transferred to Sellers’ Representative
pursuant to Section 8.7(a), and the transfers to Sellers’ Representative and the
distribution of the membership interests in Sellers’ Representative pursuant to Section 8.7
and Section 8.15, (i) enter into, adopt, or (except as may be required by law) amend or
terminate any bonus, profit sharing, compensation, severance, termination, stock option, stock
appreciation right, restricted stock, performance unit, stock equivalent, stock purchase, pension,
retirement, deferred compensation, employment, severance, or other employee benefit agreement,
trust, plan, fund, or other arrangement for the benefit or welfare of any director, officer, or
employee; (ii) increase in any manner the compensation or fringe benefits of any director, officer,
or

17

 

employee; or (iii) pay to any director, officer, or employee any benefit not required by any
employee benefit agreement, trust, plan, fund, or other arrangement as in effect on the date
hereof;

     (f) acquire, sell, lease, transfer, or otherwise dispose of, directly or indirectly, any
assets, except for (i) sales of Hydrocarbons or entering into oil and gas leases in the ordinary
course of business, (ii) sales of inventory and excess or obsolete assets in the ordinary course of
business or personal property in the ordinary course of business that is either replaced by
equivalent property or normally consumed in the operation of the Company’s business and (iii) the
sale or other disposition of the Excluded Assets pursuant to Section 8.15;

     (g) acquire (by merger, consolidation, or acquisition of stock or assets or otherwise) any
corporation, partnership, or other business organization or division thereof;

     (h) except for the capital improvements and expenditures set forth in Section 7.2(a)
of the Company Disclosure Schedule, and except for any capital expenditures related to an Emergency
or Force Majeure, make any capital expenditure;

     (i) except with respect to any federal income tax return or federal income tax liability,
amend any Tax Return or settle or compromise any federal, state or local Tax liability or enter
into any agreement or preliminary settlement with any Governmental Entity concerning Taxes; make
any Tax election except elections consistent with past practices and which are required to be made
in connection with Tax Returns filed for any tax period ending prior to the Closing Date; file
with, or provide to, any Governmental Entity any waiver extending the statutory period for
assessment or reassessment of Taxes or any other waiver of restrictions on assessment or collection
of any Taxes;

     (j) pay, discharge, or satisfy any claims, liabilities, or obligations (whether accrued,
absolute, contingent, unliquidated, or otherwise, and whether asserted or unasserted), other than
the payment, discharge, or satisfaction in the ordinary course of business consistent with past
practice, or in accordance with their terms, of liabilities reflected or reserved against in the
2005 Midstream Financial Statements or incurred since December 31, 2005 in the ordinary course of
business consistent with past practice;

     (k) enter into any lease, contract, agreement, commitment, arrangement, right of way, easement
or transaction outside the ordinary course of business consistent with past practice, or any lease,
contract, agreement, commitment, arrangement, or transaction (i) which grants or creates any area
of mutual interest, consent to assignment, option, right of first refusal, call, put or other
preferential right in favor of any third party, (ii) for the sale, exchange, gathering, processing
and transportation of Hydrocarbons having a term of more than one month, or (iii) which would
constitute a Company Contract;

     (l) amend, modify, or change in any material respect any Company Contract or any Basic
Document;

     (m) change any of the accounting principles or practices used by it, except for any change
required by reason of a concurrent change in GAAP and notice of which is given in writing by the
Company to Buyer;

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     (n) authorize or propose, or agree in writing or otherwise to take, any of the actions
described in this Section 7.2; or

     (o) take any action that may cause Company to breach any of the representations and warranties
contained in Article IV herein.

ARTICLE VIII

ADDITIONAL AGREEMENTS OF THE PARTIES

     Section 8.1. Access. Subject to the terms of the Confidentiality Agreement and Article
IX, between the date hereof and the Closing, the Company and its Affiliates will give Buyer and
Buyer’s authorized representatives reasonable access to the Company’s and its Affiliates employees,
offices, accounting and financial books, records, files and other similar documents and materials
to the extent in the Company’s or any Affiliate’s possession, custody or control and or which can
be provided without undue effort or expense, save and except the Sales Information.

     Section 8.2. Confidentiality Agreement. The Confidentiality Agreement, except to the
extent modified herein, will remain in full force and effect; provided, however, that, subject to
the provisions of Section 8.10, upon Closing, the Confidentiality Agreement shall
terminate, and Sellers shall, and shall cause their Affiliates to, not make disclosure to third
parties of any confidential or proprietary information relating to the Company, the Subsidiaries,
or the Midstream Assets, except with the prior consent of Buyer or as required by Applicable Law;
provided, further, that nothing shall prohibit Sellers or their Affiliates from using their
knowledge or mental impressions of such information or their general knowledge of the industry or
geographic area in the conduct of their respective businesses following Closing subject, however,
to the terms of any non-compete agreement contemplated by Section 10.2. At Closing,
Sellers will, or will cause their Affiliates to, assign to Buyer the benefits under any and all
confidentiality agreements between Sellers, or any of their Affiliates, and any third party in
connection with the potential sale or other disposition by Sellers and their Affiliates of the
Company, the Subsidiaries or the Midstream Assets.

     Section 8.3. Reasonable Best Efforts. Each party hereto agrees that it will not
voluntarily undertake any course of action inconsistent with the provisions of this Agreement and
will use its Reasonable Best Efforts to take, or cause to be taken, all action and to do, or cause
to be done, all things reasonably necessary, proper, or advisable under Applicable Laws or
Environmental Laws to consummate the transactions contemplated by this Agreement, including,
without limitation, (i) cooperation in determining whether any consents, approvals, orders,
authorizations, waivers, declarations, filings, or registrations of or with any Governmental Entity
or third party are required in connection with the consummation of the transactions contemplated
hereby; (ii) Reasonable Best Efforts to obtain any such consents, approvals, orders,
authorizations, and waivers and to effect any such declarations, filings, and registrations; (iii)
Reasonable Best Efforts to cause to be lifted or rescinded any injunction or restraining order or
other order adversely affecting the ability of the parties to consummate the transactions
contemplated hereby; (iv) Reasonable Best Efforts to defend, and cooperation in defending, all
lawsuits or other legal Proceedings challenging this Agreement or the consummation of the
transactions contemplated hereby; and (v) the execution of any additional instruments necessary to
consummate the transactions contemplated hereby. The parties shall use commercially

19

 

reasonable
efforts to enter into an agreement under which Sellers’ Representative shall provide to Buyer
transition services for a fee, duration and other terms and conditions mutually satisfactory to
both parties, and in substantially the form attached hereto as Exhibit 8.3.

     Section 8.4. Notice of Litigation. Until the Closing, (i) Buyer, upon learning of the
same, shall promptly notify the Company of any Proceeding which is commenced or threatened against
Buyer and which affects this Agreement or the transactions contemplated hereby and (ii) each Seller
and the Company, upon learning of the same, shall promptly notify Buyer of any Proceeding which is
commenced or threatened against such Seller or the Company or any Subsidiary and which affects this
Agreement or the transactions contemplated hereby and any Proceeding which is commenced or
threatened against the Company or any Subsidiary and which would have been listed on Section
4.11 of the Company Disclosure Schedule if such Proceeding had arisen prior to the date hereof.

     Section 8.5. Notification of Certain Matters.

     (a) Each Seller and Sellers’ Representative shall give prompt notice to Buyer of: (i) the
occurrence or nonoccurrence of any event the occurrence or nonoccurrence of which would be likely
to cause any representation or warranty made by such party in Article III to be untrue or
inaccurate at or prior to the Closing and (ii) any failure of such party to comply with or satisfy
any covenant, condition, or agreement to be complied with or satisfied by such party hereunder
prior to Closing. The Company shall give prompt notice to Buyer of: (i) the occurrence or
nonoccurrence of any event, including any Post-Signing Event, the occurrence or nonoccurrence of
which the Company has Knowledge and which would be likely to cause any representation or warranty
contained in Article IV to be untrue or inaccurate at or prior to the Closing, and (ii) any
failure of the Company to comply with or satisfy any covenant, condition,
or agreement to be complied with or satisfied by the Company hereunder prior to Closing of
which the Company has Knowledge. Buyer shall give prompt notice to the Company of: (i) the
occurrence or nonoccurrence of any event the occurrence or nonoccurrence of which would be likely
to cause any representation or warranty contained in Article VI to be untrue or inaccurate
at or prior to the Closing, and (ii) any failure of Buyer to comply with or satisfy any covenant,
condition, or agreement to be complied with or satisfied by Buyer hereunder prior to Closing. If
Buyer or any of its Affiliates obtains Knowledge (but without any duty of inquiry) of a breach by
the Company or any of the Sellers of a representation, warranty, covenant or agreement by the
Company or any of the Sellers contained in this Agreement, Buyer shall promptly notify the Company
and Sellers of such breach.

     (b) The delivery of any notice or of any supplements or amendments to the Company Disclosure
Schedule related to Post-Signing Events pursuant to this Section shall not be deemed to: (i) modify
the representations or warranties hereunder of the party delivering such notice, (ii) modify the
conditions set forth in Article X or (iii) limit or otherwise affect the remedies available
hereunder to the party receiving such notice; provided, however, that if the Closing occurs the
Company Disclosure Schedule as so supplemented or amended as of the Closing with respect to such
Post-Signing Event shall be deemed to be the Company Disclosure Schedule for purposes of
determining whether or not any breach of the representations and warranties of the Company has
occurred; provided, further, that, with respect to a Post-Signing Event that would result in a
breach of Sections 4.10 or 4.11, Sellers shall have the option to cure such breach
or to indemnify Buyer for such breach.

20

 

     Section 8.6. Resignation of Officers and Directors. At the Closing, the Company shall
deliver to Buyer (a) evidence reasonably satisfactory to Buyer of the resignations of the
respective managers, directors and officers of each of the Company and the Subsidiaries (other than
Sellers’ Representative), such resignations to be effective immediately upon the consummation of
the transactions contemplated by this Agreement and (b) releases from all such individuals,
releasing the Company and the Subsidiaries from any and all claims of such individuals against the
Company or the Subsidiaries, substantially in the form and substance attached hereto as Exhibit
8.6.

     Section 8.7. Employee Matters.

     (a) After the date hereof and at least one (1) Business Day prior to the Closing, all
employees and employee benefit plans (including any pension, profit sharing, deferred compensation,
retention bonus, incentive compensation or other similar plan, program or arrangement for the
benefit of any former or current employees) of the Company and the Subsidiaries shall be
transferred to Sellers’ Representative and Sellers’ Representative shall be solely liable for all
employee-related obligations. Buyer and Sellers acknowledge that, from and after the Closing, the
Company and the Subsidiaries will have no employees and no benefit plans for which the Company and
the Subsidiaries will be responsible, including the Retention Bonus Plan, regardless of whether the
obligations associated therewith arose prior to or after December 31, 2005. Buyer shall have the
right, but not the obligation, to make offers of employment to the employees of Sellers’
Representative, to be effective as may be determined by Buyer. Upon
request of Buyer, Sellers’ Representative agrees to provide Buyer with reasonable access to
Sellers’ Representative’s employees for the purpose of conducting employment interviews. Buyer
agrees that it will notify Sellers’ Representative no later than thirty (30) days prior to the end
of the term under the Transition Services Agreement of those employees of Sellers’ Representative
to whom Buyer will make an offer of employment.

     (b) Sellers’ Representative will administer the benefits available pursuant to the
Consolidated Omnibus Budget Reconciliation Act of 1986 (“COBRA”) for all employees of Affiliates of
the Company who do not continue employment with Sellers’ Representative following Closing.

     Section 8.8. Taxes.

     (a) Buyer and Sellers agree to treat the sale of the Interests by Sellers for United States
federal income Tax purposes as a sale in 2006 of the Interests by Sellers and a purchase in 2006 of
all of the assets of the Company by the Buyer (as described in Situation 2 of Revenue Ruling 99-6,
1999-1 C.B. 432). The Company’s existence as a partnership for United States federal income tax
purposes shall terminate as of the Closing Date. Sellers shall be solely liable for and shall pay
all federal income Taxes, including any interest, penalties or additions attributable thereto of
the Company (and any costs or expenses connected therewith) due for the Pre-Closing Tax Period.
Sellers’ Representative will cause to be prepared and filed the final federal income Tax Return on
IRS Form 1065 for the Pre-Closing Tax Period that ends at Closing.

21

 

     (b) Except as provided in Section 8.8(a) or Section 12.2(ii), Sellers shall
have no liability for, and Buyer shall be solely liable for and shall pay, all Taxes of the Company
(and any costs or expenses connected therewith) due for any taxable year or taxable period.

     (c) Sellers’ Representative shall have the right, at the sole expense of Sellers, to control
any audit or examination by the Internal Revenue Service, initiate any claim for refund, and
contest, resolve and defend against any assessment, notice of deficiency, or other adjustment or
proposed adjustment relating to any and all federal income Taxes for any Pre-Closing Tax Period.

     (d) The Adjusted Purchase Price (together with the liabilities of the Company assumed by the
Buyer) shall be allocated among the Company’s assets in accordance with Section 1060 of the Code
and the Treasury regulations thereunder (and any similar provision of state, local or foreign law,
as appropriate) (the “Allocation”). Buyer shall provide a proposed Allocation to Sellers’
Representative in writing at least 15 days prior to Closing, and thereafter Buyer and Sellers’
Representative will act in good faith and reasonably cooperate with each other to agree on the
final Allocation prior to the Closing. Sellers and Buyer shall report the transactions
contemplated hereby on all Tax Returns, including, but not limited to Form 8594, in a manner
consistent with the Allocation. If, contrary to the intent of the parties hereto as expressed in
this Section 8.8, any Taxing authority makes or proposes an allocation different from the
Allocation determined under this Section 8.8, Sellers and Buyer shall cooperate with each
other in good faith to contest such Taxing authority’s allocation (or proposed allocation),
provided, however, that, after consultation with the party (or parties) adversely affected by
such allocation (or proposed allocation), the other party (or parties) hereto may file such
protective claims or Tax Returns as may be reasonably required to protect its (or their) interests.

     (e) Sellers and Buyer agree to furnish to each other at Closing or as soon thereafter as
practicable any and all information and documents reasonably required to comply with tax and
financial reporting requirements and audits.

     Section 8.9. Fees and Expenses. All fees and expenses incurred in connection with this
Agreement by Sellers will be borne by and paid by Sellers. All fees and expenses of the Company,
including professional expenses such as legal, accounting and engineering, in connection with the
negotiation, preparation, execution and delivery of this Agreement prior to the Closing Date and
the consummation of the transactions at the Closing (including the matters described in Section
8.11) will be borne by and paid by Sellers’ Representative, on behalf of Sellers. All amounts
due and owing Petrie Parkman & Co. by the Company in respect of the transactions hereunder will be
borne by and paid by Sellers’ Representative, on behalf of Sellers. All rights and obligations of
the Company pursuant to the Engagement Letter between Chief Holdings LLC and Petrie Parkman & Co.
dated November 30, 2005 shall be assigned by Chief Holdings LLC to Sellers’ Representative prior to
Closing. All expenses incurred in connection with this Agreement by Buyer will be borne by and
paid by Buyer, regardless of whether or not the transactions contemplated hereby are consummated.

     Section 8.10. Public Announcements. Except as may be required by Applicable Law, neither
Buyer, on the one hand, nor Sellers, Sellers’ Representative and the Company, on the other hand,
shall issue any press release or otherwise make any statement to the public generally with respect
to this Agreement or the transactions contemplated hereby without the prior consent

22

 

of both Buyer
and the Company (which consent shall not be unreasonably withheld or delayed and which consent, if
given verbally, shall be confirmed in writing within one Business Day thereafter). Notwithstanding
the foregoing, Sellers, Sellers’ Representative and the Company acknowledge that Buyer will be
required to and will make a press release or statement regarding the transaction. From and after
the issuance of such press release or the making of any such statement, the Buyer, on the one hand,
and Sellers, Sellers’ Representative and the Company, on the other hand, may respond to press
inquiries and make other public disclosure consistent in nature and scope with such press release
or statement.

     Section 8.11. Credit Facilities; Midstream Reorganization. The Company, Chief Holdings and
the Subsidiaries will reach such mutually satisfactory arrangements with the lender(s) under the
Credit Facilities as are reasonably necessary to evidence that neither Buyer nor Chief Holdings nor
the Company nor any Subsidiary shall have any liability or obligation from and after Closing with
respect to the Credit Facilities, including the delivery at Closing of executed releases by the
lender(s) (in a form satisfactory to the lender(s) and reasonably satisfactory to Buyer) of all
mortgages or other Liens existing on collateral pledged or guaranties by the Company and the
Subsidiaries as security under the Credit
Facilities. The Company and the Subsidiaries shall continue to be obligated from and after Closing
to repay any Permitted Indebtedness existing as of the Closing Date. The parties will use their
Reasonable Best Efforts to take or cause to occur such actions as may be necessary or advisable in
order to effectuate the Midstream Reorganization in a manner that will effectuate the terms and
intent of this Agreement and the Devon MIPSA and which preserves the Midstream Assets, including
the release or replacement of guaranties by Chief Holdings on the Gas Contracts. In connection
with the Midstream Reorganization, Buyer hereby confirms the Four Party Agreement related to the
VPP.

     Section 8.12. Books and Records. At or promptly after Closing, Sellers’ Representative
shall deliver to Buyer all records of the Company and the Subsidiaries that are in Sellers’
Representative’s control, including original minute books and other corporate books and records and
accounts, policies of insurance, real property, equipment, materials and service contracts, Permits
and Company Contracts, and all regulatory, environmental, tariff, financial, audit, and tax data,
records, reports, returns, filings, notices, correspondence, memoranda, and other information (in
physical or digital form), including all documents supporting such reports, returns, filings,
correspondence and memoranda, but exclusive of any Sales Information. Buyer will preserve all
records so delivered by Sellers’ Representative for a period of six years following the Closing and
will allow each Seller (or such Sellers’ Representative) reasonable access to such records at all
reasonable times for a purpose reasonably related to (i) such Seller’s ownership of an Interest in
the Company or (ii) the performance by it of its obligations, and the enforcement by it of its
rights hereunder. If Buyer desires to dispose of any such records prior to the expiration of the
six-year period referenced above, Buyer shall provide notice of same to Sellers’ Representative,
and Sellers’ Representative shall have a period of 10 days to deliver written notice to Buyer that
Sellers’ Representative elect to have such records delivered to them (at the expense of Sellers).
If Sellers’ Representative fails to deliver such notice within the 10-day period referenced above,
Buyer shall have the right to dispose of the subject records.

     Section 8.13. Rights to Name. Immediately prior to the Closing, the Company and the
Subsidiaries shall be permitted to convey, transfer and assign, without warranty of title and for
no consideration whatsoever, all right, title and interest of the Company and the Subsidiaries to

23

 

the name “Chief” and its derivatives and Chief Holding LLC’s Indian head logo to Trevor D.
Rees-Jones.

     Section 8.14. Amendment to the Company’s Articles. Immediately after the Closing, Buyer
agrees to file an amendment to the Company’s and each applicable Subsidiary’s articles of formation
in a form reasonably acceptable to Sellers that provides for a change in the name of the Company or
each applicable Subsidiary, which name does not contain the word “Chief” or any derivative thereof
and is otherwise reasonably acceptable to Sellers.

     Section 8.15. Excluded Assets. After the date hereof and at least one (1) Business Day prior to Closing, Sellers shall cause
the Company or the Subsidiaries (as applicable) to convey, transfer and assign the assets and
properties described in Section 8.15 of the Company Disclosure Schedule (the “Excluded
Assets”), to Sellers’ Representative or an Affiliate or Affiliates of Sellers. Such conveyance,
transfer and assignment shall (i) be for no consideration whatsoever, save and except for the
assumption by Sellers’ Representative of all liabilities attributable to the Excluded Assets, (ii)
contain the agreement of Sellers’ Representative to defend and indemnify the Company for all
Damages associated with the ownership or operation of the Excluded Assets, whether arising before,
on or after the date of assignment, and (iii) be on an “as is, where is” basis without any
representations and warranties by the Company and the Subsidiaries, including any warranty of
title, fitness for purpose, or merchantability. Buyer acknowledges that the Excluded Assets are
not included in the Midstream Assets or the property, assets or liabilities of the Company or the
Subsidiaries to be indirectly acquired by Buyer as a result of the transactions contemplated hereby
or otherwise. Upon the conveyance, transfer and assignment of the Excluded Assets to Sellers’
Representative hereunder, Sellers’ Representative will enter an agreement with the Company or a
Subsidiary, as applicable, for the dedication of any production associated with the Excluded Assets
to the extent such production is or is required to be dedicated under the existing gas contract(s)
with the Company or any Subsidiary on the same terms as the existing contract(s) and, following
Closing, Sellers’ Representative agrees to dedicate any production associated with the Excluded
Assets that is required to be dedicated under any contract with the Company or any Subsidiary to
the extent not already dedicated thereunder prior to Closing.

     Section 8.16. HSR Filing. If compliance with the Hart-Scott-Rodino Antitrust Improvements
Act of 1976, as amended (the “HSR Act”), is required in connection with the transactions
contemplated under this Agreement, as promptly as practicable and in any event not more than ten
Business Days following the date on which the parties hereto have executed this Agreement, Sellers
and Buyer will file with the Federal Trade Commission and the Department of Justice, as applicable,
the required notification and report forms and will as promptly as practicable furnish any
supplemental information which may be requested in connection therewith. Sellers and Buyer will
request expedited treatment (i.e., early termination) of such filing. Buyer and Sellers shall use
commercially reasonable efforts to make or modify all other filings and submissions on a prompt and
timely basis in connection with the filings required by this Section. Each of Sellers and Buyer
will bear their own costs and expenses relating to the compliance with this Section.

     Section 8.17. Relationship Among Sellers. Each Seller hereby appoints Sellers’
Representative as the sole representative of such Seller to act as the agent and on behalf of such
Seller for all purposes under this Agreement, including for the purposes of: (i) determining any

24

 

adjustments to the Purchase Price in accordance with Article I and receiving the Adjusted
Purchase Price pursuant to Section 1.4(a); (ii) taking all actions in connection with the
determination of the Allocation described in Section 8.8(d), (iii) determining whether the
conditions to closing in Article X have been satisfied and supervising the Closing,
including waiving any such condition if Sellers’ Representative, in its sole discretion, determines
that such waiver is appropriate; (iv) negotiating and entering into the Escrow Agreement on behalf
of Sellers and taking any and all actions that may be necessary or desirable in connection
therewith, as determined by Sellers’ Representative in its sole and
absolute discretion; (v) taking any action that may be necessary or desirable, as determined by
Sellers’ Representative in its sole discretion, in connection with the termination of this
Agreement in accordance with Article XI; (vi) taking any and all actions that may be
necessary or desirable, as determined by Sellers’ Representative in its sole discretion, in
connection with the amendment of this Agreement or waivers of any term of this Agreement in
accordance with Sections 11.3 and 11.4; (vii) accepting notices on behalf of such
Seller in accordance with Section 13.2; (viii) taking any and all actions that may be
necessary or desirable, as determined by Sellers’ Representative in its sole discretion, in
connection with the payment of the costs and expenses incurred with respect to the Company or such
Seller in connection with the transactions contemplated by this Agreement; (ix) granting any
consent or approval on behalf of such Seller under this Agreement; (x) executing and delivering any
documents and interests or taking any action as may be necessary or advisable pursuant to
Section 13.7; and (xi) taking any and all other actions and doing any and all other things
provided in or contemplated by this Agreement to be performed by Sellers’ Representative on behalf
of any Seller. As the representative of Sellers, Sellers’ Representative shall act as the agent
for all such persons, shall have authority to bind each such person in accordance with this
Agreement, and Buyer may rely on such appointment and authority until the receipt of notice from
Sellers owning at least a majority of the Interests of the appointment of a successor upon 30 days’
prior written notice to Buyer. Sellers’ Representative shall not have any liability to Buyer for
any default under this Agreement by any Seller or the Company. No Seller shall have any liability
to Buyer for any default under this Agreement by any other Seller or the Company, except as
provided in Section 12.2. Each Seller shall, however, be responsible to each other Seller
for any default by such Seller under this Agreement.

     Section 8.18. Certain Consents by Sellers and Rees-Jones. Each Seller and Trevor D.
Rees-Jones, in his capacity as sole Manager of the Company, hereby consents to the sale of the
Interests by each other Seller on the terms and conditions set forth in this Agreement and the
execution, delivery and performance of this Agreement and the transactions contemplated hereby by
the Company and Chief Holdings for all purposes, including but not limited to, pursuant to the
Limited Liability Company Agreement of the Company, dated April 25, 2006, and the Regulations of
Chief Holdings, dated April 1, 2002, as amended through the date hereof.

     Section 8.19. SEC Required Financial Statements. Unless waived by the Securities and
Exchange Commission (the “SEC”), on or before Closing, Sellers shall provide or cause to be
provided to Buyer (i) audited financial statements for the Subsidiaries for the fiscal year ended
December 31, 2005, including a balance sheet, income statement, statements of cash flows and
owners’ equity and, (ii) unaudited financial statements for the Company and the Subsidiaries for
each of the quarterly periods ending in 2006 prior to Closing, together with the comparable prior
period in 2005. Buyer shall submit a written request to the SEC within 10 Business Days after the
date hereof seeking a waiver of the provision of the financial statements described in this
section. Sellers will: (A) obtain the consent of their auditors to allow Buyer to use such

25

 

audited financial statements in Buyer’s SEC filings; (B) cause their
auditors to review the unaudited financial statements described in clause (ii) above; (C)
obtain the consent of their auditors to provide Buyer’s auditors access to the auditors’ work
papers, and (D) provide any other financial information with respect to the Company or the
Subsidiaries reasonably requested by Buyer. Such financial statements shall be prepared in
accordance with GAAP and comply with Regulation S-X promulgated by the SEC.

     Section 8.20 Intracompany Debt. The amount of any intracompany debt, other than
accounts payable related to gas purchases, owed by the Company and the Subsidiaries to Chief
Holdings or the Upstream Subsidiaries shall not exceed $25,000,000 as of June 29, 2006.

ARTICLE IX

BUYER’S DUE DILIGENCE EXAMINATION

     Section 9.1. Due Diligence Examination.

     (a) From the date of this Agreement until 5:00 p.m. (local time in Dallas, Texas) five days
prior to Closing (the “Examination Period”), Chief Holdings and the Company shall afford to Buyer
and its authorized representatives reasonable access during normal business hours to the office,
personnel and books and records of the Company and the Subsidiaries in order for Buyer to conduct a
title examination as it may in its sole discretion choose to conduct with respect to the Midstream
Assets in order to determine whether Title Defects (as defined below) exist (“Buyer’s Title
Review”); provided, however, that such investigation shall be upon reasonable notice and shall not
unreasonably disrupt the personnel and operations of Chief Holdings, the Company or the
Subsidiaries or impede the efforts of Chief Holdings, the Company or any Subsidiary to comply with
its other obligations under this Agreement. Such books and records shall include all abstracts of
title, title opinions, title files, ownership maps, easements, files, assignments, operating
records and agreements, well files, financial and accounting records, engineering records, in each
case insofar as same may now be in existence and in the possession of Chief Holdings, the Company
or the Subsidiaries, excluding, however, any information Chief Holdings, the Company, or its
Subsidiaries is prohibited from disclosing by bona fide, third party confidentiality restrictions;
provided, that: (i) any information withheld on such basis shall be identified with as much
specificity and detail as reasonably possible without breaching such obligation, and (ii) if
requested by Buyer, Chief Holdings, the Company or the Subsidiaries shall use its Reasonable Best
Efforts to obtain a waiver of any such restrictions in favor of Buyer. The cost and expense of
Buyer’s Title Review, if any, shall be borne solely by Buyer. Buyer shall not contact any of the
customers or suppliers of the Company or any Subsidiary or any party to any Easement or any
governmental authority or party with respect to any Permit, in connection with the transactions
contemplated hereby, whether in person or by telephone, mail or other means of
communication, without the specific prior authorization of the Company, which consent shall
not be unreasonably withheld.

     (b) If Buyer discovers any Title Defect affecting any of the Midstream Assets prior to the
expiration of the Examination Period, Buyer shall notify the Company as soon as possible and no
later than the expiration of the Examination Period of such alleged Title Defect. To be effective,
such notice (“Title Defect Notice”) must (i) be in writing, (ii) be received by the Company prior
to the expiration of the Examination Period, (iii) describe the Title Defect in reasonable detail
including the basis therefor any supporting documents, (iv) identify the specific

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Midstream Assets
to which such Title Defect relates, and (v) include the value of such Title Defect as determined by
Buyer in good faith. Any matters that may otherwise constitute Title Defects, but of which the
Company has not been specifically notified by Buyer in accordance with the foregoing, shall be
deemed to have been waived by Buyer for all purposes. Upon the receipt of such effective Title
Defect Notice from Buyer, the Company shall have the option, in addition to the remedies set forth
in Section 9.1(c) (the “Remedies for Title Defects”), but not the obligation, to attempt to
cure such Title Defect at any time prior to the Closing. The Midstream Assets affected by such
uncured Title Defect shall be a “Title Defect Property”.

     (c) With respect to each Title Defect that is not cured on or before the Closing, the Purchase
Price shall be reduced, subject to this Article IX, by the Title Defect Amount with respect
to such Title Defect Property. The “Title Defect Amount” shall mean, with respect to a Title
Defect Property, the amount by which such Title Defect Property is impaired as a result of the
existence of one or more Title Defects, which amount shall be determined by taking into
consideration the value of the Midstream Asset subject to such Title Defect, and the legal and
economic effect of such Defect on the Midstream Asset affected thereby and shall be an amount equal
to the difference between the value of the Title Defect Property affected by such Title Defect with
such Title Defect and the value of such Title Defect Property without such Title Defect.

     (d) As used in this Section 9.1:

    (i) “Defensible Title” means, as of the date of this Agreement and the Closing Date,
such title and ownership by the Company or a Subsidiary that:

	 	(A)	 	entitles the Company or a Subsidiary to
operate, maintain, repair, replace and use the Pipeline and Plant in
the same manner as a reasonable prudent operator under the same or
similar circumstances;
	 
	 	(B)	 	entitles the Company or a Subsidiary to use the
Easements and Permits to the extent necessary to operate, maintain,
repair, replace and use the Pipeline, and Plant in the same manner as a
reasonable prudent operator under the same or similar circumstances;
	 
	 	(C)	 	is free and clear of all Liens, except
Permitted Encumbrances; and
	 
	 	(D)	 	reflects that all consents to assignment,
notices of assignment or preferential purchase rights which are
applicable to or must be
complied with in connection with the transaction contemplated by this
Agreement have been obtained and complied with to the extent the
failure to obtain or comply with the same could render this
transaction or any such sale, assignment or transfer (or any right or
interest affected thereby) void or voidable or could result in Buyer
or the Company or any Subsidiary incurring any liability.

    (ii) “Permitted Encumbrances” shall mean (A) Liens for taxes which are not yet
delinquent or which are being contested in good faith and for which adequate reserves

27

 

have
been established; (B) mechanic’s and materialmen’s Liens relating to the Midstream Assets,
which obligations are not yet due and pursuant to which neither the Company nor any
Subsidiary is in default; (C) Liens in the ordinary course of business consisting of minor
defects and irregularities in title or other restrictions arising in the ordinary course of
business that are of the nature customarily accepted by prudent purchasers of midstream
assets and do not materially affect the value or use of any property encumbered thereby; (D)
all rights to consent by, required notices to, filings with, or other actions by
Governmental Entities in connection with the sale or conveyance of midstream assets if the
same are customarily obtained routinely and subsequent to such sale or conveyance; (E)
preferential rights to purchase and required third party consents to assignments and similar
agreements with respect to which, prior to Closing, (i) waivers or consents are obtained
from the appropriate parties, (ii) the appropriate time period for asserting such rights has
expired without an exercise of such rights, or (iii) arrangements can be made on terms
satisfactory to Buyer to allow Buyer to receive substantially the same economic benefits as
if all such waivers and consents had been obtained; (F) easements, rights-of-way,
servitudes, Permits, surface leases and other rights in respect of surface operations,
pipelines, grazing, logging, canals, ditches, reservoirs or the like; and easements for
streets, alleys, highways, pipelines, telephone lines, power lines, railways and other
easements and rights-of-way, on, over or in respect of any of the lands upon which the
Pipeline or Plant is located to the extent such matters do not unreasonably or materially
interfere with the operations of the Pipeline or Plant; (G) rights reserved to or vested in
any municipality or governmental, statutory or public authority to control or regulate any
of the Property in any manner, and all applicable laws, rules and orders of governmental
authority; and (H) Liens under the Credit Facilities that will be fully released at Closing.

    (iii) “Title Defect” shall mean a defect exists (A) that causes the Company or the
Subsidiaries to not have Defensible Title to the Pipeline, Plant, Easements or Permits and
(B) for which a Title Defect Notice has been timely and otherwise validly delivered, shall
constitute a Title Defect. Notwithstanding any other provision in this Agreement to the
contrary, the following matters shall not constitute, and shall not be asserted as, a Title
Defect: (1) defects or irregularities arising out of lack of corporate authorization or
variation in corporate or entity name; (2) defects or irregularities that have been cured or
remedied by the applicable statutes of limitation or statutes for prescription; and (3)
defects or irregularities in the chain of title consisting of the failure to recite marital
status in documents or omissions of heirship Proceedings.

     (e) If the Company and Buyer are unable to reach an agreement as to whether a Title Defect
exists or, if it does exist, or Title Defect Amount attributable such Title Defect, the provisions
of Section 13.1 shall be applicable.

     Section 9.2. Adjustments to Purchase Price. Notwithstanding anything to the contrary
contained in this Agreement: (i) if the sum of the aggregate Title Defect Amounts and the total
amount, if any, of the Damages arising from a breach, prior to the Closing Date, of a
representation and warranty made by a Seller, Sellers’ Representative or the Company, as determined
in accordance with this Agreement, is less than or equal to $250,000 (“Deductible Amount”), then no
adjustment of the Purchase Price shall be made therefor, and (ii) if the sum of the aggregate Title
Defect Amounts and the total amount, if any, of the Damages arising from a

28

 

breach, prior to the
Closing Date, of a representation and warranty made by a Seller, Sellers’ Representative or the
Company, as determined in accordance with this Agreement, is greater than the Deductible Amount,
then the Purchase Price shall be adjusted downward by the amount that the sum of such aggregate
Title Defect Amounts and such Damages exceeds the Deductible Amount.

     Section 9.3. Buyer Indemnification. Buyer hereby INDEMNIFIES and SHALL DEFEND AND HOLD the
Company, each Seller, Affiliates thereof, and their respective owners, officers, directors,
employees, agents, representatives, contractors, successors, and assigns) HARMLESS from and against
any and all of the following claims arising from Buyer’s inspecting and observing the Midstream
Assets: (i) claims for personal injuries to or death of employees of Buyer, its contractors,
agents, consultants, and representatives, and damage to the property of Buyer or others acting on
behalf of Buyer, to the extent such injuries or death are caused by the negligence, gross
negligence or willful misconduct of Buyer; and (ii) claims for personal injuries to or death of
employees of the Company, and damage to the property of the Company, to the extent caused by the
negligence, gross negligence, or willful misconduct of Buyer. TO THE EXTENT PROVIDED ABOVE, THE
FOREGOING INDEMNITY INCLUDES, AND THE PARTIES INTEND IT TO INCLUDE, AN INDEMNIFICATION OF THE
INDEMNIFIED PARTIES FROM AND AGAINST CLAIMS ARISING OUT OF OR RESULTING, IN WHOLE OR PART, FROM THE
CONDITION OF THE PROPERTY OR THE SOLE, JOINT, COMPARATIVE, OR CONCURRENT NEGLIGENCE OR STRICT
LIABILITY OF ANY OF THE INDEMNIFIED PARTIES. THE PARTIES HERETO AGREE THAT THE FOREGOING COMPLIES
WITH THE EXPRESS NEGLIGENCE RULE AND IS CONSPICUOUS.

ARTICLE X

CONDITIONS TO OBLIGATIONS OF THE PARTIES

     Section 10.1. Conditions to Obligations of Sellers and the Company. The obligations of
Sellers and the Company to consummate the transactions contemplated by this Agreement shall be
subject to the fulfillment on or prior to the Closing Date of each of the following conditions:

     (a) Each of the representations and warranties of Buyer contained in Article VI shall
be true and correct in all material respects (other than those representations and warranties of
Buyer that are qualified as to materiality, which shall be true and correct in all respects) on and
as of the Closing Date as if made on and as of such date, except (i) as affected by transactions
contemplated or permitted by this Agreement and (ii) to the extent that any such representation or
warranty is made as of a specified date, in which case such representation or warranty shall have
been true and correct in all material respects as of such specified date.

     (b) Buyer shall have performed and complied in all material respects with all covenants and
agreements required by this Agreement to be performed or complied with by it on or prior to the
Closing Date.

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     (c) Sellers and the Company shall have received a certificate executed by a duly authorized
officer of Buyer dated the Closing Date, representing and certifying that the conditions set forth
in Section 10.1(a) and (b) have been satisfied.

     (d) No Proceeding (excluding any Proceeding initiated by any Seller or the Company or any of
their Affiliates) shall, on the Closing Date, be pending or threatened seeking to restrain,
prohibit, or obtain damages or other relief in connection with this Agreement or the consummation
of the transactions contemplated hereby.

     (e) No order, writ, injunction or decree shall have been entered and be in effect by any court
or any Governmental Entity of competent jurisdiction, and no statute, rule, regulation or other
requirement shall have been promulgated or enacted and be in effect, that on a temporary or
permanent basis restrains, enjoins or invalidates the transactions contemplated hereby.

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

     (g) The consummation of the transactions contemplated under the terms of this Agreement is not
prevented from occurring by (and the required waiting period, if any, has expired under) the HSR
Act and the rules and regulations of the Federal Trade Commission and the Department of Justice.

     (h) Sellers’ Representative, Buyer, Devon and the Escrow Agent shall have executed and
delivered the Escrow Agreement.

     Section 10.2. Conditions to Obligations of Buyer. The obligations of Buyer to consummate
the transactions contemplated by this Agreement shall be subject to the fulfillment on or prior to
the Closing Date of each of the following conditions:

     (a) Each of the representations and warranties of Sellers and Sellers’ Representative
contained in Article III shall be true and correct in all material respects (other than
those representations and warranties of Seller and Sellers’ Representative that are qualified by
materiality, which shall be true and correct in all respects) on and as of the Closing Date as if
made on and as of such date, except (i) as affected by transactions contemplated or permitted
by this Agreement and (ii) to the extent that any such representation or warranty is made as of a
specified date, in which case such representation or warranty shall have been true and correct as
of such specified date.

     (b) Each of the representations and warranties of the Company contained in Article IV
shall be true and correct in all material respects (other than those representations of and
warranties of the Company that are qualified by materiality or Material Adverse Effect, which shall
be true and correct in all respects) on and as of the Closing Date as if made on and as of such
date, except (i) as affected by transactions contemplated or permitted by this Agreement, (ii) to
the extent that any such representation or warranty is made as of a specified date, in which case
such representation or warranty shall have been true and correct in all material respects as of

30

 

such specified date, and (iii) to the extent that an adjustment to the Purchase Price has been made
in respect of any inaccuracies or breaches in accordance with Section 9.2.

     (c) Sellers, Chief Holdings, Sellers’ Representative and the Company shall have performed and
complied in all material respects with all covenants and agreements required by this Agreement to
be performed or complied with by them on or prior to the Closing Date.

     (d) Buyer shall have received certificate executed by a duly authorized officer of the Company
dated the Closing Date, representing and certifying that the conditions described in Section
10.2(b) and (as to the Company only) (c) have been satisfied.

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

     (f) Buyer shall have received an assignment executed and delivered by each Seller of such
Seller’s Interests, which assignment shall be substantially in the form of the instrument attached
hereto as Exhibit 10.2(f).

     (g) No order, writ, injunction or decree shall have been entered and be in effect by any court
or any Governmental Entity of competent jurisdiction, and no statute, rule, regulation or other
requirement shall have been promulgated or enacted and be in effect, that on a temporary or
permanent basis restrains, enjoins or invalidates the transactions contemplated hereby.

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

     (i) The consummation of the transactions contemplated under the terms of this Agreement is not
prevented from occurring by (and the required waiting period, if any, has expired under) the HSR
Act and the rules and regulations of the Federal Trade Commission and the Department of Justice.

     (j) The Company and the Subsidiaries shall not have experienced a Material Adverse Effect.

     (k) Sellers’ Representative, Buyer, Devon and the Escrow Agent shall have executed and
delivered the Escrow Agreement.

     (l) At or contemporaneously with Closing, Sellers shall have sold, transferred and conveyed to
Devon all of the Company’s right, title and interest in Chief Holdings and the Upstream
Subsidiaries.

     (m) Buyer shall have received an opinion or opinions of counsel, which counsel or counsels
shall be reasonably satisfactory to Buyer, regarding the due authorization of and the valid,
binding and enforceable nature of this Agreement with respect to the Company, Sellers’

31

 

Representative and each Seller, with such qualifications, assumptions and other terms as such
counsel or counsels determine are reasonably appropriate.

     (n) The Midstream Reorganization shall have occurred.

     (o) Buyer shall have received from Trevor D. Rees-Jones and Stephen D. Haywood executed
non-compete agreements in the forms attached as Exhibit 10.2(p)(i) and Exhibit
10.2(p)(ii), respectively.

ARTICLE XI

TERMINATION, AMENDMENT AND WAIVER

     Section 11.1. Termination. This Agreement may be terminated and the transactions
contemplated hereby abandoned at any time prior to the Closing in the following manner:

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

     (b) by either the Company or Buyer, if:

    (i) the Closing shall not have occurred on or before July 28, 2006 (which date may be
extended up to August 31, 2006 to the extent Chief Midstream Holdings is required to extend
the Closing Date in accordance with Article II), unless such failure to close shall
be due to a breach of this Agreement by the party seeking to terminate this Agreement
pursuant to this clause (i); or

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

     (c) by Sellers’ Representative, on behalf of Sellers, if the aggregate amount of the Title
Defect Amounts and Damages exceeds ten percent (10%) of the Purchase Price; or

     (d) by Buyer, if the aggregate amount of the Title Defect Amounts and Damages exceeds ten
percent (10%) of the Purchase Price; or

     (e) by the Company, if (i) Buyer shall have failed to fulfill in any material respect any of
its obligations under this Agreement; or (ii) any of the representations and warranties of Buyer
contained in this Agreement shall not be true and correct in all material respects and, in the case
of each of clauses (i) and (ii), such failure, misrepresentation, or breach of
warranty (provided it can be cured) has not been cured within ten days after written notice thereof
from the Company to Buyer (other than those set forth in Section 6.7 for which no cure
period shall be permitted); or

     (f) by Buyer, if (i) Sellers, Sellers’ Representative or the Company shall have failed to
fulfill in any material respect any of their obligations under this Agreement, or (ii) any of the

32

 

representations and warranties of Sellers and Sellers’ Representative contained in Article
III or the Company contained in Article IV shall not be true and correct in all
respects (for those representations and warranties qualified by materiality or Material Adverse
Effect) or in all material respects (for those representations that are not qualified by
materiality or Material Adverse Effect) where such failures in the aggregate have caused the
Company and the Subsidiaries to experience a Material Adverse Effect, and, in the case of each of
clauses (i) and (ii), such failure, misrepresentation or breach of warranty
(provided it can be cured) has not been cured within ten days after written notice thereof from
Buyer to Sellers and the Company.

     Section 11.2. Effect of Termination. In the event of the termination of this Agreement
pursuant to Section 11.1 by the Company or Sellers’ Representative, on the one hand, or
Buyer, on the other, written notice thereof shall forthwith be given to the other party or parties
specifying the provision hereof pursuant to which such termination is made, and this Agreement
shall become void and have no effect, except that the agreements contained in this Article
XI, in Sections 8.2 and 8.9, and in Articles XIII and XIV shall
survive the termination hereof. Nothing contained in this Section shall relieve any party from
liability for damages actually incurred as a result of any breach of this Agreement.

     Section 11.3. Amendment. This Agreement may not be amended or modified except by an
instrument in writing signed by or on behalf of all the parties hereto.

     Section 11.4. Waiver. Sellers, Sellers’ Representative and the Company on the one hand, or
Buyer, on the other, may: (i) waive any inaccuracies in the representations and warranties of the
other contained herein or in any document, certificate, or writing delivered pursuant hereto, or
(ii) waive compliance by the other with any of the other’s agreements or fulfillment of any
conditions to its own obligations contained herein. Any agreement on the part of a party hereto to
any such waiver shall be valid only if set forth in an instrument in writing signed by or on behalf
of such party.
No failure or delay by a party hereto in exercising any right, power, or privilege hereunder shall
operate as a waiver thereof nor shall any single or partial exercise thereof preclude any other or
further exercise thereof or the exercise of any other right, power, or privilege.

ARTICLE XII

SURVIVAL OF REPRESENTATIONS, WARRANTIES AND COVENANTS; INDEMNIFICATION

     Section 12.1. Survival.

     (a) Each representation, warranty and covenant of the parties hereto contained in this
Agreement shall survive the Closing and shall remain in effect thereafter until the expiration of
the applicable statute of limitations, except that the representations and warranties of the
Company contained in Article IV shall not survive the Closing, other than the
representations and warranties of the Company contained in Section 4.3 (Capital Structure),
4.8 (Subsidiaries), 4.9 (Financial Statements), 4.13 (Taxes), 4.14
(Contracts), 4.20 (Environmental Matters), 4.23 (Brokers) and 4.26
(Properties) which shall survive the Closing for a period of twelve (12) months from the Closing
Date. Following the expiration of a specific representation, warranty or covenant, none of the
Company, Sellers’ Representative, any Seller, Buyer, or any officer, director, employee, of the
Company, Sellers’ Representative, any Seller or Buyer shall have any

33

 

liability whatsoever (whether
pursuant to this Agreement or otherwise) with respect to such representation, warranty or covenant,
except to the extent provided in (b) below.

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

     Section 12.2. Indemnification by Sellers. Subject to the terms and conditions of this
Article XII, from and after Closing, each Seller shall severally (and only in proportion to
such Seller’s pro rata share of the Adjusted Purchase Price) indemnify, defend and hold harmless
Buyer, the Company, and the Subsidiaries from and against any and all claims, actions, causes of
action, Proceedings, demands, assessments, losses, damages, liabilities, judgments, settlements,
penalties, costs, and expenses (including reasonable attorneys’ fees and expenses), of any nature
whatsoever (collectively, “Damages”), asserted against, resulting to, imposed upon, or incurred by
Buyer, the Company or the Subsidiaries directly or indirectly, by reason of or resulting from (i)
any breach by such Seller or Sellers’ Representative of its representations and warranties
contained in Article III, (ii) any breach by
the Company of its representations and warranties contained in Sections 4.3 (Capital
Structure), 4.8 (Subsidiaries), 4.9 (Financial Statements), 4.13 (Taxes),
4.14 (Contracts), 4.20 (Environmental Matters), 4.23 (Brokers) and
4.26 (Properties), (iii) any breach by such Seller, Sellers’ Representative or the Company
of its covenants and agreements contained in this Agreement, including with respect to the payment
of any federal income taxes provided in Section 8.8(a), and (iv) the ownership or operation
of the Excluded Assets and the liabilities attributable thereto whether prior to or subsequent to
December 31, 2005.

     Section 12.3. Indemnification by Sellers’ Representative. Subject to the terms and
conditions of this Article XII, from and after Closing, Sellers’ Representative shall
indemnify, defend and hold harmless Buyer from and against any and all Damages, asserted against,
resulting to, imposed upon, or incurred by Buyer, directly or indirectly, by reason of or resulting
from the breach by Sellers’ Representative of its representations, warranties, covenants and
agreements contained in this Agreement, including with respect to any employee matters provided in
Section 8.7(a) and with respect to any Damages associated with ownership and operation the
Excluded Assets under Section 8.15.

     Section 12.4. Indemnification by Buyer. Subject to the terms and conditions of this
Article XII, from and after Closing, Buyer shall indemnify, defend and hold harmless
Sellers and Sellers’ Representative and each of their respective Affiliates, from and against any
and all Damages, asserted against, resulting to, imposed upon, or incurred by any Seller, directly
or indirectly, by reason of or resulting from (i) any breach by Buyer of its representations,
warranties contained in Article VI, (ii) the breach by Buyer of its covenants and
agreements

34

 

contained in this Agreement and (iii) after Closing, the ownership and operation of the
Company, the Subsidiaries and their respective properties and other assets whether prior to or
subsequent to the Closing Date, except to the extent that (A) Buyer is entitled to be indemnified
pursuant to Section 12.2 or Section 12.3, and (B) with respect to claims asserted
during the two-year period following Closing, a Seller or Sellers’ Representative had actual
knowledge prior to Closing of a breach of a representation in Article IV giving rise to
such Damages.

     Section 12.5. Indemnification Proceedings. In the event that any claim or demand for which
a party (an “Indemnifying Party”), would be liable to the another party under Section 12.2,
Section 12.3 or Section 12.4 (an “Indemnified Party”) is asserted against or sought
to be collected from an Indemnified Party by a third party, the Indemnified Party shall with
reasonable promptness notify the Indemnifying Party of such claim or demand, but the failure so to
notify the Indemnifying Party shall not relieve the Indemnifying Party of its obligations under
this Article XII, except to the extent the Indemnifying Party demonstrates that the defense
of such claim or demand is materially prejudiced thereby. The Indemnifying Party shall have 30
days from receipt of the above notice from the Indemnified Party (in this Section 12.5, the
“Notice Period”) to notify the Indemnified Party whether or not the Indemnifying Party desires, at
the Indemnifying Party’s sole cost and expense, to defend the Indemnified Party against such claim
or demand; provided, that the Indemnified Party is hereby authorized prior to and during the Notice
Period to file any motion, answer or other pleading that it shall deem necessary or appropriate to
protect its interests or those of the Indemnifying Party and not prejudicial to the Indemnifying
Party. If the Indemnifying Party elects to assume the defense of any such claim or demand, the
Indemnified Party shall have the right to employ separate counsel at its own expense and to
participate in the defense thereof. If the Indemnifying Party elects not to assume the defense of
such claim or demand (or fails to give notice to the Indemnified Party during the Notice Period),
the Indemnified Party shall be entitled to assume the defense of such claim or demand with counsel
of its own choice, at the expense of the Indemnifying Party. If the claim or demand is asserted
against both the Indemnifying Party and the Indemnified Party and based on the advice of counsel
reasonably satisfactory to the Indemnifying Party it is determined that there is a conflict of
interest which renders it inappropriate for the same counsel to represent both the Indemnifying
Party and the Indemnified Party, the Indemnifying Party shall be responsible for paying separate
counsel for the Indemnified Party; provided, however, that the Indemnifying Party shall not be
responsible for paying for more than one separate firm of attorneys to represent all of the
Indemnified Parties, regardless of the number of Indemnified Parties. If the Indemnifying Party
elects to assume the defense of such claim or demand, (i) no compromise or settlement thereof may
be effected by the Indemnifying Party without the Indemnified Party’s written consent (which shall
not be unreasonably withheld) unless the sole relief provided is monetary damages that are paid in
full by the Indemnifying Party and (ii) the Indemnified Party shall have no liability with respect
to any compromise or settlement thereof effected without its written consent (which shall not be
unreasonably withheld).

     Section 12.6. Exclusivity. The parties hereto agree that after Closing, in relation to any
breach, default, or nonperformance of any representation, warranty, covenant, or agreement made or
entered into by a party hereto pursuant to this Agreement or any certificate, instrument, schedule
or document delivered pursuant hereto, the sole and exclusive relief and remedy available to the
other party hereto in respect of said breach, default, or nonperformance shall be Damages, but only
to the extent properly claimable hereunder and subject to or under the terms

35

 

and provisions of this
Article XII. After the Closing Date, the sole and exclusive remedy of Buyer, the Company
and the Subsidiaries against any Seller for any Damages under of Section 12.2(ii) of this
Agreement is set forth in this Article XII, and such recourse shall be limited to
withdrawal from the Escrow Amount as provided in Section 12.10. Any payment required to be
made by Sellers with respect only to Damages resulting from, arising out of or relating to the
items described in Section 12.2(ii) shall be paid exclusively from and only to the extent
of the Escrow Amount and in no event shall any Seller be required to pay or refund any amount of
the Adjusted Purchase Price for such Damages.

     Section 12.7. Limits on Indemnification; Tax Treatment. Notwithstanding anything to the
contrary contained in this Agreement:

     (a) Any payments made to Sellers, the Company or the Buyer pursuant to this Article
XII shall constitute an adjustment of the Purchase Price for Tax purposes and shall be treated
as such by the Buyer and Sellers on their Tax Returns. For Tax purposes only, Buyer shall be
treated as the owner of the funds held in the Escrow Account and shall include any interest or
other earnings thereon on Buyer’s applicable federal and state income Tax Returns. The portions of
the amounts, if any, paid to Sellers (or to Sellers’ Representative on behalf of
Sellers) at the end of the Escrow Term that are treated as principal and interest for Tax
purposes shall be determined under the rules applicable to original issue discount as provided in
the Treasury Regulations promulgated under Sections 1271-1275 of the Code, and any amount so
treated as interest shall be deductible by Buyer to the extent allowed by law and included in
income by Sellers. Any portion treated as principal shall be taken into account in computing
Sellers’ gain on the sale of the Interests for Tax purposes.

     (b) Except as set forth in Section 12.4, an Indemnifying Party shall not be liable
under this Article XII for Damages resulting from any event relating to a breach of a
representation or warranty if the Indemnifying Party can establish that the Indemnified Party had
actual knowledge on or before the Closing Date of such event.

     Section 12.8. Limited to Actual Damages. The indemnification obligations of the parties
pursuant to this Article XII shall be limited to actual Damages and shall not include
incidental, consequential, indirect, punitive, special or exemplary Damages, provided that any
incidental, consequential, indirect, punitive, or exemplary Damages recovered by a third party
(including a Governmental Entity, but excluding any Affiliate of any party) against a party
entitled to indemnity pursuant to this Article XII shall be included in the Damages
recoverable under such indemnity.

     Section 12.9. Indemnification Despite Negligence. It is the express intention of the
parties hereto that each party to be indemnified pursuant to this Article XII shall be
indemnified and held harmless from and against all Damages as to which indemnity is provided for
under this Article XII, notwithstanding that any such Damages arise out of or result from
the ordinary, strict, sole, or contributory negligence of such party and regardless of whether any
other party (including the other parties to this Agreement) is or is not also negligent. The
parties hereto acknowledge that the foregoing complies with the express negligence rule and is
conspicuous.

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     Section 12.10. Post-Closing Escrow.

     (a) Subject to the terms and conditions set forth in this Section 12.10, Buyer shall
cause the Escrow Deposit to be deposited into an escrow account with funds, together with funds
deposited by Devon under the Devon MIPSA, totaling $100,000,000 in the aggregate (such amount,
together with any interest or proceeds earned thereon, the
“Escrow Amount”) to be deposited on the
Closing Date with an escrow agent mutually agreed to by the parties
(the “Escrow Agent”) and
pursuant to the terms of an escrow agreement reasonably satisfactory to the Escrow Agent, Sellers’
Representative, Devon and Buyer which incorporates or otherwise properly reflects the terms and
provisions of this Agreement, including this Section 12.10 (the “Escrow Agreement”).

     (b) The Escrow Amount will be utilized solely to satisfy any indemnification obligations of
Sellers and Sellers’ Representative (i) to Buyer under Sections 12.2 and 12.3,
respectively, and (ii) to Devon under the Devon MIPSA. The Escrow Agreement shall, subject
to paragraph (c) of this Section 12.10, have a term of twelve (12) months commencing
on the Closing Date (the “Escrow Term”). The Escrow Agreement shall provide that the Escrow Amount
may be drawn upon (i) by Buyer, its successors or assigns solely for the purpose of satisfying any
indemnification obligations of Sellers under Section 12.2 and Sellers’ Representative under
Section 12.3 and (ii) by Devon, its successors or assigns, solely for the purposes of
satisfying any indemnification obligations of Sellers under Section 12.2 and Sellers’
Representative under Section 12.3 of the Devon MIPSA. The Escrow Agreement shall also
provide that either Buyer or Devon may withdraw, upon joint written instructions by both Buyer and
Devon, funds from the Escrow Amount in excess of such party’s pro rata share of the Escrow Amount.

     (c) If Buyer asserts a claim against the Escrow Amount under this Article XII and
Sellers’ Representative does not dispute such claim on behalf of Sellers, Buyer shall be entitled
to indemnification by Sellers in accordance with this Article XII, including the right to
receive from the Escrow Amount funds in an amount equal to the amount of Damages for which Buyer is
entitled for such claim under this Article XII. If, however, Sellers’ Representative
disputes such claim, Buyer shall receive the undisputed portion thereof, if any, but shall not be
entitled to receive any such disputed portion thereof from the Escrow Amount with respect to such
claim prior to resolution of such dispute in accordance with Section 13.1 of this Agreement
and, if such dispute extends beyond the expiration of the Escrow Term, the term of the Escrow Term
will be automatically extended as provided in paragraph (d) of this Section 12.10.

     (d) Provided the indemnification obligations of Sellers for claims of indemnification under
this Article XII that Sellers’ Representative has been notified of prior to the expiration
of the Escrow Term have been satisfied and no dispute then exists as to any claim for
indemnification by Buyer for such claims, the balance of the Escrow Amount will be released to
Sellers’ Representative on behalf of Sellers on the first Business Day immediately following the
expiration of the Escrow Term. To the extent there does exist a claim for indemnification by Buyer
that Sellers’ Representative has been notified of, which claim has not been satisfied in full in
accordance herewith prior to the expiration of the Escrow Term, an amount equal to the maximum
possible amount of such claim reasonably believed to be due or likely to be due hereunder by
Sellers will be withheld from the balance of the Escrow Amount and will continue

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to be held by the
Escrow Agent pursuant to the terms of the Escrow Agreement until such claim has been fully resolved
and the Escrow Agreement shall be deemed to be extended accordingly.

     (e) Notwithstanding anything else herein to the contrary, in no event shall Sellers’
indemnification obligations under Section 12.2(ii) exceed, at any time, the amount of the
balance of the Escrow Amount.

     (f) The parties shall execute and deliver such instruction notices and letters in writing to
the Escrow Agent, and take such other actions, as may be reasonably requested, to implement the
terms hereof and to disburse the Escrow Amount as contemplated herein.

ARTICLE XIII

MISCELLANEOUS

     Section 13.1. Dispute Resolution

     (a) Except as otherwise provided in Section 13.9, any and all claims, disputes,
controversies or other matters in question arising out of or relating to Article IX of this
Agreement or to the computation of the Adjusted Purchase Price pursuant to Section 1.3 (all
of which are referred to herein as “Disputes”), even though some or all of such Disputes are
allegedly extra contractual in nature, whether such Disputes sound in contract, tort, or otherwise,
at law or in equity, under state or federal law, whether provided by statute or the common law, for
damages or any other relief, shall be resolved solely in accordance with this Section 13.1.

     (b) If a Dispute occurs that the senior representatives of the parties responsible for the
transaction contemplated by this Agreement have been unable, in good faith, to settle or agree upon
within a period of 15 days after such Dispute arose, the Company shall nominate and commit one of
its senior officers (or, if the Dispute arises after the Closing, Sellers’ Representative), and
Buyer shall nominate and commit one of its senior officers, to meet at a mutually agreed time and
place not later than 30 days after the Dispute has arisen to attempt to resolve same. If such
senior management (or Sellers’ Representative and Buyer’s senior management, as applicable) have
been unable to resolve such Dispute within a period of 15 days after such meeting, or if such
meeting has not occurred within 45 days following such Dispute arising, then any party shall have
the right, by written notice to the other, to resolve the Dispute (i) through the relevant
Independent Expert pursuant to Section 13.1(c).

     (c) Each party shall have the right to submit Disputes regarding the matters covered by
Article IX (including the existence of Title Defects or the Title Defect Amounts attributable
thereto, as applicable), to an independent expert appointed in accordance with this Section
13.1(c) (each, an “Independent Expert”), who shall serve as sole arbitrator. The Independent
Expert shall be appointed by mutual agreement of Sellers’ Representative and Buyer from among
candidates with experience and expertise in the area that is the subject of such Dispute, and
failing such agreement, such Independent Expert for such Dispute shall be selected in accordance
with the Rules (as hereinafter defined). Disputes to be resolved by an Independent Expert shall be
resolved in accordance with mutually agreed procedures and rules and failing such agreement, in
accordance with the rules and procedures for arbitration provided in Section 13.1(d). The
Independent Expert shall be instructed by the parties to resolve such Dispute as soon as reasonably
practicable in light of the circumstances. The decision and award

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of the Independent Expert shall
be binding upon the parties as an award under the Federal Arbitration Act and final and
nonappealable to the maximum extent permitted by law, and judgment thereon may be entered in a
court of competent jurisdiction and enforced by any party as a final judgment of such court.

     (d) Any Dispute that is not resolved pursuant to the foregoing provisions of this Section
13.1 shall be settled exclusively and finally by arbitration in accordance with this
Section 13.1(d).

     (i) Such arbitration shall be conducted pursuant to the Federal Arbitration Act, except
as expressly provided otherwise in this Agreement. The validity, construction, and
interpretation of this Section 13.1(d), and all procedural aspects of the
arbitration conducted pursuant hereto, including the determination of the issues that are
subject to arbitration (i.e., arbitrability), the scope of the arbitrable issues,
allegations of
“fraud in the inducement” to enter into this Agreement or this arbitration provision,
allegations of waiver, laches, delay or other defenses to arbitrability, and the rules
governing the conduct of the arbitration (including the time for filing an answer, the time
for the filing of counterclaims, the times for amending the pleadings, the specificity of
the pleadings, the extent and scope of discovery, the issuance of subpoenas, the times for
the designation of experts, whether the arbitration is to be stayed pending resolution of
related litigation involving third parties not bound by this Agreement, the receipt of
evidence, and the like), shall be decided by the arbitrators. The arbitration shall be
administered by the American Arbitration Association (the “AAA”), and shall be conducted
pursuant to the Commercial Arbitration Rules of the AAA (the “Rules”), except as expressly
provided otherwise in this Agreement. The arbitration proceedings shall be subject to any
optional rules contained in the Rules for emergency measures and, in the case of Disputes
with respect to amounts in excess of $1 million, optional rules for large and complex cases.

     (ii) The arbitrators shall permit and facilitate such discovery as they determine is
appropriate in the circumstances, taking into account the needs of the parties and the
desirability of making discovery expeditious and cost-effective. Such discovery may include
pre-hearing depositions, particularly depositions of witnesses who will not appear
personally to testify, if there is a demonstrated need therefore. The arbitrators may issue
orders to protect the confidentiality of proprietary information, trade secrets and other
sensitive information disclosed in discovery.

     (iii) All arbitration proceedings hereunder shall be conducted in Dallas, Texas or such
other mutually agreeable location.

     (iv) All arbitration proceedings hereunder shall be before a panel of three (3)
arbitrators appointed in accordance with the Rules consisting of Persons (which can include
lawyers) having at least ten (10) years of experience in or relating to the oil and gas
industry.

     (v) In deciding the substance of the Dispute, the arbitrators shall refer to the
substantive laws of the State of Texas for guidance (excluding choice-of-law principles

39

 

that
might call for the application of the laws of another jurisdiction). Matters relating to
arbitration shall be governed by the Federal Arbitration Act.

     (vi) The parties shall request the arbitrators to conduct a hearing as soon as
reasonably practicable after appointment of the third arbitrator, and to render a final
decision completely disposing of the Dispute that is the subject of such proceedings as soon
as reasonably practicable after the final hearing. The parties shall instruct the
arbitrators to impose time limitations they consider reasonable for each phase of such
proceeding, including, without limitation, limits on the time allotted to each party for the
presentation of its case and rebuttal. The arbitrators shall actively manage the
proceedings as they deem best so as to make the proceedings fair, expeditious, economical
and less burdensome than litigation. To provide for speed and efficiency, the arbitrators
may: (i) limit the time allotted to each party for presentation of its case; and (ii)
exclude testimony and other evidence they deem irrelevant or cumulative.

     (vii) Subject to Section 12.8, notwithstanding any other provision in this
Agreement to the contrary, the parties expressly agree that the arbitrators shall have
absolutely no authority to award consequential, incidental, special, treble, exemplary or
punitive damages of any type under any circumstances regardless of whether such damages may
be available under Texas law, or any other laws, or under the Federal Arbitration Act or the
Rules.

     (viii) The parties shall request that final decision of the arbitrators be in writing,
be as brief as possible, set forth the reasons for such final decision, and if the
arbitrators award monetary damages to either party, contain a certification by the
arbitrators that they have not included any incidental, special, treble, exemplary or
punitive damages. To the fullest extent permitted by law, the arbitration proceeding and
the arbitrators’ decision and award shall be maintained in confidence by the parties and the
parties shall instruct the arbitrators to likewise maintain such matters in confidence.

     (ix) The fees and expenses of the arbitrators shall be borne equally by Sellers and
Buyer.

     (x) The decision and award of the arbitrators shall be binding upon the parties and
final and nonappealable to the maximum extent permitted by law, and judgment thereon may be
entered in a court of competent jurisdiction and enforced by any party as a final judgment
of such court.

     Section 13.2. Notices. All notices, requests, demands, and other communications required
or permitted to be given or made hereunder by any party hereto shall be in writing and shall be
deemed to have been duly given or made if (i) delivered personally, (ii) transmitted by first class
registered or certified mail, postage prepaid, return receipt requested, (iii) sent by a recognized
prepaid overnight courier service (which provides a receipt), or (iv) sent by facsimile or
electronic mail transmission (followed by delivery under the methods provided in either clause (i)
or (ii) above), with receipt confirmed by telecopy machine or appropriate electronic mail receipt
confirmation, as applicable, to the parties at the following addresses (or at such other addresses
as shall be specified by the parties by like notice):

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If to a Seller:

to the address set forth opposite such Seller’s name in Schedule I

With a copy to (which shall not constitute notice to any Seller):

Thompson & Knight LLP

1700 Pacific Avenue, Suite 3300

Dallas, Texas 75201

Attention: T. Hardie

Fax No.: 214-880-3178

Email: thornton.hardie@tklaw.com

and

c/o Chief Resources LLC, as Sellers’ Representative

8111 Preston Road, Suite 600

Dallas, Texas 75225

Attention: Trevor D. Rees-Jones

Fax No.: 214-265-9593

Email: trevorrj@chiefoilandgas.com

If, prior to Closing, to the Company or Chief Holdings:

c/o Chief Resources LLC, as Sellers’ Representative

8111 Preston Road, Suite 600

Dallas, Texas 75225

Attention: Trevor D. Rees-Jones

Fax No.: 214-265-9593

Email: trevorrj@chiefoilandgas.com

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

Thompson & Knight LLP

1700 Pacific Avenue, Suite 3300

Dallas, Texas 75201

Attention: T. Hardie

Fax No.: 214-880-3178

Email: thornton.hardie@tklaw.com

41

 

If to Buyer:

Crosstex Energy Services, L.P.

2501 Cedar Springs Avenue, Suite 100

Dallas, Texas 75201

Attention: Jack M. Lafield

Fax No.: 214-953-9501

Email: jack.lafield@crosstexenergy.com

Attention: Joe A. Davis

Fax No.: 214-953-9501

Email: joe.davis@crosstexenergy.com

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

Hunton & Williams LLP

1601 Bryan Street, 30th Floor

Dallas, Texas 75201

Attention: Timothy A. Mack

Fax No.: 214-880-0011

Email: tmack@hunton.com

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

     Section 13.3. Entire Agreement. This Agreement, the Company Disclosure Schedule, and
(until Closing) the Confidentiality Agreement, together with the Schedules, Exhibits, and other
writings referred to herein or delivered pursuant hereto, constitute the entire agreement between
the parties hereto with respect to the subject matter hereof and supersede all prior agreements and
understandings, both written and oral, between the parties with respect to the subject matter
hereof. Each of the parties acknowledges that no other party, nor any agent or attorney of any
other party, has made any promise, representation or warranty whatsoever not contained herein, and
that such party has not executed or authorized the execution of this Agreement in reliance upon any
such promise, representation or warranty not contained herein.

     Section 13.4. Binding Effect; Assignment; No Third Party Benefit. This Agreement shall be
binding upon and inure to the benefit of the parties hereto and their respective heirs, legal
representatives, successors, and permitted assigns. Except as otherwise expressly provided in this
Agreement, neither this Agreement nor any of the rights, interests, or obligations hereunder shall
be assigned by any of the parties hereto without the prior written consent of the other parties,
which consent may be withheld in such party’s sole judgment; provided, however, that, without the
consent of any party hereto but upon written notice to Sellers’ Representative, Buyer shall have
the right to assign or otherwise transfer this Agreement or its rights and obligations in whole or
in part to an Affiliate of Buyer, but no such assignment or other transfer shall relieve Crosstex
Energy Services, L.P. from the obligations of Buyer hereunder. Except as provided in Section
9.3 and Article XII, nothing in this Agreement, express or implied, is intended to or
shall confer upon any Person other than the parties hereto,
and their respective heirs, legal representatives, successors, and permitted assigns, any rights,
benefits, or remedies of any nature whatsoever under or by reason of this Agreement.

42

 

     Section 13.5. Severability. If any provision of this Agreement is held to be
unenforceable, this Agreement shall be considered divisible and such provision shall be deemed
inoperative to the extent it is deemed unenforceable, and in all other respects this Agreement
shall remain in full force and effect; provided, however, that if any such provision may be made
enforceable by limitation thereof, then such provision shall be deemed to be so limited and shall
be enforceable to the maximum extent permitted by Applicable Law.

     Section 13.6. GOVERNING LAW. THIS AGREEMENT SHALL BE GOVERNED BY AND CONSTRUED AND
ENFORCED IN ACCORDANCE WITH THE INTERNAL LAWS OF THE STATE OF TEXAS, WITHOUT REGARD TO THE
PRINCIPLES OF CONFLICTS OF LAWS THEREOF.

     Section 13.7. Further Assurances. From time to time following the Closing, at the request
of any party hereto and without further consideration, the other party or parties hereto shall
execute and deliver to such requesting party such instruments and documents and take such other
action (but without incurring any material financial obligation) as such requesting party may
reasonably request in order to consummate more fully and effectively the transactions contemplated
hereby.

     Section 13.8. Counterparts. This instrument may be executed in any number of identical
counterparts, each of which for all purposes shall be deemed an original, and all of which shall
constitute collectively, one instrument. It is not necessary that each party hereto execute the
same counterpart so long as identical counterparts are executed by each such party hereto. This
instrument may be validly executed and delivered by facsimile or other electronic transmission.

     Section 13.9. Injunctive Relief. The parties hereto acknowledge and agree that irreparable
damage would occur in the event any of the provisions of this Agreement were not performed in
accordance with their specific terms or were otherwise breached. It is accordingly agreed that the
parties shall be entitled to an injunction or injunctions to prevent breaches of the provisions of
this Agreement, and shall be entitled to enforce specifically the provisions of this Agreement, in
any court of the United States or any state thereof having jurisdiction, in addition to any other
remedy to which the parties may be entitled under this Agreement or at law or in equity.

     Section 13.10. Schedules. Nothing in the Company Disclosure Schedule is intended to
broaden the scope of any representation or warranty contained in the Agreement or to create any
covenant unless clearly
specified to the contrary herein. If a document or matter is listed in one section of the Company
Disclosure Schedule and the disclosure is responsive to the disclosure required in any other
section, such listing shall suffice, without repetition and with or without any cross reference, as
a response disclosing the existence of such document or matter for any other section, so long as
the relevance is reasonably apparent. Inclusion of any item in the Company Disclosure Schedule (a)
does not represent a determination that such item is material nor shall it be deemed to establish a
standard of materiality, (b) does not represent a determination that such item did not arise in the
ordinary course of business, (c) does not represent a determination that the transactions
contemplated by the Agreement require the consent of third parties and (d) shall not constitute, or
be deemed to be, an admission to any third party concerning such item. The Company Disclosure
Schedule includes descriptions of

43

 

instruments or brief summaries of certain aspects of the Company,
the Subsidiaries and their business and operations. The descriptions and brief summaries are not
necessarily complete descriptions or summaries and are provided in the Company Disclosure Schedule
to identify documents or other materials.

     Section 13.11. Time of Essence. With regard to all dates and time periods set forth or
referred to in this Agreement, time is of the essence.

ARTICLE XIV

DEFINITIONS AND REFERENCES

     Section 14.1. Certain Defined Terms. When used in this Agreement, the following terms
shall have the respective meanings assigned to them in this Section 14.1 or in the section,
subsections or other subdivisions referred to below:

     “Affiliate” means any person directly or indirectly controlling, controlled by or under common
control with a person. The concept of control, controlling or controlled as used herein means
possession, directly or indirectly, of the power to direct or cause direction of the management and
policies of another, whether through ownership of voting securities, by contract or otherwise. For
purposes of this definition, a “person” shall include an individual, an estate, a corporation, a
partnership (limited or general), a limited liability company, an association, a joint stock
company, a trust and any other entity or organization.

     “Agreement” means this Membership Interest Purchase and Sale Agreement, as hereafter amended
or modified in accordance with the terms hereof, together with the exhibits and schedules hereto.

     “Applicable Law” means any statute, law, principle of common law, rule, regulation, judgment,
order, ordinance, requirement, code, writ, injunction, or decree of any Governmental Entity in
effect on the date of this Agreement and applicable to (i) Sellers, the Company, the Subsidiaries
and their business generally or (ii) this Agreement and the transactions contemplated hereby;

     “Business Day” means a day other than a Saturday, Sunday or day on which commercial banks in
the United States are authorized or required to be closed for business.

     “Code” means the Internal Revenue Code of 1986, or any successor statute thereto, as amended.

     “Company Disclosure Schedule” means that certain Company Disclosure Schedule dated as of even
date herewith furnished by the Company to Buyer contemporaneously with the execution and delivery
of this Agreement.

     “Confidentiality Agreement” means that certain confidentiality agreement by and between Chief
Holdings and Buyer relating to the transactions contemplated by this Agreement.

     “Credit Facilities” has the meaning assigned to such term in Section 4.14 of the
Company Disclosure Schedule.

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     “Data Room” means that certain data room prepared by the Company and Petrie Parkman & Co. and
to which Buyer had access from April 10, 2006 to April 13, 2006.

     “Devon” means Devon Energy Production Company, L.P.

     “Devon MIPSA” means that certain Membership Interest Purchase and Sale Agreement of even date
herewith among Devon, Chief Holdings LLC, Chief Resources LLC and the Sellers.

     “Dollars” or “$” means U.S. Dollars.

     “Emergency” means an emergency situation which presents a direct risk of human injury or loss
of life or of material damage or destruction of property or tangible assets.

     “Environmental Laws” means all national, state, municipal or local laws, rules, regulations,
statutes, ordinances or orders of any Governmental Entity relating to (a) the prevention of
pollution or environmental damage, (b) the remediation of pollution or environmental damages, or
(c) the protection of the environment generally, including without limitation, the Clean Air Act,
as amended, the Clean Water Act, as amended, the CERCLA, as amended, the Federal Water Pollution
Control Act, as amended, the Resource Conservation and Recovery Act of 1976, as amended, the Safe
Drinking Water Act, as amended, the Toxic Substance and Control Act, as amended, the Superfund
Amendments and Reauthorization Act of 1986, as amended, the Hazardous and Solid Waste Amendments
Act of 1984, as amended, and the Oil Pollution Act of 1990, as amended.

     “Force Majeure” means acts of terrorism, fire, explosion, earthquake, storm, flood, strike,
lock out, activities of a combination of workmen or other labor difficulties, wars, insurrection,
riot, acts of God or the public enemy, law, act, order, export or import control regulations,
proclamation, decree, regulation, ordinance, or instructions of a Governmental Authority, judgment
or decree of a court of a competent jurisdiction.

     “GAAP” means generally accepted accounting principles in the United States of America from
time to time.

     “Gas Contracts” means all of the Company’s and Subsidiaries’ right, title and interest in and
to gas sales contracts, transportation agreements, gas purchase contracts, processing agreements,
treating agreements, gathering agreements, compression agreements and pipeline operational
balancing agreements listed on Exhibit 14.1.

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

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

45

 

     “Hazardous Materials” means (a) any substance or material that is listed, defined or otherwise
designated as a “hazardous substance” under Section 101(14) of CERCLA, (b) any petroleum or
petroleum products, (c) radioactive materials, urea formaldehyde, asbestos and PCBs and (d) any
other chemical or toxic substance, pollutant, contaminant or waste, in solid, liquid or gaseous
form, that is listed, defined or regulated by any Governmental Entity under any Environmental Law.

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

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

     “IRS” means the Internal Revenue Service.

     “Knowledge” of a specified Person (or similar references to a Person’s knowledge) means all
information constructively or actually known, with and upon inquiry, to (a) in the case of a Person
who is an individual, such Person, (b) in the case of a Person (other than the Company) which is a
corporation or other entity, management level employees who were responsible for such matters
during the ordinary course of his employment by such Person, or (c) in the case of the Company, of
the following: Trevor D. Rees-Jones, Clifford L. Thomson, William G. Kiker, Jr., Antone V.
Carvalho III, Lonnie T. Samford, David M. Hundley and Stephen D. Haywood.

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

     “Material Adverse Effect” means any violation, inaccuracy, occurrence, change in circumstance
or other matter or event that results, or could reasonably be expected to result, in a material
adverse effect on the business, condition, capitalization, assets, liabilities, operations or
financial performance of the Company and the Subsidiaries (taken as a whole), except to the extent
resulting from or arising in connection with (i) this Agreement or the transactions contemplated
hereby or the public announcement thereof; (ii) changes, circumstances or effects (A) that affect
generally the oil and gas industry, such as fluctuations in the price of oil and gas, or (B) that
result from (w) international, national, regional, state or local economic conditions, (x) general
developments or conditions in the industry in which the Company and the Subsidiaries conduct
business, (y) changes in Applicable Law or the application or interpretation thereof by any
Governmental Entity, or (z) other general economic conditions, facts or circumstances that are not
subject to the control of such party; (iii) effects of conditions or events resulting from an
outbreak or escalation of hostilities (whether nationally or internationally), or the occurrence of
any other calamity or crisis (whether nationally or internationally) including, the occurrence of
one or more terrorist attacks, but not including any direct damage or impact to the operations or
assets of the Company or the Subsidiaries that are directly impacted by such event such that the
Company and the Subsidiaries are disproportionately impact by the event as compared to the industry
generally when such direct damages or impact could be reasonably

46

 

inferred or expected to result in
a Material Adverse Effect; (iv) actions taken by Buyer or any of its Affiliates; or (v) any other
matter set forth in the Company Disclosure Schedule to the extent it may be reasonably inferred
that such other matter could reasonably be expected to result in a material adverse effect.

     “Midstream Assets” means all of the Company’s and the Subsidiaries’ right, title and interest
in and to an approximate 175-mile pipeline system located in Wise, Denton, Tarrant, Parker, Hood,
Johnson and Hill Counties, Texas including the following:

     (a) the pipelines, compressors, dehydration equipment, meter stations, and appurtenant
equipment and facilities, including any and all line pack, gas, gas inventories, and other
gaseous substances located in said pipelines, equipment and facilities; provided, however,
the Company makes no representation or warranty regarding the volume of gas that will exist
in the such pipelines, equipment and facilities at the time of Closing (collectively
referred to as the “Pipeline”);

     (b) the processing and treating plant, and related compressors, dehydration equipment,
and appurtenant equipment and facilities, including the SCADA system and any and all line
pack, gas, gas inventories, natural gas liquids and other gaseous substances located in such
plant, equipment and facilities and in inventory; provided, however, the Company makes no
representation or warranty regarding the amount that will exist in the such plant, equipment
and facilities at the time of Closing (collectively referred to as the “Plant”);

     (c) The rights-of-way, easements, leases, servitudes, Permits, and licenses of the
Company and the Subsidiaries that are necessary or useful for the location, operation,
maintenance, repair, replacement, use or ownership of the Pipeline and/or Plant, to the
extent such rights or interests are transferable (collectively referred to as the
“Easements”);

     (d) Any and all Permits, licenses and government authorization of the Company and the
Subsidiaries relating to the Pipeline, Plant, and/or the Easements that
are necessary or useful for the operation, maintenance, repair, replacement, use or
ownership of the Pipeline, Plant, and/or the Easements (collectively referred to as the
“Permits”); and

     (e) The Gas Contracts.

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

     “Permitted Indebtedness” means amounts owed by the Company or any Subsidiary to Chief Holdings
or its Affiliates (other than the Company or any Subsidiary) for indebtedness for borrowed money
incurred on or after January 1, 2006.

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

47

 

     “Post-Signing Event” means any fact, matter, circumstance or event, which arose after the date
hereof but prior to the Closing, requiring supplementation or amendment of the Company Disclosure
Schedule to reflect such Post-Signing Event, which, if existing, occurring or known on the date of
this Agreement, would have been required to be set forth or described in Company Disclosure
Schedule.

     “Pre-Closing Tax Period” means all taxable periods (or portions thereof) ending on or before
the Closing Date.

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

     “Reasonable Best Efforts” means a party’s reasonable best efforts in accordance with
reasonable commercial practice.

     “Retention Bonus Plan” means the retention bonus memorandum issued by Chief Oil & Gas LLC to
its employees;

     “Sales Information” means all (i) correspondence or other documents of the Company or its
Affiliates relating to the transactions contemplated hereby, (ii) lists of other prospective
purchasers of the Midstream Assets or the Company or any Affiliate of the Company or any assets of
such Affiliate compiled by Sellers, the Company or their respective Affiliates, (iii) bids
submitted to Sellers, the Company or their respective Affiliates by other prospective purchasers of
the Midstream Assets or the Company or any Affiliate of the Company or any assets of such
Affiliate, (iv) analyses by Sellers, the Company or any of the respective Affiliates thereof of any
bids submitted by other prospective purchasers of the Midstream Assets or the Company or any
Affiliate of the Company or any assets of such Affiliate, and (v) correspondence between or among
any Seller, the Company, or their respective Affiliates or their respective representatives with
respect to, or with, any other prospective purchasers of the Midstream Assets or the Company or any
Affiliate of the Company or any assets of such Affiliate, but not including the confidentiality
agreements the benefits of which will be assigned pursuant to Section 8.2.

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

     “Subsidiaries” means Eagle Mountain Pipeline Company, LP, a Texas limited partnership, Eagle
Mountain Gas Partners, LLC, a Texas limited liability company and Chief Midstream, LLC, a Texas
limited liability company, but shall not include Chief Holdings, Sellers’ Representative or the
Upstream Subsidiaries.

     “Tax Return” means any return or report, including any related or supporting information, with
respect to Taxes.

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

     “Upstream Subsidiaries” means Chief Oil & Gas LLC, a Texas limited liability company, and
Avondale Land Company LLC, a Texas limited liability company.

48

 

     “VPP” means a volumetric production payment pursuant to that certain (i) Purchase and Sale
Agreement, dated October 8, 2004, between Chief Holdings and VPP Holdings II LP (ii) Conveyance of
Term Overriding Royalty Interest, dated October 8, 2004, from Chief Holdings and to VPP Holdings II
LP, and (iii) Production and Marketing Agreement, dated October 8, 2004, between the Company and
VPP Holdings II LP.

     Section 14.2. Certain Additional Defined Terms. In addition to such terms as are defined
in the preamble of and the recitals to this Agreement and in Section 14.1, the following
terms are used in this Agreement as defined in the Articles or Sections set forth opposite such
terms:

	 	 	 
	Defined Term	 	Reference
	2005 Financial Statements

	 	Section 4.9(a)
	AAA

	 	Section 13.1(d)(i)
	Adjusted Purchase Price

	 	Section 1.2
	Allocation

	 	Section 8.8(d)
	Basic Documents

	 	Section 4.14(b)
	Buyer

	 	Introduction
	Buyer’s Title Review

	 	Section 9.1(a)
	CERCLA

	 	Section 4.20
	Chief Holdings

	 	Introduction
	Chief Midstream Holdings

	 	Introduction
	Closing

	 	Article II
	Closing Date

	 	Article II
	COBRA

	 	Section 8.7
	Company

	 	Introduction
	Company Contracts

	 	Section 4.14(a)
	Damages

	 	Section 12.2
	Deductible Amount

	 	Section 9.2
	Defensible Title

	 	Section 9.1(d)(i)
	Disputes

	 	Section 13.1(a)
	Environmental Liabilities

	 	Section 4.20
	Escrow Agent

	 	Section 12.10
	Escrow Agreement

	 	Section 12.10
	Escrow Amount

	 	Section 12.10
	Escrow Deposit

	 	Section 1.4(a)
	Escrow Term

	 	Section 12.10
	Examination Period

	 	Section 9.1(a)
	Excluded Assets

	 	Section 8.15
	Final Settlement Statement

	 	Section 1.3(d)
	Financial Statements

	 	Section 4.9(a)
	HSR Act

	 	Section 8.16
	Indemnified Party

	 	Section 12.5
	Indemnifying Party

	 	Section 12.5
	Independent Expert

	 	Section 13.1(c)
	Interim Financial Statements

	 	Section 4.9(a)
	Interests

	 	Recital A

49

 

	 	 	 
	Defined Term	 	Reference
	Midstream Reorganization

	 	Section 1.5
	Midstream 2005 Financial Statements

	 	Section 4.9(b)
	Midstream Financial Statements

	 	Section 4.9(b)
	Midstream Interim Financial Statements

	 	Section 4.9(b)
	NGA

	 	Section 4.15
	NGPA

	 	Section 4.15
	Notice Period

	 	Section 12.5
	Permitted Encumbrances

	 	Section 9.1(d)(ii)
	Post-Closing Adjusted Purchase Price

	 	Section 1.3(d)
	Purchase Price

	 	Section 1.2
	Regulatory Agencies

	 	Section 4.24
	Remedies for Title Defects

	 	Section 9.1(b)
	Rules

	 	Section 13.1(d)(i)
	SEC

	 	Section 8.19
	Sellers

	 	Introduction
	Sellers’ Representative

	 	Introduction
	Title Defect

	 	Section 9.1(d)(iii)
	Title Defect Amount

	 	Section 9.1(c)
	Title Defect Notice

	 	Section 9.1(b)
	Title Defect Property

	 	Section 9.1(b)
	Transition Services Agreement

	 	Section 10.1(h)

     Section 14.3. References and Construction. All references in this Agreement to articles,
sections, subsections and other subdivisions refer to corresponding articles, sections, subsections
and other subdivisions of this Agreement unless expressly provided otherwise.

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

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

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

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

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

50

 

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

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

[Remainder of Page Intentionally Left Blank—Signature Pages Follow]

51

 

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

	 	 	 	 	 
	 	 	SELLERS:
	 
	 	 	 	 
	 	 	/s/ Trevor D. Rees-Jones
	 	 	 
	 	 	Trevor D. Rees-Jones
	 
	 	 	 	 
	 	 	DAVID GARRETT REES-JONES IRREVOCABLE TRUST
	 
	 	 	 	 
	 

	 	By:
	 	/s/ Trevor D. Rees-Jones
	 

	 	 	 	 
	 	 	Name: Trevor D. Rees-Jones
	 	 	Title: Trustee
	 
	 	 	 	 
	 	 	TREVOR RICHARD REES-JONES IRREVOCABLE TRUST
	 
	 	 	 	 
	 

	 	By:
	 	/s/ Trevor D. Rees-Jones
	 

	 	 	 	 
	 	 	Name: Trevor D. Rees-Jones
	 	 	Title: Trustee
	 
	 	 	 	 
	 	 	MM TERRY INVESTMENTS/CHIEF, L.P.
	 
	 	 	 	 
	 	 	By: MM Terry Holdings/Chief, LLC,
	 	 	its general partner
	 
	 	 	 	 
	 

	 	By:
	 	/s/ Michael F. Terry
	 

	 	 	 	 
	 	 	Name: Michael F. Terry
	 	 	Title: Manager
	 
	 	 	 	 
	 	 	DOUBLE V INVESTMENTS, LTD.
	 
	 	 	 	 
	 	 	By: DOUBLE V (GP), LLC, its general partner
	 
	 	 	 	 
	 

	 	By:
	 	/s/ William G. Kiker, Jr.
	 

	 	 	 	 
	 	 	Name: William G. Kiker, Jr.
	 	 	Title: Manager
	 
	 	 	 	 
	 

	 	By:
	 	/s/ Sherry H. Kiker
	 

	 	 	 	 
	 	 	Name: Sherry H. Kiker
	 	 	Title: Manager

SIGNATURE PAGE TO MEMBERSHIP INTEREST

PURCHASE AND SALE AGREEMENT

 

 

	 	 	 	 	 
	 	 	ICBT HOLDINGS, LTD.
	 
	 	 	 	 
	 	 	By: ICBT (GP), LLC, its general partner
	 
	 	 	 	 
	 

	 	By:
	 	/s/ Clifford L. Thomson
	 

	 	 	 	 
	 	 	Name: Clifford L. Thomson
	 	 	Title: Manager
	 
	 	 	 	 
	 	 	COMPANY:
	 
	 	 	 	 
	 	 	CHIEF MIDSTREAM HOLDINGS LLC
	 
	 	 	 	 
	 

	 	By:
	 	/s/ Trevor D. Rees-Jones
	 

	 	 	 	 
	 	 	         Trevor D. Rees-Jones, Manager
	 
	 	 	 	 
	 	 	SELLERS’ REPRESENTATIVE:
	 
	 	 	 	 
	 	 	CHIEF RESOURCES LLC
	 
	 	 	 	 
	 

	 	By:
	 	/s/ Trevor D. Rees-Jones
	 

	 	 	 	 
	 	 	         Trevor D. Rees-Jones, Manager
	 
	 	 	 	 
	 	 	HOLDINGS:
	 
	 	 	 	 
	 	 	CHIEF HOLDINGS LLC
	 
	 	 	 	 
	 

	 	By:
	 	/s/ Trevor D. Rees-Jones
	 

	 	 	 	 
	 	 	         Trevor D. Rees-Jones, Manager

     I hereby consent to the execution, delivery and the consummation of this Agreement by my
spouse, Trevor D. Rees-Jones.

	 	 	 	 	 
	 	 	/s/ Janice M. Rees-Jones
	 	 	 
	 	 	Janice M. Rees-Jones, as spouse of Trevor D. Rees- Jones

SIGNATURE PAGE TO MEMBERSHIP INTEREST

PURCHASE AND SALE AGREEMENT

 

 

	 	 	 	 	 
	 	 	BUYER:
	 
	 	 	 	 
	 	 	CROSSTEX ENERGY SERVICES, L.P.
	 
	 	 	 	 
	 	 	By: Crosstex Operating GP, LLC, its general partner
	 
	 	 	 	 
	 

	 	By:
	 	/s/ Barry E. Davis
	 

	 	 	 	 
	 

	 	 	 	Barry E. Davis, President and Chief Executive Officer

SIGNATURE PAGE TO MEMBERSHIP INTEREST

PURCHASE AND SALE AGREEMENT

 

 

SCHEDULE I

Trevor D. Rees-Jones

8111 Preston Road, Suite 600

Dallas, Texas 75225

David Garrett Rees-Jones Irrevocable Trust

c/o Sellers’ Representative

8111 Preston Road, Suite 600

Dallas, Texas 75225

Attention: Trevor D. Rees-Jones

Trevor Richard Rees-Jones Irrevocable Trust

c/o Sellers’ Representative

8111 Preston Road, Suite 600

Dallas, Texas 75225

Attention: Trevor D. Rees-Jones

MM Terry Investments/Chief, L.P.

5950 Berkshire Lane, Suite 320

Dallas, TX 75225

Double V Investments, Ltd.

c/o Sellers’ Representative

8111 Preston Road, Suite 600

Dallas, Texas 75225

Attention: Trevor D. Rees-Jones

ICBT Holdings, Ltd.

c/o Sellers’ Representative

8111 Preston Road, Suite 600

Dallas, Texas 75225

Attention: Trevor D. Rees-Jones

1

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