Document:

ex102.htm

ASSET PURCHASE AGREEMENT

 

THIS AGREEMENT (together with the exhibits and schedules attached hereto, this “Agreement”) dated as of the 17th day of December, 2012.

 

BETWEEN:

 

MULTI-CORP INTERNATIONAL INC., a company organized under the laws of the State of Nevada and having a registered address at 952 N. Western Avenue, Los Angeles, California 90029

(hereinafter referred to as “MII”)

 

AND:

 

QUAD ENERGY CORP., a corporation organized under the laws of the State of Nevada having a principal office located at 3208 East Colonial Drive, Suite 277, Orlando, Florida 32893

(hereinafter referred to as “QUAD”)

 

WHEREAS QUAD desires to purchase and acquire from QUAD and QUAD desires to sell to MII 100% of QUAD's right, title and interest in and to all materials, supplies, machinery, equipment, improvements and other personal property and fixtures relating to the assets, as more fully and particularly described in Exhibit A attached hereto (collectively referred to in this agreement as the “Assets”), and to all wells, wellhead equipment, pumping units, flow lines, tanks, buildings, injection facilities, salt water disposal facilities, compression facilities, gathering systems and other equipment, all easements, rights-of-way, surface leases and other surface rights, all permits and licenses and all other appurtenances used or held for use in connection with or related to the exploration, development, operation or maintenance of any of the Assets (the “Surface Rights”) (collectively referred to in this agreement as the “Fixtures”);

WHEREAS, the parties desire to enter into this Agreement to set forth their mutual agreements concerning the above matter;

 

NOW, THEREFORE, in consideration of the mutual promises of the parties hereto, and of good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, it is mutually agreed by and between the parties hereto as follows:

ARTICLE 1

SALE AND TRANSFER OF FIXTURES

1.1         Sale of Assets. Subject to the terms and conditions of this Agreement and in reliance upon the representations, warranties, covenants and agreements contained herein, at the closing of the transactions contemplated hereby, QUAD will sell, convey, assign and transfer 100% of its right, title and interest in the Fixtures, and MII will purchase and acquire 100% of QUAD’s right, title and interest in and to the Fixtures from QUAD as follows:

  

1

  

 

	
(a)  

	
One hundred (100%) percent of QUAD's right, title and interest in and to all materials, supplies, machinery, equipment, improvements and other personal property and fixtures relating to the Assets and all wells, wellhead equipment, pumping units, flow lines, tanks, buildings, injection facilities, salt water disposal facilities, compression facilities, gathering systems and other equipment, all easements, rights-of-way, surface leases and other surface rights, all permits and licenses and all other appurtenances used or held for use in connection with or related to the exploration, development, operation or maintenance of any of the Assets.

1.2         Consideration.  

	
(a)  

	
Purchase Price.  In consideration of the sale, transfer and assignment to MII of 100% of QUAD’s right, title and interest in and to the Fixtures, MII shall pay an aggregate purchase price of $3,200,000.00, which shall consist of: (i) issuance at Closing of 2,000,000 shares of restricted common stock of MII at $1.60 per share for aggregate consideration of $3,200,000.00 (hereinafter referred to as the “Purchase Price”).

1.3         The Closing.  The transfer and delivery of the documents transferring 100% of the right, title and interest of QUAD in the Fixtures to MII and issuance of stock by MII to QUAD (the “Closing”) will take place on  December 17, 2012 or such earlier date as may be mutually acceptable to QUAD and MII, subject to the satisfaction or waiver (by the party receiving the benefit thereof) of the conditions precedent set forth in Section 6 and 7 of this Agreement (the “Closing Date”).

 

1.4         Deliveries.  At the Closing on the Closing Date:

	
(a)  

	
QUAD shall deliver to MII an executed Bill of Sale conveying 100% of the right, title and interest of QUAD to the Fixtures to MII;

	
(b)  

	
MII shall deliver 2,000,000 shares of restricted common stock to QUAD;

	
(c)  

	
MII shall deliver to QUAD and/or its designee a share certificate evidencing an aggregate of 2,000,000 shares of MII’s restricted common stock;

	
(d)  

	
QUAD and MII shall each execute and deliver such other instruments and take such other action as may be necessary to carry out its obligations under this Agreement; including, without limitation, working together to cause the title to any fixtures to be transferred into the name of MII in the applicable governmental records.

ARTICLE 2

TITLE DUE DILIGENCE

2.2         Access to Assets.  QUAD shall grant MII such access to the Assets thereof, including all records relating to same, as is necessary to permit MII to conduct a thorough due diligence investigation of the title to the Fixtures.  MII shall have a maximum of seven (7) days from the date of this Agreement to conduct its due diligence (this 7-day period, as it may be extended in accordance with this Agreement or by other agreement of the parties, will be referred to herein as the “Due Diligence Period”).

  

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2.3         MII shall notify QUAD in writing (the “Defect Notice”) by the end of the Due Diligence Period of any failures or defects in title (“Title Defects”) that MII may have identified as pertaining to the Fixtures.  The Defect Notice shall identify the alleged defect and the nature of the defect.  If no defects are identified in said written notice, MII will be deemed to have accepted title for said Fixtures.  Upon receipt of Defect Notice, QUAD shall have until the Closing to cure any such Title Defects or, if not curable prior to the Closing, advise MII how such Title Defects will be cured following the Closing and provide a satisfactory commitment to MII with respect to curing of such Title Defects. If QUAD is unable to cure any material Title Defects to the Purchaser’s reasonable satisfaction or provide a plan and commitment to cure such Title Defects prior to the Closing, then MII may (i) terminate this Agreement; or (ii) proceed with the Closing with no reduction in the Purchase Price.  Title Defect, as used in this Agreement, shall mean any lien, encumbrance, encroachment or other defect in QUAD’s title to the Fixtures that would cause MII not to have defensible title to such Fixtures.

ARTICLE 3

REPRESENTATIONS AND WARRANTIES OF QUAD

 

3.1         To induce MII to execute, deliver and perform this Agreement, and in acknowledgement of MII’s reliance on the following representations and warranties, QUAD represents and warrants to MII as follows as of the date hereof and as of the Closing Date:

 

	
  

	
(a)

	
Organization.  QUAD is a corporation duly incorporated, validly existing and in good standing under the applicable laws of the State of Nevada with the power and authority to conduct its business as it is now being conducted and to own its assets.

 

	
  

	
(b)

	
Power and Authority.  QUAD has the power and authority to execute, deliver, and perform this Agreement and the other agreements and instruments to be executed and delivered by them in connection with the transactions contemplated hereby, and QUAD will have taken all necessary action to authorize the execution and delivery of this Agreement and such other agreements and instruments and the consummation of the transactions contemplated hereby, including but not limited to the receipt of all necessary regulatory approvals.  The execution, delivery and performance by QUAD of the Agreement has been duly authorized. This Agreement is, and the other agreements and instruments to be executed and delivered by QUAD in connection with the transactions contemplated hereby, when such other agreements and instruments are executed and delivered, shall be, the valid and legally binding obligations of QUAD enforceable against QUAD in accordance with their respective terms.

 

	
(c)

	
Non-Contravention. To QUAD’s knowledge, neither the execution, delivery and/or performance of this Agreement, nor the consummation of the transactions contemplated hereby, will:

	
(i)  

	
conflict with, result in a violation of, cause a default under (with or without notice, lapse of time or both) or give rise to a right of termination, amendment, cancellation or acceleration of any obligation contained in or the loss of any material benefit under, or result in the creation of any lien, security interest, charge or encumbrance upon any of the fixtures or assets of QUAD under any term, condition or provision of any loan or credit agreement, note, bond, lease or other agreement, instrument, permit, license, judgment, order, decree, statute, law, ordinance, rule or regulation applicable to QUAD, or any of its material property or assets;

  

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(ii)         violate any provision of the articles or bylaws of QUAD; or

	
  

	
(iii)

	
violate any order, writ, injunction, decree, statute, rule, or regulation of any court or governmental or regulatory agency in the State of New Mexico that would result in a QUAD Material Adverse Effect (defined below).

 

3.2         Actions and Proceedings. To the knowledge of QUAD, (i) there is no basis for and there is no action, suit, judgment, claim, demand or proceeding outstanding or pending, or threatened against or affecting QUAD or which involves any of the business, or assets of QUAD that, if adversely resolved or determined, would have a material adverse effect on the Fixtures (a “QUAD Material Adverse Effect”), and (ii) there is no reasonable basis for any claim or action that, based upon the likelihood of its being asserted and its success if asserted, would have such a QUAD Material Adverse Effect.

3.3         Compliance. 

	
  

	
(a)

	
To the knowledge of QUAD, QUAD is in compliance with, is not in default or violation in any material respect under, and has not been charged with or received any notice at any time of any material violation of any statute, law, ordinance, regulation, rule, decree or other regulation in New Mexico that would constitute a QUAD Material Adverse Effect;

	
  

	
(b)

	
To the knowledge of QUAD, QUAD is not subject to any judgment, order or decree entered in any lawsuit or proceeding applicable to its business and operations that would result in a QUAD Material Adverse Effect; and

	
  

	
(c)

	
To the knowledge of QUAD, QUAD has duly filed all reports and has obtained all governmental permits and other governmental consents, except as may be required after the execution of this Agreement.  To the knowledge of QUAD, all of such permits and consents are in full force and effect, and no proceedings for the suspension or cancellation of any of them, and no investigation relating to any of them, is pending or to the knowledge of QUAD, threatened, and none of them will be adversely affected by the consummation of this Agreement.

3.4         Filings, Consents and Approvals. To the knowledge of QUAD, no filing or registration with, no notice to and no permit, authorization, consent, or approval of any public or governmental body or authority or other person or entity is necessary for the consummation by QUAD of the transactions contemplated by this Agreement, other than filing a change of title to the Fixtures.

  

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ARTICLE 4

REPRESENTATIONS AND WARRANTIES OF MII

4.1         To induce QUAD to execute, deliver and perform this Agreement, and in acknowledgement of QUAD’s reliance on the following representations and warranties, MII hereby represents and warrants to QUAD as follows as of the date hereof and as of the Closing Date:

	
  

	
(a)

	
Organization.  MII is a corporation duly incorporated, validly existing and in good standing under the laws of the State of Nevada, with the power and authority to conduct its business as it is now being conducted and to own and lease its properties and assets.

	
  

	
(b)

	
Power and Authority.  MII has the power and authority to execute, deliver, and perform this Agreement and the other agreements and instruments to be executed and delivered by it in connection with the transactions contemplated hereby, and the execution, delivery and performance of the Agreement by MII has been duly authorized.  This Agreement is, and, when such other agreements and instruments are executed and delivered, the other agreements and instruments to be executed and delivered by MII in connection with the transactions contemplated hereby shall be, the valid and legally binding obligations of the Purchaser, enforceable in accordance with their respective terms.

 

	
  

	
(c)

	
Broker’s or Finder’s Fees.  MII has not authorized any person to act as broker, finder, or in any other similar capacity in connection with the transactions contemplated by this Agreement.

	
  

	
(d)

	
No Conflict.  Neither the execution and delivery by MII of this Agreement and of the other agreements and instruments to be executed and delivered by MII in connection with the transactions contemplated hereby or thereby, nor the consummation by MII of the transactions contemplated hereby, will or do violate or conflict with: (a) any foreign or local law, regulation, ordinance, governmental restriction, order, judgment or decree applicable to MII; (b) any provision of any charter, bylaw, or (c) under any material agreement to which MII is a party.

	
  

	
(e)

	
Required Consents.  No permit or approval, authorization, consent, permission, or waiver to or from any person, or notice, filing, or recording to or with, any person is necessary for the execution and delivery of this Agreement and the other agreements and instruments to be executed and delivered by MII in connection with the transactions contemplated hereby, or the consummation by MII of the transactions contemplated hereby.

	
  

	
(f)

	
Litigation.  There are no proceedings pending or, to the knowledge of the Purchaser, threatened against MII which (i) seek to restrain or enjoin the consummation of the Agreement or the transactions contemplated hereby or (ii) could reasonably be expected to have a material adverse effect on MII or its abilities to perform its obligations under the Agreement and the other agreements and instruments to be executed and delivered by MII in connection with the transactions contemplated hereby.

  

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(h)

	
Payment of Operating Expenses. MII shall assume and make payment on behalf of QUAD of any and all operating costs associated with the Fixtures.

ARTICLE 5

COVENANTS OF QUAD PRIOR TO CLOSING

 

5.1         Required Approvals.  As promptly as practicable after the date of this Agreement, QUAD shall make all filings required by foreign or local law to be made by them in order to consummate the transactions contemplated hereby.  QUAD shall cooperate with MII with respect to all filings that MII elects to make or is required by law to make in connection with the transactions contemplated hereby.

 

5.2         Prohibited Actions.  Except as provided herein below, in no event, without the prior written consent of MII, shall QUAD:

	
  

	
(a)

	
permit any of the Assets to be subjected to any claim or encumbrance, except claims or encumbrances that QUAD believes, in its sole judgment, are necessary to continue operations in the ordinary course of business and consistent with past practice;

	
  

	
(b)

	
waive any claims or rights respecting the Fixtures, or sell, transfer, or otherwise dispose of any of the Fixtures; or

	
(c)           

	
dispose of any interest in any of the Fixtures, or permit any rights in any of the Fixtures to lapse into default or in non-compliance with all and any regulatory or governmental requirement.

 

5.3         Access.  From the date of this Agreement to the Closing Date, QUAD shall provide MII with such information and access as MII may from time to time reasonably request regarding the Fixtures.

 

ARTICLE 6

CONDITIONS TO QUAD’S OBLIGATIONS

 

6.1         Each of the obligations of QUAD to be performed hereunder shall be subject to the satisfaction (or waiver by QUAD) at or prior to the Closing Date of each of the following conditions:

	
  

	
(a)

	
Representations and Warranties; Performance.  MII shall have performed and complied in all respects with the covenants and agreements contained in this Agreement required to be performed and complied with by it at or prior to the Closing Date, the representations and warranties of MII set forth in this Agreement shall be true and correct in all respects as of the date hereof and as of the Closing Date as though made at and as of the Closing Date (except as otherwise expressly

  

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contemplated by this Agreement), and the execution and delivery of this Agreement by MII and the consummation of the transactions contemplated hereby shall have been duly and validly authorized by the Purchaser’s Board of Directors, and QUAD shall have received a certificate to that effect signed by the secretary of the Purchaser.

	
  

	
(b)

	
Consents.  All required approvals, consents and authorizations shall have been obtained.

	
  

	
(c)

	
Litigation.  No Litigation shall be threatened or pending against MII or QUAD that, in the reasonable opinion of counsel for QUAD, could result in the restraint or prohibition of any such party, or the obtaining of damages or other relief from such party, in connection with this Agreement or the consummation of the transactions contemplated hereby.

	
  

	
(d)

	
Documents Satisfactory in Form and Substance.  All agreements, certificates, and other documents delivered by MII to QUAD hereunder shall be in form and substance satisfactory to counsel for QUAD, in the exercise of such counsel’s reasonable judgment.

	
  

	
(e)

	
Due Diligence.  QUAD shall have completed its due diligence review of MII and shall have been satisfied with the findings thereof.

 

ARTICLE 7

CONDITIONS TO MII’S OBLIGATIONS

 

7.1         Each of the obligations of MII to be performed hereunder shall be subject to the satisfaction (or the waiver by MII) at or prior to the Closing Date of each of the following conditions:

	
  

	
(a)

	
Representations and Warranties; Performance.  QUAD shall have performed and complied in all respects with the covenants and agreements contained in this Agreement required to be performed and complied with by it at or prior to the Closing Date, the representations and warranties of QUAD set forth in this Agreement shall be true and correct in all respects as of the date hereof and as of the Closing Date as though made at and as of the Closing Date (except as otherwise expressly contemplated by this Agreement), and the execution and delivery of this Agreement by QUAD and the consummation of the transactions contemplated hereby shall have been duly and validly authorized by QUAD’s Board of Directors, and MII shall have received a certificate to that effect signed by the secretary of QUAD.

	
  

	
(b)

	
Consents.  All required approvals, consents and authorizations shall have been obtained.

	
  

	
(c)

	
No Litigation.  No Litigation shall be threatened or pending against MII or QUAD that, in the reasonable opinion of counsel for the Purchaser, could result in the restraint or prohibition of any such party, or the obtaining of damages or other relief from such party, in connection with this Agreement or the consummation of the transactions contemplated hereby.

  

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(d)

	
Due Diligence.  MII shall have completed its due diligence review of the Fixtures and shall have been satisfied with the findings thereof.

	
  

	
(e)

	
Proof of Ownership of the Fixtures.  QUAD shall have delivered to MII copies of instruments evidencing its ownership of the Fixtures.

 

ARTICLE 8

 

COVENANTS OF QUAD AND MII FOLLOWING CLOSING

 

8.1         Transfer, Documentary Taxes.  All sales, transfer, and similar taxes and fees (including all recording fees, if any) incurred in connection with this Agreement and the transactions contemplated hereby shall be borne by QUAD and QUAD shall file all necessary documentation with respect to such taxes.

8.2         Further Assurances.  Subject to the terms and conditions of this Agreement, each party agrees to use all of its reasonable efforts to take, or cause to be taken, all actions and to do or cause to be done, all things necessary and proper or advisable to consummate and make effective the transactions contemplated by this Agreement (including the execution and delivery of such further instruments and documents) as the other party may reasonably request.

8.3         Nondisclosure of Proprietary Data.  The Parties shall hold in a fiduciary capacity for the benefit of each other all secret or confidential information, knowledge or data relating to each other or any of their affiliated companies, and their respective businesses, which shall not be or become public knowledge.  Neither Party, without the prior written consent of the other, or as may otherwise be required by law or legal process, shall communicate or divulge either before or after the Closing Date any such information, knowledge or data to anyone other than the other Party and those designated by the other Party in writing, or except as required by applicable law.

ARTICLE 9

SURVIVAL AND INDEMNITY

9.1         Survival of Representations, Warranties, etc.  Each of the representations, warranties, agreements, covenants and obligations herein is material and shall be deemed to have been relied upon by the other party or parties and shall survive for a period of twelve (12) months after the Closing and shall not merge in the performance of any obligation by any party hereto.  All rights to indemnification contained in this Agreement shall survive the Closing indefinitely.

9.2         Indemnification by QUAD and MII.  The parties shall indemnify, defend, and hold harmless each other, and each other’s representatives, stockholders, controlling persons and affiliates, at, and at any time after, the Closing, from and against any and all demands, claim, actions, or causes of action, assessments, losses, damages (including incidental and consequential damages), liabilities, costs, and expenses, including reasonable fees and expenses of counsel, other expenses of investigation, handling, and litigation , and settlement amounts, together with interest and penalties 

  

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(collectively, a “Loss” or “Losses”), asserted against, resulting to, imposed upon, or incurred by the either party, directly or indirectly, by reason of, resulting from, or arising in connection with: (i) any breach of any representation, warranty, or agreement of either party contained in or made pursuant to this Agreement, including the agreements and other instruments contemplated hereby; (ii) any breach of any representation, warranty, or agreement of either party contained in or made pursuant to this Agreement, including the agreements and other instruments contemplated hereby, as if such representation or warranty were made on and as of the Closing Date; (iii) any claim by any person for brokerage or finder’s fees or commissions or similar payments based upon any agreement or understanding alleged to have been made by any such person with either party in connection this Agreement or any of the transactions contemplated hereby; and (iv) to the extent not covered by the foregoing, any and all demands, claims, actions or causes of action, assessments, losses, damages, liabilities, costs, and expenses, including reasonable fees and expenses of counsel, other expenses of investigation, handling, and litigation and settlement amounts, together with interest and penalties, incident to the foregoing.

The remedies provided in this Section 9.2 will not be exclusive of or limit any other remedies that may be available to the either party to this Agreement.

ARTICLE 10

TERMINATION

10.1         Termination.  This Agreement may be terminated at any time prior to the Closing Date:

(a)         by mutual written consent of QUAD and MII;

 

	
  

	
(b)

	
by either QUAD or MII if (i) there shall have been a material breach of any representation, warranty, covenant or agreement set forth in this Agreement, on the part of the Purchaser, in the case of a termination by QUAD, or on the part of QUAD, in the case of a termination by the Purchaser, which breach shall not have been cured, in the case of a representation or warranty, prior to Closing or, in the case of a covenant or agreement, within ten (10) business days following receipt by the breaching party of notice of such breach, or (ii) any permanent injunction or other order of a court or other competent authority preventing the consummation of the transactions contemplated hereby shall have become final and non-appealable;

	
  

	
(c)

	
by either QUAD or MII if the transactions contemplated hereby shall not have been consummated on or before the Closing Date; provided, however, that the right to terminate this Agreement pursuant to this Section 10.1(c) shall not be available to any party whose failure to fulfill any obligation under this Agreement has been the cause of, or resulted in, the failure of the consummation of the transactions contemplated hereby to have occurred on or before the aforesaid date; or

	
  

	
(d)

	
By MII in the event of an uncured Title Defect as provided in Section.2.3 of this Agreement.

  

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10.2         Effect of Termination.  Each party’s right of termination under Section 10.1 is in addition to any other rights it may have under this Agreement or otherwise, and the exercise of a right of termination will not be an election of remedies.  If this Agreement is terminated pursuant to Section 10.1, unless otherwise specified in this Agreement, all further obligations of the parties under this Agreement will terminate; provided, however, that if this Agreement is terminated by a party because of the breach of this Agreement by the other party or because one or more of the conditions to the terminating party’s obligations under this Agreement is not satisfied as a result of the other party’s failure to comply with its obligations under this Agreement, the terminating party’s rights to pursue all legal remedies will survive such termination unimpaired.

ARTICLE 11

MISCELLANEOUS

11.1         Entire Agreement.  This Agreement, and the other certificates, agreements, and other instruments to be executed and delivered by the parties in connection with the transactions contemplated hereby, constitute the sole understanding of the parties with respect to the subject matter hereof and supersede all prior oral or written agreements with respect to the subject matter hereof.

11.2         Parties Bound by Agreement; Successors and Assigns.  The terms, conditions, and obligations of this Agreement shall inure to the benefit of and be binding upon the parties hereto and their respective successors and assigns.

11.3         Amendments and Waivers.  No modification, termination, extension, renewal or waiver of any provision of this Agreement shall be binding upon a party unless made in writing and signed by such party.  A waiver on one occasion shall not be construed as a waiver of any right on any future occasion.  No delay or omission by a party in exercising any of its rights hereunder shall operate as a waiver of such rights.

11.4         Severability.  If for any reason any term or provision of this Agreement is held to be invalid or unenforceable, all other valid terms and provisions hereof shall remain in full force and effect, and all of the terms and provisions of this Agreement shall be deemed to be severable in nature.  If for any reason any term or provision containing a restriction set forth herein is held to cover an area or to be for a length of time which is unreasonable, or in any other way is construed to be too broad or to any extent invalid, such term or provision shall not be determined to be null, void and of no effect, but to the extent the same is or would be valid or enforceable under applicable law, any court of competent jurisdiction shall construe and interpret or reform this Agreement to provide for a restriction having the maximum enforceable area, time period and other provisions (not greater than those contained herein) as shall be valid and enforceable under applicable law.

11.5         Attorneys’ Fees.  Should any party hereto retain counsel for the purpose of enforcing, or preventing the breach of, any provision hereof including, but not limited to, the institution of any action or proceeding, whether by arbitration, judicial or quasi-judicial action or otherwise, to enforce any provision hereof or for damages for any alleged breach of any provision hereof, or for a declaration of such party’s rights or obligations hereunder, then, whether such matter is settled by negotiation, or by arbitration or judicial determination, the prevailing party shall be entitled to be reimbursed by the losing party for all costs and expenses incurred thereby, including, but not limited to, reasonable attorneys’ fees for the services rendered to such prevailing party.

  

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11.6         Counterparts.  This Agreement may be executed in one or more counterparts, each of which shall for all purposes be deemed to be an original and all of which shall constitute the same instrument.

11.7         Headings.  The headings of the sections and paragraphs of this Agreement are inserted for convenience only and shall not be deemed to constitute part of this Agreement or to affect the construction hereof.

11.8         Notices.  All notices, requests, demands, claims, and other communications which are required or may be given under this Agreement shall be in writing and shall be deemed to have been duly given five business days after such notice, request, demand, claim or other communication is sent, if sent by registered or certified mail, return receipt requested, postage prepaid; and, in any case, all such communications must be addressed to the intended recipient at the address set forth on the first page of this Agreement.  Any party may send any notice, request, demand, claim, or other communication hereunder to the intended recipient at the address set forth above using any other means, but no such notice, request, demand, claim, or other communication shall be deemed to have been duly given unless and until it actually is received by the intended recipient. Any party may change the address to which notices, requests, demands, claims, and other communications hereunder are to be delivered by giving the other party notice in the manner herein set forth.

11.9         Governing Law.  This Agreement shall be construed in accordance with and governed by the laws of the State of Nevada without giving effect to the principles of choice of law thereof.

11.10                 Arbitration.  Any dispute arising under or in connection with any matter related to this Agreement or any related agreement shall be resolved exclusively by arbitration in the State of Nevada.  The arbitration shall be in conformity with and subject to the applicable rules and procedures of the American Arbitration Association.  All parties agree to be (1) subject to the jurisdiction and venue of the arbitration in the State of Nevada, (2) bound by the decision of the arbitrator as the final decision with respect to the dispute, and (3) subject to the jurisdiction of the Superior Court of the State of Nevada for the purpose of confirmation and enforcement of any award made by the arbitrator or for any actions seeking injunctive relief.

11.11                 References, etc.

	
  

	
(a)

	
Whenever reference is made in this Agreement to any Article, Section, or paragraph, such reference shall be deemed to apply to the specified Article, Section or paragraph of this Agreement.

	
  

	
(b)

	
Wherever reference is made in this Agreement to a Schedule, such reference shall be deemed to apply to the specified Schedule attached hereto, which are incorporated into this Agreement and form a part hereof.  All terms defined in this Agreement shall have the same meaning in the Schedules attached hereto.

	
  

	
(c)

	
Any form of the word “include” when used herein is not intended to be exclusive (e.g., “including” means “including, without limitation”).

11.12                 No Strict Construction.  The language used in this Agreement will be deemed to be the language chosen by the parties hereto to express their mutual intent, and no rule of strict construction will be applied against any person.

 

  

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11.13                 No Third Party Beneficiary Rights.  No provision in this Agreement is intended or shall create any rights with respect to the subject matter of this Agreement in any third party.

11.14                 Such Other Acts.  The parties hereto shall do all things, take such acts and execute such documents as are necessary to give effect to the intention herein contemplated.

 

11.15                 Electronic Means.  Delivery of an executed copy of this Agreement by electronic facsimile transmission or other means of electronic communication capable of producing a printed copy will be deemed to be execution and delivery of this Agreement as of the date first indicated above.

IN WITNESS WHEREOF, each of the parties hereto has caused this Agreement to be executed on its behalf as of the date first indicated above.

 

	  	
MULTI-CORP INTERNATIONAL INC.

	  
	  	  	  	  
	  	  	  	  
	  	  	  	  
	  	
By:

	/s/ Robert Baker  	  
	  	  	
Robert Baker

	  
	  	  	
President

	  
	  	  	  	  

 

	  	
QUAD ENERGY CORP

	  
	  	  	  	  
	  	  	  	  
	  	  	  	  
	  	
By:

	  /s/Robert Popick	  
	  	  	
Robert Popick

	  
	  	  	
President

	  

 

  

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SCHEDULE “A”

TO

ASSET PURCHASE AGREEMENT

Seller hereby conveys to Purchaser ONE HUNDRED (100%) per cent of its interest in and to the following:

LANDS:

Seller’s interest in lands located in Eddy County, New Mexico, including but not limited to the following lands:

	
1)  

	
Section 33, Township 16 South, Range 29 East

	
2)  

	
Section 3, Township 17 South, Range 29 East

	
3)  

	
Section 4, Township 17 South, Range 29 East

	
4)  

	
Section 5, Township 17 South, Range 29 East

	
5)  

	
Section 7, Township 17 South, Range 29 East

	
6)  

	
Section 8, Township 17 South, Range 29 East

	
7)  

	
Section 9, Township 17 South, Range 29 East

LEASES:

1)         Federal Lease LC-058594 C, dated December 30, 1939

2)         Federal Lease LKC-068960, dated July 1, 1949

3)         Federal Lease NM-011331, dated June 1, 1953

4)         Federal Lease LC-028480 B, dated November 3, 1933

5)         State Lease B-7071, dated June 10, 1937

6)         State Lease B-7596, dated May 10, 1938

7)         State Lease B-11662, dated December 1, 1944

8)         State Lease 8569, dated March 11, 1940

9)         State Lease E-134, dated February 10, 1945

10)         State Lease E-741, dated February 11, 1946

11)         State Lease E-950, dated August 10, 1946

12)         State Lease E-4200, dated September 11, 1950

13)         State Lease E-6353, dated July 10, 1952

14)         State Lease E-7639, dated December 15, 1953

15)         State Lease E-10163, dated June 19, 1956

16)         Federal Lease LC-037777A

17)         Federal Lease LC-58594A

  

13

  

WELLS:

	  	
PROPERTY NO.

	
LEASE NAME

	
WELL NAME

	
COUNTY

	
UL

	
SEC

	
TWP

	
RGE

	
1

	
16230

	
Cave Pool Unit

	
Cave Pool

Unit #001

	
Eddy

	
O

	
33

	
16S

	
29E

	
2

	  	  	
Cave Pool

Unit #010

	
Eddy

	
G

	
5

	
17S

	
29E

	
3

	  	  	
Cave Pool

Unit #012

	
Eddy

	
E

	
4

	
17S

	
29E

	
4

	  	  	
Cave Pool

Unit #019

	
Eddy

	
K

	
4

	
17S

	
29E

	
5

	  	  	
Cave Pool

Unit #023

	
Eddy

	
K

	
5

	
17S

	
29E

	
6

	  	  	
Cave Pool

Unit #026

	
Eddy

	
O

	
5

	
17S

	
29E

	
7

	  	  	
Cave Pool

Unit #027

	
Eddy

	
P

	
5

	
17S

	
29E

	
8

	  	  	
Cave Pool

Unit #028

	
Eddy

	
M

	
4

	
17S

	
29E

	
9

	  	  	
Cave Pool

Unit #030

	
Eddy

	
O

	
4

	
17S

	
29E

	
10

	  	  	
Cave Pool

Unit #035

	
Eddy

	
A

	
8

	
17S

	
29E

	
11

	  	  	
Cave Pool

Unit #036

	
Eddy

	
B

	
8

	
17S

	
29E

	
12

	  	  	
Cave Pool

Unit #041

	
Eddy

	
E

	
8

	
17S

	
29E

	
13

	  	  	
Cave Pool

Unit #051

	
Eddy

	
L

	
5

	
17S

	
29E

	
14

	  	  	
Cave Pool

Unit #052

	
Eddy

	
M

	
5

	
17S

	
29E

	
15

	  	  	
Cave Pool

Unit #059

	
Eddy

	
J

	
5

	
17S

	
29E

	
16

	  	  	
Cave Pool

Unit #062

	
Eddy

	
P

	
5

	
17S

	
29E

 

  

14

  

	
17

	
16248

	
Cave State

	
Cave State #001

	
Eddy

	
D

	
4

	
17S

	
29E

	
18

	  	  	
Cave State #002

	
Eddy

	
H

	
5

	
17S

	
29E

	
19

	  	  	
Cave State #003

	
Eddy

	
E

	
4

	
17S

	
29E

	
20

	  	  	
Cave State #004

	
Eddy

	
F

	
4

	
17S

	
29E

	
21

	  	  	
Cave State #005

	
Eddy

	
C

	
4

	
17S

	
29E

	
22

	
16249

	
Diamond State

	
Diamond State #001

	
Eddy

	
O

	
4

	
17S

	
29E

	
23

	  	  	
Diamond State #002

	
Eddy

	
M

	
4

	
17S

	
29E

	
24

	
16253

	
Hodges Federal

	
Hodges Federal #002

	
Eddy

	
A

	
5

	
17S

	
29E

	
25

	
16255

	
Levers

	
Levers #003Y

	
Eddy

	
N

	
33

	
16S

	
29E

	
26

	  	  	
Levers #005

	
Eddy

	
M

	
33

	
16S

	
29E

	
27

	  	  	
Levers #006

	
Eddy

	
L

	
33

	
16S

	
29E

	
28

	
16254

	
Levers Federal

	
Levers Federal #007

	
Eddy

	
J

	
33

	
16S

	
29E

	
29

	
16250

	
Red State

	
Red State #001

	
Eddy

	
B

	
4

	
17S

	
29E

	
30

	  	  	
Red State #002

	
Eddy

	
G

	
4

	
17S

	
29E

	
31

	
16219

	
Red Twelve Federal

	
Red Twelve Federal #001

	
Eddy

	
O

	
33

	
16S

	
29E

	
32

	  	  	
Red Twelve Federal #002

	
Eddy

	
P

	
33

	
16S

	
29E

	
33

	
16268

	
Red Twelve Levers Federal

	
Red Twelve Levers Fed #008Q

	
Eddy

	
I

	
33

	
16S

	
29E

	
34

	  	  	
Red Twelve Levers Fed #012

	
Eddy

	
D

	
33

	
16S

	
29E

	
35

	
16256

	
Red Twelve State

	
Red Twelve State #001

	
Eddy

	
N

	
4

	
17S

	
29E

	
36

	  	  	
Red Twelve State #002

	
Eddy

	
H

	
4

	
17S

	
29E

	
37

	  	  	
Red Twelve State #003

	
Eddy

	
I

	
5

	
17S

	
29E

	
38

	  	  	
Red Twelve State #004

	
Eddy

	
O

	
5

	
17S

	
29E

	
39

	  	  	
Red Twelve State #006

	
Eddy

	
K

	
5

	
17S

	
29E

	
40

	
16251

	
State

	
State #001

	
Eddy

	
D

	
4

	
17S

	
29E

	
41

	  	  	
State #002

	
Eddy

	
C

	
4

	
17S

	
29E

  

  

15Ex 4.1 - Form of Employee Restricted Stock Award Agreement

		

			 

		

		
			THE SHARES REPRESENTED BY THIS RESTRICTED STOCK AWARD AGREEMENT ARE ISSUED ON JUNE 29, 2012, HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED, OR APPLICABLE STATE SECURITIES LAWS, AND MAY BE OFFERED OR SOLD ONLY IF REGISTERED UNDER SUCH ACT OR LAWS OR IF AN EXEMPTION FROM REGISTRATION IS AVAILABLE.  THE SHARES REPRESENTED BY THIS RESTRICTED STOCK AWARD AGREEMENT ARE UNVESTED, SUBJECT TO SUBSTANTIAL RESTRICTIONS ON VOTING AND TRANSFER AND SUBJECT TO FORFEITURE UPON THE OCCURRENCE OF VARIOUS EVENTS, THE SPECIFIC TERMS OF WHICH ARE SET FORTH IN THIS RESTRICTED STOCK AWARD AGREEMENT.  A COPY OF THIS RESTRICTED STOCK AWARD AGREEMENT HAS BEEN FILED AT THE PRINCIPAL OFFICE OF THE COMPANY AND IS AVAILABLE UPON WRITTEN REQUEST FROM THE COMPANY WITHOUT CHARGE.
		

		
			
ZAZA ENERGY CORPORATION
RESTRICTED STOCK AWARD AGREEMENT

(SERVICE PROVIDER)
		

		
			THIS RESTRICTED STOCK AWARD AGREEMENT (this “Agreement”) is made and entered into as of June 29, 2012 (the “Date of Grant”), by and between BLACKSTONE OIL & GAS, LLC, a Texas limited liability company (“Blackstone”), OMEGA ENERGY LLC (“Omega”), LARA ENERGY INC. (“Lara”, with each of Blackstone, Omega and Lara referred to individually as a “Grantor” and referred to collective as “Grantors”), and [NAME OF SERVICE PROVIDER] (“Grantee”) to evidence the grant, transfer and award of the Restricted Stock, as defined below, made by Grantors to Grantee, in consideration for Grantee’s efforts as an indirect service provider to the Company (as defined below) through Sequent Petroleum Management, LLC (“Sequent”).  
		

			 1.	
			Grant of Restricted Stock.  Subject to the terms and conditions of this Agreement, (i) Blackstone hereby grants, transfers and awards to Grantee, and Grantee hereby accepts from Blackstone, [NUMBER OF SHARES] shares of Common Stock, par value $0.01 per share (“Common Stock”), of ZaZa Energy Corporation, a Delaware corporation (the “Company”), (ii) Omega hereby grants, transfers and awards to Grantee, and Grantee hereby accepts from Omega, [NUMBER OF SHARES] shares of Common Stock, and (iii) Lara hereby grants, transfers and awards to Grantee, and Grantee hereby accepts from Lara, [NUMBER OF SHARES]  shares of Common Stock, for an aggregate grant from the Grantors [AGGREGATE NUMBER OF SHARES]  shares of Common Stock to Grantee, which shares of Common Stock are unvested, subject to substantial restrictions on voting and transfer and subject to forfeiture upon the occurrence of various events, all as set forth in this Agreement (such shares, collectively, the “Restricted Stock”).  

			 2.	
			Restricted Period; Vesting Schedule.  The Restricted Stock shall be subject to restrictions on voting and transfer and forfeiture by Grantee for a period of six (6) months commencing on the Date of Grant (the “Restricted Period”).  So long as a termination of Grantee’s provision of services to the Company or any of its subsidiaries or affiliates has not 
		

		 

		

			            1

		

		

			 

		

 

		

			 

		

		occurred, on the six-month anniversary of the Date of Grant,  all of the Restricted Stock shall become vested, as defined herein.  In the event of a Change of Control occurring during the Restricted Period, all of the Restricted Stock shall become vested upon the occurrence of such Change of Control.  For purposes of this Agreement, the terms “vest,” “vested,” “vesting” and any variations thereof means the lapsing or elimination of the restrictions of voting and transfer imposed by this Agreement (but not by the Stockholders’ Agreement, as defined in Section 14, or by any applicable foreign or U.S.  federal and state laws, rules and regulations) upon, and of Grantee’s risk of forfeiture with respect to, the Restricted Stock or the specified portion thereof.  For purposes of this Agreement, the term “Change of Control” means an event or series of events by which: (i) a “person” or “group” within the meaning of Section 13(d) of the Securities Exchange Act of 1934, as amended (other than a “person” or “group” comprised solely of John Hearn, Gaston Kearby, Todd Brooks, their respective heirs, and their respective affiliates and Permitted Transferees, as such term is defined in the Lock-Up Agreement dated as of February 21, 2012, among the Grantors, the Company, and the other parties thereto, as amended from time to time, along with Grantee and other recipients of grants of restricted stock from one or more of the Grantors) becomes the beneficial owner of more than 50% of the Company’s outstanding Common Stock; (ii) consummation of any consolidation or merger of the Company or similar transaction or any sale, lease or other transfer in one transaction or a series of transactions of all or substantially all of the consolidated assets of the Company and its subsidiaries, taken as a whole, to any person, in each case pursuant to which the Company’s Common Stock will be converted into cash, securities or other property, other than pursuant to a transaction in which the persons that beneficially owned, directly or indirectly, voting shares of the Company immediately prior to such transaction beneficially own, directly or indirectly, voting shares representing a majority of the total voting power of all outstanding classes of voting shares of the continuing or surviving person immediately after the transaction; or (iii) the Company’s stockholders approve and adopt a plan of liquidation or dissolution of the Company or a sale of all or substantially all of the Company’s assets.

			 3.	
			Risk of Forfeiture Upon Termination.  

			 (a)	
			Termination Generally.  In the event that Grantee’s provision of services to the Company or any of its subsidiaries or affiliates is terminated for any reason other than (i) without Cause (as defined in Section 3(c)), (ii) upon the Grantee’s Permanent Disability (as defined in Section 3(d)), (iii) upon Grantee’s death, or (iv) by Grantee for Good Reason (as defined in Section 3(e)), all of the Restricted Stock that is not vested as of the date of such termination shall immediately be forfeited by Grantee in favor of Grantors, and Grantors shall have the right to recover such forfeited Restricted Stock.

			 (b)	
			Termination without Cause, upon Disability or Death or for Good Reason.  In the event that Grantee’s provision of services to the Company or any of its subsidiaries or affiliates is terminated (i) at the request of the Company and without Cause, (ii) upon the Grantee’s Permanent Disability, (iii) upon Grantee’s death, or (iv) by Grantee for Good Reason (as defined in Section 3(e)), the Restricted Stock that is not vested as of the date of such termination shall immediately become vested.

			 (c)	
			Definition of Cause.  For purposes of this Agreement, the term “Cause” means, with respect to the termination of Grantee’s provision of services to the Company or any 
		

		 

		

			            2

		

		

			 

		

 

		

			 

		

		of its subsidiaries or affiliates: (i) any act or omission that constitutes a material breach by Grantee of any of Grantee’s obligations under any agreement with Sequent; (ii) the willful and continued failure or refusal of Grantee substantially to perform the duties required of Grantee as a service provider or performance materially below the level required or expected of Grantee in such capacity; (iii) Grantee’s willful misconduct, gross negligence or breach of fiduciary duty in his or her capacity as a service provider that, in each case or in the aggregate, results in material harm to the Company or any of its subsidiaries or affiliates; (iv) any willful violation by Grantee of any federal, state or foreign law or regulation applicable to the business of the Company or any of its subsidiaries or affiliates, or Grantee’s commission of any felony or other crime involving moral turpitude, or Grantee’s commission of an act of fraud, embezzlement or misappropriation; or (v) any other misconduct by Grantee that is materially injurious to the financial condition or business reputation of, or is otherwise materially injurious to, the Company or any of its subsidiaries or affiliates.  Sequent and  the Company shall determine whether Cause exists and whether a termination of Grantee’s status as a service provider was for Cause, and by acceptance and execution of this Agreement, Grantors and Grantee acknowledge and agree that such determination with respect to the foregoing are conclusive and binding on all persons and entity for all purposes of this Agreement. 

			 (d)	
			For purposes of this Agreement, the term “Permanent Disability” means that the Grantee is not working and is currently unable to engage in any substantial gainful activity as a result of sickness, accident or bodily injury for a period of three months and which is reasonably expected to last for a continuous period of at least twelve (12) months, which determination is made in good faith by Sequent and the Company.

			 (e)	
			For purposes of this Agreement, “Good Reason” means the occurrence of any of the following circumstances without the Grantee’s consent: (i) a material reduction in the Grantee’s remuneration (excluding the substitution of substantially equivalent remuneration and benefits); (ii) a material diminution of the Grantee’s duties, authority or responsibilities as in effect immediately prior to such diminution; (iii) the relocation of the Grantee’s principal location to a location more than 50 miles from its current location; or (iv) if Grantee reports directly to a Grantor as of the Date of Grant, Grantee thereafter ceases to report directly to such Grantor as a result of such Grantor ceasing to be a service provider of the Company or of Grantee being assigned to report to a different person.

			 (f)	
			Voting of Restricted Stock; Non-Transferability of Restricted Stock.  Except for Restricted Stock that has vested, Grantee shall not have the right to vote the shares of Restricted Stock, and the voting rights with respect to all unvested shares of Restricted Stock shall remain exercisable by the Grantor of such shares of Restricted Stock.  Except for Restricted Stock that has vested, the Restricted Stock may not (a) be assigned, sold or otherwise transferred by Grantee to any other person or entity, except by will, by applicable laws of descent and distribution or pursuant to a qualified domestic relations order, or (b) be subject to any encumbrance, pledge or charge of any nature.  No transfer by will or by applicable laws of descent or distribution shall be effective to bind either the Company or Grantors unless each of the Company and the Grantors shall have been furnished with a copy of the deceased Grantee’s will or such other evidence as the Company and the Grantors may deem necessary to establish the validity of such transfer.  Any attempted assignment, sale or transfer in violation of this Section 4 shall be null, void and without legal force or effect for all purposes. 

		 

		

			            3

		

		

			 

		

 

		

			 

		

			 (g)	
			Notice of Transfer.  Grantee shall provide written notice to Grantors and the Company promptly after effecting any sale, assignment, encumbrance, pledge, charge or other transfer of any shares of vested Restricted Stock.  Such notice shall specify the name and contact information (including physical address, telephone number, facsimile number and e-mail address) of the person or entity to which such Restricted Stock was sold, assigned or otherwise transferred, and the number of vested Restricted Stock that was sold, assigned or otherwise transferred to such person or entity.  

			 (h)	
			Retention of Stock Certificate(s) by the Company.    Each certificate representing Restricted Stock awarded under this Agreement shall be registered in the name of both the applicable Grantor and the Grantee, as their interests shall appear, and, unless and until such Restricted Stock vests, shall be left on deposit with the Company, along with stock powers, substantially in the form attached hereto as Exhibit A (the “Stock Power”), endorsed in blank, until such time as the risk of forfeiture of, and restrictions on voting and transfer with respect to, the Restricted Stock have lapsed (at which time of lapse of such restrictions, the shares evidenced by such certificate over which such restrictions have lapsed shall be registered in the name of Grantee as provided below).  In the event that a forfeiture event occurs, then Grantors shall have the right to recover such forfeited shares of Restricted Stock and deliver the Stock Power to the Company in respect of such forfeited Restricted Stock.  As soon as practicable after the date on which any portion of the Restricted Stock becomes vested, and provided that the tax withholding requirements of Section 10 have been met, Grantors shall deliver, or cause the Company to deliver, to Grantee a certificate representing the number of shares of Restricted Stock that is no longer subject to the risk of forfeiture and restrictions on transfer set forth in this Agreement. 

			 (i)	
			Dividends and Other Distributions; Voting.  Grantee shall be entitled to receive all  dividends and other distributions, if any, paid with respect to the Restricted Stock.  If any dividends or distributions paid with respect to the Restricted Stock are paid in shares of Common Stock, such shares of Common Stock shall be deposited with the Company and shall be subject to the same risks of forfeiture and restrictions on voting and transferability as the Restricted Stock with respect to which such shares were paid.  Each Grantor shall retain full voting rights with respect to the Restricted Stock granted by it hereunder prior to the applicable date of vesting.  Any dividends or other distributions received by Grantee with respect to the Restricted Stock shall constitute additional income to Grantee and shall be subject to Section 10 of this Agreement.

			 (j)	
			Legends.  

			 (k)	
			Any certificate or certificates representing unvested Restricted Stock shall bear a legend substantially similar to the following:

		
			THE SHARES REPRESENTED BY THIS CERTIFICATE HAVE BEEN ISSUED PURSUANT TO THE TERMS OF A RESTRICTED STOCK AWARD AGREEMENT AND ARE UNVESTED, SUBJECT TO SUBSTANTIAL RESTRICTIONS ON VOTING AND TRANSFER AND SUBJECT TO FORFEITURE UPON THE OCCURRENCE OF VARIOUS 
		

		 

		

			            4

		

		

			 

		

 

		

			 

		

		EVENTS, THE SPECIFIC TERMS OF WHICH ARE 
SET FORTH IN SUCH RESTRICTED STOCK AWARD AGREEMENT.  A COPY OF SUCH RESTRICTED STOCK AWARD AGREEMENT HAS BEEN FILED AT THE PRINCIPAL OFFICE OF THE COMPANY AND IS AVAILABLE UPON WRITTEN REQUEST FROM THE COMPANY WITHOUT CHARGE.
		

			 (l)	
			In addition, during any period in which the Company does not have in place an effective registration statement on Form S-8 or other available form permitted by the U.S. Securities and Exchange Commission, any certificate or certificates representing Restricted Stock, whether vested or unvested, shall bear a legend substantially similar to the following: 

		
			THE SHARES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED, OR APPLICABLE STATE SECURITIES LAWS, AND MAY BE OFFERED OR SOLD ONLY IF REGISTERED UNDER SUCH ACT OR LAWS OR IF AN EXEMPTION FROM REGISTRATION IS AVAILABLE. 
		

			 (m)	
			In addition, any certificate or certificates representing the Restricted Stock, whether vested or unvested, shall bear a legend substantially similar to the following: 

		
			THE SHARES REPRESENTED BY THIS CERTIFICATE ARE SUBJECT TO CERTAIN RESTRICTIONS ON TRANSFER AND VOTING AND OTHER ARRANGEMENTS SET FORTH IN A STOCKHOLDERS’ AGREEMENT, DATED AS OF AUGUST 9, 2011, AS AMENDED FROM TIME TO TIME.  A COPY OF SUCH STOCKHOLDERS’ AGREEMENT HAS BEEN FILED AT THE PRINCIPAL OFFICE OF THE COMPANY AND IS AVAILABLE UPON WRITTEN REQUEST FROM THE COMPANY WITHOUT CHARGE.  THIS CERTIFICATE AND THE SHARES REPRESENTED HEREBY MAY NOT BE SOLD, TRANSFERRED, ASSIGNED, PLEDGED, ENCUMBERED, HYPOTHECATED, MORTGAGED, OR OTHERWISE DISPOSED OF, EITHER VOLUNTARILY OR INVOLUNTARILY, EXCEPT AS PERMITTED BY SUCH STOCKHOLDERS’ AGREEMENT.
		

			 (n)	
			Compliance with Laws.  The grant of the Restricted Stock and/or unrestricted shares of Common Stock pursuant to this Agreement shall be subject to, and shall comply with, any applicable requirements of any foreign and U.S. federal and state securities laws, rules and regulations (including, without limitation, the provisions of the Securities Act of 1933, as amended, the Securities Exchange Act of 1934, as amended, and any respective rules and regulations promulgated thereunder) and any other law or regulation applicable thereto.  The Grantors shall not be obligated to grant the Restricted Stock or any of the shares of Common Stock pursuant to this Agreement if any such grant would violate any such requirements.

		 

		

			            5

		

		

			 

		

 

		

			 

		

			 (o)	
			Withholding of Taxes.  Grantee is solely responsible for timely reporting all income derived from the Restricted Stock (including any dividends or other distributions with respect to such Restricted Stock received by Grantee pursuant to Section 7 of the Agreement) on Grantee’s personal tax return and paying all tax items related thereto, and shall indemnify the Grantors, the Company and any affiliate and hold them harmless from and against all claims, damages, losses and expenses, including reasonable fees and expenses of attorneys, relating to any obligation imposed by law on the Grantors, Sequent, or the Company or any affiliate to withhold any taxes relating to the Restricted Stock.  Upon request by the Company or the Grantors, Grantee shall provide evidence reasonably satisfactory to the Company and the Grantors that all applicable taxes, including but not limited to, any federal income tax, social security, and Medicare taxes (but excluding the employer’s portion of any social security, Medicare or unemployment taxes), have been or will be withheld or otherwise paid.  If Grantee fails to provide such evidence upon request, the Company may otherwise refuse to issue or transfer any Restricted Stock or shares of Common Stock otherwise required to be issued or transferred pursuant to this Agreement.  Notwithstanding the foregoing, if it is determined that the Grantors, Sequent, or the Company or any affiliate has any obligation to withhold any tax item under any applicable law, including the Internal Revenue Code of 1986, as amended (the “Code”), Grantee authorizes Sequent and/or the Company or an affiliate, or their respective agents, at their discretion, to satisfy the obligations with regard to all such tax items by any means that the Company and/or affiliate determines appropriate, including but not limited to (i) withholding from any cash remuneration paid to Grantee; and (ii) withholding from proceeds of the sale of shares of Common Stock delivered upon vesting of the Restricted Stock, either through a voluntary sale or through a mandatory sale arranged by the Company (on the Grantee’s behalf pursuant to this Section), and if Grantee fails to properly remit such taxes, the Company may otherwise refuse to issue or transfer any Restricted Stock or shares of Common Stock otherwise required to be issued or transferred pursuant to this Agreement.

			 (p)	
			No Section 83(b) Election.   Grantee agrees that no election pursuant to Section 83(b) of the Code shall be made with respect to the Restricted Stock to include in gross income for federal income tax purposes in the year of issuance the fair market value of such Restricted Stock.

			 (q)	
			No Guaranty of Tax Consequences.   Grantee shall be solely responsible and liable for any tax consequences (including, but not limited to, any interest or penalties) as a result of the Restricted Stock awarded hereunder.  No Grantor nor the Company (a) makes any commitment or guarantee that any federal, state or local tax treatment will apply or be available to any person with respect to the Restricted Stock, nor (b) assumes any liability or obligation whatsoever for the tax consequences to Grantee of the Restricted Stock. 

			 (r)	
			No Right to Service.  Nothing in this Agreement shall confer on Grantee a right to remain as a service provider to Sequent or the Company or any of its subsidiaries or affiliates, or interfere with or limit in any way any right of the Company or any of its subsidiaries or affiliates to terminate (or cause to be terminated) Grantee’s service to the Company or any of its subsidiaries or affiliates at any time, for any reason and with or without Cause. 

			 (s)	
			Grantee’s Acceptance.  The grant of the Restricted Stock to Grantee under this Agreement is conditioned upon (a) Grantee’s execution of this Agreement and the Stock Power, 
		

		 

		

			            6

		

		

			 

		

 

		

			 

		

		and the delivery of such documents by Grantee to Grantors no later than ten (10) days after the Date of Grant; and (b) Grantee’s execution of a Joinder Agreement to that certain Stockholders’ Agreement, dated as of August 9, 2011, by and among the Company and its stockholders (the “Stockholders’ Agreement”), in substantially the form of such Joinder Agreement attached hereto as Exhibit B, and the delivery of such Joinder Agreement by Grantee to the Company no later than ten (10) days after the Date of Grant.  

			 (t)	
			Entire Agreement; Amendment.  This Agreement, together with all Exhibits hereto, contains the entire agreement between the parties hereto with respect to the subject matter hereof, and supersedes all prior agreements or understandings, whether written or oral, between the parties relating to such subject matter.  This Agreement may not be modified or amended, except by a writing signed by Grantors, the Company and Grantee.  

			 (u)	
			Binding Effect; Assignment; Third Party Beneficiaries.  This Agreement shall inure to the benefit of, be binding upon, and be enforceable by each of the parties hereto and their respective successors, permitted assigns, heirs, executors, administrators, trustees, and legal and personal representatives, as applicable.  Except as expressly provided in Section 4, Grantee shall not assign this Agreement, or any right or in interest herein, without the prior express written consent of Grantors and the Company.    Except as otherwise expressly set forth in this Agreement, nothing in this Agreement shall create or be deemed to create any third party beneficiary rights in any person or entity not party to this Agreement.

			 (v)	
			Notices.  All notices and other communications required or permitted to be given hereunder shall be in writing and shall be deemed to have been duly delivered and received hereunder (a) four business days after being sent by registered or certified mail, return receipt requested, postage prepaid, (b) one business day after being sent for next business day delivery, fees prepaid, via a reputable nationwide overnight courier service, or (c) immediately upon delivery by hand or by facsimile (with a written or electronic confirmation of delivery), if sent during normal business hours of the recipient, or if not sent during normal business hours of the recipient, then on the recipient’s next business day, in each case to the intended recipient as set forth below:

			if to Grantors, to:

			Blackstone Oil & Gas LLC
		

		
			Omega Energy LLC
		

		
			Lara Energy Inc .
1301 McKinney Street, Suite 2850
		

		
			Houston, Texas 77010 
Attn: Todd Brooks, Gaston Kearby and John Hearn 
Facsimile: (713) 595-1919 
		

			if to Grantee, to the address specified on the signature page hereto.

		 

		

			            7

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