Document:

Exhibit
10.1

 

FIRST
AMENDMENT TO LEASE AGREEMENT

 

THIS
FIRST AMENDMENT TO LEASE AGREEMENT (this “Amendment”) is made and entered into as of the 2nd day of November,
2021 (the “Effective Date”) by and between PW MI CanRE Marengo LLC, a Michigan
limited liability company (“Landlord”), and Marengo Cannabis LLC, a Michigan limited liability company (“Tenant”).

 

RECITALS:

 

A. Landlord
and Tenant are parties to the Lease Agreement dated September 3, 2021 (the “Original Lease”), pursuant to which Tenant leases
from Landlord the land and all improvements thereon located at 22695 J Dr N, Marshall, MI 49068 as more particularly described in the
Original Lease (the “Premises”).

 

B. Landlord
and Tenant desire to amend the Lease to add additional items to the property improvement budget (“the Additional Items”)
and to make corresponding changes to the Lease. The Additional Items are described on Exhibit 1- First Amendment, attached hereto.

 

AGREEMENT:

 

THEREFORE,
in consideration of the mutual covenants set forth herein, the Lease is hereby amended on the terms and conditions hereinafter set forth.

 

1. Initially
capitalized terms not otherwise defined herein will have the meanings given to such terms in the Original Lease.

 

2. The
definition of “Base Rent” in the Lease is amended to include the column entitled “Monthly Rent” on the Rent Schedule
attached as Exhibit 2 – First Amendment, which will be in addition to the Monthly Rent on the Rent Schedule attached to the Original
Lease as Exhibit 2. In the event of the federal legalization of the recreations use of cannabis in the United States, the Base Rent attributable
to the Additional Items will be the amount listed in the column entitled “Rent if Reset’ in the Rent Scheduled attached as
Exhibit 2 – First Amendment.

 

3. Effective
as of the date of this Amendment, Section 11.1 of the Original Lease is amended to require that the Security Deposit shall be $1,877,897
and Tenant shall deposit $152,095 on the Effective Date and an additional $152,095 by August 30, 2022 to fund the increased Security
Deposit.

 

4. This
Amendment sets forth the entire understanding and agreement of the parties hereto in relation to the subject matter hereof.

 

5. Except
as specifically amended, modified or supplemented herein, the Original Lease, as amended hereby, is hereby confirmed and ratified in
all respects and will remain in full force and effect according to its terms. In the event of any conflict or inconsistency between the
provisions of the Original Lease and this Amendment, the provisions of this Amendment will control in all instances.

 

6. This
Amendment may be executed in several counterparts, each of which will be deemed an original, and all of such counterparts together will
constitute one and the same instrument. Executed copies hereof may be delivered by telecopy or electronic delivery, and upon receipt,
will be deemed originals and binding upon the parties hereto.

 

7. Each
party represents and warrants that, as of the date of this Amendment it has the unconditional and unrestricted right, power and authority
to enter into this Amendment.

 

IN
WITNESS WHEREOF, the parties have caused this Amendment to be executed as of the date first written above.

 

[SIGNATURE
PAGE TO FOLLOW]

 

    	1

    	 

    

 

	 	TENANT:
	 	 	 
	 	Marengo
    Cannabis LLC,
	 	a
    Michigan limited liability company
	 	 	 
	 	By:	 
	 	Name:	 
	 	Title:
    	 
	 	 	 
	 	LANDLORD:
    
	 	 	 
	 	PW
    MI CanRE Marengo LLC, 
	 	a
    Michigan limited liability company
	 	 	 
	 	By:	 
	 	Name:	David
    H. Lesser
	 	Title:
    	Authorized
    Signatory

 

    	2

    	 

    

 

JOINDER
OF GUARANTOR

 

The
Guarantor of the Original Lease join herein for the purposes of evidencing their consent to this Amendment, and agreement to be bound
all obligations of the Tenant Parties under the Original Lease as amended by this Amendment. The obligations of the Tenant Parties herein
shall be joint and several.

 

Millennium
Cannabis LLC, a Delaware limited liability company

 

	By:	 	 
	Name:	David
    H. Lesser	 
	Title:	Authorized
    Signatory	 

 

    	3

    	 

    

 

Exhibit
1 – First Amendment

 

	Power REIT Funded Construction Costs	 	 	 	 
	 	 	 	 	 
	Phase 2 Budget:	 	 	 	 
	Propagation Space Buildout (40 x 60)	 	 	87,290	 
	Office Improvements (floors and walls)	 	 	70,000	 
	Blackout and Energy Curtains plus install	 	 	1,530,059	 
	Nursery approximately (3/4 acre with Lights)	 	 	609,774	 
	Head House (walls)	 	 	24,550	 
	Priva Control System	 	 	280,104	 
	Video Surveillance System (in addition to prior approval of $130k)	 	 	65,000	 
	Dry and Cure (includes walls and dehumidification equipment only)	 	 	922,812	 
	Greenhouse Improvements	 	 	360,984	 
	 	 	 	 	 
	 Contingency/Development Fee (5%)	 	 	197,529	 
	 	 	 	 	 
	Total Power REIT Funded Construction Costs	 	 	4,148,102	 
	 	 	 	 	 
	Remaining TBD Budget Items include:	 	 	 	 
	Electrical throughout	 	 	 	 
	Plumbing throughout	 	 	 	 
	HVAC throughout	 	 	 	 
	Dry and Cure Dehumidification Installation	 	 	 	 
	Security Lighting	 	 	 	 
	Processing Space Buildout	 	 	 	 

 

    	4

    	 

    

 

Exhibit
2 – First Amendment

 

	Month	 	Date	 	Monthly
    Rent	 	Monthly
    Rent if Reset
	1	 	1-Nov-21	 	-	 	 NA
    
	2	 	1-Dec-21	 	-	 	 NA
    
	3	 	1-Jan-22	 	-	 	 NA
    
	4	 	1-Feb-22	 	-	 	 NA
    
	5	 	1-Mar-22	 	-	 	 NA
    
	6	 	1-Apr-22	 	-	 	 NA
    
	7	 	1-May-22	 	-	 	 NA
    
	8	 	1-Jun-22	 	-	 	 NA
    
	9	 	1-Jul-22	 	-	 	 NA
    
	10	 	1-Aug-22	 	57,612.53	 	 NA
    
	11	 	1-Sep-22	 	57,612.53	 	 NA
    
	12	 	1-Oct-22	 	57,612.53	 	 NA
    
	13	 	1-Nov-22	 	57,612.53	 	 NA
    
	14	 	1-Dec-22	 	57,612.53	 	 NA
    
	15	 	1-Jan-23	 	57,612.53	 	 NA
    
	16	 	1-Feb-23	 	115,225.06	 	 NA
    
	17	 	1-Mar-23	 	115,225.06	 	 NA
    
	18	 	1-Apr-23	 	115,225.06	 	 NA
    
	19	 	1-May-23	 	115,225.06	 	 NA
    
	20	 	1-Jun-23	 	115,225.06	 	 NA
    
	21	 	1-Jul-23	 	115,225.06	 	 NA
    
	22	 	1-Aug-23	 	115,225.06	 	 NA
    
	23	 	1-Sep-23	 	115,225.06	 	 NA
    
	24	 	1-Oct-23	 	115,225.06	 	 NA
    
	25	 	1-Nov-23	 	115,225.06	 	 NA
    
	26	 	1-Dec-23	 	115,225.06	 	 NA
    
	27	 	1-Jan-24	 	115,225.06	 	 NA
    
	28	 	1-Feb-24	 	115,225.06	 	 NA
    
	29	 	1-Mar-24	 	115,225.06	 	 NA
    
	30	 	1-Apr-24	 	115,225.06	 	 NA
    
	31	 	1-May-24	 	115,225.06	 	 NA
    
	32	 	1-Jun-24	 	115,225.06	 	 NA
    
	33	 	1-Jul-24	 	115,225.06	 	 NA
    
	34	 	1-Aug-24	 	115,225.06	 	 NA
    
	35	 	1-Sep-24	 	115,225.06	 	 NA
    
	36	 	1-Oct-24	 	115,225.06	 	 NA
    

 

    	5

    	 

    

 

	37	 	1-Nov-24	 	115,225.06	 	 NA
    
	38	 	1-Dec-24	 	115,225.06	 	 NA
    
	39	 	1-Jan-25	 	115,225.06	 	 NA
    
	40	 	1-Feb-25	 	172,837.58	 	 NA
    
	41	 	1-Mar-25	 	172,837.58	 	 NA
    
	42	 	1-Apr-25	 	172,837.58	 	 NA
    
	43	 	1-May-25	 	172,837.58	 	 NA
    
	44	 	1-Jun-25	 	172,837.58	 	 NA
    
	45	 	1-Jul-25	 	172,837.58	 	 NA
    
	46	 	1-Aug-25	 	50,698.52	 	 NA
    
	47	 	1-Sep-25	 	50,698.52	 	 NA
    
	48	 	1-Oct-25	 	50,698.52	 	 NA
    
	49	 	1-Nov-25	 	50,698.52	 	 NA
    
	50	 	1-Dec-25	 	50,698.52	 	 NA
    
	51	 	1-Jan-26	 	50,698.52	 	 NA
    
	52	 	1-Feb-26	 	50,698.52	 	 NA
    
	53	 	1-Mar-26	 	50,698.52	 	 NA
    
	54	 	1-Apr-26	 	50,698.52	 	 NA
    
	55	 	1-May-26	 	50,698.52	 	 NA
    
	56	 	1-Jun-26	 	50,698.52	 	 NA
    
	57	 	1-Jul-26	 	50,698.52	 	 NA
    
	58	 	1-Aug-26	 	52,219.48	 	 NA
    
	59	 	1-Sep-26	 	52,219.48	 	 NA
    
	60	 	1-Oct-26	 	52,219.48	 	 NA
    
	61	 	1-Nov-26	 	52,219.48	 	 NA
    
	62	 	1-Dec-26	 	52,219.48	 	 NA
    
	63	 	1-Jan-27	 	52,219.48	 	 NA
    
	64	 	1-Feb-27	 	52,219.48	 	 NA
    
	65	 	1-Mar-27	 	52,219.48	 	 NA
    
	66	 	1-Apr-27	 	52,219.48	 	 NA
    
	67	 	1-May-27	 	52,219.48	 	 NA
    
	68	 	1-Jun-27	 	52,219.48	 	 NA
    
	69	 	1-Jul-27	 	52,219.48	 	 NA
    
	70	 	1-Aug-27	 	53,786.06	 	 NA
    
	71	 	1-Sep-27	 	53,786.06	 	 NA
    
	72	 	1-Oct-27	 	53,786.06	 	 NA
    
	73	 	1-Nov-27	 	53,786.06	 	31,110.77
	74	 	1-Dec-27	 	53,786.06	 	31,110.77
	75	 	1-Jan-28	 	53,786.06	 	31,110.77

 

    	6

    	 

    

 

	76	 	1-Feb-28	 	53,786.06	 	31,110.77
	77	 	1-Mar-28	 	53,786.06	 	31,110.77
	78	 	1-Apr-28	 	53,786.06	 	31,110.77
	79	 	1-May-28	 	53,786.06	 	31,110.77
	80	 	1-Jun-28	 	53,786.06	 	31,110.77
	81	 	1-Jul-28	 	53,786.06	 	31,110.77
	82	 	1-Aug-28	 	55,399.64	 	31,110.77
	83	 	1-Sep-28	 	55,399.64	 	31,110.77
	84	 	1-Oct-28	 	55,399.64	 	31,110.77
	85	 	1-Nov-28	 	55,399.64	 	32,044.09
	86	 	1-Dec-28	 	55,399.64	 	32,044.09
	87	 	1-Jan-29	 	55,399.64	 	32,044.09
	88	 	1-Feb-29	 	55,399.64	 	32,044.09
	89	 	1-Mar-29	 	55,399.64	 	32,044.09
	90	 	1-Apr-29	 	55,399.64	 	32,044.09
	91	 	1-May-29	 	55,399.64	 	32,044.09
	92	 	1-Jun-29	 	55,399.64	 	32,044.09
	93	 	1-Jul-29	 	55,399.64	 	32,044.09
	94	 	1-Aug-29	 	57,061.63	 	32,044.09
	95	 	1-Sep-29	 	57,061.63	 	32,044.09
	96	 	1-Oct-29	 	57,061.63	 	32,044.09
	97	 	1-Nov-29	 	57,061.63	 	33,005.41
	98	 	1-Dec-29	 	57,061.63	 	33,005.41
	99	 	1-Jan-30	 	57,061.63	 	33,005.41
	100	 	1-Feb-30	 	57,061.63	 	33,005.41
	101	 	1-Mar-30	 	57,061.63	 	33,005.41
	102	 	1-Apr-30	 	57,061.63	 	33,005.41
	103	 	1-May-30	 	57,061.63	 	33,005.41
	104	 	1-Jun-30	 	57,061.63	 	33,005.41
	105	 	1-Jul-30	 	57,061.63	 	33,005.41
	106	 	1-Aug-30	 	58,773.48	 	33,005.41
	107	 	1-Sep-30	 	58,773.48	 	33,005.41
	108	 	1-Oct-30	 	58,773.48	 	33,005.41
	109	 	1-Nov-30	 	58,773.48	 	33,995.57
	110	 	1-Dec-30	 	58,773.48	 	33,995.57
	111	 	1-Jan-31	 	58,773.48	 	33,995.57
	112	 	1-Feb-31	 	58,773.48	 	33,995.57
	113	 	1-Mar-31	 	58,773.48	 	33,995.57
	114	 	1-Apr-31	 	58,773.48	 	33,995.57

 

    	7

    	 

    

 

	115	 	1-May-31	 	58,773.48	 	33,995.57
	116	 	1-Jun-31	 	58,773.48	 	33,995.57
	117	 	1-Jul-31	 	58,773.48	 	33,995.57
	118	 	1-Aug-31	 	60,536.69	 	33,995.57
	119	 	1-Sep-31	 	60,536.69	 	33,995.57
	120	 	1-Oct-31	 	60,536.69	 	33,995.57
	121	 	1-Nov-31	 	60,536.69	 	35,015.44
	122	 	1-Dec-31	 	60,536.69	 	35,015.44
	123	 	1-Jan-32	 	60,536.69	 	35,015.44
	124	 	1-Feb-32	 	60,536.69	 	35,015.44
	125	 	1-Mar-32	 	60,536.69	 	35,015.44
	126	 	1-Apr-32	 	60,536.69	 	35,015.44
	127	 	1-May-32	 	60,536.69	 	35,015.44
	128	 	1-Jun-32	 	60,536.69	 	35,015.44
	129	 	1-Jul-32	 	60,536.69	 	35,015.44
	130	 	1-Aug-32	 	62,352.79	 	35,015.44
	131	 	1-Sep-32	 	62,352.79	 	35,015.44
	132	 	1-Oct-32	 	62,352.79	 	35,015.44
	133	 	1-Nov-32	 	62,352.79	 	36,065.90
	134	 	1-Dec-32	 	62,352.79	 	36,065.90
	135	 	1-Jan-33	 	62,352.79	 	36,065.90
	136	 	1-Feb-33	 	62,352.79	 	36,065.90
	137	 	1-Mar-33	 	62,352.79	 	36,065.90
	138	 	1-Apr-33	 	62,352.79	 	36,065.90
	139	 	1-May-33	 	62,352.79	 	36,065.90
	140	 	1-Jun-33	 	62,352.79	 	36,065.90
	141	 	1-Jul-33	 	62,352.79	 	36,065.90
	142	 	1-Aug-33	 	64,223.37	 	36,065.90
	143	 	1-Sep-33	 	64,223.37	 	36,065.90
	144	 	1-Oct-33	 	64,223.37	 	36,065.90
	145	 	1-Nov-33	 	64,223.37	 	37,147.88
	146	 	1-Dec-33	 	64,223.37	 	37,147.88
	147	 	1-Jan-34	 	64,223.37	 	37,147.88
	148	 	1-Feb-34	 	64,223.37	 	37,147.88
	149	 	1-Mar-34	 	64,223.37	 	37,147.88
	150	 	1-Apr-34	 	64,223.37	 	37,147.88
	151	 	1-May-34	 	64,223.37	 	37,147.88
	152	 	1-Jun-34	 	64,223.37	 	37,147.88
	153	 	1-Jul-34	 	64,223.37	 	37,147.88

 

    	8

    	 

    

 

	154	 	1-Aug-34	 	66,150.07	 	37,147.88
	155	 	1-Sep-34	 	66,150.07	 	37,147.88
	156	 	1-Oct-34	 	66,150.07	 	37,147.88
	157	 	1-Nov-34	 	66,150.07	 	38,262.32
	158	 	1-Dec-34	 	66,150.07	 	38,262.32
	159	 	1-Jan-35	 	66,150.07	 	38,262.32
	160	 	1-Feb-35	 	66,150.07	 	38,262.32
	161	 	1-Mar-35	 	66,150.07	 	38,262.32
	162	 	1-Apr-35	 	66,150.07	 	38,262.32
	163	 	1-May-35	 	66,150.07	 	38,262.32
	164	 	1-Jun-35	 	66,150.07	 	38,262.32
	165	 	1-Jul-35	 	66,150.07	 	38,262.32
	166	 	1-Aug-35	 	68,134.57	 	38,262.32
	167	 	1-Sep-35	 	68,134.57	 	38,262.32
	168	 	1-Oct-35	 	68,134.57	 	38,262.32
	169	 	1-Nov-35	 	68,134.57	 	39,410.19
	170	 	1-Dec-35	 	68,134.57	 	39,410.19
	171	 	1-Jan-36	 	68,134.57	 	39,410.19
	172	 	1-Feb-36	 	68,134.57	 	39,410.19
	173	 	1-Mar-36	 	68,134.57	 	39,410.19
	174	 	1-Apr-36	 	68,134.57	 	39,410.19
	175	 	1-May-36	 	68,134.57	 	39,410.19
	176	 	1-Jun-36	 	68,134.57	 	39,410.19
	177	 	1-Jul-36	 	68,134.57	 	39,410.19
	178	 	1-Aug-36	 	70,178.61	 	39,410.19
	179	 	1-Sep-36	 	70,178.61	 	39,410.19
	180	 	1-Oct-36	 	70,178.61	 	39,410.19
	181	 	1-Nov-36	 	70,178.61	 	40,592.49
	182	 	1-Dec-36	 	70,178.61	 	40,592.49
	183	 	1-Jan-37	 	70,178.61	 	40,592.49
	184	 	1-Feb-37	 	70,178.61	 	40,592.49
	185	 	1-Mar-37	 	70,178.61	 	40,592.49
	186	 	1-Apr-37	 	70,178.61	 	40,592.49
	187	 	1-May-37	 	70,178.61	 	40,592.49
	188	 	1-Jun-37	 	70,178.61	 	40,592.49
	189	 	1-Jul-37	 	70,178.61	 	40,592.49
	190	 	1-Aug-37	 	72,283.97	 	40,592.49
	191	 	1-Sep-37	 	72,283.97	 	40,592.49
	192	 	1-Oct-37	 	72,283.97	 	40,592.49

 

    	9

    	 

    

 

	193	 	1-Nov-37	 	72,283.97	 	41,810.27
	194	 	1-Dec-37	 	72,283.97	 	41,810.27
	195	 	1-Jan-38	 	72,283.97	 	41,810.27
	196	 	1-Feb-38	 	72,283.97	 	41,810.27
	197	 	1-Mar-38	 	72,283.97	 	41,810.27
	198	 	1-Apr-38	 	72,283.97	 	41,810.27
	199	 	1-May-38	 	72,283.97	 	41,810.27
	200	 	1-Jun-38	 	72,283.97	 	41,810.27
	201	 	1-Jul-38	 	72,283.97	 	41,810.27
	202	 	1-Aug-38	 	74,452.49	 	41,810.27
	203	 	1-Sep-38	 	74,452.49	 	41,810.27
	204	 	1-Oct-38	 	74,452.49	 	41,810.27
	205	 	1-Nov-38	 	74,452.49	 	43,064.57
	206	 	1-Dec-38	 	74,452.49	 	43,064.57
	207	 	1-Jan-39	 	74,452.49	 	43,064.57
	208	 	1-Feb-39	 	74,452.49	 	43,064.57
	209	 	1-Mar-39	 	74,452.49	 	43,064.57
	210	 	1-Apr-39	 	74,452.49	 	43,064.57
	211	 	1-May-39	 	74,452.49	 	43,064.57
	212	 	1-Jun-39	 	74,452.49	 	43,064.57
	213	 	1-Jul-39	 	74,452.49	 	43,064.57
	214	 	1-Aug-39	 	76,686.06	 	43,064.57
	215	 	1-Sep-39	 	76,686.06	 	43,064.57
	216	 	1-Oct-39	 	76,686.06	 	43,064.57
	217	 	1-Nov-39	 	76,686.06	 	44,356.51
	218	 	1-Dec-39	 	76,686.06	 	44,356.51
	219	 	1-Jan-40	 	76,686.06	 	44,356.51
	220	 	1-Feb-40	 	76,686.06	 	44,356.51
	221	 	1-Mar-40	 	76,686.06	 	44,356.51
	222	 	1-Apr-40	 	76,686.06	 	44,356.51
	223	 	1-May-40	 	76,686.06	 	44,356.51
	224	 	1-Jun-40	 	76,686.06	 	44,356.51
	225	 	1-Jul-40	 	76,686.06	 	44,356.51
	226	 	1-Aug-40	 	78,986.65	 	44,356.51
	227	 	1-Sep-40	 	78,986.65	 	44,356.51
	228	 	1-Oct-40	 	78,986.65	 	44,356.51
	229	 	1-Nov-40	 	78,986.65	 	45,687.21
	230	 	1-Dec-40	 	78,986.65	 	45,687.21
	231	 	1-Jan-41	 	78,986.65	 	45,687.21
	232	 	1-Feb-41	 	78,986.65	 	45,687.21
	233	 	1-Mar-41	 	78,986.65	 	45,687.21
	234	 	1-Apr-41	 	78,986.65	 	45,687.21
	235	 	1-May-41	 	78,986.65	 	45,687.21
	236	 	1-Jun-41	 	78,986.65	 	45,687.21
	237	 	1-Jul-41	 	78,986.65	 	45,687.21
	238	 	1-Aug-41	 	81,356.24	 	45,687.21
	239	 	1-Sep-41	 	81,356.24	 	45,687.21
	240	 	1-Oct-41	 	81,356.24	 	45,687.21

 

    	10

    	 

    

 

Option
Period 1:

	241	 	1-Nov-41	 	81,356.24	 	47,057.82
	242	 	1-Dec-41	 	81,356.24	 	47,057.82
	243	 	1-Jan-42	 	81,356.24	 	47,057.82
	244	 	1-Feb-42	 	81,356.24	 	47,057.82
	245	 	1-Mar-42	 	81,356.24	 	47,057.82
	246	 	1-Apr-42	 	81,356.24	 	47,057.82
	247	 	1-May-42	 	81,356.24	 	47,057.82
	248	 	1-Jun-42	 	81,356.24	 	47,057.82
	249	 	1-Jul-42	 	81,356.24	 	47,057.82
	250	 	1-Aug-42	 	83,796.93	 	47,057.82
	251	 	1-Sep-42	 	83,796.93	 	47,057.82
	252	 	1-Oct-42	 	83,796.93	 	47,057.82
	253	 	1-Nov-42	 	83,796.93	 	48,469.56
	254	 	1-Dec-42	 	83,796.93	 	48,469.56
	255	 	1-Jan-43	 	83,796.93	 	48,469.56
	256	 	1-Feb-43	 	83,796.93	 	48,469.56
	257	 	1-Mar-43	 	83,796.93	 	48,469.56
	258	 	1-Apr-43	 	83,796.93	 	48,469.56
	259	 	1-May-43	 	83,796.93	 	48,469.56
	260	 	1-Jun-43	 	83,796.93	 	48,469.56
	261	 	1-Jul-43	 	83,796.93	 	48,469.56
	262	 	1-Aug-43	 	86,310.84	 	48,469.56
	263	 	1-Sep-43	 	86,310.84	 	48,469.56
	264	 	1-Oct-43	 	86,310.84	 	48,469.56
	265	 	1-Nov-43	 	86,310.84	 	49,923.64
	266	 	1-Dec-43	 	86,310.84	 	49,923.64
	267	 	1-Jan-44	 	86,310.84	 	49,923.64

 

    	11

    	 

    

 

	268	 	1-Feb-44	 	86,310.84	 	49,923.64
	269	 	1-Mar-44	 	86,310.84	 	49,923.64
	270	 	1-Apr-44	 	86,310.84	 	49,923.64
	271	 	1-May-44	 	86,310.84	 	49,923.64
	272	 	1-Jun-44	 	86,310.84	 	49,923.64
	273	 	1-Jul-44	 	86,310.84	 	49,923.64
	274	 	1-Aug-44	 	88,900.17	 	49,923.64
	275	 	1-Sep-44	 	88,900.17	 	49,923.64
	276	 	1-Oct-44	 	88,900.17	 	49,923.64
	277	 	1-Nov-44	 	88,900.17	 	51,421.35
	278	 	1-Dec-44	 	88,900.17	 	51,421.35
	279	 	1-Jan-45	 	88,900.17	 	51,421.35
	280	 	1-Feb-45	 	88,900.17	 	51,421.35
	281	 	1-Mar-45	 	88,900.17	 	51,421.35
	282	 	1-Apr-45	 	88,900.17	 	51,421.35
	283	 	1-May-45	 	88,900.17	 	51,421.35
	284	 	1-Jun-45	 	88,900.17	 	51,421.35
	285	 	1-Jul-45	 	88,900.17	 	51,421.35
	286	 	1-Aug-45	 	91,567.17	 	51,421.35
	287	 	1-Sep-45	 	91,567.17	 	51,421.35
	288	 	1-Oct-45	 	91,567.17	 	51,421.35
	289	 	1-Nov-45	 	91,567.17	 	52,963.99
	290	 	1-Dec-45	 	91,567.17	 	52,963.99
	291	 	1-Jan-46	 	91,567.17	 	52,963.99
	292	 	1-Feb-46	 	91,567.17	 	52,963.99
	293	 	1-Mar-46	 	91,567.17	 	52,963.99
	294	 	1-Apr-46	 	91,567.17	 	52,963.99
	295	 	1-May-46	 	91,567.17	 	52,963.99
	296	 	1-Jun-46	 	91,567.17	 	52,963.99
	297	 	1-Jul-46	 	91,567.17	 	52,963.99
	298	 	1-Aug-46	 	94,314.19	 	52,963.99
	299	 	1-Sep-46	 	94,314.19	 	52,963.99
	300	 	1-Oct-46	 	94,314.19	 	52,963.99

 

    	12

    	 

    

 

Option
Period 2:

	301	 	1-Nov-46	 	94,314.19	 	54,552.91
	302	 	1-Dec-46	 	94,314.19	 	54,552.91
	303	 	1-Jan-47	 	94,314.19	 	54,552.91
	304	 	1-Feb-47	 	94,314.19	 	54,552.91
	305	 	1-Mar-47	 	94,314.19	 	54,552.91
	306	 	1-Apr-47	 	94,314.19	 	54,552.91
	307	 	1-May-47	 	94,314.19	 	54,552.91
	308	 	1-Jun-47	 	94,314.19	 	54,552.91
	309	 	1-Jul-47	 	94,314.19	 	54,552.91
	310	 	1-Aug-47	 	97,143.61	 	54,552.91
	311	 	1-Sep-47	 	97,143.61	 	54,552.91
	312	 	1-Oct-47	 	97,143.61	 	54,552.91
	313	 	1-Nov-47	 	97,143.61	 	56,189.50
	314	 	1-Dec-47	 	97,143.61	 	56,189.50
	315	 	1-Jan-48	 	97,143.61	 	56,189.50
	316	 	1-Feb-48	 	97,143.61	 	56,189.50
	317	 	1-Mar-48	 	97,143.61	 	56,189.50
	318	 	1-Apr-48	 	97,143.61	 	56,189.50
	319	 	1-May-48	 	97,143.61	 	56,189.50
	320	 	1-Jun-48	 	97,143.61	 	56,189.50
	321	 	1-Jul-48	 	97,143.61	 	56,189.50
	322	 	1-Aug-48	 	100,057.92	 	56,189.50
	323	 	1-Sep-48	 	100,057.92	 	56,189.50
	324	 	1-Oct-48	 	100,057.92	 	56,189.50
	325	 	1-Nov-48	 	100,057.92	 	57,875.19
	326	 	1-Dec-48	 	100,057.92	 	57,875.19
	327	 	1-Jan-49	 	100,057.92	 	57,875.19
	328	 	1-Feb-49	 	100,057.92	 	57,875.19
	329	 	1-Mar-49	 	100,057.92	 	57,875.19
	330	 	1-Apr-49	 	100,057.92	 	57,875.19
	331	 	1-May-49	 	100,057.92	 	57,875.19
	332	 	1-Jun-49	 	100,057.92	 	57,875.19
	333	 	1-Jul-49	 	100,057.92	 	57,875.19
	334	 	1-Aug-49	 	103,059.66	 	57,875.19
	335	 	1-Sep-49	 	103,059.66	 	57,875.19
	336	 	1-Oct-49	 	103,059.66	 	57,875.19
	337	 	1-Nov-49	 	103,059.66	 	59,611.44
	338	 	1-Dec-49	 	103,059.66	 	59,611.44
	339	 	1-Jan-50	 	103,059.66	 	59,611.44
	340	 	1-Feb-50	 	103,059.66	 	59,611.44
	341	 	1-Mar-50	 	103,059.66	 	59,611.44
	342	 	1-Apr-50	 	103,059.66	 	59,611.44
	343	 	1-May-50	 	103,059.66	 	59,611.44
	344	 	1-Jun-50	 	103,059.66	 	59,611.44
	345	 	1-Jul-50	 	103,059.66	 	59,611.44
	346	 	1-Aug-50	 	106,151.45	 	59,611.44
	347	 	1-Sep-50	 	106,151.45	 	59,611.44
	348	 	1-Oct-50	 	106,151.45	 	59,611.44
	349	 	1-Nov-50	 	106,151.45	 	61,399.79
	350	 	1-Dec-50	 	106,151.45	 	61,399.79
	351	 	1-Jan-51	 	106,151.45	 	61,399.79
	352	 	1-Feb-51	 	106,151.45	 	61,399.79
	353	 	1-Mar-51	 	106,151.45	 	61,399.79
	354	 	1-Apr-51	 	106,151.45	 	61,399.79
	355	 	1-May-51	 	106,151.45	 	61,399.79
	356	 	1-Jun-51	 	106,151.45	 	61,399.79
	357	 	1-Jul-51	 	106,151.45	 	61,399.79
	358	 	1-Aug-51	 	109,335.99	 	61,399.79
	359	 	1-Sep-51	 	109,335.99	 	61,399.79
	360	 	1-Oct-51	 	109,335.99	 	61,399.79

 

    	13d093021dex101

Exhibit 10.1 
Execution Version 
PURCHASE AND SALE AGREEMENT 
dated as of 
September 20, 2021 
by and between 
SHELL ENTERPRISES LLC 
(as Seller) 
and 
CONOCOPHILLIPS COMPANY 
(as Buyer) 

Exhibit 10.1
i 
TABLE 
OF CONTENTS 
ARTICLE 1 DEFINITIONS AND INTERPRETATION ........................................................ 1
Section 1.1 
Defined Terms ....................................................................................................... 1
Section 1.2 
References and Rules of Construction 
................................................................... 1
ARTICLE 2 PURCHASE AND SALE ...................................................................................... 
2
Section 2.1 
Purchase and Sale .................................................................................................. 2
Section 2.2 
Effective Time; Proration of Revenues 
.................................................................. 2
Section 2.3 
Procedures 
.............................................................................................................. 3
Section 2.4 
Purchase Price 
........................................................................................................ 4
Section 2.5 
Adjustments to the Base Purchase Price 
................................................................ 4
Section 2.6 
Indebtedness Free................................................................................................... 5
Section 2.7 
Deposit 
................................................................................................................... 5
Section 2.8 
Withholding ........................................................................................................... 5
ARTICLE 3 REPRESENTATIONS 
AND WARRANTIES 
OF SELLER ............................ 6
Section 3.1 
Generally 
................................................................................................................ 6
Section 3.2 
Existence and Qualification 
................................................................................... 6
Section 3.3 
Organizational Power............................................................................................. 6
Section 3.4 
Authorization and Enforceability 
........................................................................... 7
Section 3.5 
No Conflicts 
........................................................................................................... 7
Section 3.6 
Liability for Brokers’ Fees 
..................................................................................... 8
Section 3.7 
Litigation 
................................................................................................................ 8
Section 3.8 
Taxes ...................................................................................................................... 
8
Section 3.9 
Capital Commitments and Expenditures ............................................................. 11
Section 3.10 
Compliance with Laws ........................................................................................ 11
Section 3.11 
Material Contracts 
................................................................................................ 11
Section 3.12 
Payments for Production and Imbalances 
............................................................ 13
Section 3.13 
Consents and Preferential Rights 
......................................................................... 13
Section 3.14 
Non-Consent Operations; Payout Status 
.............................................................. 14
Section 3.15 
Environmental Matters......................................................................................... 14
Section 3.16 
Suspense Funds 
.................................................................................................... 15
Section 3.17 
Bankruptcy 
........................................................................................................... 15
Section 3.18 
Ownership Structure and Interests 
....................................................................... 15
Section 3.19 
Wells .................................................................................................................... 15
Section 3.20 
Special Warranty of Title ..................................................................................... 
16
Section 3.21 
Permits ................................................................................................................. 
16
Section 3.22 
Royalties .............................................................................................................. 17
Section 3.23 
Bonds, Letters of Credit and Guarantees 
............................................................. 17
Section 3.24 
Indebtedness 
......................................................................................................... 17
Section 3.25 
Condemnation 
...................................................................................................... 17
Section 3.26 
Powers of Attorney; Bank Accounts.................................................................... 17
Section 3.27 
Anti-Corruption; Trade Controls ......................................................................... 17
Section 3.28 
Leases 
................................................................................................................... 18
Section 3.29 
Employment Matters 
............................................................................................ 18

Exhibit 10.1
ii 
Section 3.30 
Operatorship 
......................................................................................................... 18
Section 3.31 
Intellectual Property 
............................................................................................. 18
Section 3.32 
Certain Disclaimers 
.............................................................................................. 18
ARTICLE 4 REPRESENTATIONS 
AND WARRANTIES 
OF BUYER 
............................ 21
Section 4.1 
Generally 
.............................................................................................................. 21
Section 4.2 
Existence and Qualification 
................................................................................. 21
Section 4.3 
Organizational Power........................................................................................... 21
Section 4.4 
Authorization and Enforceability 
......................................................................... 21
Section 4.5 
No Conflicts 
......................................................................................................... 22
Section 4.6 
Liability for Brokers’ Fees 
................................................................................... 22
Section 4.7 
Litigation 
.............................................................................................................. 22
Section 4.8 
Financing.............................................................................................................. 22
Section 4.9 
Investment Intent ................................................................................................. 22
Section 4.10 
Independent Evaluation ....................................................................................... 22
Section 4.11 
Consents, Approvals or Waivers.......................................................................... 23
Section 4.12 
Bankruptcy 
........................................................................................................... 23
Section 4.13 
Anti-Corruption; Trade Controls. ........................................................................ 23
ARTICLE 5 COVENANTS OF THE PARTIES .................................................................... 23
Section 5.1 
Access. ................................................................................................................. 
23
Section 5.2 
Government Reviews 
........................................................................................... 25
Section 5.3 
Public Announcements; Confidentiality 
.............................................................. 26
Section 5.4 
Operation of Business 
.......................................................................................... 27
Section 5.5 
Amendment to Schedules .................................................................................... 30
Section 5.6 
Further Assurances............................................................................................... 31
Section 5.7 
Related Party Contracts........................................................................................ 31
Section 5.8 
Conduct of Buyer 
................................................................................................. 31
Section 5.9 
Employee Matters 
................................................................................................ 31
Section 5.10 
Bonds, Letters of Credit and Guarantees 
............................................................. 31
Section 5.11 
Transition Services Agreement 
............................................................................ 31
Section 5.12 
Use of Name ........................................................................................................ 31
Section 5.13 
Records. ............................................................................................................... 32
Section 5.14 
Insurance 
.............................................................................................................. 32
Section 5.15 
Anti-Bribery and Corruption................................................................................ 33
Section 5.16 
Required Consents ............................................................................................... 
35
Section 5.17 
Defense of Retained Litigation 
............................................................................ 36
Section 5.18 
Seller Parent Guaranty 
......................................................................................... 36
Section 5.19 
Reorganization 
..................................................................................................... 36
Section 5.20 
Name Change and Reorganization....................................................................... 37
Section 5.21 
Notice to Third Persons ....................................................................................... 37
Section 5.22 
Seismic Data ........................................................................................................ 
37
Section 5.23 
Supplemental Information ................................................................................... 38
Section 5.24 
Operational Technology....................................................................................... 38
ARTICLE 6 CONDITIONS TO CLOSING ........................................................................... 38

Exhibit 10.1
iii 
Section 6.1 
Seller’s Conditions to Closing ............................................................................. 
38
Section 6.2 
Buyer’s Conditions to Closing 
............................................................................. 39
ARTICLE 7 CLOSING 
............................................................................................................. 40
Section 7.1 
Time and Place of Closing 
................................................................................... 40
Section 7.2 
Obligations of Seller at Closing 
........................................................................... 40
Section 7.3 
Obligations of Buyer at Closing .......................................................................... 41
Section 7.4 
Closing Payment and Post-Closing Purchase Price Adjustments 
........................ 42
ARTICLE 8 TERMINATION 
.................................................................................................. 43
Section 8.1 
Termination 
.......................................................................................................... 43
Section 8.2 
Effect of Termination 
........................................................................................... 43
ARTICLE 9 INDEMNIFICATION ......................................................................................... 45
Section 9.1 
Indemnification 
.................................................................................................... 45
Section 9.2 
Indemnity Actions 
................................................................................................ 48
Section 9.3 
Limitation on Actions .......................................................................................... 
50
ARTICLE 10 TAX 
MATTERS ................................................................................................ 
52
Section 10.1 
Tax Allocations; Tax 
Returns 
.............................................................................. 52
Section 10.2 
Tax Refunds ......................................................................................................... 
54
Section 10.3 
Tax Cooperation................................................................................................... 54
Section 10.4 
Characterization of Certain Payments ................................................................. 54
Section 10.5 
Transfer Taxes ..................................................................................................... 55
Section 10.6 
Termination of Tax 
Agreements 
.......................................................................... 55
Section 10.7 
Purchase Price Allocation 
.................................................................................... 55
Section 10.8 
Amended Returns................................................................................................. 55
ARTICLE 11 
MISCELLANEOUS 
.......................................................................................... 56
Section 11.1 
Counterparts 
......................................................................................................... 56
Section 11.2 
Notice 
................................................................................................................... 56
Section 11.3 
Newco Transaction Expenses .............................................................................. 
57
Section 11.4 
Governing Law .................................................................................................... 
57
Section 11.5 
Waivers ................................................................................................................ 58
Section 11.6 
Assignment .......................................................................................................... 58
Section 11.7 
Entire Agreement 
................................................................................................. 58
Section 11.8 
Amendment 
.......................................................................................................... 58
Section 11.9 
No Third Party Beneficiaries ............................................................................... 
58
Section 11.10 
Construction 
......................................................................................................... 58
Section 11.11 
Limitation on Damages 
........................................................................................ 59
Section 11.12 
Conspicuous 
......................................................................................................... 59
Section 11.13 
Affiliate Liability ................................................................................................. 
59
Section 11.14 
Time of Essence 
................................................................................................... 60
Section 11.15 
Severability .......................................................................................................... 
60
Section 11.16 
Specific Performance 
........................................................................................... 60

Exhibit 10.1
iv 
APPENDICES: 
Appendix A 
- 
Definitions 
EXHIBITS: 
Exhibit A 
- 
Form of Assignment Agreement 
Exhibit B 
- 
Allocated Values 
Exhibit C 
- 
Transition Services Agreement 
Exhibit D 
- 
Seller Parent Guaranty 
SCHEDULES: 
Schedule 1.1(a) 
- 
Real Property Interests 
Schedule 1.1(b) 
- 
Wells 
Schedule 1.1(c) 
- 
Surface Contracts 
Schedule 3.1 
- 
Seller Knowledge Individuals 
Schedule 3.7(a) 
- 
Pending Litigation 
Schedule 3.7(b) 
- 
Pending Actions 
Schedule 3.8 
- 
Taxes 
Schedule 3.9 
- 
Capital Commitments 
Schedule 3.11(a) 
- 
Material Contracts 
Schedule 3.12 
- 
Imbalances 
Schedule 3.13 
- 
Required Consents 
Schedule 3.14 
- 
Non-Consent Operations; Payout Status 
Schedule 3.15 
- 
Environmental Matters 
Schedule 3.16 
- 
Suspense Funds 
Schedule 3.19 
- 
Wells 

Schedule 3.21 
- 
Permits 
Schedule 3.22 
- 
Royalties 
Schedule 3.23 
- 
Bonds, Letters of Credit, and Guaranties 
Schedule 3.24 
- 
Permitted Indebtedness 

Schedule 3.28 
- 
Leases 
Schedule 4.1 
- 
Buyer Knowledge Individuals 
Schedule 5.4 
- 
Operation of Business 
Schedule 5.7 
- 
Allocated Related Party Contracts 

Schedule 5.9(a) 
- 
Employee Matters 
Schedule 5.9(b) 
- 
Personal Data 
Schedule 5.17 
- 
Retained Litigation 
Schedule 5.23 
- 
Supplemental Information 
Schedule A-1 
- 
Previously-Divested Properties

 

 

 

 

 

 

 

 

 

 

 

 

Exhibit 10.1
- 1 - 
PURCHASE AND SALE AGREEMENT 
This 
Purchase 
and 
Sale 
Agreement 
(as 
may 
be 
amended, 
restated, 
supplemented 
or 
otherwise modified from 
time to time, 
this “Agreement”) is 
dated as of 
September 20, 2021 
(the 
“Execution Date”), by and between 
Shell Enterprises LLC, a Delaware 
limited liability company 
(“Seller”), on the 
one part, 
and ConocoPhillips 
Company,
a Delaware 
corporation (“Buyer”), 
on 
the other 
part. Seller 
and 
Buyer are 
sometimes referred 
to herein 
individually 
as a 
“Party” 
and, 
collectively, as the “Parties.” 
RECITALS: 
WHEREAS, 
SWEPI 
LP, 
a 
Delaware 
limited 
partnership 
(“SWEPI”), 
owns 
the 
Assets, 
which are located in the Permian Basin in western Texas; 

WHEREAS, Seller 
will complete 
the Reorganization 
whereby, 
after effecting 
a statutory 
merger, 
(a) Seller will 
own 100 percent 
of the membership 
interests in Non-Permian 
Newco, (b) 
Non-Permian Newco 
will own 
100 percent 
of the 
membership interests 
in Newco 
(the “Subject 
Interests”) and (c) the Assets will be owned by Newco; and 
WHEREAS, the Parties desire that, at the 
Closing, Seller shall cause Non-Permian Newco 
to 
sell 
and 
transfer 
to 
Buyer, 
and 
Buyer 
shall 
purchase 
from 
Non-Permian 
Newco, 
the 
Subject 
Interests, upon the terms, and subject to the conditions, set forth herein. 
NOW, 
THEREFORE, 
in 
consideration 
of 
the 
premises 
and 
of 
the 
mutual 
promises, 
representations, warranties, covenants, conditions and agreements contained herein, and for other 
valuable consideration, the receipt 
and sufficiency of which are 
hereby acknowledged, the Parties, 
intending to be legally bound by the terms hereof, agree as follows: 
ARTICLE 1 
DEFINITIONS AND INTERPRETATION 
Section 1.1
Defined 
Terms. 
In 
addition 
to 
the 
terms 
defined 
in 
the 
Preamble 
and 
the 
Recitals 
of 
this 
Agreement, 
for 
purposes 
hereof, 
the 
capitalized 
terms 
used 
herein 
and 
not 
otherwise defined shall have the 
meanings set forth in Appendix 
A. A defined term has 
its defined 
meaning 
throughout 
this 
Agreement 
regardless 
of 
whether 
it 
appears 
before 
or 
after 
the 
place 
where it is defined, and its other grammatical forms have corresponding meanings. 
Section 1.2
References and Rules of 
Construction. All references in 
this Agreement to 
Exhibits, Schedules, Appendices, 
Articles, Sections, 
subsections, clauses, and 
other subdivisions 
refer 
to 
the 
corresponding 
Exhibits, 
Schedules, 
Appendices, 
Articles, 
Sections, 
subsections, 
clauses, and other 
subdivisions of or 
to this Agreement 
unless expressly provided 
otherwise. Titles 
appearing at 
the beginning 
of any 
Exhibits, Schedules, 
Appendices, Articles, 
Sections, subsections, 
clauses, and other subdivisions of this Agreement are for convenience only, 
do not constitute any 
part of this Agreement, and shall be disregarded in construing the language hereof. All references 
to “$” shall 
be deemed 
references to 
Dollars. Each 
accounting term not 
defined herein will 
have 
the meaning given 
to it 
under GAAP as 
interpreted as 
of the Execution 
Date, and, as 
applicable, 
as consistently applied in the oil and gas 
industry. Unless the context requires otherwise, the word 
“or” is not 
exclusive. As used 
herein, the word 
(a) “day” means 
calendar day; (b) 
“extent” in the 

 

 

 

 

 

 

Exhibit 10.1
- 2 - 
phrase “to 
the extent” 
shall mean 
the degree 
to which 
a subject 
or other 
thing extends, 
and such 
phrase 
shall 
not 
mean 
simply 
“if”; 
(c) 
“this 
Agreement,” 
“herein,” 
“hereby,” 
“hereunder,” 
and 
“hereof,” and words of 
similar import, refer to this 
Agreement as a whole 
and not to any 
particular 
Article, 
Section, 
subsection, 
clause, 
or 
other 
subdivision 
unless 
expressly 
so 
limited; 
(d) 
“this 
Article,” “this Section,” “this subsection,” 
“this clause,” and words 
of similar import, refer 
only to 
the Article, Section, subsection, and clause hereof 
in which such words occur; and (e) 
“including” 
(in 
its 
various 
forms) 
means 
including 
without 
limitation. 
Pronouns 
in 
masculine, 
feminine, 
or 
neuter genders 
shall 
be 
construed to 
state 
and 
include 
any 
other 
gender, 
and 
words, 
terms, 
and 
titles (including terms defined herein) in the singular form shall be construed to include the plural 
and vice 
versa, unless 
the context 
otherwise requires. 
Appendices, Exhibits, 
and Schedules 
referred 
to herein are attached 
to this Agreement and 
by this reference incorporated 
herein for all purposes. 
Reference herein 
to any 
federal, state, 
local, or 
foreign Law 
shall be 
deemed to 
also refer 
to all 
rules and regulations 
promulgated thereunder, unless the context 
requires otherwise, and 
shall also 
be deemed 
to refer 
to such 
Laws as 
in effect 
as of 
the Execution 
Date or 
as hereafter 
amended. 
Examples are not 
to be 
construed to 
limit, expressly 
or by implication, 
the matter they 
illustrate. 
References to a specific time shall refer to prevailing Central Time, 
unless otherwise indicated. If 
any period of 
days referred to 
in this Agreement 
shall end on a 
day that is not 
a Business Day, then 
the expiration of such period 
shall be automatically extended until 
the end of the first 
succeeding 
Business 
Day. 
Except 
as 
otherwise 
specifically 
provided 
in 
this 
Agreement, 
any 
agreement, 
instrument, or writing defined or referred to herein means such agreement, instrument, or writing, 
as from time to time amended, supplemented, or modified prior to the Execution Date. 
ARTICLE 2 
PURCHASE AND SALE 
Section 2.1
Purchase 
and 
Sale. 
At 
the 
Closing, 
upon 
the 
terms 
and 
subject 
to 
the 
conditions 
of 
this 
Agreement, 
Seller 
agrees 
to 
cause 
Non-Permian 
Newco 
to 
sell, 
transfer, 
and 
convey the Subject Interests to Buyer, free and clear of any Encumbrances (other than restrictions 
on transfer 
that may be 
imposed by state 
or federal securities 
Laws), and Buyer 
agrees to purchase, 
accept, and pay for the Subject Interests. 
Section 2.2
Effective Time; Proration of Revenues. 

(a)
Newco 
shall 
be 
entitled 
to 
(i) all 
production 
of 
Hydrocarbons 
from 
or 
attributable to the Properties after 7:00 a.m., 
Central Time, on July 1, 2021 (the “Effective Time”) 
and all products and proceeds attributable thereto and (ii) all other income, proceeds, receipts and 
credits earned with respect to the Assets after the Effective Time, and Newco shall be responsible 
for, and entitled 
to any refunds with respect 
to, all Property Costs 
incurred and attributable to the 
period 
after 
the 
Effective 
Time 
and 
all 
Asset 
Taxes 
apportioned 
to 
Buyer 
pursuant 
to 
Section 
10.1(a). 
(b)
Seller 
shall 
be 
entitled 
to 
(i) all 
production 
of 
Hydrocarbons 
from 
or 
attributable 
to 
the 
Properties 
prior 
to 
and 
at 
the 
Effective 
Time 
and 
all 
products 
and 
proceeds 
attributable thereto and (ii) all other income, proceeds, 
receipts and credits earned with respect 
to 
the Assets 
prior to 
and at 
the Effective 
Time, 
and Seller 
shall be 
responsible for, 
and entitled 
to 
any refunds with respect to, all Property Costs 
incurred and attributable to the period prior 
to and 
at the Effective Time and all Asset Taxes 
apportioned to Seller pursuant to Section 10.1(a). 

 

 

 

 

 

 

 

 

 

 

 

Exhibit 10.1
- 3 - 
(c)
Should Buyer or any of its Affiliates receive after the Closing any amounts 
to which Seller 
is entitled under Section 
2.2(b), Buyer shall, and 
shall cause its 
relevant Affiliate 
to, fully disclose, 
account for and 
promptly remit the 
same to Seller. 
If, after the 
Closing, Seller 
or any of 
its Affiliates receives any 
amount to which Newco 
is entitled under Section 
2.2(a), Seller 
shall, and shall 
cause its 
relevant Affiliate 
to, fully 
disclose, account for, 
and promptly 
remit the 
same to Buyer. 
(d)
Should 
Buyer 
or 
any 
of 
its 
Affiliates 
pay 
after 
the 
Closing 
any 
Property 
Costs or 
Asset Taxes 
for which Seller 
is responsible under 
Section 2.2(b), Seller 
shall reimburse 
Buyer or its 
relevant Affiliate promptly 
after receipt from such 
party of an invoice, 
accompanied 
by 
copies 
of 
the 
relevant 
vendor 
or 
other 
invoice 
and 
proof 
of 
payment, 
with 
respect 
to 
such 
Property Costs 
or Asset 
Taxes. 
Should 
Seller or 
any of 
its 
Affiliates 
pay 
after the 
Closing 
any 
Property Costs or Asset Taxes 
for which Newco is responsible 
under Section 2.2(a), Buyer shall, 
or shall cause Newco 
to, reimburse Seller or its relevant 
Affiliate promptly after receipt from such 
party of 
an invoice, 
accompanied by 
copies of 
the relevant 
vendor or 
other invoice 
and proof 
of 
payment, with respect to such Property Costs or Asset Taxes. 
(e)
Notwithstanding the 
foregoing, Seller 
shall have 
no further 
entitlement to 
amounts earned 
from the 
sale of 
Hydrocarbons produced 
from or 
attributable 
to the 
Assets and 
other income 
earned 
with respect 
to the 
Assets 
and 
no further 
responsibility 
for Property 
Costs 
incurred with respect to the Assets following the final determination and payment 
of the Purchase 
Price in accordance with Section 7.4. 
(f)
Right-of-way 
fees, 
insurance premiums 
and 
other 
Property 
Costs 
that 
are 
paid periodically 
shall be 
prorated based 
on the 
number of 
days in 
the applicable 
period falling 
before, and the number of days in 
the applicable period falling on or 
after, the day of the Effective 
Time. 
Asset Taxes shall be apportioned as set forth in Section 10.1(a). 
(g)
Settlement between 
Buyer and 
Seller of 
receipts and 
disbursements under 
Section 2.2(c) and 
Section 2.2(d) shall 
be made no 
less frequently than 
monthly on or 
before the 
20
th
 
day of the month following the month of such receipt or disbursement. 
Section 2.3
Procedures. 

(a)
For purposes of allocating production and accounts receivable with respect 
thereto under Section 2.2, (i) liquid Hydrocarbons shall be deemed to be “from 
or attributable to” 
the Properties when they 
pass through the 
inlet flange of the 
pipeline connecting into 
the storage 
facilities into which they are run or, if there are no such storage facilities, when they pass through 
the lease automatic 
custody transfer meters 
or similar meters 
at the point 
of entry into 
the pipelines 
through which they are transported from the field and (ii) gaseous Hydrocarbons shall 
be deemed 
to be “from 
or attributable to” 
the Properties when 
they pass through 
the custody transfer 
meters 
on the 
pipelines through 
which they 
are transported 
(or whichever 
meter 
is closest 
to the 
well). 

Seller shall 
utilize reasonable 
interpolative procedures 
to arrive 
at an 
allocation of 
production when 
exact 
meter 
readings 
or 
gauging 
and 
strapping 
data 
is 
not 
available. 
The 
terms 
“earned” 
and 
“incurred” shall be interpreted 
in accordance with 
GAAP and Council of 
Petroleum Accountants 
Society 
(“COPAS”) 
standards, 
and 
expenditures 
that 
are 
incurred 
pursuant 
to 
an 
operating 
agreement, unit agreement 
or similar agreement shall 
be deemed incurred when 
expended by the 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Exhibit 10.1
- 4 - 
operator 
of 
the 
applicable 
Property 
in 
accordance 
with 
or 
allowed 
under 
the 
applicable 
joint 
operating agreement. 
(b)
Seller shall be entitled to 
handle all joint interest audits 
and other audits of 
Property Costs 
covering the 
period for 
which Seller 
is in 
whole or 
in part 
responsible under 
Section 
2.2; 
provided
, 
however
,
that Seller shall not agree to any adjustments to previously assessed costs 
for which 
Buyer or 
Newco is 
liable, or 
any compromise 
of any 
audit claims 
to which 
Buyer or 
Newco would 
be entitled 
or that 
may otherwise 
materially and 
adversely affect 
Newco, without 
the prior written consent of 
Buyer, which consent shall not be unreasonably 
withheld, conditioned 
or delayed. Each Party shall provide the 
other Party with a copy of all 
applicable audit reports and 
written audit agreements received by such Party or its 
Affiliates and relating to periods for which 
such other Party is partially responsible. 
Section 2.4
Purchase Price. The 
total consideration 
to be paid 
for the Subject 
Interests 
shall be 
comprised of 
cash in 
the amount 
of $9,500,000,000 
(the “Base 
Purchase Price” 
and, as 
adjusted pursuant to this Agreement, the “Purchase Price”). 
Section 2.5
Adjustments 
to 
the 
Base 
Purchase 
Price. 
All 
adjustments 
to 
the 
Base 
Purchase Price shall 
be made (x) in accordance 
with the terms of 
this Agreement and, to 
the extent 
not 
inconsistent 
with 
this 
Agreement, 
in 
accordance 
with 
GAAP 
and 
COPAS 
standards, 
as 
applicable, as consistently applied in 
the oil and gas industry and 
(y) in the case of all matters 
set 
forth in Section 2.5(a) and Section 2.5(b), only with respect to adjustments 
identified on or before 
the 180
th
 
day after the Closing (the 
“Cut-off Date”). 
Each adjustment to the 
Base Purchase Price 
described in 
Section 
2.5(a) 
and 
Section 
2.5(b) 
shall 
be 
allocated to 
the 
Assets 
affected 
by 
such 
adjustment. 
Without limiting the foregoing, the Base Purchase Price shall be adjusted as follows, 
with the adjustments to such Base Purchase Price resulting in the “Purchase Price”: 
(a)
The 
Base 
Purchase 
Price 
shall 
be 
adjusted 
upward 
by 
the 
following 
amounts, without duplication: 
(i)
an amount equal to all 
Property Costs attributable to 
the ownership 
and operation 
of the 
Assets or 
the production 
of Hydrocarbons 
therefrom that 
are 
incurred 
after 
the 
Effective 
Time 
or 
Asset 
Taxes 
for 
which 
Buyer 
is 
responsible 
pursuant to Section 10.1(a) but 
that have been paid by 
Seller or any of its 
Affiliates 
(other 
than 
Newco), 
as 
is 
consistent 
with 
Section 
2.2(a) 
and 
Section 
2.2(b), 
but 
excluding any amounts 
previously reimbursed to 
Seller or any 
such Affiliate 
by a 
Third Party or pursuant to Section 2.2(d); 
(ii)
an amount equal to all proceeds to 
which Seller is entitled pursuant 
to Section 2.2(b), to the 
extent that such proceeds have 
been received by Buyer or 
any of its 
Affiliates, and 
not remitted or 
paid to Seller 
or any of 
its Affiliates 
(net 
of 
any 
Royalties 
paid 
by 
Buyer 
or 
its 
Affiliates 
to 
Third 
Parties, 
gathering, 
processing 
and 
transportation 
costs 
and 
any 
Hydrocarbon 
production, 
severance, 
sales or excise Taxes 
not reimbursed to Buyer 
or its Affiliates 
by the purchaser of 
Hydrocarbon production); and 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Exhibit 10.1
- 5 - 
(iii)
any 
other 
amount 
provided 
for 
elsewhere 
in 
this 
Agreement 
or 
otherwise 
agreed 
upon 
in 
writing 
by 
the 
Parties 
as 
an 
upward 
adjustment 
to 
the 
Base Purchase Price. 
(b)
The 
Base 
Purchase 
Price 
shall 
be 
adjusted 
downward 
by 
the 
following 
amounts, without duplication: 

(i)
an amount equal to all 
Property Costs attributable to 
the ownership 
and operation 
of the 
Assets or 
the production 
of Hydrocarbons 
therefrom that 
are 
incurred 
prior 
to 
and 
at 
the 
Effective 
Time 
or 
Asset 
Taxes 
for 
which 
Seller 
is 
responsible pursuant to Section 10.1(a) but that have been paid by Buyer or any of 
its Affiliates, as is consistent with Section 2.2(a) and Section 2.2(b), 
but excluding 
any 
amounts 
previously 
reimbursed 
to 
Buyer 
or 
its 
relevant 
Affiliate 
by 
a 
Third 
Party or pursuant to Section 2.2(d); 
(ii)
an amount equal 
to all proceeds 
to which Newco 
is entitled pursuant 
to Section 2.2(a), 
to the 
extent that such 
amounts have 
been received 
by Seller 
or 
any of 
its Affiliates 
and not 
remitted or 
paid to 
Newco (net of 
any Royalties 
paid 
by Seller or its Affiliates to Third Parties, 
gathering, processing and transportation 
costs 
and 
any 
Hydrocarbon 
production, 
severance, 
sales 
or 
excise 
Taxes 
not 
reimbursed to Seller or its Affiliates by the purchaser of Hydrocarbon production); 
(iii)
the amount of 
funds in suspense 
listed on Schedule 
3.16 that are 
still 
in suspense on the Closing Date; and 
(iv)
any 
other 
amount 
provided 
for 
elsewhere 
in 
this 
Agreement 
or 
otherwise agreed 
upon in 
writing by 
the Parties 
as a 
downward adjustment 
to the 
Base Purchase Price. 
Section 2.6
Indebtedness Free. 
At the 
Closing, Newco 
will not 
be responsible 
for any 
obligations to repay Indebtedness. 
Section 2.7
Deposit. 
No 
later 
than 
5:00 
p.m. 
Central 
Time 
on 
September 
21, 
2021, 
Buyer 
shall 
pay 
to 
Shell 
US 
E&P 
Investments 
LLC, 
in 
immediately 
available 
funds 
by 
wire 
transfer 
to 
an 
account 
designated 
by 
Seller, 
an 
amount 
equal 
to 
five 
percent 
(5%) 
of 
the 
Base 
Purchase 
Price 
(the 
“Deposit”). 
In 
the 
event 
that 
the 
Deposit 
is 
not 
paid 
to 
Shell 
US 
E&P 
Investments LLC within 
the required time 
period, in addition 
to any other 
remedy available 
at Law 
or in equity, Seller shall have the 
right to terminate this Agreement 
pursuant to Section 8.1(b), and 
any 
rights 
or 
remedies 
Seller 
may 
have 
under 
this 
Agreement 
in 
relation 
to 
such 
breach 
shall 
survive such termination. The Deposit 
shall be distributed in accordance 
with the terms of Section 
8.2(b) or Section 8.2(c), as applicable. 
Section 2.8
Withholding. 
Buyer 
and 
its 
Affiliates 
(and 
any 
Person 
acting 
on 
their 
behalf) 
shall 
be 
entitled 
to 
deduct 
and 
withhold 
from 
any 
consideration 
otherwise 
payable 
or 
deliverable to Non-Permian Newco 
such amounts as may 
be required to be 
deducted or withheld 
therefrom 
pursuant 
to 
applicable 
Law. 
If 
the 
applicable 
withholding 
agent 
intends 
to 
withhold 
from any 
amounts payable 
to 
Non-Permian Newco 
(other than 
with 
respect to 
any 
withholding 
relating 
to 
a 
failure 
by 
Seller 
to 
deliver 
to 
Buyer, 
at 
or 
prior 
to 
the 
Closing, 
the 
deliverable 

 

 

 

 

 

 

 

Exhibit 10.1
- 6 - 
contemplated 
in 
Section 
7.2(b)), 
the 
applicable 
withholding 
agent 
shall 
use 
commercially 
reasonable 
efforts 
to 
provide 
prior 
notice 
of 
such 
withholding 
to 
Seller 
as 
soon 
as 
reasonably 
practicable after 
it 
determines withholding 
is required 
and to 
reasonably 
cooperate to 
reduce or 
eliminate 
such 
withholding 
to 
the 
extent 
permissible 
under 
applicable 
Law. 
To 
the 
extent 
such 
amounts are 
so deducted 
or withheld 
and remitted 
to the 
appropriate Governmental 
Authority, such 
amounts shall be 
treated for 
all purposes 
of this Agreement 
as having been 
paid to the 
Person to 
whom such amounts would otherwise have been paid absent such deduction or withholding. 
ARTICLE 3 
REPRESENTATIONS 
AND WARRANTIES 
OF SELLER 
Section 3.1
Generally. 

(a)
Any representation 
or warranty qualified 
by the 
“Knowledge of Seller” 
or 
“to Seller’s Knowledge” 
or with any 
similar knowledge qualification is 
limited to matters 
within 
the Knowledge of the individuals listed in Schedule 3.1. 
(b)
Subject to the disclaimers and waivers contained 
in and the other terms and 
conditions of this 
Agreement, and the exceptions 
and matters set forth 
on the Schedules attached 
to this Agreement, Seller represents and warrants 
to Buyer the matters set forth in this Article 
3 as 
of the Execution Date (except for the representations and warranties that 
refer to a specified date, 
which will be deemed made as of such date). 
(c)
The 
disclosure 
of 
any 
matter 
in 
any 
Schedule 
to 
a 
representation 
and 
warranty 
of 
Seller 
set 
forth 
in 
this 
Article 
3 
shall 
be 
deemed 
to 
be 
a 
disclosure 
for 
all 
representations 
and 
warranties 
in 
respect 
of 
which 
it 
is 
evident 
such 
matter 
relates, 
but 
shall 
expressly not be deemed to 
constitute an admission by Seller 
to otherwise imply that such 
matter 
is material for the purposes of this Agreement. 
Section 3.2
Existence and Qualification. 
(a)
Seller is a limited liability 
company duly organized, validly existing, and 
in 
good standing under the Laws 
of the State of Delaware 
and is duly qualified to 
do business in all 
jurisdictions 
in 
which 
its 
ownership 
of 
property 
or 
conduct 
of 
business 
requires 
Seller 
to 
be 
qualified except where 
the failure to 
be so qualified 
or licensed or in 
good standing, individually 
or in the aggregate, has not been and would not reasonably be expected to be material to Seller. 
(b)
As of the Closing, following the Merger, 
each of Non-Permian Newco and 
Newco will be a 
limited liability company duly 
organized, validly existing, 
and in good standing 
under the Laws of the 
State of Texas 
and will be duly 
qualified to do business 
in all jurisdictions 
in which its ownership of property or conduct of 
business requires it to be qualified, except where 
the failure 
to be 
so qualified 
or licensed 
or in 
good standing, 
individually or 
in the 
aggregate, would 
not reasonably be expected to be material to it. 
Section 3.3
Organizational 
Power. 
Seller 
has 
all 
requisite 
limited 
liability 
company 
power to enter into 
and perform this 
Agreement and each Transaction 
Document to which 
Seller 
is or will be a 
party and to consummate the 
transactions contemplated by this Agreement 
and such 
other Transaction Documents. 
As of the 
Closing, following the 
Merger, Non-Permian Newco will 

 

 

Exhibit 10.1
- 7 - 
have all requisite limited liability company power 
to own the Subject Interests and to 
carry on its 
business as 
being conducted 
except where 
the failure 
to have 
such power, 
individually or 
in the 
aggregate, 
has 
not 
been 
and 
would 
not 
reasonably 
be 
expected 
to 
be 
material 
to 
Non-Permian 
Newco. 
As of 
the Closing, 
following the 
Merger, 
Newco will 
have all requisite 
limited liability 
company power to own, lease, and operate its properties and 
to carry on its business as now being 
conducted 
by 
SWEPI 
with 
respect 
to 
the 
Assets, 
except 
where 
the 
failure 
to 
have 
such 
power, 
individually or in the aggregate, would not reasonably be expected to be material to Newco. 
Section 3.4
Authorization and Enforceability. 

(a)
The execution, delivery, and performance 
of this Agreement, all 
documents 
required to be executed and delivered 
by Seller at Closing and all 
other Transaction Documents to 
which Seller 
is or 
will be 
a party, 
and the 
performance of 
the transactions 
contemplated hereby 
and 
thereby, 
have 
been 
duly 
and 
validly 
authorized 
by 
all 
necessary 
limited 
liability 
company 
action on the part of 
Seller. This 
Agreement has been duly executed 
and delivered by Seller 
(and 
all documents required 
hereunder to be 
executed and delivered 
by Seller at 
Closing and all 
other 
Transaction 
Documents 
will 
be 
duly 
executed 
and 
delivered 
by 
Seller) 
and 
this 
Agreement 
constitutes, and 
at the 
Closing such 
documents will 
constitute, the 
valid and 
binding obligations 
of Seller, enforceable in accordance with their terms except as such enforceability may be limited 
by 
applicable 
bankruptcy 
or 
other 
similar 
Laws 
affecting 
the 
rights 
and 
remedies 
of 
creditors 
generally as 
well as 
by general 
principles of 
equity (regardless 
of whether 
such enforceability 
is 
considered in a proceeding in equity or at Law). 
(b)
All 
documents 
required 
to 
be 
executed 
and 
delivered 
by 
Non-Permian 
Newco at 
Closing and 
all other 
Transaction Documents 
to which 
Non-Permian Newco 
will be 
a 
party, 
and 
the 
performance 
of 
the 
transactions 
contemplated 
thereby, 
will 
have 
been 
duly 
and 
validly authorized 
by all 
necessary limited 
liability company 
action on 
the part 
of Non-Permian 
Newco 
and 
such 
documents 
will 
constitute, 
the 
valid 
and 
binding 
obligations 
of 
Non-Permian 
Newco, enforceable in 
accordance with 
their terms 
except as such 
enforceability may 
be limited 
by 
applicable 
bankruptcy 
or 
other 
similar 
Laws 
affecting 
the 
rights 
and 
remedies 
of 
creditors 
generally as 
well as 
by general 
principles of 
equity (regardless 
of whether 
such enforceability 
is 
considered in a proceeding in equity or at Law). 
Section 3.5
No 
Conflicts. 
Subject 
to 
compliance 
with 
the 
HSR 
Act, 
the 
execution, 
delivery, and performance of this Agreement and the other Transaction 
Documents by Seller, and 
the 
transactions 
contemplated 
hereby 
and 
thereby, 
will 
not 
(a) 
violate 
any 
provision 
of 
the 
Organizational 
Documents 
of 
Seller, 
SWEPI, 
Non-Permian 
Newco 
or 
Newco, 
(b) 
result 
in 
a 
material default (with or without due notice or lapse of time or both) or the creation of any lien or 
encumbrance or give rise to any right of 
termination, cancellation or acceleration under any note, 
bond, mortgage, 
indenture, or 
other financing 
instrument to 
which Seller, 
SWEPI, Non-Permian 
Newco 
or 
Newco 
is 
a 
party 
or 
that 
affects 
the 
Assets 
or 
the 
Subject 
Interests, 
(c) 
violate 
any 
judgment, 
order, 
writ, 
injunction, 
ruling, 
or 
decree 
in 
any 
material 
respect 
applicable 
to 
Seller, 
SWEPI, Non-Permian Newco, Newco, or any of the Assets or the Subject Interests, or (d) 
violate 
any Laws 
in any 
material respect 
applicable to 
Seller, 
SWEPI, Non-Permian 
Newco, Newco, 
or 
any of the Assets or the Subject Interests. 

 

 

 

 

 

 

 

Exhibit 10.1
- 8 - 
Section 3.6
Liability 
for Brokers’ 
Fees. None 
of Buyer, 
its 
Affiliates, 
or Newco 
shall 
directly or 
indirectly have 
any responsibility, 
liability or 
expense, as 
a result 
of undertakings 
or 
agreements 
of 
Seller 
or 
its 
respective 
Affiliates, 
for 
brokerage 
fees, 
finder’s 
fees, 
agent’s 
commissions 
or other 
similar forms 
of compensation 
in connection 
with this 
Agreement or 
any 
agreement or transaction contemplated hereby. 
Section 3.7
Litigation. 
(a)
Except 
as 
set 
forth 
on 
Schedule 
3.7(a), 
there 
are 
no 
actions, 
suits 
or 
proceedings against 
SWEPI, Seller, 
Non-Permian Newco 
or Newco 
pending with 
or before 
any 
Governmental 
Authority 
or 
arbitrator, 
or, 
to 
Seller’s 
Knowledge, 
threatened 
in 
writing 
(i) 
with 
respect 
to 
or 
affecting 
the 
Assets, 
the 
Subject 
Interests, 
or 
Newco 
that 
would 
reasonably 
be 
expected to be material to Newco or the ownership, operation, exploration or development of any 
of the 
Assets or 
(ii) that 
would materially 
impair, 
hinder, 
or delay 
Seller’s 
ability to 
perform its 
obligations under this Agreement or any Transaction 
Document or Non-Permian Newco’s 
ability 
to perform those 
actions that Seller 
is required to 
cause Non-Permian Newco to 
perform under this 
Agreement. 
(b)
There is no outstanding judgment, order, writ, injunction, ruling, or decree, 
or pending or, to 
the Knowledge of 
Seller, threatened material investigation, 
by any Governmental 
Authority 
relating 
to 
Newco, 
the 
Subject 
Interests, 
any 
of 
the 
Assets, 
or 
the 
transactions 
contemplated by 
this Agreement. Except 
as set 
forth on 
Schedule 3.7(b), 
there is 
no action, 
suit, 
or proceeding 
(i) by 
SWEPI pending, or 
for which SWEPI 
has commenced preparations 
to initiate, 
against any other 
Person with respect 
to the Subject Interests 
or the Assets, 
(ii) by Newco 
pending, 
or for which Newco 
has commenced preparations 
to initiate, against 
any other Person, or 
(iii) by 
any Third 
Party (including any 
Representative of 
Seller or any 
of its Affiliates 
(excluding Newco)) 
pending in connection with 
the ownership or operation 
of the Assets that 
is financed by 
Seller or 
Newco or for which 
Seller or any of its 
Affiliates (including Newco) is (or 
will be) responsible for 
any 
portion 
of 
the 
costs, 
expenses or 
liabilities 
thereof. 
Except 
as 
set 
forth 
on 
Schedule 
3.7(b), 
during the 
past two 
years prior 
to the 
Execution Date, 
there have 
been no claims 
for personal 
injury 
or 
death 
of 
any 
Person 
in 
connection 
with 
the 
ownership 
or 
operation 
of 
the 
Assets 
for 
which 
Newco 
would 
have 
any 
liability 
in 
any 
respect 
after 
the 
Closing 
Date. 
Notwithstanding 
the 
foregoing, with 
respect to 
matters pertaining 
to 
Assets that 
are operated 
by a 
Person other 
than 
Seller 
or 
its 
Affiliates 
(including 
Newco), 
the 
representations 
and 
warranties 
set 
forth 
in 
this 
Section 3.7(b) are limited to the Knowledge of Seller. 
Section 3.8
Taxes. 
(a)
All 
income 
and 
franchise 
Taxes 
and 
all 
other 
material 
Taxes 
that 
have 
become due or 
payable by 
or with respect 
to Newco 
or the 
Assets or the 
ownership or operation 
thereof (whether or not shown or required to be shown on any Tax Return) have been paid in full. 
(b)
All material Tax Returns that were required to 
be filed by or with 
respect to 
Newco 
or 
the 
Assets 
or 
the 
ownership 
or 
operation 
thereof 
have 
been 
duly 
filed 
(taking 
into 
account any extension 
of time 
within which to 
file), and 
all such Tax 
Returns are 
true, complete 
and correct in all material respects. 

 

 

 

 

Exhibit 10.1
- 9 - 
(c)
The 
Taxes 
reflected 
on 
the 
Tax 
Returns 
that 
will 
be 
filed 
under 
Section 
10.1(d) and are set 
forth on Schedule 3.8(c) 
will be the only 
Income Taxes 
payable by Newco or 
SWEPI for the taxable periods covered by such Tax Returns. 
(d)
Except 
as 
set 
forth 
on 
Schedule 
3.8(d), 
no 
audits, 
examinations, 
investigations 
or 
proceedings 
are 
pending, 
in 
progress 
or, 
to 
Seller’s 
Knowledge, 
have 
been 
threatened with respect 
to any Taxes 
or Tax 
Returns relating 
to SWEPI or 
Newco or 
the Assets. 
Neither SWEPI 
nor Newco 
has consented 
to, or 
entered into 
any agreement 
with respect 
to, and 
there is 
not currently 
in effect 
with respect 
to any 
of the 
Assets, any 
waiver or 
extension of 
any 
statute of 
limitations related 
to the assessment, 
determination or 
collection of 
any Taxes. No power 
of attorney granted by or with respect 
to SWEPI or Newco in respect of 
any Taxes is in effect that 
will not be revoked or cancelled at or prior to the Closing. 
(e)
None 
of 
the 
Assets 
is 
subject 
to 
any 
tax 
partnership 
agreement 
or 
is 
otherwise 
treated, 
or 
required 
to 
be 
treated, 
as 
held 
in 
an 
arrangement 
requiring 
a 
partnership 
income Tax Return to 
be filed or 
otherwise treated, or 
required to be 
treated, as a 
partnership under 
Subchapter K of Chapter 1 of Subtitle A of the Code or any similar state or local Law. 
(f)
No deficiency for any 
material amount of Tax has been 
asserted or assessed 
by any 
Governmental Authority 
against SWEPI 
or Newco 
or with 
respect to 
any of 
the Assets, 
which deficiency has not been fully satisfied by payment, settled or withdrawn. 
(g)
No claim 
has been made 
by any 
Governmental Authority in 
any jurisdiction 
in which SWEPI or 
Newco does not 
file Tax 
Returns that any 
material Tax 
Return is required to 
be filed 
or any 
material 
Taxes 
are required 
to be 
paid in 
such jurisdiction 
by or 
with respect 
to 
SWEPI or Newco. 
(h)
There are no Encumbrances for Taxes 
(other than liens described in clause 
(d) of the definition of Permitted Encumbrances) on any of the Assets. 
(i)
SWEPI 
has 
not 
since 
2007, 
and 
Newco 
has 
never, 
been 
a 
member 
of 
an 
affiliated 
group 
of 
corporations 
within 
the 
meaning 
of 
Section 
1504 
of 
the 
Code 
filing 
a 
consolidated 
U.S. 
federal 
income 
Tax 
Return, 
or 
a 
member 
of 
an 
aggregate, 
combined, 
consolidated, unitary 
or other 
similar group 
for state, 
local or 
foreign Tax 
purposes. SWEPI 
has 
not since 2007, and Newco has never, had any liability for the Taxes 
of any Person under Section 
1.1502-6 of the Treasury 
Regulations or any similar provision 
of state, local or 
foreign Law, 
as a 
transferee or 
successor, 
by contract 
or other 
agreement or 
arrangement (other 
than pursuant 
to a 
Customary 
Arrangement), 
by 
operation 
of 
Law 
or 
otherwise. 
Each 
of 
SWEPI 
and 
Newco 
has 
timely paid all material amounts of Taxes required to be paid by or on behalf of it pursuant to any 
Customary Agreement. 
(j)
For U.S. federal 
income Tax purposes and all applicable 
state and local Tax 
purposes, SWEPI and 
Newco are currently 
properly classified as 
disregarded entities, as 
described 
in 
Treasury 
Regulation 
Section 
301.7701-3(b)(1)(ii), 
and 
no 
election 
has 
been 
filed 
or 
made 
to 
change such 
classification for 
U.S. federal 
income tax 
purposes (or 
applicable state 
or local 
Tax 
purposes). 

 

 

 

 

Exhibit 10.1
- 10 - 
(k)
Neither SWEPI nor Newco 
has distributed stock of 
another Person, or had 
its 
stock 
distributed 
by 
another 
Person, 
in 
a 
transaction 
that 
was 
purported 
or 
intended 
to 
be 
governed in whole or in part by Section 
355 or Section 361 of the Code 
(or any similar provision 
of state, local or non-U.S. Law). 
(l)
Neither SWEPI nor 
Newco is, or has 
ever been, a party 
to, or bound by, any 
agreement or 
arrangement relating 
to the 
sharing, indemnification 
or allocation 
of Tax 
liabilities 
(or any similar 
agreement or arrangement) 
between or among 
Persons, in each 
case, other than 
a 
Customary Agreement. 
(m)
Except 
as 
set 
forth 
on 
Schedule 
3.8(m), 
SWEPI 
and 
Newco 
have 
not 
requested or received any rulings from, or entered into any arrangements with, any Governmental 
Authority, 
or received or 
benefited from any Tax 
exemption, Tax 
holiday or other Tax 
reduction 
agreement or order 
or other special 
Tax 
regime (each a 
“Tax 
Incentive”). Neither Buyer 
nor any 
of its 
Affiliates will 
be liable 
to any 
Governmental Authority 
after the 
Closing for 
any amounts 
benefiting SWEPI or Newco before the Closing 
under or with respect to any 
such Tax 
Incentives 
(including as a result of a termination thereof or disqualification therefrom). 
(n)
Neither SWEPI nor Newco has 
participated in, or been a party 
to, a “listed 
transaction” 
as 
this 
term 
is 
defined 
in 
Treasury 
Regulations 
Section 1.6011-4(b) 
(or 
any 
predecessor provision). 
(o)
Neither 
SWEPI 
nor 
Newco 
(i) 
has 
ever 
been 
subject 
to 
Tax 
in 
a 
country 
outside of the country in which it 
is organized, or (ii) has 
ever had a permanent establishment (as 
defined in 
any applicable 
Tax 
treaty or 
convention) or other 
fixed place 
of business 
in a 
country 
other than the country in which it is organized. SWEPI and 
Newco do not currently own and have 
not ever owned an interest in any entity that is 
not a “United States person” within the meaning of 
Section 7701(a)(30) of the Code. 
(p)
SWEPI (with 
respect to 
the Assets 
or the 
ownership or 
operation thereof) 
and Newco have 
properly collected and 
remitted all material 
amounts of sales, 
use, value added, 
and 
similar 
Taxes 
with 
respect 
to 
sales 
or 
leases 
made 
to, 
purchases 
made 
from, 
or 
services 
provided to their 
customers or have 
properly received and 
retained any appropriate 
Tax exemption 
certificates and 
other documentation 
for all 
services provided, 
or sales, 
leases, purchases 
made, 
without 
charging 
or 
remitting 
sales, 
use, 
value 
added, 
or 
similar 
Taxes 
that 
qualify 
such 
sales, 
leases, purchases, or services as exempt from sales, use, value added, and similar Taxes. 
(q)
The 
consummation 
of 
the 
transactions 
contemplated 
by 
this 
Agreement 
(whether alone or in combination with a subsequent event) will 
not result in the loss of deduction 
to Buyer or Newco under Section 280G of the Code. 
(r)
Notwithstanding 
anything 
to 
the 
contrary 
in 
this 
Agreement, 
(i) 
the 
representations 
and 
warranties 
in 
this 
Section 
3.8 
and 
in 
Section 
3.29 
(to 
the 
extent 
relating 
to 
Taxes) 
are 
the 
only 
representations 
and 
warranties 
in 
this 
Agreement 
with 
respect 
to 
the 
Tax 
matters of SWEPI and Newco, and (ii) Seller makes no representation or warranty with respect to 
the existence, 
availability, 
amount, usability 
or limitations 
(or lack 
thereof) of 
any net 
operating 
loss, net operating loss carryforward, capital loss, capital loss carryforward, 
basis amount or other 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Exhibit 10.1
- 11 - 
Tax 
attribute of 
Newco after 
the Closing 
Date, except 
for the 
representations and 
warranties set 
forth 
in 
Section 
3.8(j) 
and 
Section 
3.8(q), 
and 
(iii) 
Buyer 
acknowledges 
and 
agrees 
that 
Buyer 
cannot 
rely 
on 
Seller’s 
methodologies 
for 
the 
determination 
and 
reporting 
of 
Taxes 
that 
were 
utilized for 
any Tax 
period (or portion 
thereof) beginning 
prior to the 
Closing Date for 
purposes 
of calculating 
and reporting 
Taxes 
attributable to 
any Tax 
period (or 
portion thereof) 
beginning 
after the Closing Date. 
Section 3.9
Capital 
Commitments 
and 
Expenditures. 
Except 
as 
set 
forth 
on 
Schedule 3.9, as of the Effective 
Time, with respect 
to the Assets, there are 
no outstanding AFEs 
or 
other 
commitments 
to 
conduct 
any 
operations 
or 
expend 
any 
amount 
of 
money 
on 
or 
with 
respect to 
the Assets 
which are 
binding on 
SWEPI that 
could reasonably 
be expected 
to require 
expenditures in excess of $2,500,000, individually or in the aggregate, net to SWEPI’s interest. 
Section 3.10
Compliance with Laws. With 
respect to its ownership 
and operation of the 
Assets, SWEPI 
is (and, 
as of 
the Closing 
Date, Newco 
will 
be) in 
material compliance 
with all 
applicable Laws 
and, to 
Seller’s 
Knowledge, no 
Third Party 
operator is 
in material 
violation 
of 
any applicable 
Laws with 
respect to 
the Assets. 
As of 
the Execution 
Date, SWEPI 
has not 
received, 
and 
to 
Seller’s 
Knowledge, 
no 
Third 
Party 
operator 
of 
any 
of 
the 
Assets 
has 
received, 
written 
notice of any material 
violation in any 
respect of any applicable 
Law relating to 
its ownership or 
operation 
of 
the 
Assets. 
As 
of 
the 
Execution 
Date, 
SWEPI 
has 
not 
received, 
and, 
to 
Seller’s 
Knowledge, 
no 
Third 
Party 
operator 
of 
any 
of 
the 
Assets 
has 
received, 
written 
notice 
that 
it 
is 
under investigation 
by any 
Governmental Authority 
for potential 
non-compliance with 
any Law 
relating to 
its ownership 
or operation 
of the 
Assets in 
a material 
respect. This 
Section 3.10 
does 
not include any 
matters with respect 
to Environmental Laws, 
which are exclusively 
addressed in 
Section 3.15, or Taxes, which are exclusively addressed in Section 3.8 
and in Section 3.29 (to the 
extent relating to Taxes). 
Section 3.11
Material Contracts. 
(a)
Schedule 3.11(a) sets 
forth all 
Contracts as 
of the 
Execution Date 
of the 
type 
described below to 
which SWEPI is 
a party or 
by which SWEPI 
or any of 
the Assets are 
bound, 
in each case, that will be binding on Newco after Closing in accordance with 
Section 5.19(b), but 
excluding, in each case, 
(x) those Contracts that are 
cancelable without penalty on 30 
days’ or less 
prior 
written 
notice 
and 
(y) 
any 
Contract 
to 
which 
a 
Third 
Party 
operator 
of 
the 
Assets 
is 
(but 
SWEPI is not) a party 
and by which SWEPI and any 
of the Assets are bound (for 
the avoidance of 
doubt, for purposes of 
this Section 3.11, 
Newco will be deemed 
to be bound after 
Closing to any 
Contract subject 
to a Required 
Consent that SWEPI 
retains as a 
Retained Asset pursuant 
to Section 
5.16(c)) (the “Material Contracts”): 
(i)
any 
Contract 
(excluding 
customary 
joint 
operating 
agreements 
substantially 
in 
the 
form 
of 
the 
AAPL 
promulgated 
joint 
operating 
agreement 
forms) that can reasonably be expected to result in 
aggregate payments by SWEPI 
before Closing 
or Newco 
after Closing 
of more 
than $2,500,000 
(net to 
SWEPI’s 
(or, as of the consummation 
of the Merger, Newco’s) interest) during the current 
or 
any 
subsequent 
calendar 
year 
(based 
solely 
on 
the 
terms 
thereof 
and 
current 
volumes, without regard to any expected increase in volumes or revenues); 

Exhibit 10.1
- 12 - 
(ii)
any Contract that can 
reasonably be expected to 
result in aggregate 
revenues to 
SWEPI before 
Closing or 
Newco after 
Closing of 
more than 
$2,500,000 
during 
the 
current 
or 
any 
subsequent 
calendar 
year 
(based 
solely 
on 
the 
terms 
thereof and 
current volumes, 
without regard 
to any 
expected increase 
in volumes 
or revenues); 
(iii)
any 
Hydrocarbon 
or 
water 
(produced 
or 
fresh) 
purchase 
and 
sale, 
acreage 
dedication, 
volume 
commitment, 
storage, 
marketing, 
transportation, 
processing, gathering, treatment, 
separation, compression, 
balancing, fractionation, 
disposal, 
handling, 
or 
similar 
Contract 
with 
respect 
to 
Hydrocarbons 
or 
water 
(produced or fresh) 
produced from or attributable 
to SWEPI’s interest in the Assets 
that is 
not terminable 
without penalty 
or other 
payment upon 
60 days’ 
or less 
notice; 
(iv)
any indenture, mortgage, deed of trust, loan, credit or 
note purchase 
agreements, or sale-leaseback agreements, guaranties, bonds 
(other than operator’s 
bonds 
required 
by 
the 
Railroad 
Commission 
of 
Texas 
or 
any 
other 
applicable 
regulatory governmental 
authority), letters 
of credit, 
or similar 
financial agreements 
or other agreements or instruments governing Indebtedness affecting the Assets 
or 
that will affect Newco at Closing; 
(v)
any 
Contract 
that 
constitutes 
a 
lease 
under 
which 
SWEPI 
is 
the 
lessor 
or 
the 
lessee 
of 
real 
or 
personal 
property 
which 
lease 
(A) 
cannot 
be 
terminated by 
SWEPI without 
penalty or 
other payment 
upon 60 
days’ or 
less notice 
and (B) involves an annual base rental of more than $2,500,000; 
(vi)
any 
farmout 
or 
farmin 
agreement, 
participation 
agreement, 
exploration 
agreement, 
development 
agreement, 
joint 
operating 
agreement, 
unit 
agreement, or purchase and sale agreement, or other Contract 
that provides for the 
purchase, 
exchange, 
farmin, 
or 
earning 
by 
SWEPI 
of 
any 
oil 
and 
gas 
lease 
or 
mineral rights, other than 
customary joint operating agreements 
substantially in the 
form of the AAPL promulgated joint operating agreement forms; 
(vii)
any agreement 
regarding any 
partnership, Tax 
partnership, or 
joint 
venture, or regarding 
any option, put or 
call, or right 
of first refusal 
triggered by the 
transactions 
contemplated 
by 
this 
Agreement, 
with 
respect 
to 
the 
Assets 
or 
the 
Subject Interests; 
(viii)
any 
Contract 
that 
(A) 
contains 
or 
constitutes 
an 
existing 
area 
of 
mutual 
interest 
agreement, 
(B) 
includes 
non-competition 
or 
non-solicitation 
restrictions or 
other similar 
restrictions on 
SWEPI’s doing business, 
or (C) 
involves 
the 
settlement, 
waiver, 
or 
release 
of 
any 
material 
rights 
of 
SWEPI 
or 
the 
counterparty; 
(ix)
any Contract to sell, lease, exchange, 
transfer, or otherwise 
dispose 
of 
all 
or 
any 
part 
of 
the 
Assets 
(other 
than 
with 
respect 
to 
production 
of 
Hydrocarbons 
in 
the 
ordinary 
course) 
from 
and 
after 
the 
Effective 
Time, 
but 

 

 

 

 

 

 

Exhibit 10.1
- 13 - 
excluding 
rights 
of 
reassignment 
upon 
intent 
to 
abandon 
or 
release 
a 
Well 
or 
a 
Lease; 
(x)
any Contract 
under which 
SWEPI has 
the right 
to be 
“carried” by 
another Person (i.e., 
have another Person 
pay its share 
of costs and expenses) 
or the 
obligation 
to 
“carry” another 
Person 
(i.e., 
pay 
the 
costs 
and 
expenses 
of 
another 
Person) 
with 
respect 
to, 
or 
in 
connection 
with, 
the 
ownership, 
operation, 
or 
development of the Properties or 
any other assets or 
properties (or future assets 
or 
properties); 
(xi)
any Related Party Contract set forth on Schedule 5.7; 
and 
(xii)
any agreement the primary purpose of which is the 
indemnification 
of another Person. 
(b)
The Material 
Contracts are 
in full 
force and 
effect as 
to SWEPI 
(as of 
the 
Execution Date) and 
Newco (as of 
the Closing Date) 
and, to Seller’s Knowledge, 
are binding upon 
the counterparties 
thereto 
in accordance 
with their 
terms. SWEPI 
is not 
(and, as 
of the 
Closing 
Date, Newco will 
not be) in material 
breach or default 
under any Material 
Contract, and to 
Seller’s 
Knowledge, 
no 
other 
Person 
that 
is 
a 
party 
thereto 
is 
in 
material 
breach 
or 
default 
under 
any 
Material Contract. 
To 
Seller’s Knowledge, 
no event 
has occurred, 
which after 
notice or 
lapse of 
time, or both, 
would constitute a 
material default under any 
Material Contract. No 
written notice 
of default 
or breach 
has been 
received or 
delivered by 
SWEPI under 
any Material 
Contract, the 
resolution 
of 
which 
is 
outstanding 
as 
of 
the 
Execution 
Date, 
and 
there 
are 
no 
current 
notices 
received by SWEPI 
or Newco of 
the exercise of 
any premature termination, 
price redetermination, 
market-out, or curtailment of any such Material Contract. Prior to the Execution Date, and except 
to the extent not permitted due to confidentiality obligations, true, 
complete, and correct copies of 
all 
Material 
Contracts 
have 
been 
made 
available 
to 
Buyer, 
including 
all 
amendments 
or 
modifications thereto. 
Section 3.12
Payments for 
Production and 
Imbalances. As 
of the 
Execution Date, 
SWEPI 
is 
not 
(and, 
as 
of 
the 
Closing 
Date, 
Newco 
will 
not 
be) 
obligated 
by 
virtue 
of 
any 
take-or-pay 
payment, advance payment, 
or other similar 
payment (other than 
Royalties reflected in 
the Leases) 
to deliver Hydrocarbons, or proceeds from 
the sale thereof, attributable to SWEPI’s 
(or, as of 
the 
consummation 
of 
the 
Merger, 
Newco’s) 
interest 
in 
the 
Properties 
at 
some 
future 
time 
without 
receiving payment therefor 
at or after 
the time of 
delivery. 
Except as set 
forth on 
Schedule 3.12, 
there are no material Imbalances attributable to the Properties. 
Section 3.13
Consents and Preferential Rights. Except as set forth on Schedule 3.13 (the 
“Required 
Consents”), 
and 
subject 
to 
compliance 
with 
the 
HSR 
Act, 
(a) 
none 
of 
the 
Subject 
Interests, the Assets or any portion of 
any of the foregoing, is subject 
to any Consents, except for 
Customary Post-Closing Consents, 
and (b) 
there are no 
Consents required 
to be obtained, 
provided 
or submitted by SWEPI in connection with the 
sale of the Subject Interests by Seller 
to Buyer, the 
Reorganization, 
the 
execution, 
delivery 
and 
performance 
of 
this 
Agreement 
or 
the 
other 
Transaction Documents, or the consummation of 
the transactions contemplated hereby 
or thereby. 
None of the 
Subject Interests, the 
Assets or any 
portion of 
any of the 
foregoing is 
subject to any 

 

 

 

 

 

 

Exhibit 10.1
- 14 - 
Preferential Rights 
or tag-along rights, 
drag-along rights 
or similar 
rights that may 
be applicable 
to the transactions contemplated by this Agreement. 
Section 3.14
Non-Consent 
Operations; 
Payout 
Status. 
Except 
as 
set 
forth 
on 
Schedule 3.14, 
prior 
to 
the 
Closing 
Date, 
SWEPI 
has 
not 
(and, 
as 
of 
the 
Closing 
Date, 
neither 
Newco nor SWEPI will have, except as approved by 
Buyer pursuant to Section 5.4) elected not to 
participate in any operation or activity proposed with 
respect to the Properties that could result in 
any of SWEPI’s 
(or, as of 
the consummation of the 
Merger, Newco’s) 
interest in such Properties 
becoming subject 
to a 
penalty or 
forfeiture as 
a result 
of such 
election not 
to participate 
in such 
operation or activity. To 
Seller’s Knowledge, Schedule 3.14 contains a complete and accurate list 
of the status 
of any payout 
balances, as of 
the date set 
forth on such 
Schedule, for each 
Property 
that 
is 
subject 
to 
a 
reversion 
or 
other 
adjustment 
at 
any 
level 
of 
cost 
recovery 
or 
payout 
or 
Hydrocarbon production from 
or attributable to 
such Property (or 
passage of 
time or other 
event 
other than termination 
of an Property 
by its 
terms), as of 
the dates 
shown on 
such schedule with 
respect to each Property. 
Section 3.15
Environmental Matters. Except as set forth on Schedule 3.15: 
(a)
Neither SWEPI nor Newco has 
entered into, or is subject 
to, any agreement 
with, 
or 
consent, 
order, 
injunction, 
decree 
or 
judgment 
of, 
any 
Governmental 
Authority 
issued 
pursuant to Environmental Laws 
that requires any Remediation 
of or with respect 
to, or relating to 
the ownership or operation 
of, any of the 
Assets, that imposes material 
obligations or liability 
on 
SWEPI or Newco, 
or that would 
reasonably be expected 
to be material 
to SWEPI, Newco 
or the 
ownership, operation, exploration or development of any of the Assets. 
(b)
There is no material action, suit, 
or proceeding by any Third 
Party pending, 
or to the Knowledge of Seller, 
threatened in writing, in connection with 
the ownership, operation 
or use of the Assets arising under Environmental Laws. 
(c)
To Seller’s Knowledge, there is 
no outstanding investigation 
or information 
request 
made 
in 
writing 
by 
or 
claims 
or 
other 
pending 
actions 
initiated 
by 
a 
Governmental 
Authority related 
to Environmental 
Laws with 
respect to 
the Assets 
and any 
act or 
omission by 
SWEPI or 
Newco. 
To 
Seller’s Knowledge, 
there is 
no outstanding 
investigation or 
information 
request 
made 
in 
writing 
by, 
or 
claims 
or 
other 
actions 
initiated 
by, 
a 
Governmental 
Authority 
related to 
Environmental 
Laws 
with 
respect to 
the 
Assets 
and 
the 
act 
or 
omission 
of 
any 
Third 
Party. 
(d)
As of the Execution Date, neither SWEPI (nor, to 
Seller’s Knowledge, any 
Third 
Party 
operator 
of 
the 
Assets) 
has 
received 
written 
notice 
that 
remains 
unresolved 
of 
any 
condition 
on 
or 
with 
respect 
to 
any 
Asset, 
including 
notice 
of 
liability 
with 
respect 
to 
off-site 
transportation, 
storage, 
treatment, 
recycling 
or 
disposal 
of 
Hazardous 
Substances, 
that, 
if 
true, 
would constitute 
a material 
violation of, 
require material 
Remediation after 
the Closing 
Date, or 
give rise to material obligations 
or liability under, 
any Environmental Laws or the 
environmental 
provisions of any of the Leases or Contracts, in each case, by either SWEPI or Newco. 
(e)
To 
Seller’s 
Knowledge, as 
of the 
Execution Date, 
SWEPI has 
(and, as 
of 
the Closing Date, 
Newco will have) 
all material Permits 
required under Environmental 
Laws for 

 

 

 

 

 

 

 

 

 

 

 

 

Exhibit 10.1
- 15 - 
the ownership 
or operation of 
the Assets, and 
all such Permits 
are in 
full force and 
effect, including 
the timely filing of any renewal applications. 
(f)
To Seller’s Knowledge, during 
SWEPI’s and Newco’s period of 
ownership, 
the 
Assets 
have 
been 
owned 
and 
operated 
by 
SWEPI 
and 
Newco 
in 
compliance 
in 
all 
material 
respects 
with 
all 
applicable 
Environmental 
Laws 
and 
the 
terms 
of 
any 
Permits 
issued 
pursuant 
thereto 
and 
with 
the 
environmental 
provisions 
of 
the 
Leases 
and 
Contracts, 
except 
for 
prior 
instances of non-compliance that have been fully and finally resolved. 
(g)
To 
Seller’s 
Knowledge, 
except 
as 
would 
not 
constitute 
a 
Seller 
Material 
Adverse Effect, no Environmental Condition exists with respect to the Assets or to the operations 
of SWEPI or Newco with respect to the Assets. 
(h)
Prior 
to 
the 
Execution 
Date, 
Seller 
has 
provided 
Buyer 
with 
all 
material 
written 
environmental 
assessments, 
reports 
and 
audits 
and 
written 
notices 
from 
Governmental 
Authorities 
relating 
to 
Environmental 
Laws 
in 
its 
possession 
or 
under 
its 
control 
as 
of 
the 
Execution Date relating to the Assets. 
Notwithstanding 
anything 
to 
the 
contrary 
herein, 
with 
respect 
to 
Assets 
that 
are 
operated 
by 
a 
Person other 
than SWEPI 
or Newco, 
the representations 
and warranties 
set forth 
in this 
Section 
3.15 are limited to the Knowledge of Seller. 
The representations and warranties set forth in this Section 
3.15 and in Section 3.19 represent the 
sole and exclusive representations and warranties of Seller with respect to environmental matters, 
including SWEPI’s and Newco’s 
compliance with Environmental Laws. 
Section 3.16
Suspense Funds. As 
of September 10, 
2021 and as 
of the date 
that is three 
(3) days 
prior to 
the Closing 
Date, to 
Seller’s 
Knowledge, except 
as set 
forth 
on 
Schedule 3.16 
(which Schedule 3.16 shall be 
updated by Seller, 
on or prior to Closing, 
to reflect any changes to 
such Schedule 
3.16 as 
of the 
date that 
is three 
(3) days 
prior to 
Closing), neither 
SWEPI nor Newco 
holds any Third Party funds 
in suspense with respect to 
production of Hydrocarbons from 
any of 
the Assets other 
than amounts 
less than the 
statutory minimum amount 
that SWEPI or 
Newco is 
permitted to accumulate prior to payment. 
Section 3.17
Bankruptcy. 
There 
are 
no 
bankruptcy, 
insolvency, 
reorganization, 
receivership 
or 
similar 
proceedings 
pending 
against, 
being 
contemplated 
by 
or, 
to 
Seller’s 
Knowledge, threatened against Seller or any Affiliate of Seller (including Newco). 
Section 3.18
Ownership Structure and 
Interests. 
Following the Merger, 
there will be 
no 
Interests in Newco other 
than the Subject Interests, and 
Non-Permian Newco will own, 
of record 
and beneficially, 
100 percent 
of the 
Subject Interests 
free and 
clear of 
any Encumbrance, 
and at 
the Closing, 
Buyer will 
obtain good 
and valid 
title to 
the Subject 
Interests free 
and clear 
of any 
Encumbrance. Seller is 
not, and at 
the Closing Seller and 
Non-Permian Newco will 
not be, party 
to any voting 
trust or other 
agreement or understanding with 
respect to the 
voting, transfer or other 
disposition of the Subject Interests. The rights 
and privileges of the Subject Interests will be 
as set 
forth in Newco’s Organizational Documents. 
Section 3.19
Wells. 
Except as set forth on Schedule 3.19: 

 

 

 

 

 

 

 

 

 

Exhibit 10.1
- 16 - 
(a)
all Wells 
have been drilled and completed at 
legal locations and within the 
limits permitted by all applicable Leases, Contracts, and/or pooling or unit agreements; 
(b)
no Well is subject to penalties 
on allowables because 
of any overproduction 
or any other violation of Laws; 
(c)
(i) neither SWEPI nor Newco has received 
any written notices or demands 
from Governmental Authorities or other Third Parties to plug or abandon any Wells 
and (ii) there 
are no Wells 
(a) that SWEPI or Newco as operator is currently obligated 
(directly or indirectly as 
a working 
interest owner) 
by Law 
or Contract 
to plug 
or abandon 
that have 
not been 
plugged and/or 
abandoned, 
as 
applicable, 
in 
accordance 
in 
all 
material 
respects 
with 
all 
applicable 
Laws 
and 
Contracts, as 
applicable, (b) 
to the 
Knowledge of 
Seller, 
that a 
Third Party 
operator is 
currently 
obligated (directly or indirectly as a working 
interest owner) by Law, Lease or Contract to plug or 
abandon that have not 
been plugged and/or abandoned, 
as applicable, in accordance 
in all material 
respects with all applicable Laws, Leases and Contracts, as applicable, (c) that have been plugged 
or abandoned by Seller or its Affiliates (including Newco) 
(or to Seller’s Knowledge by any other 
Person) in a manner that does not comply 
in all material respects with all applicable Laws, 
Leases 
and Contracts, and (d) that are currently 
subject to exceptions to a requirement to plug or 
abandon 
issued by a Governmental Authority; 
provided
, 
however
 
that any extension for the period 
to plug 
and abandon any Well 
resulting from the 
filing of Form W-3C 
with the Railroad 
Commission of 
Texas shall not constitute such an exception; 
(d)
As of the Execution Date, SWEPI has (and, as of the Closing Date, Newco 
will 
have) 
(i) 
title 
to 
the 
Equipment 
free 
and 
clear 
of 
Encumbrances, 
other 
than 
Permitted 
Encumbrances, or 
(ii) with 
respect to 
rented Equipment, 
a good 
and valid 
leasehold interest 
in such 
Equipment; 
provided
, 
however
, that, with 
respect to Assets 
that are operated 
by a Person 
other than Seller 
or 
its Affiliates 
(including Newco), 
the representations 
and warranties set 
forth in 
this Section 
3.19 
are limited to the Knowledge of Seller. 
Section 3.20
Special Warranty 
of Title. 
Subject to 
the Permitted 
Encumbrances, Seller 
warrants that (a) the Leases 
and Wells are free and clear of any 
Encumbrance made by, through or 
under 
SWEPI, 
Newco, 
or 
any 
of 
their 
respective 
Affiliates 
prior 
to 
the 
Closing 
Date, 
but 
not 
otherwise 
(provided, 
if 
any 
such 
Encumbrance 
would 
also 
result 
in 
a 
breach 
of 
any 
other 
representation 
and 
warranty 
of 
Seller 
set 
forth 
in 
this 
Article 
3 
(without 
giving 
effect 
to 
the 
indemnity 
limitations 
set 
forth 
in 
Article 
9), 
Buyer 
shall 
be 
precluded 
from 
asserting 
such 
Encumbrance as a breach of this Section 3.20(a)), and (b) none of SWEPI, Newco, or any of their 
respective Affiliates have 
conveyed any 
Leases or 
Wells prior to the 
Execution Date 
or the 
Closing 
Date to anyone outside of 
Newco; 
provided, however
, that any Buyer claim 
for indemnification or 
defense 
pursuant 
to 
Section 
9.1(b)(ii) 
for 
Damages 
or 
Proceedings, 
as 
applicable, 
caused 
by, 
related to, arising out of, or resulting from any breach of this Section 3.20 shall be limited to such 
Damages or 
Proceedings, 
as 
applicable, caused 
by, 
relating 
to, 
arising 
out of, 
or 
resulting 
from 
Third Person Claims. 
Section 3.21
Permits. 
Except 
as 
set 
forth 
on 
Schedule 
3.21, 
as 
of 
the 
Execution 
Date, 
SWEPI has (and, 
as of 
the Closing 
Date, Newco will 
have) all, and, 
to the 
Knowledge of Seller, 

 

 

 

 

 

 

 

 

 

 

 

 

 

Exhibit 10.1
- 17 - 
each Third Party operator has 
all, material Permits required to permit 
the ownership and operation 
of 
the 
Assets 
as 
presently 
owned 
and 
operated 
by 
SWEPI 
or 
such 
Third 
Party 
operator, 
as 
applicable, and each is 
in full force and effect and 
has been duly and 
validly issued. The execution 
and 
delivery 
of 
this 
Agreement 
and 
the 
consummation 
of 
the 
transactions 
contemplated hereby 
will 
not 
result 
in 
any 
revocation, 
cancellation, 
suspension 
or 
modification 
of 
any 
such 
Permit. 
There is no outstanding violation in 
any material respect of any 
of the Permits by either 
SWEPI or 
Newco and, to 
the Knowledge of 
Seller, there 
is no outstanding 
violation in any 
material respect 
of any of the Permits by any Third Party 
operator of the Assets. Section 3.21 does not include any 
matters with respect to Environmental 
Laws, which are exclusively 
addressed in Section 3.15, 
or 
Taxes, 
which are 
exclusively addressed in 
Section 3.8 
and in Section 
3.29 (to 
the extent 
relating 
to Taxes). 
Section 3.22
Royalties. Except as set 
forth on Schedule 3.22 
and for such items 
that are 
being held 
in suspense 
as permitted 
pursuant to 
applicable Law, 
each of 
SWEPI and 
Newco has 
timely 
paid 
in 
all 
material 
respects 
all 
Royalties 
due 
by 
SWEPI 
or 
Newco, 
as 
applicable, 
with 
respect to the Assets. 
Section 3.23
Bonds, Letters of Credit and 
Guarantees. As of the Execution 
Date, SWEPI 
has all 
bonds, letters 
of 
credit, guarantees, 
and other 
similar security 
arrangements necessary 
to 
own the Assets 
and, with respect 
to all Assets 
operated by any 
Third Party, 
to the Knowledge 
of 
Seller, 
such 
Third 
Party 
has 
all 
bonds, 
letters 
of 
credit, 
guarantees, 
and 
other 
similar 
security 
arrangements 
necessary 
to 
operate 
such 
operated 
Assets. 
Such 
arrangements 
are 
set 
forth 
on 
Schedule 3.23. 
Section 3.24
Indebtedness. 
Except as set forth on Schedule 3.24, as of the Closing Date, 
(a) Newco 
will not 
have any 
Indebtedness, and 
(b) no 
Asset will 
be burdened 
by any 
Encumbrances 
for Indebtedness created by Seller or its Affiliates (including Newco). 
Section 3.25
Condemnation. 
There 
is 
no 
pending 
or, 
to 
the 
Knowledge 
of 
Seller, 
threatened in 
writing, 
taking 
(whether permanent, 
temporary, 
whole, 
or 
partial) 
of 
any 
material 
part of the Assets by reason of condemnation or the threat of condemnation. 
Section 3.26
Powers of 
Attorney; Bank 
Accounts. Newco 
will not 
have any 
(a) powers 
of 
attorney 
or 
comparable 
delegations 
of 
authority 
outstanding 
or 
(b) accounts 
or 
safe-deposit 
boxes with 
any banks, 
trust companies, 
savings and 
loan associations 
or other 
financial institutions. 
Section 3.27
Anti-Corruption; Trade Controls. 

(a)
With respect to Seller, 
Newco, the Subject Interests and the Assets, neither 
Seller, Newco 
nor their 
respective officers 
and directors 
nor, to their 
Knowledge, any 
Person acting 
on behalf of 
them (i) has 
violated Anti-Corruption Laws 
or Trade Control Laws, 
(ii) is a 
Restricted 
Party, 
or 
(iii) 
whether 
directly 
or 
indirectly, 
has 
made, 
offered, 
authorized 
or 
accepted 
any 
payment, gift, promise, or 
other advantage, to or for 
the use or benefit 
of any Government Official 
or 
any 
other 
Person 
where 
that 
payment, 
gift, 
promise, 
or 
other 
advantage 
would 
comprise 
a 
facilitation payment or 
otherwise violate the 
Anti-Corruption Laws or 
any other applicable 
Law, 
or that would cause Buyer to be in breach of any Anti-Corruption Laws. 

 

 

 

 

 

 

 

 

 

 

 

 

 

Exhibit 10.1
- 18 - 
(b)
Seller maintains 
(i) adequate 
written policies 
and procedures 
to comply 
with 
Anti-Corruption Laws and 
Trade Control Laws and (ii) 
adequate internal controls, including 
using 
reasonable efforts to ensure 
that all transactions are accurately recorded 
and reported in its books 
and 
records 
to 
reflect 
truly 
the 
activities 
to 
which 
they 
pertain, 
such 
as 
the 
purpose 
of 
each 
transaction, with whom it was entered into, for whom it was undertaken, or what was exchanged. 

Section 3.28
Leases. 
Except as set forth 
on Schedule 3.22, SWEPI 
is not (and, as 
of the 
Closing 
Date, Newco 
will 
not be) 
in material 
breach of 
any 
terms 
and condition 
of the 
Leases. 
Schedule 3.28 contains a true, 
correct, and complete list of 
all Leases that (a) are 
currently held by 
payment 
of 
shut-in 
royalties, 
reworking 
operations, 
any 
substitute 
for 
production 
in 
paying 
quantities, 
or 
any 
other 
means 
other 
than 
production 
in 
paying 
quantities, 
and 
(b) 
will 
expire, 
terminate, or otherwise be materially 
impaired absent actions by or 
on behalf of SWEPI or 
Newco 
(other than continued production 
in paying quantities) on 
or before a date 
that is 180 days after 
the 
Closing Date. 
Section 3.29
Employment 
Matters. 
Newco 
does 
not 
employ, 
and 
has 
never 
employed, 
any individual as 
an employee. Newco 
does not 
sponsor or 
contribute to, 
or have any 
obligation 
to contribute to, and has never sponsored or contributed to, or had any obligation to contribute to, 
any Benefit 
Plan. There 
does not 
now exist, 
nor do 
any circumstances 
exist that 
could result 
in, 
any Controlled Group Liability of Seller, Newco or any ERISA Affiliate that could reasonably be 
expected to be a liability of the Buyer or its Affiliates (including Newco) following the Closing.
Section 3.30
Operatorship. As 
of 
the 
Execution Date, 
SWEPI 
has not 
received 
written 
notice pursuant to 
and in accordance 
with the terms of 
any operating agreement with 
respect to the 
Assets under which SWEPI is currently designated as the operator 
or, to the Knowledge of Seller, 
any other notice with respect to any pending vote to remove SWEPI or 
any of its Affiliates as the 
named “operator” of any of the Assets 
for which SWEPI or such Affiliate 
is currently designated 
as “operator.” 
With 
respect to 
those swaps 
of Assets 
that SWEPI 
operates that 
are contemplated 
and set forth on Schedule 3.11(a) or Schedule 5.4, Buyer acknowledges that operatorship 
for such 
Assets may change pursuant 
to and upon 
the consummation of such 
swaps, and any such 
change 
in operatorship shall not constitute a breach of this Section 3.30.
Section 3.31
Intellectual 
Property. 
Neither 
SWEPI 
nor 
Newco 
own 
any 
Intellectual 
Property relating 
to the 
Assets. None 
of Seller 
or its 
Affiliates (including 
Newco) has 
interfered 
with, 
infringed 
upon, 
misappropriated, 
or 
violated 
any 
material 
Intellectual 
Property 
Rights 
of 
Third Parties in 
any material respect, 
and none of 
Seller or its 
Affiliates (including 
Newco) have 
received 
any 
written 
notice 
asserting 
that 
the 
conduct 
of 
SWEPI’s 
or 
Newco’s 
operations 
with 
respect 
to 
the 
Assets 
materially 
infringes 
upon 
or 
materially 
violates 
any 
Intellectual 
Property 
Rights of any Person. 
Section 3.32
Certain Disclaimers. 
(a)
EXCEPT AS AND 
TO THE EXTENT EXPRESSLY REPRESENTED 
AND 
WARRANTED 
OTHERWISE 
IN 
THIS 
ARTICLE 
3, 
THE 
ASSIGNMENT 
AGREEMENT, 
THE 
CERTIFICATE 
OF 
SELLER 
TO 
BE 
DELIVERED 
AT 
THE 
CLOSING 
PURSUANT 
TO 
SECTION 
7.2(c) 
OR 
ANY 
ASSIGNMENT 
SELLER 
DELIVERS 
TO 
NEWCO 
PURSUANT 
TO 
SECTION 
5.16(c), 
SELLER 
EXPRESSLY 

 

 

 

 

 

 

 

 

 

Exhibit 10.1
- 19 - 
DISCLAIMS, 
AND 
BUYER 
WAIVES 
ANY 
REPRESENTATION 
OR 
WARRANTY, 
EXPRESS, 
STATUTORY 
OR 
IMPLIED, 
IN 
THIS 
OR 
ANY 
OTHER 
INSTRUMENT, 
AGREEMENT 
OR 
CONTRACT 
DELIVERED 
HEREUNDER 
OR 
IN 
CONNECTION 
WITH 
THE 
TRANSACTIONS 
CONTEMPLATED 
HEREUNDER 
OR 
THEREUNDER, 
INCLUDING ANY 
REPRESENTATION 
OR WARRANTY, ORAL OR WRITTEN, AS 
TO 
(I) 
TITLE 
TO 
ANY 
OF 
THE 
SUBJECT 
INTERESTS 
OR 
THE 
ASSETS, 
(II) 
THE 
CONTENTS, 
CHARACTER 
OR 
NATURE 
OF 
ANY 
DESCRIPTIVE 
MEMORANDUM, 
ANY 
REPORT 
OF 
ANY 
PETROLEUM 
ENGINEERING 
CONSULTANT 
OR 
ANY 
GEOLOGICAL, SEISMIC 
DATA, 
RESERVE 
DATA, 
RESERVE 
REPORTS, 
RESERVE 
INFORMATION (ANY ANALYSIS OR INTERPRETATION THEREOF) RELATING TO 
THE 
ASSETS, 
(III) 
THE 
QUANTITY, 
QUALITY 
OR 
RECOVERABILITY 
OF 
HYDROCARBONS 
IN 
OR 
FROM 
THE 
ASSETS, 
(IV) 
THE 
EXISTENCE 
OF 
ANY 
PROSPECT, RECOMPLETION, INFILL OR STEP-OUT 
DRILLING OPPORTUNITIES, 
(V) 
ANY 
ESTIMATES 
OF 
THE 
VALUE 
OF 
THE 
SUBJECT 
INTERESTS 
OR 
THE 
ASSETS 
OR 
FUTURE 
REVENUES 
GENERATED 
BY 
SWEPI
OR 
THE 
ASSETS, 
(VI) 
THE 
PRODUCTION 
OF 
PETROLEUM 
SUBSTANCES 
FROM 
THE 
ASSETS, 
OR 
WHETHER PRODUCTION HAS 
BEEN CONTINUOUS OR 
IN PAYING 
QUANTITIES, 
OR ANY PRODUCTION 
OR DECLINE 
RATES, 
(VII) THE MAINTENANCE, 
REPAIR, 
CONDITION, 
QUALITY, 
SUITABILITY, 
DESIGN 
OR 
MARKETABILITY 
OF 
THE 
ASSETS, (VIII) 
INFRINGEMENT OF 
ANY INTELLECTUAL 
PROPERTY RIGHT, 
OR 
(IX) 
ANY 
OTHER 
RECORD, 
FILES 
OR 
MATERIALS 
OR 
INFORMATION 
(INCLUDING 
AS 
TO 
THE 
ACCURACY, 
COMPLETENESS 
OR 
CONTENTS 
OF 
THE 
RECORDS) THAT MAY 
HAVE 
BEEN MADE AVAILABLE 
OR COMMUNICATED TO 
BUYER 
OR 
ITS 
AFFILIATES, 
OR 
ITS 
OR 
THEIR 
EMPLOYEES, 
AGENTS, 
CONSULTANTS, 
REPRESENTATIVES 
OR ADVISORS IN CONNECTION WITH 
THE 
TRANSACTIONS 
CONTEMPLATED 
BY 
THIS 
AGREEMENT 
OR ANY 
DISCUSSION 
OR 
PRESENTATION 
RELATING 
THERETO 
(INCLUDING 
ANY 
ITEMS 
PROVIDED 
IN 
CONNECTION 
WITH 
SECTION 
5.1); 
AND 
EXCEPT 
AS 
AND 
TO 
THE 
EXTENT 
EXPRESSLY REPRESENTED AND WARRANTED 
OTHERWISE IN THIS ARTICLE 3, 
THE 
ASSIGNMENT 
AGREEMENT, 
THE 
CERTIFICATE 
OF 
SELLER 
TO 
BE 
DELIVERED 
AT 
THE 
CLOSING 
PURSUANT 
TO 
SECTION 
7.2(c) 
OR 
ANY 
ASSIGNMENT 
SELLER 
DELIVERS 
TO 
NEWCO 
PURSUANT 
TO 
SECTION 
5.16(c), 
SELLER 
FURTHER 
DISCLAIMS, 
AND 
BUYER 
WAIVES, 
ANY 
REPRESENTATION 
OR WARRANTY, 
EXPRESS, 
STATUTORY 
OR IMPLIED, 
OF MERCHANTABILITY, 
FITNESS 
FOR 
A 
PARTICULAR 
PURPOSE 
OR 
CONFORMITY 
TO 
MODELS 
OR 
SAMPLES 
OF 
MATERIALS 
OR 
ANY 
EQUIPMENT, 
IT 
BEING 
EXPRESSLY 
UNDERSTOOD AND 
AGREED BY 
THE PARTIES 
HERETO THAT 
EXCEPT AS 
AND 
TO THE EXTENT EXPRESSLY REPRESENTED AND WARRANTED 
OTHERWISE IN 
THIS 
ARTICLE 
3, 
THE 
ASSIGNMENT 
AGREEMENT, 
THE 
CERTIFICATE 
OF 
SELLER TO BE DELIVERED 
AT 
THE CLOSING PURSUANT TO 
SECTION 7.2(c) OR 
ANY 
ASSIGNMENT 
SELLER 
DELIVERS 
TO 
NEWCO 
PURSUANT 
TO 
SECTION 
5.16(c), 
AND 
WITHOUT 
LIMITATIONS 
OF 
THE 
RIGHTS 
AND 
OBLIGATIONS 
IN 
ARTICLE 
9, 
THE 
ASSETS 
ARE 
BEING 
TRANSFERRED 
“
AS 
IS, 
WHERE 
IS
,” 
WITH 
ALL FAULTS 
AND DEFECTS, AND THAT, 
AS OF CLOSING, BUYER HAS MADE OR 
CAUSED TO BE MADE SUCH INSPECTIONS AS BUYER DEEMS APPROPRIATE. 

 

 

Exhibit 10.1
- 20 - 
(b)
EXCEPT AS AND TO THE 
EXTENT EXPRESSLY 
SET FORTH IN 
THIS AGREEMENT, SELLER SHALL NOT 
HAVE 
ANY LIABILITY IN 
CONNECTION 
WITH 
AND 
HAS 
NOT 
AND 
WILL 
NOT 
MAKE 
(AND 
HEREBY 
DISCLAIMS) 
ANY 
REPRESENTATION 
OR 
WARRANTY 
REGARDING 
ANY 
MATTER 
OR 
CIRCUMSTANCE 
RELATING 
TO 
ENVIRONMENTAL 
LAWS, 
ENVIRONMENTAL 
CONDITIONS, 
ENVIRONMENTAL 
LIABILITIES, 
THE 
RELEASE 
OF 
HAZARDOUS 
SUBSTANCES, 
HYDROCARBONS 
OR 
NORM 
INTO 
THE 
ENVIRONMENT 
OR 
THE 
PROTECTION 
OF 
HUMAN 
HEALTH, 
SAFETY, 
NATURAL 
RESOURCES 
OR 
THE 
ENVIRONMENT, 
OR 
ANY 
OTHER 
ENVIRONMENTAL 
CONDITION 
OF 
THE 
ASSETS, AND EXCEPT AS AND TO THE EXTENT EXPRESSLY SET FORTH IN THIS 
AGREEMENT NOTHING IN 
THIS AGREEMENT SHALL 
BE CONSTRUED AS 
SUCH 
A 
REPRESENTATION 
OR 
WARRANTY, 
AND 
BUYER 
SHALL 
BE 
DEEMED 
TO 
BE 
TAKING 
THE 
SUBJECT 
INTERESTS 
AND 
ASSETS 
“
AS 
IS, 
WHERE 
IS
” 
FOR 
PURPOSES 
OF 
THEIR 
ENVIRONMENTAL 
CONDITION. 
BUYER 
SHALL 
HAVE 
INSPECTED, 
OR 
WAIVED 
(AND 
UPON 
CLOSING 
SHALL 
BE 
DEEMED 
TO 
HAVE 
WAIVED) 
ITS 
RIGHT 
TO 
INSPECT, 
THE 
ASSETS 
FOR 
ALL 
PURPOSES, 
AND 
SATISFIED ITSELF AS TO 
THEIR PHYSICAL 
AND ENVIRONMENTAL CONDITION, 
BOTH 
SURFACE 
AND 
SUBSURFACE, 
INCLUDING 
CONDITIONS 
SPECIFICALLY 
RELATING 
TO 
THE 
PRESENCE, 
RELEASE, 
OR 
DISPOSAL 
OF 
HAZARDOUS 
SUBSTANCES, 
SOLID 
WASTES, 
ASBESTOS, 
AND 
NORM. 
BUYER 
IS 
RELYING 
SOLELY 
UPON 
THE 
TERMS 
OF 
THIS 
AGREEMENT, 
EACH 
TRANSACTION 
DOCUMENT, 
AND 
ITS 
OWN 
INSPECTION 
OF 
THE 
ASSETS. 
AS 
OF 
CLOSING, 
BUYER HAS MADE ALL 
SUCH REVIEWS AND INSPECTIONS 
OF THE ASSETS AND 
THE 
RECORDS 
AS 
BUYER 
HAS 
DEEMED 
NECESSARY 
OR 
APPROPRIATE 
TO 
CONSUMMATE THE TRANSACTION CONTEMPLATED 
BY THIS AGREEMENT.
(c)
WITHOUT 
LIMITING 
SELLER’S 
INDEMNITY 
AND 
DEFENSE 
OBLIGATIONS SET 
FORTH IN SECTION 9.1(b), BUYER SHALL ASSUME ALL RISK 
OF LOSS WITH 
RESPECT TO (i) CHANGES 
IN COMMODITY OR 
PRODUCT PRICES 
AND 
ANY 
OTHER 
MARKET 
FACTORS 
OR 
CONDITIONS 
FROM 
AND 
AFTER 
CLOSING; 
(ii) 
PRODUCTION 
DECLINES 
OR 
ANY 
ADVERSE 
CHANGE 
IN 
THE 
PRODUCTION CHARACTERISTICS 
OR DOWNHOLE 
CONDITION OF 
ANY WELL, 
INCLUDING 
ANY 
WELL 
WATERING 
OUT, 
OR 
EXPERIENCING 
A 
COLLAPSE 
IN 
THE 
CASING 
OR 
SAND 
INFILTRATION, 
FROM 
AND 
AFTER 
CLOSING, 
AND 
(iii) 
DEPRECIATION 
OF 
ANY 
ASSETS 
THAT 
CONSTITUTE 
PERSONAL 
PROPERTY 
THROUGH ORDINARY WEAR AND TEAR. 
(d)
SELLER 
AND 
BUYER 
AGREE 
THAT, 
TO 
THE 
EXTENT 
REQUIRED 
BY 
APPLICABLE 
LAW 
TO 
BE 
EFFECTIVE 
OR 
ENFORCEABLE, 
THE 
DISCLAIMERS 
OF 
CERTAIN 
REPRESENTATIONS 
AND 
WARRANTIES 
CONTAINED 
IN 
THIS 
ARTICLE 
3 
AND 
THE 
REST 
OF 
THIS 
AGREEMENT 
ARE 
“
CONSPICUOUS
” DISCLAIMERS FOR THE PURPOSE OF ANY APPLICABLE LAW. 
(e)
SELLER 
EXPRESSLY 
DISCLAIMS, 
AND 
BUYER 
WAIVES 
ANY 
REPRESENTATION 
, 
WARRANTY, 
OR 
ASSURANCE, 
EXPRESS, 
STATUTORY 
OR 
IMPLIED, IN THIS 
AGREEMENT OR ANY 
OTHER INSTRUMENT, AGREEMENT OR 
CONTRACT 
DELIVERED 
HEREUNDER 
OR 
IN 
CONNECTION 
WITH 
THE 

 

 

 

 

 

 

 

 

Exhibit 10.1
- 21 - 
TRANSACTIONS 
CONTEMPLATED 
HEREUNDER 
OR 
THEREUNDER, 
ORAL 
OR 
WRITTEN, 
REGARDING 
THE 
OPERATORSHIP 
OF 
ANY 
PORTION 
OF 
THE 
PROPERTIES.
ARTICLE 4 
REPRESENTATIONS 
AND WARRANTIES 
OF BUYER 
Section 4.1
Generally. 

(a)
Any representation or 
warranty qualified by 
the “Knowledge of 
Buyer” or 
“to Buyer’s Knowledge” or 
with any similar knowledge qualification 
is limited to matters within 
the Knowledge of the individuals listed in Schedule 4.1. 
(b)
Buyer represents and warrants 
to Seller the matters 
set forth in this 
Article 
4 as of 
the Execution Date 
(except for the representations 
and warranties that refer 
to a specified 
date, which will be deemed made as of such date). 
(c)
The disclosure 
of any 
matter in any 
section of 
a Schedule 
to a representation 
and warranty of 
Buyer set 
forth in this 
Article 4 
shall be deemed 
to be 
a disclosure for 
all other 
sections in respect of which it is evident 
such matter relates, but shall expressly not 
be deemed to 
constitute an admission by Buyer to otherwise imply 
that such matter is material for the purposes 
of this Agreement. 

Section 4.2
Existence 
and 
Qualification. 
Buyer 
is 
an 
entity 
duly 
organized, 
validly 
existing, and 
in good 
standing under 
the Laws 
of the 
jurisdiction of 
its organization 
and is 
duly 
qualified to do 
business in each 
jurisdiction in which 
the nature of 
its business or 
the ownership, 
leasing or 
operation of 
its properties 
makes such 
qualification or licensing 
necessary, except where 
the failure to be so 
qualified or licensed or in good 
standing, individually or in the 
aggregate, has 
not been and would not reasonably be expected to be material to Buyer. 
Section 4.3
Organizational Power. Buyer has the requisite 
corporate power to 
enter into 
and perform this Agreement and 
each Transaction Document 
to which it is or 
will be a party and 
to 
consummate 
the 
transactions 
contemplated 
by 
this 
Agreement 
and 
such 
other 
Transaction 
Documents except, where the failure to have such power, individually or in the aggregate, has not 
been and would not reasonably be expected to be material to Buyer. 
Section 4.4
Authorization and 
Enforceability. The execution, 
delivery, and performance 
of this Agreement, 
all documents required 
to be executed 
and delivered by 
Buyer at Closing 
and 
all other Transaction Documents 
to which Buyer is or will be 
a party, 
and the performance of the 
transactions 
contemplated 
hereby 
and 
thereby, 
have 
been 
duly 
and 
validly 
authorized 
by 
all 
necessary 
corporate 
action 
on 
the 
part 
of 
Buyer. 
This 
Agreement 
has 
been 
duly 
executed 
and 
delivered by Buyer (and all documents required hereunder to be executed and delivered by Buyer 
at Closing and 
all other 
Transaction Documents will be 
duly executed and 
delivered by Buyer) 
and 
this 
Agreement 
constitutes, 
and 
at 
the 
Closing 
such 
documents 
will 
constitute, 
the 
valid 
and 
binding 
obligations 
of 
Buyer, 
enforceable 
in 
accordance 
with 
their 
terms 
except 
as 
such 
enforceability may be limited by 
applicable bankruptcy or other similar Laws 
affecting the rights 
and remedies 
of creditors 
generally as 
well as 
by general 
principles of 
equity (regardless 
of whether 
such enforceability is considered in a proceeding in equity or at Law). 

 

 

 

 

 

 

Exhibit 10.1
- 22 - 
Section 4.5
No 
Conflicts. 
Subject 
to 
compliance 
with 
the 
HSR 
Act, 
the 
execution, 
delivery, and performance of this Agreement and the other Transaction Documents by Buyer, and 
the 
transactions 
contemplated 
hereby 
and 
thereby, 
will 
not 
(a) 
violate 
any 
provision 
of 
the 
Organizational Documents of Buyer, (b) result in a material default (with or without due notice 
or 
lapse 
of 
time 
or 
both) 
or 
the 
creation 
of 
any 
lien 
or 
encumbrance 
or 
give 
rise 
to 
any 
right 
of 
termination, cancellation 
or acceleration 
under any 
material note, 
bond, mortgage, 
indenture, or 
other 
financing 
instrument 
to 
which 
Buyer 
is 
a 
party, 
(c) 
violate 
any 
judgment, 
order, 
writ, 
injunction, ruling, 
or decree in 
any material respect 
applicable to Buyer, 
or (d) violate 
any Laws 
in any material respect applicable to Buyer or any of its assets. 
Section 4.6
Liability 
for 
Brokers’ 
Fees. 
None 
of 
Seller 
or 
its 
Affiliates 
(including 
SWEPI and Non-Permian 
Newco) shall directly 
or indirectly have 
any responsibility, 
liability or 
expense, as 
a result 
of undertakings 
or agreements 
of Buyer 
or its 
Affiliates, for 
brokerage fees, 
finder’s fees, agent’s commissions or other similar forms of compensation in connection with this 
Agreement or any agreement or transaction contemplated hereby. 
Section 4.7
Litigation. There 
are no 
actions, suits, 
or proceedings 
against Buyer 
pending 
with or 
before any 
Governmental Authority 
or arbitrator, 
or, 
to Buyer’s 
Knowledge, threatened 

(a) with respect 
to or affecting the assets 
of Buyer or any 
of its Subsidiaries other 
than any actions, 
suits or proceedings that, individually or in the aggregate, have not had and would not reasonably 
be expected to have, a Buyer Material 
Adverse Effect, or (b) that would materially impair, hinder, 
or 
delay 
Buyer’s 
ability 
to 
perform 
its 
obligations 
under 
this 
Agreement 
or 
any 
Transaction 
Document. 
Section 4.8
Financing. 
Buyer 
will 
have 
at 
Closing 
sufficient 
cash, 
available 
lines 
of 
credit 
or 
other 
sources 
of 
immediately 
available 
funds 
(in 
Dollars) 
to 
enable 
Buyer 
to 
pay 
the 
Purchase Price to Seller at the Closing. 
Section 4.9
Investment Intent. 
Buyer is an 
“accredited investor,” as 
such term 
is defined 
in Regulation D 
of the Securities 
Act and will 
acquire the Subject 
Interests for its 
own account and 
not with 
a view 
to a 
sale or 
distribution thereof 
in violation 
of the 
Securities Act, 
and any 
applicable 
state blue sky Laws or any other applicable securities Laws. 
Section 4.10
Independent Evaluation. 
(a)
Buyer 
is 
knowledgeable 
of 
the 
oil 
and 
gas 
business 
and 
of 
the 
usual 
and 
customary practices of oil and gas producers, has retained 
and taken advice concerning the Assets 
and transactions herein from advisors and consultants which 
are knowledgeable about the oil and 
gas business, and is aware of the risks inherent in the oil and gas business. 
(b)
Buyer is 
a party 
capable of 
making such 
investigation, inspection, 
review 
and evaluation of Newco and 
the Assets as a prudent purchaser 
would deem appropriate under the 
circumstances including 
with respect 
to all 
matters 
relating to 
the Assets, 
their value, 
operation 
and suitability. 
(c)
In making 
the 
decision to 
enter into 
this 
Agreement 
and 
consummate the 
transactions contemplated hereby, Buyer has relied solely on the basis of its own independent due 
diligence investigation of Newco and the 
Assets and the terms 
and conditions of this Agreement, 

 

 

 

 

 

 

 

 

Exhibit 10.1
- 23 - 
and Buyer has not 
relied on any 
representation or warranty, 
express, statutory or 
implied, oral or 
written, 
or 
any 
other 
statement, 
oral 
or 
written, 
other 
than 
the 
representations 
and 
warranties 
contained in 
Article 
3, 
the 
Assignment 
Agreement 
or 
any 
assignment 
Seller 
delivers 
to 
Newco 
pursuant to Section 5.16(c) or 
confirmed in the certificate 
of Seller to be delivered 
at the Closing 
pursuant to Section 7.2(c). 
Section 4.11
Consents, Approvals or Waivers. 
Subject to compliance with 
the HSR Act 
and the matters 
set forth in 
Section 5.2, the 
Buyer’s execution, 
delivery, 
and performance of 
this 
Agreement (and the other Transaction Documents to be executed and delivered by Buyer, and the 
transactions 
contemplated 
hereby 
and 
thereby) 
is 
not 
and 
will 
not 
be 
subject 
to 
any 
consent, 
approval, or 
waiver 
from 
any 
Third 
Party 
(other 
than 
any 
Governmental 
Authority), 
except 
for 
Customary Post-Closing Consents. 
Section 4.12
Bankruptcy. 
There 
are 
no 
bankruptcy, 
insolvency, 
reorganization 
or 
receivership proceedings pending against, being contemplated by, or, to the Knowledge of Buyer, 
threatened against Buyer or any of its Affiliates. 
Section 4.13
Anti-Corruption; Trade Controls. 
(a)
Buyer 
nor 
any 
of 
its 
officers 
and 
directors 
nor, 
to 
their 
Knowledge, 
any 
Person acting on behalf 
of them (i) has violated 
Anti-Corruption Laws or Trade Control Laws, (ii) 
is 
a 
Restricted 
Party, 
or 
(iii) 
whether 
directly 
or 
indirectly, 
has 
made, 
offered, 
authorized 
or 
accepted 
any 
payment, 
gift, 
promise, 
or 
other 
advantage, 
to 
or 
for 
the 
use 
or 
benefit 
of 
any 
Government Official 
or any 
other Person 
where that 
payment, gift, 
promise, or 
other advantage 
would comprise a facilitation payment 
or otherwise violate the 
Anti-Corruption Laws or any 
other 
Applicable Law, or that would cause Seller to be in breach of any Anti-Corruption Laws. 
(b)
Buyer 
and 
its 
Affiliates 
maintain 
(i) 
adequate 
written 
policies 
and 
procedures 
to 
comply 
with 
Anti-Corruption 
Laws 
and 
Trade 
Control 
Laws 
and 
(ii) 
adequate 
internal controls, 
including using 
reasonable efforts 
to ensure 
that all 
transactions are 
accurately 
recorded and reported in its books and records 
to reflect truly the activities to 
which they pertain, 
such 
as 
the 
purpose 
of 
each 
transaction, 
with 
whom 
it 
was 
entered 
into, 
for 
whom 
it 
was 
undertaken, or what was exchanged. 

ARTICLE 5 
COVENANTS OF THE PARTIES 
Section 5.1
Access. 
(a)
Between the Execution Date 
and the Closing Date 
(or earlier termination of 
this Agreement), Seller will, and will cause its 
Affiliates (including Newco) to, give Buyer and its 
Representatives reasonable access to the Assets in Seller’s or its 
Affiliates’ possession or control, 
Seller’s 
and its 
Affiliates’ 
personnel knowledgeable 
about the 
Assets, the 
Subject Interests, 
and 
Newco, and access to and the right 
to copy (or electronic copies of), 
at Buyer’s sole cost, risk, and 
expense, the 
books and 
records of 
Seller, SWEPI and 
Newco in 
Seller’s or 
its Affiliates’ 
possession 
or control (including any 
other information in Seller’s 
or its Affiliates’ 
possession or control that 
is reasonably 
requested by 
Buyer), for 
the purpose 
of conducting 
a reasonable 
due diligence 
review 
of the Assets, the Subject Interests, and Newco, except to the extent that Seller may not do so due 

 

 

 

 

Exhibit 10.1
- 24 - 
to any obligations to any 
Third Party after the 
use of commercially reasonable efforts 
to have such 
obligations waived. 
Buyer shall 
be entitled 
to conduct 
a Phase 
I Environmental 
Site Assessment 
of the 
Assets 
in SWEPI’s 
possession or 
control and 
may conduct 
visual inspections 
and 
record 
reviews 
relating 
to 
the 
Assets 
in 
SWEPI’s 
possession 
or 
control, 
including 
their 
condition 
and 
compliance 
with 
Environmental 
Laws, 
provided
, 
that 
Buyer 
(and 
its 
Representatives) 
shall 
not 
operate any equipment 
or conduct any 
invasive testing or 
sampling of soil, 
groundwater or other 
materials (including any testing or sampling for Hazardous 
Substances, Hydrocarbons or NORM) 
on or with 
respect to the 
Assets without the 
prior written consent 
of Seller, 
which consent Seller 
may grant or deny 
in its sole discretion. 
Further, Buyer shall provide Seller 
with a copy of 
Buyer’s 
Phase I Environmental Site Assessment. 

(b)
Buyer’s 
investigation 
shall 
be 
conducted 
in 
a 
manner 
that 
minimizes 
interference with the 
operation of 
the Assets. 
Buyer shall 
coordinate its 
access rights with 
Seller 
to reasonably minimize any inconvenience to or interruption of the conduct of business by Seller, 
and 
Seller 
shall 
have 
the 
right 
to 
accompany 
Buyer 
(and 
any 
Representative 
of 
Buyer) 
in 
connection with any physical inspection of the Assets. 
(c)
Buyer acknowledges 
that, pursuant 
to its 
right of 
access to 
the Assets, 
Buyer 
will become privy 
to confidential 
and other information 
of Seller and 
its Affiliates 
and that such 
confidential information (which 
includes Buyer’s conclusions with 
respect to its 
evaluations) shall 
be held confidential by Buyer in accordance with the terms of 
the Confidentiality Agreement and 
Section 5.3(b) and any applicable privacy Laws regarding personal information. 
(d)
In connection 
with the 
rights of 
physical access, examination 
and inspection 
granted to Buyer under 
this Section 5.1, 
WITHOUT PREJUDICE TO ANY 
BUYER CLAIMS 
FOR 
INDEMNIFICATION 
OR 
DEFENSE 
PURSUANT 
TO 
SECTION 
9.1(b) 
(INCLUDING SUCH 
CLAIMS RELATED 
TO SELLER’S 
BREACH OF 
SECTION 3.15) 
OR 
OTHERWISE 
UNDER 
THIS 
AGREEMENT, 
BUYER 
HEREBY 
AGREES 
TO 
INDEMNIFY 
AND 
HOLD 
HARMLESS, 
AND 
DEFEND, 
SELLER, 
ITS 
AFFILIATES, 
AND 
EACH 
OF 
THEIR 
RESPECTIVE 
OFFICERS, 
DIRECTORS, 
EMPLOYEES, 
AGENTS, ADVISORS AND 
OTHER REPRESENTATIVES 
FROM AND 
AGAINST (AND 
BUYER AGREES 
TO WAIVE, AND RELEASE 
SUCH PERSONS 
FROM AND 
AGAINST, 
ANY CLAIMS 
BUYER MAY 
HAVE 
AGAINST SUCH 
PERSONS FOR) 
ANY AND 
ALL 
DAMAGES OR PROCEEDINGS, 
AS APPLICABLE, ATTRIBUTABLE 
TO PERSONAL 
INJURY, 
DEATH 
OR 
PHYSICAL 
PROPERTY 
DAMAGE, 
ARISING 
OUT 
OF, 
RESULTING 
FROM 
OR 
RELATING 
TO 
ANY 
FIELD 
VISIT 
OR 
OTHER 
DUE 
DILIGENCE ACTIVITY CONDUCTED BY BUYER WITH RESPECT TO THE ASSETS 
OR 
TO 
ANY 
VIOLATION 
OF 
ANY 
OF 
THE 
FOREGOING 
PERSON’S 
RULES, 
REGULATIONS, 
OR 
OPERATING 
POLICIES 
(PROVIDED 
THAT 
SUCH 
RULES, 
REGULATIONS OR OPERATING 
POLICIES ARE MADE AVAILABLE 
TO BUYER IN 
ADVANCE 
OF 
OR 
DURING 
BUYER’S 
DUE 
DILIGENCE 
EVALUATION), 
EVEN 
IF 
SUCH LIABILITIES ARISE OUT OF OR RESULT FROM, SOLELY 
OR IN PART, 
THE 
SOLE, 
ACTIVE, 
PASSIVE, 
CONCURRENT, 
OR 
COMPARATIVE 
NEGLIGENCE, 
STRICT LIABILITY OR 
OTHER FAULT 
OR VIOLATION 
OF LAW 
BY SELLER, 
ITS 
AFFILIATES, 
EACH 
OF 
THEIR 
RESPECTIVE 
OFFICERS, 
DIRECTORS, 
EMPLOYEES, AGENTS, ADVISORS AND OTHER REPRESENTATIVES, 
BUT SHALL 
EXCLUDE: (i) 
LIABILITIES CAUSED 
BY THE 
GROSS NEGLIGENCE OR 
WILLFUL 

 

 

Exhibit 10.1
- 25 - 
MISCONDUCT 
OF 
THE 
APPLICABLE 
INDEMNIFIED 
PERSON, 
OR 
(ii) 
ANY 
ENVIRONMENTAL LIABILITIES DISCOVERED OR UNCOVERED 
AS A RESULT OF 
SUCH 
EXAMINATION 
OR 
INSPECTION 
TO 
THE 
EXTENT 
THE 
PHYSICAL 
CONDITIONS GIVING RISE 
TO ANY SUCH 
ENVIRONMENTAL LIABILITIES WERE 
NOT EXACERBATED BY SUCH EXAMINATION 
OR INSPECTION.
Section 5.2
Government 
Reviews. 
In 
a 
timely 
manner, 
the 
Parties 
shall 
(a) 
make 
all 
required 
filings, 
prepare 
all 
required 
applications 
and 
conduct 
negotiations 
with 
each 
Governmental 
Authority 
as 
to 
which 
such 
filings, 
applications 
or 
negotiations 
are 
necessary 
or 
appropriate 
in 
the 
consummation 
of 
the 
transactions 
contemplated hereby 
and 
(b) 
provide 
such 
information as 
each may 
reasonably request 
to make 
such filings, 
prepare such 
applications and 
conduct 
such 
negotiations. 
Each 
Party 
shall 
reasonably 
cooperate 
with 
and 
use 
all 
reasonable 
efforts 
to 
assist 
the 
other 
with 
respect 
to 
such 
filings, 
applications, 
and 
negotiations. 
Without 
limiting the 
foregoing, in 
the event 
the Parties 
determine that 
filings by 
the Parties 
are required 
under the HSR Act, 
then within ten Business Days following 
the execution by Buyer and 
Seller of 
this Agreement, Buyer and Seller will each prepare 
and simultaneously file with the DOJ and the 
FTC the notification 
and report form 
required by 
the HSR Act 
for the transactions 
contemplated 
by 
this 
Agreement, 
and 
request 
early 
termination 
of 
the 
waiting 
period 
thereunder. 
Buyer 
and 
Seller agree to 
respond promptly to 
any inquiries from 
the DOJ or 
the FTC concerning 
such filings 
and 
to 
comply 
in 
all 
material 
respects 
with 
the 
filing 
requirements 
of 
the 
HSR 
Act. 
Buyer 
and 
Seller shall cooperate with each 
other and shall promptly furnish all 
information to the other Party 
that is necessary in connection 
with Buyer’s and Seller’s compliance with the 
HSR Act; 
provided, 
however
, that 
(i) any 
materials concerning 
valuation of 
the transaction 
may be 
redacted, and 
(ii) 
each 
of 
the 
Parties, 
as 
each 
deem 
advisable 
and 
necessary, 
may 
reasonably 
designate 
any 
competitively sensitive material 
provided to the 
other under 
this Section 5.2 
as “counsel 
only” and, 
in such 
event, such 
material and 
the information 
contained therein 
shall be 
given only 
to the 
outside 
legal counsel 
of 
the 
recipient and 
shall not 
be 
disclosed by 
such 
counsel 
to non-legal 
directors, 
officers, 
employees 
or 
other 
advisors 
or 
representatives 
of 
the 
recipient 
unless 
prior 
consent 
is 
obtained in 
advance from 
the source 
of the 
materials or 
its legal 
counsel. Buyer 
and Seller 
shall 
keep each other fully advised with respect 
to any requests from or communications 
with the DOJ 
or 
FTC 
concerning 
such 
filings 
and 
shall 
consult 
with 
each 
other 
with 
respect 
to 
all 
responses 
thereto. Buyer and Seller agree not to participate, or to 
permit their Affiliates or representatives to 
participate, 
in 
any 
substantive 
meeting 
or 
discussion 
with 
any 
Governmental 
Authority 
in 
connection with 
the 
transactions 
contemplated by 
this 
Agreement unless 
it 
so consults 
with the 
other Party 
in advance 
and, to 
the extent 
not prohibited 
by such 
Governmental Authority, 
gives 
the other Party 
the opportunity to 
attend and participate 
duly represented by 
its external counsel. 
The Parties shall use their reasonable efforts in connection with any HSR Act filing and to secure 
any required 
approval from 
the antitrust 
agencies to 
consummate the 
transactions 
contemplated 
hereby; 
provided, 
however, 
that 
nothing 
in 
this 
Agreement 
shall 
require 
Buyer 
or 
any 
of 
its 
Affiliates to take any action 
to, consent or proffer 
to divest, hold separate, or 
enter into any license 
or similar 
agreement with 
respect to, 
or agree 
to restrict 
the ownership 
or operation 
of, any 
business 
or assets of Buyer, 
Newco, Seller, or 
any of their respective Affiliates. Notwithstanding 
anything 
to the 
contrary herein, 
in no 
event shall 
Buyer or 
any of 
its Affiliates 
be obligated 
to litigate 
or 
participate 
in 
the 
litigation 
of 
any 
action, 
whether 
judicial 
or 
administrative, 
brought 
by 
any 
Governmental 
Authority 
or 
appeal 
any 
order 
challenging 
or 
seeking 
to 
make 
illegal, 
delaying 
materially or 
otherwise directly 
or indirectly 
restraining or 
prohibiting the 
consummation of 
the 

 

 

 

 

 

 

 

 

 

 

Exhibit 10.1
- 26 - 
transactions contemplated hereby. All 
filing fees incurred in connection with the HSR 
Act filings 
made pursuant to this Section 5.2 shall be paid by Buyer. 
Section 5.3
Public Announcements; Confidentiality. 
(a)
From and after the Execution 
Date and through the Closing 
Date, no Party 
shall 
make 
(or 
cause 
any 
Affiliate 
or 
Newco 
to 
make) 
any 
press 
release 
or 
other 
public 
announcement, including 
any press 
release or 
other public 
announcement through 
social media, 
regarding the 
existence 
of this 
Agreement, the 
contents 
hereof or 
the transactions 
contemplated 
hereby 
without 
the 
prior 
written 
consent 
of 
the 
other 
Party 
(collectively, 
the 
“Public 
Announcement Restrictions”), which consent shall 
be requested no fewer 
than five Business Days 
prior to the date on which the relevant press release or other public announcement is desired to be 
made. 
The 
Public 
Announcement 
Restrictions 
shall 
not 
restrict 
disclosures 
to 
the 
extent 
(i) 
necessary 
for 
a 
Party 
to 
perform 
this 
Agreement 
(including 
disclosures 
to 
Governmental 
Authorities or Third Parties holding rights of consent or other rights that may be applicable to the 
transaction 
contemplated 
by 
this 
Agreement, 
as 
reasonably 
necessary 
to 
provide 
notices, 
seek 
waivers, 
amendments 
or 
termination 
of 
such 
rights, 
or 
seek 
such 
consents), 
(ii) 
required 
(upon 
advice of counsel) by applicable 
securities or other Laws or 
regulations or the applicable rules 
of 
any 
stock 
exchange 
having 
jurisdiction 
over 
the 
Parties 
or 
their 
respective 
Affiliates, 
or 
(iii) 
consistent with prior press 
releases or other public 
announcements agreed in writing 
by the other 
Party 
or 
otherwise 
made 
in 
compliance 
with 
this 
Section 
5.3(a) 
or 
any 
presentation, 
communication 
plan 
or 
strategy 
previously 
agreed 
to 
in 
writing 
by 
the 
other 
Party 
(for 
the 
avoidance of doubt, the Public 
Announcement Restrictions shall not (x) 
restrict disclosures made 
in an earnings release, earnings call, 
or other communication with current 
or potential investors or 
financial analysts 
that is 
consistent with 
any such 
press release, 
public announcement, 
presentation, 
communication plan or strategy that is permitted pursuant to subsection (iii) of this Section 5.3(a) 
or (y) 
restrict Buyer 
from communicating 
with any 
counterparty to 
a Lease, 
Surface Contract 
or 
Contract about any 
matter that Buyer 
is permitted to disclose 
pursuant to this 
Section 5.3(a) or 
that 
is not otherwise 
subject to a 
Confidentiality Restriction). 
In the case 
of the disclosures 
described 
under subsections (i) and 
(ii) of this Section 5.3(a), 
each Party shall use its 
best efforts to consult 
with the other 
Party regarding the 
contents of any 
such release or announcement 
prior to making 
such release or announcement. 
(b)
The 
Parties 
shall 
keep 
all 
information 
and 
data 
relating 
to 
(i) 
this 
Agreement, the 
contents hereof, 
and the 
transactions contemplated 
hereby and 
(ii) the 
Assets, in 
each case, 
strictly 
confidential 
(and shall 
cause its 
Affiliates 
to 
keep such 
information 
and 
data 
confidential) except 
for (i) 
disclosures to 
Representatives of 
the Parties 
(
provided
, 
however
, that 
such 
Representatives 
are 
first 
directed 
by 
the 
disclosing 
Party 
to 
treat 
such 
information 
in 
accordance 
with 
the 
terms 
of 
this 
Agreement 
and, 
in 
each 
case, 
the 
disclosing 
Party 
will 
be 
responsible for making sure that the Representatives keep such information and 
data confidential) 
to the extent 
required to perform 
this Agreement, (ii) 
disclosures by Seller 
of such information 
and 
data to its Affiliate or to the employees, officers, directors, members, equity owners or counsel of 
Seller or any of its 
Affiliates to the 
extent necessary for use in 
internal operations by Seller 
or its 
Affiliates 
(
provided
, 
however
, that 
Seller will 
be 
responsible for 
making 
sure that 
such Persons 
keep such 
information and 
data confidential), 
and (iii) 
information that 
is or 
becomes known 
to 
the public other 
than as 
a result 
of a breach 
of this 
Agreement (collectively, 
the “Confidentiality 
Restrictions”). 

 

 

 

 

 

 

 

 

 

 

 

Exhibit 10.1
- 27 - 
(c)
The 
Confidentiality 
Restrictions 
shall 
not 
restrict 
disclosures 
that 
are 
(i) 
required 
(upon 
advice 
of 
counsel) 
by 
applicable 
securities 
or 
other 
Laws 
or 
regulations 
or 
the 
applicable 
rules 
of 
any 
stock 
exchange 
having 
jurisdiction 
over 
the 
Parties 
or 
their 
respective 
Affiliates; 
(ii) 
necessary 
for 
a 
Party 
to 
perform 
this 
Agreement 
(including 
disclosures 
to 
Governmental Authorities 
or Third 
Parties holding 
rights of 
consent or 
other rights 
that may 
be 
applicable to the transaction contemplated by this Agreement, as reasonably necessary to 
provide 
notices, 
seek 
waivers, 
amendments 
or 
termination 
of 
such 
rights, 
or 
seek 
such 
consents); 
(iii) 
necessary for a Party to enforce its rights under this Agreement or to defend any claim brought or 
threatened by any 
other Party to 
this Agreement, or such 
Party’s Affiliates; or (iv) permitted or 
not 
restricted pursuant to Section 5.3(a). In the case of the disclosures described under subsections (i) 
and (ii) of 
this Section 5.3(c), 
each Party shall 
use its commercially 
reasonable efforts to 
consult 
with the other Party 
regarding the contents of 
any such disclosure prior 
to making such disclosure. 
(d)
To the 
extent that the foregoing provisions of this Section 5.3 conflict with 
the provisions 
of the 
Confidentiality Agreement, 
the provisions 
of this 
Section 5.3 
shall prevail 
and control to the extent of such 
conflict. If Closing should occur, 
the Confidentiality Agreement 
shall terminate as 
of the Closing 
and the Confidentiality 
Restrictions set forth 
in this 
Section 5.3 
shall terminate as to Buyer and its Affiliates (including Newco) at Closing. 
Section 5.4
Operation 
of 
Business. 
Except 
(i) 
for 
the 
operations 
set 
forth 
on 
Schedule 3.9 or Schedule 
5.4, (ii) as required 
in the event of 
an emergency to protect life, 
property 
or the environment, (iii) as 
may be required by 
Law, 
(iv) as permitted or otherwise 
contemplated 
by this Agreement, or (v) as otherwise approved in writing by Buyer, which approval shall not be 
unreasonably 
withheld, 
conditioned, 
or 
delayed 
and 
without 
limiting 
any 
disclaimer 
expressly 
made by Seller 
in this Agreement, 
from the Execution Date 
until the Closing 
Date, Seller shall 
and 
shall cause SWEPI and Newco (following the Merger) to: 

(a)
conduct 
its 
business, 
in 
accordance 
with 
its 
ordinary 
course 
of 
business, 
consistent with past 
practice, and 
subject to interruptions 
resulting from 
force majeure, 
mechanical 
breakdown or planned maintenance, 
and conduct its 
business related to the 
Assets in compliance 
with the Leases, Contracts and all applicable Laws; 
(b)
not resign 
SWEPI’s 
or Newco’s, 
as the 
case may 
be, position 
as operator 
with respect to any of the Assets, or abandon any of the Assets, other than as required pursuant to 
the terms of any agreement or as required by applicable Law; 
(c)
except 
for 
(i) 
those 
capital 
expenditures 
by 
SWEPI 
provided 
for 
in 
the 
capital expenditure budget 
set forth on 
Schedule 5.4, and 
(ii) capital expenditures 
to repair damage 
resulting 
from 
insured 
casualty 
events 
or 
required 
on 
an 
emergency 
basis 
for 
the 
safety 
of 
individuals, 
assets 
or 
the 
environment, 
not 
authorize, 
propose, 
or 
commit 
to 
any 
operation 
reasonably anticipated by Seller 
to cost the owner 
of the Assets 
more than $2,500,000 per 
activity, 
net to SWEPI’s (or, 
as of the consummation of the Merger, Newco’s) 
interest; 
(d)
(i) not 
take any 
affirmative action 
to terminate, 
materially amend, execute 
or 
extend 
any 
Leases 
(except 
as 
specifically 
described 
on 
Schedule 
5.4), 
(ii) 
except 
for 
those 
amendments, waivers, modifications 
or extensions to 
Material Contracts resulting 
from operations 
set forth on 
Schedule 5.4 (to 
the extent the terms 
of such amendments, waivers, 
modifications or 

 

 

Exhibit 10.1
- 28 - 
extensions 
are 
expressly 
set 
forth 
on 
Schedule 
5.4), 
not 
terminate, 
materially 
amend, 
waive, 
modify, 
or extend any 
Material Contracts, and 
(iii) not enter 
into any 
new contract 
which would 
constitute a Material Contract if executed prior to the Execution Date or amend a 
Contract that by 
virtue of 
the 
amendment 
makes such 
Contract 
a 
Material Contract; 
in each 
case, other 
than 
the 
execution or extension 
of a Contract 
for the sale, 
exchange, or marketing 
of oil, gas 
and/or other 
Hydrocarbons in 
the ordinary 
course of 
business and 
terminable without 
penalty on 
60 days’ 
or 
shorter notice; 
(e)
not enter into or extend any Surface Contract other 
than (i) the extension of 
the term of those 
Surface Contracts described 
in Schedule 5.4 
and (ii) the 
execution of a 
Surface 
Contract that 
(x) contains 
terms typically 
and customarily 
included in 
similar instruments 
in the 
oil and gas industry and (y) would not reasonably 
be expected to result in aggregate payments by 
Newco after Closing 
of more than 
$250,000 (net to 
SWEPI’s (or, 
as of the 
consummation of the 
Merger, Newco’s) 
interest) during the current or any subsequent calendar year; 
(f)
maintain 
all 
material 
insurance 
policies 
in 
the 
amounts 
and 
of 
the 
types 
presently in force with respect to the Assets and the operations and activities of SWEPI and, as of 
the consummation of the Merger, Newco; 
(g)
maintain 
the 
books, 
accounts 
and 
records 
of 
SWEPI 
with 
respect 
to 
the 
Assets 
and, 
upon 
consummation 
of 
the 
Merger, 
Newco 
in 
the 
ordinary 
course 
of 
business 
consistent 
with 
past 
practice 
and 
in 
compliance 
with 
all 
applicable 
Laws 
and 
contractual 
obligations; 
(h)
promptly 
notify 
Buyer 
of 
any 
material 
emergency 
affecting 
Newco’s 
business or the Assets; 
(i)
promptly 
notify 
Buyer 
of, 
and 
not 
settle 
or 
compromise, 
any 
material 
actions, 
suits 
or 
proceedings 
filed 
with 
any 
Governmental 
Authority, 
or 
threatened 
in 
writing 
against SWEPI or 
Newco with respect 
to the Assets, 
Newco or the 
transactions contemplated by 
this Agreement; 
(j)
not amend or otherwise change the Organizational Documents of Newco; 
(k)
maintain all Permits, 
approvals, bonds and guaranties 
affecting the Assets, 
and make all filings 
that Seller and its 
Affiliates are required to 
make under applicable Law 
with 
respect to the Assets; 
(l)
not transfer, sell, hypothecate, 
encumber or otherwise 
dispose of any 
Assets 
except 
for 
(i) 
sales 
and 
dispositions 
of 
Hydrocarbons 
or 
equipment 
and 
materials 
made 
in 
the 
ordinary 
course 
of 
business 
consistent 
with 
past 
practices, 
which 
in 
the 
case 
of 
equipment 
and 
materials, are replaced 
with equipment and 
materials of comparable 
or better value 
and utility in 
connection 
with 
the 
maintenance, 
repair, 
and 
operation 
of 
the 
Assets 
and 
(ii) 
other 
sales 
and 
dispositions of the Assets (other than Properties and Surface 
Contracts) not exceeding $1,000,000 
in the aggregate; 
(m)
promptly notify Buyer of any written notice 
received by Seller, SWEPI, 
or 
Newco of 
any material 
violation of 
any Environmental 
Laws relating 
to Newco 
or the 
Assets where 

 

Exhibit 10.1
- 29 - 
such violation 
has not 
been previously 
cured or 
otherwise resolved 
to the 
written satisfaction 
of 
the relevant Governmental Authority; 
(n)
not issue, 
sell, pledge, 
transfer, 
or dispose 
of, or 
otherwise subject 
to any 
Encumbrance, any 
of the 
Subject Interests 
or any 
other Interest 
of Newco, 
or any 
options, warrants, 
convertible securities or other rights of any 
kind to acquire any such Subject Interests 
or any other 
Interest of Newco; 
(o)
not 
declare, 
set 
aside 
or 
pay 
any 
dividends 
on, 
or 
make 
any 
other 
distributions (whether in cash, stock or property) in respect of, the Subject Interests; 
(p)
not reclassify, combine, 
split, subdivide 
or redeem, 
or purchase 
or otherwise 
acquire, 
directly 
or 
indirectly, 
the 
Subject 
Interests, 
or 
make 
any 
other 
change 
with 
respect 
to 
Newco’s capital structure; 
(q)
not 
acquire 
any 
Interest 
in 
any 
corporation, 
partnership, 
limited 
liability 
company, other business organization 
or division thereof 
or any 
material amount of 
assets, or enter 
into any joint venture, strategic 
alliance, exclusive dealing, noncompetition 
or similar contract or 
arrangement other than acquisitions as to which 
the aggregate amount of the consideration 
paid or 
transferred by 
Newco 
in 
connection 
with 
all 
such 
acquisitions 
would 
not exceed 
$2,500,000 
or 
would be permitted under Section 5.4(d); 
(r)
not 
adopt 
any 
plan 
or 
agreement 
of 
complete 
or 
partial 
liquidation, 
dissolution, 
restructuring, 
recapitalization, 
merger, 
consolidation 
or 
other 
reorganization 
or 
otherwise effect any transaction that would alter Newco’s limited liability company structure; 
(s)
not incur any 
Indebtedness or 
issue any 
debt securities or 
assume, guarantee 
or endorse, or otherwise become responsible 
for, the obligations of any Person, or make any loans 
or advances; 
(t)
not 
make, 
compromise 
or 
forgive 
any 
loans, 
advances, 
or 
capital 
contributions to, or investments in, any other Person; 
(u)
not make any 
change in any 
method of accounting 
or accounting practice 
or 
policy, except as required by GAAP; 
(v)
except in 
the ordinary 
course of 
business (and, 
in each 
case, as 
would not 
materially 
affect 
Buyer 
or 
any 
of 
its 
Affiliates, 
Newco 
or 
the 
Assets), 
not 
(i) 
make, 
change 
or 
revoke any Tax election (including making any election for Newco to be treated as an association 
taxable 
as 
a 
corporation 
for 
U.S. 
federal 
income 
tax 
purposes 
or 
applicable 
state 
or 
local 
Tax 
purposes), (ii) 
change any 
annual Tax 
accounting period, 
(iii) change 
any method 
of accounting 
for Tax purposes, (iv) commence, settle, or compromise any 
claim or assessment in respect 
of any 
Taxes 
or 
any 
other 
Tax 
Proceeding, 
(v) 
file 
any 
Tax 
Returns 
other 
than 
in 
a 
manner 
that 
is 
consistent with 
past practice, 
except to 
the extent 
required by 
applicable Law, (vi) 
file any 
amended 
Tax 
Return, (vii) 
agree to 
an extension 
or waiver 
of the 
statute of 
limitations with 
respect to 
the 
assessment, collection or determination of any Taxes, (viii) enter into any closing agreement with 
respect to 
any 
Taxes, 
(ix) 
grant 
any power 
of 
attorney with 
respect to 
Taxes, 
(x) 
surrender 
any 
right to claim a Tax refund, or (xi) enter into any Tax allocation, Tax sharing, Tax receivable, Tax 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Exhibit 10.1
- 30 - 
indemnity agreement 
or other 
similar agreement 
or arrangement, 
or any 
closing or 
other agreement 
relating to Taxes; 
(w)
not take any action that 
would or would reasonably 
be expected to prevent 
or 
materially 
delay 
the 
Closing 
and 
the 
consummation of 
the 
transactions 
contemplated by 
this 
Agreement; and 
(x)
not 
enter 
into 
an 
agreement 
or 
commitment 
that 
would 
cause 
Newco 
to 
violate any of the foregoing clauses (a) through (w). 
Requests for 
approval of 
any action 
restricted by 
this Section 
5.4 shall 
be delivered 
to the 
following 
individual, who shall 
have full authority to 
grant or deny 
such requests for 
approval on behalf of 
Buyer; 
provided
, that such approval shall not be unreasonably withheld, conditioned or delayed: 
Danny Yick 
Sr. Director 
Acquisitions & Divestitures 

925 N. Eldridge Parkway 
Houston, Texas 77079 
SP1-21-21-N096 
Danny.H.Yick@conocophillips.com 
Buyer’s approval of 
any action restricted 
by this Section 
5.4 shall be 
considered granted within 
ten 
days 
after 
Seller’s 
notice 
to 
Buyer 
requesting 
such 
consent 
unless 
Buyer 
notifies 
Seller 
to 
the 
contrary during that period. In the event 
of an emergency, 
Seller (or SWEPI or Newco) may 
take 
such action as a 
reasonably prudent owner or 
operator would take and 
shall notify Buyer of 
such 
action 
promptly 
thereafter. 
In 
cases 
in 
which 
neither 
Seller 
nor 
any 
of 
its 
Affiliates 
(including 
SWEPI 
and 
Newco) 
is 
the 
operator 
of 
any 
portion 
of 
the 
Assets, 
to 
the 
extent 
that 
the 
actions 
described 
in 
this 
Section 
5.4 
may 
only 
be 
taken 
by 
(or 
are 
the 
primary 
responsibility 
of) 
the 
operator of such 
Assets, the provisions 
of this 
Section 5.4 shall 
be construed to 
require only that 
Seller use, 
or cause Newco 
to use, commercially 
reasonable efforts to 
cause the operator(s) 
of such 
Assets to take such 
actions within the constraints 
of the applicable operating 
agreements and other 
applicable agreements. 
Section 5.5
Amendment to 
Schedules. At 
any point 
prior to 
the date 
that is 
five Business 
Days 
prior 
to 
Closing, 
Seller 
shall 
have 
the 
right 
to 
supplement 
its 
Schedules 
relating 
to 
the 
representations 
and 
warranties 
set 
forth 
in 
Article 
3 
with 
respect 
to 
any 
matters 
first 
occurring 
subsequent 
to 
the 
Execution 
Date 
(including 
with 
respect 
to 
any 
matters 
taken 
by 
Seller 
in 
accordance with, but not in 
violation of, Section 5.4). 
However, all such supplements (except with 
respect 
to 
matters 
taken 
by 
Seller 
in 
accordance 
with 
Section 
5.4) 
shall 
be 
disregarded 
for 
all 
purposes, 
including 
determining 
whether 
the 
conditions 
to 
Buyer’s 
obligation 
to 
close 
the 
transaction pursuant to Section 
6.2(a) and Section 
6.2(b) have been satisfied; 
provided
, 
however
, 
if Seller has supplemented 
its Schedules pursuant to 
this Section 5.5, and 
based upon the matters 
relating to such 
supplements (other than matters 
taken by Seller 
in accordance with 
Section 5.4), 
Buyer’s obligation to close the transactions pursuant to Section 6.2(a) 
and Section 6.2(b) have not 
been 
satisfied 
but 
Buyer 
nevertheless 
elects 
to 
close 
the 
transactions 
contemplated 
hereunder, 
Buyer will be deemed to have waived only the matters 
disclosed pursuant to any such supplement 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Exhibit 10.1
- 31 - 
which gave rise to Buyer’s right 
to not close the transactions contemplated 
by this Agreement (for 
the avoidance of doubt, no 
matter set forth in any 
such supplement will be taken 
into account for 
purposes 
of, 
and 
will 
not 
affect 
Buyer’s 
remedies 
under, 
Section 
9.1(b)(ii) 
with 
respect 
to 
any 
breaches of Seller’s representations and 
warranties related to the 
Assets that do not 
individually or 
in the 
aggregate give 
rise to 
a failure 
of a 
condition precedent 
to Buyer’s 
obligation to 
close the 
transaction contemplated by this Agreement contained in Section 6.2(a)). 
Section 5.6
Further 
Assurances. 
After 
Closing, 
the 
Parties 
agree 
to 
take 
such 
further 
actions 
and 
to 
execute, 
acknowledge 
and 
deliver 
all 
such 
further 
documents 
as 
are 
reasonably 
requested 
by 
the 
other 
Party 
for 
carrying 
out 
the 
purposes 
of 
this 
Agreement 
or 
any 
other 
Transaction Document. 
Section 5.7
Related 
Party 
Contracts. 
Except 
as 
set 
forth 
on 
Schedule 
5.7, 
no 
Related 
Party Contracts shall be allocated to Newco or included in the Assets. 
Section 5.8
Conduct of Buyer. Except with the prior written consent of Seller, from the 
Execution Date until the Closing, Buyer shall not take any action that would or would reasonably 
be expected to 
prevent or materially 
delay the Closing 
and the consummation 
of the transactions 
contemplated by this Agreement. 
Section 5.9
Employee 
Matters. 
Seller 
and 
Buyer 
shall 
comply 
with 
the 
terms 
and 
conditions 
with 
respect 
to 
employee 
matters 
and 
personal 
data 
protection 
set 
forth 
in 
Schedule 
5.9(a) and Schedule 5.9(b), respectively. 
Section 5.10
Bonds, 
Letters 
of 
Credit 
and 
Guarantees. 
The 
Parties 
acknowledge 
and 
agree that none of the bonds, 
letters of credit and guarantees listed 
on Schedule 3.23, which have 
been posted 
by Seller 
or its 
Affiliates (other 
than Newco) 
with Governmental 
Authorities and 
relate 
to the Assets 
for the benefit 
of Newco, may 
be transferable to 
Buyer. 
Promptly following Closing, 
Buyer shall obtain, 
or cause 
to be obtained 
in the name 
of Buyer 
or its Affiliate 
(including Newco), 
as 
applicable, 
replacements 
for 
such 
bonds, 
letters 
of 
credit 
and 
guarantees, 
to 
the 
extent 
such 
replacements are necessary to permit cancellations of 
such bonds, letters of credit and 
guarantees 
posted by Seller or its 
Affiliates (other than Newco) 
with respect to the Assets 
or to consummate 
the transactions contemplated by this Agreement. 
Section 5.11
Transition Services Agreement. From the Execution 
Date until the Closing 
Buyer 
and 
Seller 
shall 
take 
commercially 
reasonable 
efforts 
to 
negotiate 
a 
transition 
services 
agreement that contains terms 
substantially similar to those 
set forth on Exhibit 
C and such other 
terms that 
are mutually 
acceptable to 
the Parties 
(the “Transition 
Services Agreement”). 
For the 
avoidance of doubt, the 
Parties’ covenants and obligations 
pursuant to this Section 
5.11 shall 
not 
be conditions 
precedent to 
Closing pursuant 
to Section 
6.1 and 
Section 6.2 
or be 
the basis 
upon 
which either Party may terminate this Agreement pursuant to Section 8.1. 
Section 5.12
Use of 
Name. On 
or before 
90 days 
after Closing 
(or earlier 
to the 
extent 
required by Laws), at 
Buyer’s cost, Buyer 
will remove, or cause 
to be removed, from 
the Assets, 
the 
name, 
logo 
and 
service 
mark 
of 
Seller 
and 
its 
Affiliates, 
and 
all 
variations 
and 
derivations 
thereof (including any reference to “Shell”) and will not thereafter make use thereof. 

 

 

 

 

 

 

 

Exhibit 10.1
- 32 - 
Section 5.13
Records. Subject to 
the limitations contained 
in this Agreement, 
Seller shall 
deliver to Buyer 
copies of the Records, 
in the current written 
or electronic format of 
such Records, 
to the extent 
possible at Closing, 
but in any event, 
within 90 days 
after Closing, to the 
extent not 
already 
delivered 
by 
Seller. 
Any 
electronic 
information 
or 
data 
provided 
shall 
be 
in 
the 
same 
format as that 
then currently used 
by Seller, 
and Seller shall 
not be required 
to perform or 
create 
additional programming or system support in connection 
therewith. Seller may exercise or redact 
Records to remove information 
that does not constitute 
a Record. Seller 
may retain photocopies or 
electronic images of 
the Records; 
provided
, that Seller 
shall keep confidential 
and not disclose 
any 
such Records that 
are not public 
information pursuant to 
the terms of 
Section 5.3. Seller 
and Buyer 
shall each appoint one focal point for coordination of the transfer of the Records. 
Section 5.14
Insurance. 
(a)
Buyer acknowledges and 
agrees that (i) 
no insurance policies 
arranged for 
the 
benefit 
of, 
or 
provided 
to, 
Seller 
or 
any 
member of 
the 
Seller 
Group, 
including 
any 
current 
insurance policies relating 
to the business 
or assets of 
the Seller shall 
continue after Closing, 
(ii) 
Buyer 
shall 
not, 
and 
shall 
procure 
that 
no 
member 
of 
the 
Buyer 
Group 
shall, 
make 
any 
claims 
under 
any 
such 
insurance 
policies 
or 
insurance 
coverage 
in 
respect 
of 
facts, 
events 
or 
circumstances 
arising 
prior 
to 
the 
Closing 
and 
(iii) 
from 
the 
Execution 
Date 
and 
until 
Closing, 
Seller shall ensure that all policies of insurance 
relating to the business or Assets in force 
as of the 
Execution 
Date 
are 
kept 
in 
force 
in 
accordance 
with 
past 
practices 
(the 
“Current 
Insurance 
Policies”). In the 
event Seller becomes 
aware of any 
fact, event or 
circumstance arising after 
the 
Execution Date and 
prior to 
Closing in respect 
of which a 
claim may be 
made under the 
Current 
Insurance Policies, Seller shall (i) file 
a claim in respect of such 
event or circumstance and (ii) use 
reasonable endeavours to 
have such claim 
paid at or 
prior to Closing, 
in each case 
in accordance 
with 
its 
customary 
past 
practices. 
In 
the 
event 
that 
such 
a 
claim 
is 
not 
paid 
prior 
to 
Closing, 
notwithstanding anything 
else in 
this Section 
5.14, Seller 
shall use 
reasonable endeavours 
to pursue 
payment in 
respect of 
such a 
claim on 
behalf of 
Buyer and 
Buyer shall 
have the 
right to 
receive 
any 
payment 
made 
in 
respect 
of 
any 
such 
claim 
made 
prior 
to 
the 
Closing 
as, 
when 
and 
to 
the 
extent such claim shall be paid. 

(b)
In 
the 
event 
any 
tangible 
assets 
of 
Newco 
are 
destroyed 
or 
damaged, 
in 
whole or in part, by 
fire or other casualty prior 
to the Closing Date, then, in 
lieu of making a claim 
in accordance with this Section 5.14, Seller shall have the option to repair 
or replace (with similar 
grade 
and 
quality) 
such 
damaged 
assets 
on 
or 
before 
the 
Closing 
Date, 
in 
which 
case, 
neither 
Newco nor Buyer shall have any right, claim or title to any insurance proceeds. 
(c)
Buyer 
further 
hereby 
acknowledges 
and 
agrees 
that 
no 
historic 
insurance 
coverage provided 
by 
or 
to 
Seller 
or 
Newco, 
including 
the 
Current 
Insurance Policies, 
shall 
be 
available to the Buyer 
or Newco after Closing, with 
the exception of insurance 
coverages required 
by statute 
or law 
and, in 
such limited 
instances, only 
to the 
extent that 
the policies 
provide such 
historical coverage. Buyer further acknowledges and agrees 
that it has no right, title 
or interest in 
any unearned premiums on any policies maintained by 
or for the benefit of Seller or 
any member 
of the Seller Group. 

 

 

 

 

Exhibit 10.1
- 33 - 
Section 5.15
Anti-Bribery and Corruption. 

(a)
Without limitation to Section 3.10 or Section 3.27, Seller: 
(i)
is aware 
of, during 
the period 
between the 
Execution Date 
and the 
Closing 
Date 
will 
comply 
with, 
and 
has 
not 
violated, 
Anti-Corruption 
Laws 
or 
Trade Control Laws and is not a Restricted Party; 
(ii)
whether directly or 
indirectly, 
has not made, 
offered, authorized 
or 
accepted and will not make, offer, authorize, or accept any payment, gift, promise, 
or other advantage, to 
or for the 
use or benefit 
of any Government 
Official or any 
other Person where 
that payment, gift, 
promise, or other 
advantage would comprise 
a facilitation payment 
or otherwise violate 
the Anti-Corruption Laws 
or any other 
applicable Law, or 
that would cause Buyer to be 
in breach of any Anti-Corruption 
Laws; 
(iii)
has 
maintained 
and 
will 
maintain 
adequate 
written 
policies 
and 
procedures to comply with Anti-Corruption Laws; 
(iv)
has 
maintained 
and 
will 
maintain 
adequate 
internal 
controls, 
including 
using 
reasonable 
efforts 
to 
ensure 
that 
all 
transactions 
are 
accurately 
recorded and reported 
in its books 
and records 
to reflect truly 
the activities to 
which 
they 
pertain, 
such 
as 
the 
purpose 
of 
each 
transaction, 
with 
whom 
it 
was 
entered 
into, for whom it was undertaken, or what was exchanged; 
(v)
will, to its Knowledge, retain such books and records for the period 
required by applicable Law or Seller’s own retention 
policies, whichever is longer; 

(vi)
is 
not 
a 
Government 
Official, 
and 
to 
the 
best 
of 
its 
Knowledge 
exercising reasonable diligence, 
no officer, agent or employee 
engaged by Seller 
or 
acting on Seller’s behalf is a Government Official; 

(vii)
will, in the 
event Seller 
becomes aware it 
has breached an 
obligation 
in 
this 
paragraph, 
promptly 
notify 
Buyer, 
subject 
to 
the 
preservation 
of 
legal 
privilege; and 
(viii)
shall 
make 
payments 
to 
Buyer, 
except 
with 
Buyer’s 
prior 
written 
consent. 

(b)
Without limitation to Section 4.13, Buyer: 
(i)
is aware 
of, during 
the period 
between the 
Execution Date 
and the 
Closing 
Date 
will 
comply 
with, 
and 
has 
not 
violated, 
Anti-Corruption 
Laws 
or 
Trade 
Control Laws and is not a Restricted Party; 
(ii)
whether directly or indirectly, 
has not made, offered, authorized, or 
accepted and will 
not make, offer, authorize, or accept 
any payment, gift, promise, 
or other 
advantage, 
to 
or 
for 
the 
use 
or 
benefit 
of 
any 
Government 
Official 
or 
any 
other 
Person 

 

 

 

Exhibit 10.1
- 34 - 
where 
that 
payment, 
gift, 
promise, 
or 
other 
advantage 
would 
comprise 
a 
facilitation 
payment or 
otherwise violate 
the Anti-Corruption 
Laws or 
any other 
applicable Law, 
or 
which would cause Seller to be in breach of any Anti-Corruption Laws; 
(iii)
has 
maintained 
and 
will 
maintain 
adequate 
written 
policies 
and 
procedures to comply with Anti-Corruption Laws; 

(iv)
has 
maintained 
and 
will 
maintain 
adequate 
internal 
controls, 
including using 
reasonable 
efforts 
to 
ensure that 
all transactions 
are 
accurately recorded 
and reported 
in its 
books and 
records to 
reflect truly 
the activities 
to which 
they pertain, 
such as 
the purpose 
of each 
transaction, with 
whom it 
was entered into, 
for whom 
it was 
undertaken, or what was exchanged; 

(v)
will, to its Knowledge, retain such books and records for the period 
required by applicable Law or Buyer’s own retention policies, whichever is longer; 

(vi)
is 
not 
a 
Government 
Official, 
and 
to 
the 
best 
of 
its 
Knowledge 
exercising reasonable diligence, no officer, agent or employee engaged by Buyer or 
acting 
on Buyer’s behalf is a Government Official; 

(vii)
will, in the 
event it becomes aware 
it has breached 
an obligation in 
this paragraph, promptly notify Seller, subject to the preservation of legal privilege; 

(viii)
and any Person 
who has acted 
on its behalf 
in connection with 
this 
Agreement has 
not been 
and is 
not now 
involved in 
internal or 
external investigations 
or 
discussions 
with 
any 
Governmental 
Authority 
related 
to 
potential 
or 
actual 
breaches 
of 
Trade Control Laws or Anti-Corruption Laws; 
(ix)
warrants 
that 
all 
information 
provided 
by 
Buyer 
to 
Seller 
in 
connection with Seller’s integrity due diligence is accurate; and 
(x)
shall 
make 
payments 
to 
Seller, 
except 
with 
Seller’s 
prior 
written 
consent.
(c)
Prior to 
Closing and 
notwithstanding any 
other provision 
of this 
Agreement, 
if 
a 
Party 
becomes 
a 
Restricted 
Party, 
is 
listed 
on 
the 
Restricted 
Party 
list, 
or 
is 
held 
liable 
for 
violation 
of Anti-Corruption 
Laws or 
Trade 
Control 
Laws, in 
each case, 
in 
connection with 
the 
transaction contemplated by this Agreement, then this Agreement 
shall terminate upon a notice of 
termination being provided 
by the other 
Party to 
such Party. 
For the 
avoidance of 
doubt, a 
Party 
becoming 
a 
Restricted 
Party, 
being 
listed 
on 
the 
Restricted 
Party 
list, 
or 
being 
held 
liable 
for 
violation 
of Anti-Corruption 
Laws or 
Trade 
Control 
Laws, in 
each case, 
in 
connection with 
the 
transaction contemplated 
by 
this 
Agreement, shall 
constitute 
a 
material 
breach 
or 
failure 
of 
the 
relevant Party’s 
representations, 
warranties, or 
covenants hereunder 
in 
accordance 
with 
Section 
8.2(b)(i) or Section 8.2(c)(ii), as applicable. 

 

 

 

Exhibit 10.1
- 35 - 
Section 5.16
Required Consents. 
(a)
Promptly after the Execution Date, Seller shall prepare and send notices (i) 
to the holders 
of any Required Consents, 
in compliance with the 
terms of such Required 
Consents, 
requesting 
consents 
to 
the 
transactions 
contemplated 
hereby 
or 
waivers 
of 
the 
applicable 
rights 
related to such 
Consents. Seller 
shall use 
commercially reasonable 
efforts (at 
no material 
cost to 
Seller) to 
cause such 
Required 
Consents to 
be 
waived or 
obtained, 
as 
applicable, and 
delivered 
prior to 
the 
Closing. 
As 
applicable, Buyer 
shall 
reasonably 
cooperate 
with, or 
(after 
Closing, 
if 
applicable) cause Newco to reasonably 
cooperate with, Seller in seeking 
to obtain consents to, or 
to comply with, 
such Required Consents 
and will provide 
any additional collateral 
or security to 
meet 
reasonable 
financial 
requirements 
requested 
by 
counterparties 
in 
order 
to 
satisfy 
the 
applicable Required Consent. 

(b)
In the event a Soft 
Required Consent that is triggered by 
the Merger or the 
Closing is not satisfied 
prior to the Merger, 
then the applicable Required 
Consent Asset shall not 
be excluded from the Assets 
to be allocated to Newco 
pursuant to the Merger 
on the basis of this 
Section 5.16, and Seller shall continue to use commercially reasonable efforts (at no material cost 
to 
Seller) 
for 
a 
period 
of 
one 
year 
after 
Closing 
to 
obtain 
the 
Consent 
for 
such 
Soft 
Required 
Consent. 
Seller shall not otherwise be 
liable to Buyer or 
Newco after Closing for 
the inability to 
obtain the 
Consent for 
such Soft 
Required Consent 
and BUYER 
SHALL INDEMNIFY, DEFEND, 
AND HOLD 
EACH MEMBER 
OF SELLER 
GROUP HARMLESS 
FROM ANY 
CLAIM MADE 
AGAINST 
SUCH 
MEMBER 
BY 
THE 
HOLDER 
OF 
SUCH 
SOFT 
REQUIRED 
CONSENT 
WITH 
RESPECT 
TO 
THE 
FAILURE 
TO 
OBTAIN 
THE 
CONSENT 
FOR 
SUCH 
SOFT 
REQUIRED CONSENT. 
(c)
In the event a Hard Required Consent that is triggered by the 
Merger or the 
Closing is 
not satisfied 
prior to 
the consummation 
of the 
Merger, 
then (i) the 
Required Consent 
Asset 
subject 
to 
such 
Hard 
Required 
Consent 
shall 
not 
be 
allocated 
to 
Newco 
pursuant 
to 
the 
Merger 
and, 
to 
the 
extent 
such 
Required 
Consent 
Asset 
is 
a 
Property, 
SWEPI 
shall 
retain 
such 
Required Consent 
Asset as 
a “Retained 
Asset” for 
all purposes 
hereunder, (ii) 
to the 
extent such 
Required Consent Asset is a Property, 
the Base Purchase Price will be adjusted 
downward by the 
Allocated Value of such Property, (iii) to the 
extent such 
Required Consent 
Asset is not 
a Property, 
until the Consent for such 
Hard Required Consent is obtained 
for any combination of the 
Merger 
and the Closing 
that triggered such 
Hard Required Consent (A) 
such Required Consent 
Asset shall 
be held 
by SWEPI 
for the 
benefit of 
Newco (which 
benefit shall 
include the 
right for 
Newco to 
receive any 
and all 
proceeds related 
to such 
Required Consent 
Asset during 
the period 
after Closing 
that are attributable to the period from 
and after the Effective Time), 
(B) SWEPI shall not amend 
or take any action under 
or with respect to such 
Required Consent Asset without 
Buyer’s written 
consent 
(which 
may 
be 
withheld 
in 
Buyer’s 
sole 
discretion), 
and 
(C) 
Newco 
shall 
(1) 
pay 
all 
amounts related to SWEPI’s 
interest in such Required 
Consent Asset under any 
agreement to the 
extent such 
amounts are 
attributable to 
the period 
from and 
after the 
Effective 
Time, 
and (2) 
be 
responsible 
for 
the 
performance 
of 
SWEPI’s 
obligations 
under 
any 
agreement 
related 
to 
such 
Required Consent Asset, 
and (iv) SWEPI shall 
continue for a 
period of one 
year after Closing 
to 
use commercially reasonable 
efforts (at no material 
cost to Seller 
or SWEPI) to 
obtain the Consent 
for such Hard Required 
Consent, and upon receiving the 
Consent for such Hard 
Required Consent 
applicable to 
each of 
the 
Merger 
and the 
Closing, 
(A) SWEPI shall 
promptly 
convey to 
Newco 
such Required 
Consent Asset 
subject to 
the warranty 
of title 
set forth 
in Section 
3.20, (B) 
if the 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Exhibit 10.1
- 36 - 
Required Consent Asset 
is a Property, 
then at the time 
of such assignment, Buyer will 
pay Seller 
an amount equal to the amount by which the Base Purchase Price was adjusted downward, if any, 
for such Required 
Consent Asset and 
(C) upon the 
execution and delivery 
of such assignment 
of 
such Required Consent Asset by 
SWEPI to Newco, such Required 
Consent Asset shall be deemed 
to be 
an “Asset” 
for all 
purposes hereunder. 
If, following 
such one-year 
period, the 
consent for 
such Hard Required Consent is not obtained, 
then such Required Consent Asset shall continue 
as 
a 
Retained 
Asset, 
and 
Seller’s 
and 
SWEPI’s 
obligations 
pursuant 
to 
this 
Section 
5.16 
shall 
no 
longer apply. 
Section 5.17
Defense 
of 
Retained 
Litigation. 
For 
the 
avoidance 
of 
doubt, 
Seller 
or 
its 
relevant Affiliate (but not 
Newco) will (at its sole 
cost and expense) continue to 
defend and shall 
continue to manage in accordance with Section 
9.2(d) any actions, suits or proceedings 
(including 
any 
compromise 
or 
settlement 
thereof) 
set 
forth 
on 
Schedule 
5.17 
(such 
actions, 
suits 
or 
proceedings, 
the 
“Retained 
Litigation”). 
Buyer 
will 
cooperate 
with 
Seller’s 
reasonable 
written 
requests to 
facilitate such 
defense and 
management but, 
except as otherwise 
provided in 
Section 
9.2(e), shall have no 
right to defend or 
otherwise control the defense 
with respect to such Retained 
Litigation. 
Section 5.18
Seller Parent Guaranty. At Closing, Seller shall deliver to Buyer a guaranty 
in the form attached as Exhibit D (the “Seller Parent Guaranty”) executed by Shell Oil Company. 
Section 5.19
Reorganization. 
Prior 
to 
the 
Closing 
Date, 
Seller 
shall 
cause 
each 
of 
the 
following to occur (collectively, the “Reorganization 
”): 
(a)
SWEPI shall 
file a 
certificate of 
conversion with 
each of 
the Secretary 
of 
State of Delaware and the Secretary of State of Texas and shall file a certificate of formation with 
the Secretary 
of State 
of Texas, 
in each 
case, in 
such form 
as is 
required by 
the Texas 
Business 
Organizations Code 
(the “TBOC”) 
and the 
Delaware Revised 
Uniform Limited 
Partnership Act, 
as 
applicable, 
for 
the 
purpose 
of 
domesticating 
SWEPI 
in 
Texas 
as 
a 
Texas 
limited 
liability 
company (the “Conversion”). 
(b)
Following the Conversion, SWEPI shall merge, pursuant to Section 10.003 
et. 
seq. 
of 
the 
TBOC, 
resulting 
in 
two 
entities 
(the 
“Merger”): 
(i) 
Shell 
Legacy 
Holdings 
LLC 
(“Non-Permian Newco”), 
a newly 
formed single-member 
limited liability 
company and 
wholly-
owned subsidiary of Seller, 
which will have as its 
assets and properties the Subject 
Interests and, 
subject to Section 
5.16(c), the Retained 
Assets and which 
will have as 
its liabilities and 
obligations 
the 
Retained 
Liabilities 
and 
Seller 
Taxes, 
and 
(ii) 
Permian 
Holdings 
LLC 
(“Newco”), 
a 
newly 
formed single-member 
limited 
liability company 
and wholly-owned 
subsidiary of 
Non-Permian 
Newco, which will have 
as its assets and 
properties the Assets and 
which will have as 
its liabilities 
and obligations 
the Assumed 
Liabilities; 
provided, 
however
, that 
if all 
Hard Required 
Consents 
have not 
been obtained 
by the 
Merger, 
then SWEPI 
shall merge, 
pursuant to 
Section 10.003 
et. 
seq. of 
the TBOC, 
resulting into 
three entities: 
(i) Non-Permian 
Newco, a 
newly formed 
single-
member limited liability 
company and wholly-owned 
subsidiary of Seller, 
which will have 
as its 
assets 
and 
properties 
the 
Subject 
Interests 
and 
the 
Retained 
Assets 
(other 
than 
the 
Required 
Consent 
Assets 
retained 
by 
SWEPI 
pursuant 
to 
Section 
5.16(c)) 
and 
which 
will 
have 
as 
its 
liabilities and 
obligations the 
Retained Liabilities 
(other than 
those Retained 
Liabilities attributable 
to 
such 
Required 
Consent 
Assets 
retained 
by 
SWEPI) 
and 
Seller 
Taxes, 
(ii) 
Newco, 
a 
newly 

 

 

 

 

 

 

 

 

Exhibit 10.1
- 37 - 
formed single-member 
limited 
liability company 
and wholly-owned 
subsidiary of 
Non-Permian 
Newco, which will have 
as its assets and 
properties the Assets and 
which will have as 
its liabilities 
and 
obligations 
the 
Assumed 
Liabilities, 
and 
(iii) 
SWEPI, 
as 
the 
surviving 
limited 
liability 
company, which will remain as 
a wholly-owned subsidiary of 
Seller and will have 
as its assets and 
properties the Required 
Consent Assets retained 
by it pursuant 
to Section 5.16(c) 
and which will 
have as its 
liabilities and obligations 
the Retained Liabilities 
attributable to such 
Required Consent 
Assets retained by SWEPI. 
(c)
Seller 
shall 
provide 
Buyer 
with 
copies 
of 
all 
documents 
and 
instruments 
related 
to 
or 
used 
to 
consummate 
the 
Reorganization, 
which 
shall 
be 
in 
forms 
reasonably 
acceptable to Buyer prior to filing. 
(d)
Notwithstanding anything to the contrary in this Agreement, Seller will not 
be in breach of any provision of this Agreement, nor will any representation or warranty of Seller 
be inaccurate 
in any 
respect solely 
by virtue 
of any 
secondary liability 
imposed on 
Seller under 
TBOC Section 
10.008; 
provided
, 
however
, that 
notwithstanding anything 
stated herein 
to contrary, 
the Retained Liabilities shall be deemed to include any obligation or 
liability that is not expressly 
included as part of the Assumed Liabilities, including any such 
successor or secondary liability or 
liabilities and 
obligations relating to 
assets, properties 
and businesses 
not included 
as part 
of the 
Assets. 
Section 5.20
Name Change and Reorganization. Buyer 
shall promptly after Closing (and 
in any event, no 
later than thirty 
(30) days after the 
Closing Date) execute, 
acknowledge, deliver 
and file with 
the appropriate 
Governmental Authority 
all documents as 
are reasonably requested 
by Seller to evidence of record Newco’s ownership and operation of the Assets, or as are required 
by any 
Governmental Authority, as a 
result of 
the Reorganization and 
the transaction 
contemplated 
by 
this 
Agreement 
(each 
such 
document, 
a 
“Governmental 
Transition 
Filing”) 
that 
were 
not 
otherwise executed and delivered by the Parties pursuant to Sections 7.2(j) and 7.3(f). 
Section 5.21
Notice to 
Third Persons. 
Promptly after 
Closing but 
in no 
event later 
than 
thirty (30) days 
after the Closing 
Date, Newco shall 
notify all lessors, 
royalty owners, operators, 
non-operators, purchasers of production, other contract parties and 
Governmental Authorities that 
Newco 
has succeeded to the interests 
of Seller by virtue of 
the Reorganization, in each case to 
the 
extent 
Newco 
is 
required 
by 
any 
applicable 
Contracts 
or 
Laws 
to 
notify 
such 
Persons 
of 
the 
Reorganization. 
Section 5.22
Seismic Data. Prior to Closing, Seller shall provide Buyer 
a list of all third-
party 
Seismic 
Data. 
For 
any 
such 
third-party 
Seismic 
Data 
for 
which 
Buyer 
wishes 
to 
obtain 
a 
sublicense after Closing, 
promptly after receiving 
written notice thereof 
from Buyer, 
Seller shall 
sublicense to Buyer such third-party Seismic Data to the extent permitted under the agreement by 
which 
such 
Seismic 
Data 
is 
licensed 
to 
Seller 
or 
its 
relevant 
Affiliate 
or, 
to 
the 
extent 
not 
so 
permitted, take commercially reasonable efforts to obtain the necessary consents and approvals to 
sublicense to 
Buyer such 
third-party Seismic 
Data. All 
out-of-pocket costs 
and expenses 
associated 
with such 
sublicense which 
are approved 
in writing 
by Buyer 
shall be 
for the 
account of 
Buyer, 
and Seller shall have no 
further obligations pursuant to this 
Section 5.22 to the extent Buyer 
fails 
to pay any such costs and expenses. 

 

 

 

 

 

 

 

 

 

Exhibit 10.1
- 38 - 
Section 5.23
Supplemental Information. 
Promptly following 
the Execution 
Date, Seller 
shall provide to Buyer supplemental information as described on Schedule 5.23. 
Section 5.24
Operational 
Technology. 
If, 
prior 
to 
Closing, 
it 
is 
determined 
that 
any 
operational technology 
systems other 
than the 
SCADA Systems 
are held 
for use 
exclusively for 
the 
use 
or 
operation 
of 
the 
Assets, 
and 
such 
operational 
technology 
systems 
are 
not 
used 
in 
connection with Seller or its Affiliates’ business 
generally, then Seller 
shall reasonably cooperate 
with Buyer to transfer such 
operational technology systems to 
Newco at Closing. 
Upon any such 
transfer, 
such 
operational 
technology 
systems 
shall 
be 
deemed 
to 
be 
“Assets” 
for 
all 
purposes 
hereunder. 

ARTICLE 6 
CONDITIONS TO CLOSING 
Section 6.1
Seller’s Conditions to Closing. 
The obligations of 
Seller to consummate 
the 
transactions contemplated by 
this Agreement are subject 
to the satisfaction 
(or written waiver by 
Seller) on or prior to Closing of each of the following conditions precedent: 
(a)
Representations. The 
(i) Buyer 
Fundamental Representations 
shall be 
true 
and 
correct 
in 
all 
material 
respects 
(and 
in 
all 
respects, 
in 
case 
of 
Buyer 
Fundamental 
Representations 
which 
are 
qualified 
by 
the 
requirement 
of 
a 
materiality 
qualifier), 
as 
of 
the 
Execution Date 
and as 
of the 
Closing Date, 
in each 
case as 
though made 
on and 
as of 
such date 
(except for representations and warranties that expressly refer to a specified date which need only 
be 
true 
and 
correct 
on 
and 
as 
of 
such 
specified 
date), 
and 
(ii) the 
other 
representations 
and 
warranties of Buyer set forth in Article 4 shall be true and correct as of the Execution Date and as 
of the 
Closing Date, in 
each case as 
though made on 
and as 
of such date 
(except for representations 
and warranties that expressly refer to a specified 
date which need only be true and 
correct on and 
as 
of 
such 
specified 
date), 
except 
for 
breaches, 
if 
any, 
of 
such 
representations 
and 
warranties 
referenced in this 
clause (ii) as would 
not, individually or in 
the aggregate, reasonably be 
expected 
to 
have 
a 
Buyer 
Material 
Adverse 
Effect 
(without 
regard 
to 
whether 
such 
representation 
or 
warranty is qualified in terms of materiality); 
(b)
Performance. 
Buyer 
shall 
have 
performed 
and 
observed, 
in 
all 
material 
respects, all 
covenants and 
agreements to 
be performed 
or observed 
by it 
under this 
Agreement 
prior to or on the Closing Date; 
(c)
No 
Action. 
No 
injunction, 
order 
or 
award 
restraining, 
enjoining, 
or 
otherwise prohibiting the consummation of 
the transactions contemplated by this Agreement 
shall 
have been 
issued by 
any Governmental 
Authority having 
jurisdiction over 
any Party 
and remain 
in force; 
(d)
Governmental Consents; HSR Act. (i) 
All material consents and approvals 
of 
any 
Governmental 
Authority 
(including 
those 
required 
by 
the 
HSR 
Act) 
required 
for 
the 
transactions contemplated under this Agreement, 
except consents and approvals by 
Governmental 
Authorities 
that 
are 
customarily 
obtained 
after 
closing 
(including 
Customary 
Post-Closing 
Consents), shall have 
been granted or received, 
or the necessary waiting 
period shall have 
expired, 
or early 
termination of 
the waiting 
period shall 
have been 
granted and 
(ii) the 
consummation of 

 

 

 

 

 

 

 

 

Exhibit 10.1
- 39 - 
the transactions contemplated under the 
terms of this Agreement 
is not prevented from occurring 
by (and the required waiting period, including the period under an 
extension or timing agreement, 
if 
any, 
has 
expired 
under) 
the 
HSR 
Act 
and 
the 
rules 
and 
regulations 
of 
the 
FTC 
and 
the 
DOJ 
thereunder; and 
(e)
Deliveries. 
Buyer 
shall 
have 
delivered 
(or 
be 
ready, 
willing, 
and 
able 
to 
deliver 
at 
Closing) 
to 
Seller duly 
executed counterparts 
of 
the 
documents 
and 
certificates 
to 
be 
delivered by Buyer under Section 7.3. 
Section 6.2
Buyer’s Conditions to 
Closing. The 
obligations of 
Buyer to 
consummate the 
transactions contemplated by 
this Agreement are subject 
to the satisfaction 
(or written waiver by 
Buyer) on or prior to Closing of each of the following conditions precedent: 
(a)
Representations. The 
(i) Seller 
Fundamental Representations 
shall be 
true 
and 
correct 
in 
all 
material 
respects 
(and 
in 
all 
respects, 
in 
case 
of 
such 
Seller 
Fundamental 
Representations 
which 
are 
qualified 
by 
the 
requirement 
of 
a 
materiality 
qualifier), 
as 
of 
the 
Execution Date 
and as 
of the 
Closing Date, 
in each 
case as 
though made 
on and 
as of 
such date 
(except for representations and warranties that expressly refer to a specified date which need only 
be 
true 
and 
correct 
on 
and 
as 
of 
such 
specified 
date), 
and 
(ii) 
the 
other 
representations 
and 
warranties of Seller set forth in Article 3 shall be true and correct as 
of the Execution Date and as 
of the 
Closing Date, in 
each case as 
though made on 
and as 
of such date 
(except for representations 
and warranties that refer to a specified date which need only be true and correct on and as of such 
specified date), except 
for breaches, 
if any, 
of such 
representations and 
warranties as 
would not, 
individually or in the 
aggregate, reasonably be expected to 
have a Seller Material Adverse 
Effect 
(without regard to whether such representation or warranty is qualified in terms of materiality); 
(b)
Performance. 
Seller 
shall 
have 
performed 
and 
observed, 
in 
all 
material 
respects, all 
covenants and 
agreements to 
be performed 
or observed 
by it 
under this 
Agreement 
prior to or on the Closing Date; 
(c)
No 
Action. 
No 
injunction, 
order 
or 
award 
restraining, 
enjoining, 
or 
otherwise prohibiting the consummation of 
the transactions contemplated by this Agreement 
shall 
have been 
issued by 
any Governmental 
Authority having 
jurisdiction over 
any Party 
and remain 
in force; 
(d)
Governmental Consents; HSR Act. (i) 
All material consents and approvals 
of 
any 
Governmental 
Authority 
(including 
those 
required 
by 
the 
HSR 
Act) 
required 
for 
the 
transactions contemplated under this Agreement, 
except consents and approvals by 
Governmental 
Authorities 
that 
are 
customarily 
obtained 
after 
closing 
(including 
Customary 
Post-Closing 
Consents), shall have 
been granted or received, 
or the necessary waiting 
period shall have 
expired, 
or early 
termination of 
the waiting 
period shall 
have been 
granted and 
(ii) the 
consummation of 
the transactions contemplated under the 
terms of this Agreement 
is not prevented from occurring 
by (and the required waiting period, including the period under 
an extension or timing agreement, 
if 
any, 
has 
expired 
under) 
the 
HSR 
Act 
and 
the 
rules 
and 
regulations 
of 
the 
FTC 
and 
the 
DOJ 
thereunder; 

 

 

 

 

 

 

 

 

 

 

 

 

 

Exhibit 10.1
- 40 - 
(e)
Deliveries. 
Seller 
shall 
have 
delivered 
(or 
be 
ready, 
willing, 
and 
able 
to 
deliver at 
Closing) 
to Buyer 
duly executed 
counterparts of 
the 
documents 
and certificates 
to be 
delivered by Seller and its Affiliates under Section 7.2; and 
(f)
Reorganization. 
The Reorganization shall have been consummated. 
ARTICLE 7 
CLOSING 
Section 7.1
Time 
and 
Place 
of 
Closing. 
Consummation 
of 
the 
purchase 
and 
sale 
contemplated by 
this Agreement 
(the “Closing”), 
shall, unless 
otherwise agreed 
to in 
writing by 
Buyer and Seller, 
take place at the 
offices of Norton 
Rose Fulbright US LLP 
at 1301 McKinney, 
Suite 5100, Houston, 
Texas 
77010, at 
10:00 a.m., 
Central Time, 
on the 
later of 
(a) December 1, 
2021, 
and 
(b) the 
fifth 
Business 
Day 
following 
the 
satisfaction 
or, 
to 
the 
extent 
permitted 
by 
applicable Law, 
waiver (in 
writing) of 
all conditions 
to the 
obligations of the 
Parties set 
forth in 
Article 
6 
(except 
for 
any 
such 
conditions 
that 
by 
their 
nature 
may 
only 
be 
satisfied 
at 
or 
in 
connection 
with 
the 
occurrence 
of 
Closing, 
but 
subject 
to 
the 
satisfaction 
or 
waiver 
of 
those 
conditions), 
subject 
to 
the 
rights 
of 
the 
Parties 
under 
Article 
8. 
The 
date 
on 
which 
the 
Closing 
occurs is herein referred to as the “Closing Date.” 
Section 7.2
Obligations of Seller at 
Closing. At the Closing, upon the 
terms and subject 
to the conditions of this 
Agreement, and subject to the 
simultaneous performance by Buyer of 
its 
obligations 
pursuant 
to 
Section 
7.3, 
Seller 
shall 
deliver 
or 
cause 
to 
be 
delivered 
to 
Buyer, 
the 
following: 
(a)
counterparts of 
the Assignment 
Agreement transferring 
the Subject 
Interests 
to 
Buyer, 
duly 
executed 
by 
an 
authorized 
officer 
of 
Seller, 
acting 
as 
the 
sole 
member 
of 
Non-
Permian Newco; 
(b)
a certificate 
of non-foreign 
status of 
Non-Permian Newco 
(or its 
regarded 
owner for U.S. federal 
income Tax purposes, if Non-Permian Newco is 
an entity disregarded from 
its owner 
for U.S. 
federal income 
Tax 
purposes), signed 
under penalties 
of perjury 
and dated 
no 
more 
than 
30 
days 
prior 
to 
the 
Closing 
Date, meeting 
the 
requirements 
of 
Treasury 
Regulation 
Section 1.1445-2(b)(2) 
and 
certifying that 
Non-Permian Newco 
(or its 
regarded owner 
for U.S. 
federal income Tax 
purposes, if Non-Permian 
Newco is an 
entity disregarded from 
its owner for 
U.S. 
federal 
income 
Tax 
purposes) 
is 
not 
a 
“foreign 
person” 
as 
defined 
in 
Section 
1445 
of 
the 
Code; 
(c)
a 
certificate 
duly 
executed 
by 
an 
authorized 
officer 
of 
Seller, 
dated 
as 
of 
Closing, certifying on 
behalf of Seller 
that the conditions set 
forth in Section 6.2(a), 
Section 6.2(b) 
and Section 6.2(f) have been fulfilled; 

(d)
a 
certificate 
duly 
executed 
by 
the 
secretary 
or 
any 
assistant 
secretary 
of 
Seller, dated as of 
the Closing, (i) attaching 
and certifying on behalf 
of Seller complete 
and correct 
copies 
of 
the 
resolutions 
or 
unanimous 
consent 
of 
the 
board 
of 
directors, 
managers, 
members, 
partners, 
or 
other 
equivalent 
governing 
body 
of 
Seller 
authorizing 
the 
execution, 
delivery, 
and 
performance 
by 
Seller 
of 
this 
Agreement 
and 
the 
transactions 
contemplated 
hereby, 
and 
(ii) 

 

 

 

 

 

 

 

Exhibit 10.1
- 41 - 
certifying on behalf 
of Seller 
the incumbency of 
each officer 
of Seller 
executing this 
Agreement 
or any document delivered in connection with the Closing; 
(e)
where approvals 
are received 
by Seller 
pursuant to 
a filing 
or application 
under Section 5.2, copies of those approvals; 

(f)
resignations 
effective 
as 
of 
the 
Closing 
Date 
of 
each 
director, 
officer 
or 
manager of Newco, duly executed by each such director, officer or manager; 
(g)
terminations 
of 
any 
powers of 
attorney 
granted by 
Newco to 
any 
Person, 
duly executed by an authorized officer of Newco; 
(h)
original certificates of the 
applicable Governmental Authorities, dated 
as of 
a date not 
earlier than five 
Business Days before 
the Closing 
Date, evidencing 
the existence and 
good standing of Newco in the State of its formation and in the State of Texas; 
(i)
the Seller Parent Guaranty, 
duly executed by an authorized officer of 
Shell 
Oil Company; 

(j)
duly executed counterparts of each Governmental Transition Filing; and 

(k)
all 
other 
instruments, 
documents and 
other 
items 
reasonably necessary 
to 
effectuate the terms of this Agreement, as may be reasonably requested by Buyer. 
Section 7.3
Obligations of Buyer 
at Closing. At the 
Closing, upon the 
terms and subject 
to the conditions 
of this Agreement, and 
subject to the 
simultaneous performance by Seller 
of its 
obligations 
pursuant 
to 
Section 
7.2, 
Buyer 
shall 
deliver 
or 
cause 
to 
be 
delivered 
to 
Seller, 
the 
following: 
(a)
a wire transfer of the Closing Payment in same-day funds to the account of 
Non-Permian Newco, as designated by Seller prior to Closing; 
(b)
a 
certificate 
duly 
executed 
by 
an 
authorized officer 
of 
Buyer, 
dated 
as 
of 
Closing, certifying 
on behalf of 
Buyer that 
the conditions 
set forth 
in Section 
6.1(a) and 
Section 
6.1(b) have been fulfilled; 

(c)
a 
certificate 
duly 
executed 
by 
the 
secretary 
or 
any 
assistant 
secretary 
of 
Buyer, dated as 
of the 
Closing, (i) 
attaching and 
certifying on 
behalf of 
Buyer complete 
and correct 
copies 
of 
the 
resolutions 
or 
unanimous 
consent 
of 
the 
board 
of 
directors, 
managers, 
members, 
partners, 
or 
other 
equivalent 
governing 
body 
of 
Buyer 
authorizing 
the 
execution, 
delivery, 
and 
performance 
by 
Buyer 
of 
this 
Agreement 
and 
the 
transactions 
contemplated 
hereby, 
and 
(ii) 
certifying on behalf of 
Buyer the incumbency of 
each officer of Buyer 
executing this Agreement 
or any document delivered in connection with the Closing; 
(d)
duly executed counterparts of the Assignment Agreement; 
(e)
where approvals 
are received 
by Buyer 
pursuant to 
a filing 
or application 
under Section 5.2, copies of those approvals; 

 

 

 

 

 

 

 

 

Exhibit 10.1
- 42 - 
(f)
duly executed counterparts of each Governmental Transition Filing; and 
(g)
all 
other 
instruments, 
documents and 
other 
items 
reasonably necessary 
to 
effectuate the terms of this Agreement, as may be reasonably requested by Seller. 
Section 7.4
Closing Payment and Post-Closing Purchase Price Adjustments. 

(a)
Not later 
than ten 
days prior 
to the 
Closing Date, 
Seller shall 
prepare and 
deliver 
to 
Buyer, 
(i) 
using 
the 
best 
information 
available 
to 
Seller, 
a 
preliminary 
settlement 
statement 
estimating 
the initial 
Purchase Price 
after 
giving 
effect 
to 
all 
adjustments 
set 
forth 
in 
Section 2.5 and (ii) 
reasonable documentation supporting the 
calculation of the amounts 
presented 
on such statement. 
In the 
event Buyer 
believes that 
such statement 
does not 
accurately set forth 
the initial Purchase Price, Buyer 
shall communicate to Seller 
in writing such inaccuracies 
not later 
than three 
Business Days 
prior to 
the Closing 
Date. 
The Parties 
shall cooperate in 
good faith 
to 
agree on 
the such 
inaccuracies as 
soon as 
possible after 
Seller’s receipt 
of Buyer’s 
written response. 

The estimate 
delivered in 
accordance with 
this Section 
7.4(a) (with 
such 
changes thereto 
as the 
Parties may 
agree in connection 
with this Section 
7.4(a)) 
less
 
the Deposit shall 
constitute the dollar 
amount to be paid by Buyer to Seller at the Closing (the “Closing Payment”). 

(b)
As soon 
as 
reasonably practicable 
after 
the Closing 
but not 
later 
than the 
Cut-off Date, 
Seller shall 
prepare and 
deliver to 
Buyer a 
statement setting 
forth the 
final calculation 
of 
the 
Purchase 
Price 
and 
showing 
the 
calculation 
of 
each 
adjustment 
set 
forth 
in 
Section 
2.5, 
based, to the 
extent possible, on 
actual credits, charges, 
receipts and other 
items before and 
after 
the Effective Time. Concurrently with the delivery of 
such statement, Seller shall deliver 
to Buyer 
documentation in 
reasonable detail 
reasonably available 
to support 
any credit, 
charge, receipt 
or 
other 
item. 
Seller 
shall 
also 
deliver 
to 
Buyer 
such 
other 
documentation 
in 
Seller’s 
reasonable 
possession or control as Buyer 
may reasonably request to verify 
the adjustments set forth in 
such 
statement, 
which 
documentation 
shall 
be 
delivered 
by 
Seller 
to 
Buyer 
promptly 
after 
Seller 
receives such request. As 
soon as reasonably practicable 
but not later than 
the 30
th
 
day following 
receipt of 
Seller’s 
statement hereunder, 
Buyer shall 
deliver to 
Seller a 
written report 
containing 
any changes that 
Buyer proposes be 
made to such 
statement. 
Seller may 
deliver a written 
report 
to Buyer 
during this 
same period reflecting 
any changes 
that Seller 
proposes to 
be made 
to such 
statement as a 
result of 
additional information 
received after the 
statement was prepared. 
Buyer 
and 
Seller 
shall 
undertake 
to 
agree 
on 
the 
final 
statement 
of 
the 
Purchase 
Price 
no 
later 
than 
240 days after the Closing 
Date. 
In the event that 
Buyer and Seller cannot 
reach agreement within 
such 
period 
of 
time, 
either 
Buyer 
or 
Seller 
may 
refer 
the 
remaining 
matters 
in 
dispute 
to 
the 
Houston, Texas office 
of
Deloitte Touche 
Tohmatsu 
Limited
(the “Accounting Firm”) for review 
and 
final 
determination 
by 
arbitration. 
The 
Accounting 
Firm 
shall 
conduct 
the 
arbitration 
proceedings 
in 
Houston, 
Texas, 
in 
accordance 
with 
the 
Commercial 
Arbitration 
Rules 
of 
the 
American Arbitration 
Association, to 
the extent 
such rules 
do not 
conflict with 
the terms 
of this 
Section 7.4. 
Seller and Buyer shall instruct 
the Accounting Firm to deliver 
to Buyer and Seller a 
written 
determination 
within 
30 days 
after 
submission 
of 
the 
matters 
in 
dispute, 
which 
shall 
be 
final and binding on all Parties, without right of appeal. 
In determining the proper amount of any 
adjustment to the Base Purchase Price, 
the Accounting Firm shall not increase the 
Base Purchase 
Price more than 
the increase proposed 
by Seller nor 
decrease the Base 
Purchase Price more 
than 
the decrease proposed by Buyer, 
as applicable. 
The Accounting Firm shall act as an independent 
neutral expert 
for the 
limited purpose 
of determining 
the specific 
disputed matters 
submitted by 

 

 

 

 

 

 

 

 

 

 

 

 

Exhibit 10.1
- 43 - 
Buyer and Seller 
and may not 
award Damages, interest or 
penalties to the 
Parties with respect to 
any matter. 
Buyer and 
Seller shall 
each bear 
its own 
legal fees 
and other 
costs of 
presenting its 
case. 
Seller 
shall 
bear 
one-half 
and 
Buyer 
shall 
bear one-half 
of 
the 
costs 
and 
expenses of 
the 
Accounting Firm. 
Within ten days after the 
earlier of (i) the expiration of Buyer’s 
30-day review 
period without delivery of any 
written report by Buyer and 
(ii) the date on which Buyer and 
Seller 
finally 
determine 
the 
Purchase 
Price 
or 
the 
Accounting 
Firm 
finally 
determines 
the 
disputed 
matters submitted to it, as applicable, (A) Buyer shall pay to Seller the amount 
by which the final 
Purchase Price (
less
 
the Deposit amount) 
exceeds the Closing 
Payment or (B) Seller 
shall pay to 
Buyer the 
amount by 
which the 
Closing Payment 
exceeds the 
final Purchase 
Price (
less
 
the Deposit 
amount), 
as 
applicable. 
Any 
post-closing 
payment 
pursuant 
to 
this 
Section 
7.4(b) 
shall 
bear 
interest from the Closing Date to the date of 
payment at the rate of interest published from time to 
time as the “Prime Rate” in the “Money Rates” section of 
The Wall 
Street Journal
. 
(c)
Buyer shall, and 
shall cause Newco to, 
assist Seller in 
the preparation of 
the 
final 
statement 
of 
the 
Purchase 
Price 
under 
Section 
7.4(b) 
by 
furnishing 
invoices 
and 
receipts 
reasonably 
available 
to 
Buyer 
and 
Newco, 
reasonable 
access 
to 
personnel, 
and 
such 
other 
assistance as may be reasonably requested by Seller to facilitate such process post-Closing. 
(d)
All payments 
made or 
to be 
made under 
this Agreement 
to Seller 
shall be 
made by 
electronic transfer 
of immediately 
available funds 
to the 
account designated 
by Seller. 

All 
payments 
made 
or 
to 
be 
made 
hereunder 
to 
Buyer 
shall 
be 
made 
by 
electronic 
transfer 
of 
immediately available funds to the account designated by Buyer. 
ARTICLE 8 
TERMINATION 
Section 8.1
Termination. 
This 
Agreement 
may 
be 
terminated 
at 
any 
time 
prior 
to 
Closing: 
(a)
by the mutual prior written consent of the Parties; 
(b)
by Seller 
if Shell 
US E&P 
Investments LLC 
has not 
received the 
Deposit 
by the date and time provided in Section 2.7; 
(c)
by either 
Party if 
Closing has 
not occurred 
on or 
before the 
Outside Date; 
or 
(d)
in accordance with Section 5.15(c); 

provided, 
however
, that no 
Party shall be 
entitled to terminate 
this Agreement under 
Section 8.1(c) 
if 
such 
Party 
is 
then 
in 
material 
breach 
of 
any 
of 
its 
representations, 
warranties 
or 
covenants 
contained in this Agreement, 
which breach would, individually 
or in the aggregate, 
give rise to the 
failure of a condition set forth in Section 6.1 or Section 6.2, as applicable. 
Section 8.2
Effect of Termination. 
(a)
If 
this 
Agreement 
is 
terminated 
pursuant 
to 
Section 
8.1, 
this 
Agreement 
shall become 
void and 
of no 
further force 
or effect 
(except for 
the provisions 
of Section 
3.6, Section 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Exhibit 10.1
- 44 - 
4.6, Section 
5.1(d), Section 
5.3, Section 
5.9, Article 
8, Article 
11, 
and Appendix 
A, which 
shall 
continue in full force and effect). 
(b)
In the event that 
(i) all conditions precedent 
to the obligations of 
Seller set 
forth 
in 
Section 
6.1 
have 
been 
satisfied 
or 
waived 
(in 
writing) 
by 
Seller 
(or 
would 
have 
been 
satisfied except 
for the 
breach or 
failure of any 
of Seller’s representations, 
warranties, or 
covenants 
hereunder and 
except for 
any such 
conditions that 
by their 
nature may 
only be 
satisfied at 
or in 
connection with the occurrence of Closing) and (ii) the Closing has not occurred solely as a result 
of the 
material breach 
or failure 
of Seller’s 
representations, warranties, 
or 
covenants hereunder, 
including, if and 
when required, Seller’s obligations to 
consummate the transactions contemplated 
hereunder at 
Closing (including, 
for the 
avoidance of 
doubt, if 
Buyer terminates 
this Agreement 
pursuant to Section 
8.1(c) and 
at the 
time of termination, 
such a 
material breach or 
failure by Seller 
has occurred and is continuing), then 
Buyer shall have the right (in its 
sole discretion) to promptly 
elect in writing, as the 
sole and exclusive remedy 
of the Buyer Group 
against any member of 
the 
Seller Group for the failure to consummate 
the transactions contemplated hereunder at Closing on 
account of such 
events, to either 
(A) exercise its 
right to require 
Seller’s specific performance 
of 
this Agreement as provided in Section 11.16, 
or (B) terminate this Agreement, receive from Shell 
US E&P Investments LLC a refund of the Deposit without any interest accrued thereon, and seek 
any other remedy available to Buyer at law on account 
of the breach by Seller of this Agreement. 
If Buyer elects 
the remedy of 
specific performance contemplated 
by clause (A) 
but such remedy 
is 
not 
awarded 
by 
courts 
of 
competent 
jurisdiction, 
the 
Buyer 
shall 
be 
entitled 
to 
the 
remedy 
contemplated by 
clause (B), 
in each 
case, in 
accordance with 
the terms 
and conditions 
set forth 
herein. The Parties agree 
that specific performance is 
a remedy expressly negotiated 
by the Parties 
and 
that 
Buyer 
shall 
not 
be 
required 
to 
provide 
any 
bond 
or 
other 
security 
in 
connection 
with 
seeking specific performance as a remedy as described in this Section 8.2(b). The remedy elected 
and ultimately awarded under this Section 8.2(b) shall be the sole and exclusive remedy available 
to Buyer 
prior to 
Closing for 
Seller’s breach 
or failure 
of Seller’s 
representations, warranties, 
or 
covenants 
hereunder, 
including, 
if 
and 
when 
required, 
Seller’s 
obligations 
to 
consummate 
the 
transactions contemplated at Closing. 
(c)
In the event that (i) all 
conditions precedent to the obligations 
of Buyer set 
forth 
in 
Section 
6.2 
have 
been 
satisfied 
or 
waived 
(in 
writing) 
by 
Buyer 
(or 
would 
have 
been 
satisfied except 
for the 
breach or 
failure of 
any of 
Buyer’s representations, 
warranties, or 
covenants 
hereunder and 
except for 
any such 
conditions that 
by their 
nature may 
only be 
satisfied at 
or in 
connection with the occurrence of Closing) and (ii) the Closing has not occurred solely as a result 
of 
the 
material 
breach 
or 
failure 
of 
any 
of 
Buyer’s 
representations, 
warranties, 
or 
covenants 
hereunder, 
including, if 
and when 
required, Buyer’s 
obligations to 
consummate the 
transactions 
contemplated hereunder at Closing (including, for the 
avoidance of doubt, if Seller terminates 
this 
Agreement pursuant 
to 
Section 8.1(c) 
and 
at 
the 
time 
of 
termination, 
such 
a 
material 
breach 
or 
failure 
by 
Buyer 
has 
occurred 
and 
is 
continuing), 
then 
Seller 
shall 
have 
the 
right 
(in 
its 
sole 
discretion) 
to 
promptly 
elect 
in 
writing, 
as 
the 
sole 
and 
exclusive 
remedy 
of 
the 
Seller 
Group 
against 
any 
member 
of 
the 
Buyer 
Group 
for 
the 
failure 
to 
consummate 
the 
transactions 
contemplated hereunder 
at Closing 
on account 
of 
such events, 
to either 
(A) exercise 
its right 
to 
require 
Buyer’s 
specific 
performance 
of 
this 
Agreement 
as 
provided 
in 
Section 
11.16, 
or 
(B) 
terminate this 
Agreement and 
Shell US 
E&P Investments LLC 
shall retain 
the Deposit, 
together 
with any interest 
or income thereon, free 
of any claims by 
Buyer or any 
other Person, as liquidated 
damages. If Seller elects the remedy of specific performance 
contemplated by clause (A) but such 

 

 

 

 

 

 

 

 

 

 

 

 

Exhibit 10.1
- 45 - 
remedy is not 
awarded by courts 
of competent jurisdiction, 
Seller shall be 
entitled to the 
remedy 
contemplated by 
clause (B), 
in each 
case, in 
accordance with 
the terms 
and conditions 
set forth 
herein. The Parties agree 
that specific performance is 
a remedy expressly negotiated 
by the Parties 
and 
that 
Seller 
shall 
not 
be 
required 
to 
provide 
any 
bond 
or 
other 
security 
in 
connection 
with 
seeking specific performance as a remedy as described in this 
Section 8.2(c). The remedy elected 
and ultimately awarded under this Section 8.2(c) shall be the sole and exclusive remedy available 
to Seller prior 
to Closing 
for Buyer’s 
breach or 
failure of Buyer’s 
representations, warranties, or 
covenants 
hereunder, 
including, 
if 
and 
when 
required, 
Buyer’s 
obligations 
to 
consummate 
the 
transactions contemplated at Closing. 
(d)
SELLER 
AND 
BUYER 
ACKNOWLEDGE 
AND 
AGREE 
THAT 
IF 
SELLER RECEIVES LIQUIDATED DAMAGES IN ACCORDANCE WITH SECTION 8.2(C), 
THEN (1) 
ACTUAL DAMAGES 
UPON THE 
EVENT OF 
A TERMINATION ARE DIFFICULT 
TO ASCERTAIN 
WITH ANY CERTAINTY, 
(2) SUCH LIQUIDATED DAMAGES AMOUNT 
IS 
A 
FAIR 
AND 
REASONABLE 
ESTIMATE 
BY 
THE 
PARTIES 
OF 
SUCH 
AGGREGATE 
ACTUAL DAMAGES, AND (3) 
SUCH LIQUIDATED 
DAMAGES DO NOT CONSTITUTE A 
PENALTY. 
(e)
Subject to 
Section 8.2(b) 
and Section 
8.2(c), upon 
the termination 
of this 
Agreement in accordance with the 
express terms of this Article 
8, Seller and Newco shall be 
free 
immediately 
to 
enjoy 
all 
rights 
of 
ownership 
of 
Newco 
and 
the 
Assets 
and 
to 
sell, 
transfer, 
encumber 
or 
otherwise 
dispose 
of 
the 
Assets 
to 
any 
Person 
without 
any 
restriction 
under 
this 
Agreement. Except 
to the 
extent Seller 
terminates 
this 
Agreement pursuant 
to 
Section 8.2(c), 
if 
either Party terminates 
this Agreement in 
accordance with this 
Article 8, Seller 
shall promptly (but 
in any event 
no more 
than ten Business 
Days after such 
termination of this 
Agreement) cause Shell 
US E&P Investments 
LLC to return 
the Deposit (without any 
interest accrued thereon) to 
Buyer. 
Following termination of this 
Agreement in accordance with 
this Article 8, Buyer 
shall promptly 
(but in any event no 
more than ten Business Days 
after the termination of this 
Agreement) return 
or destroy all agreements, Contracts, instruments, books, records, materials and other information 
regarding Seller or its Affiliates (including Newco and the Assets) provided to Buyer or any of 
its 
Affiliates 
or 
any 
of 
their 
respective 
Representatives 
in 
connection 
with 
the 
transactions 
contemplated by this Agreement. 
(f)
Notwithstanding 
anything 
to 
the 
contrary 
in 
this 
Agreement, 
each 
Party 
acknowledges and 
agrees that 
if the 
Closing fails 
to occur 
for any 
reason, such 
Party’s 
sole and 
exclusive remedy against the other Party shall be 
to exercise an applicable remedy set 
forth in this 
Article 8. 
ARTICLE 9 
INDEMNIFICATION 
Section 9.1
Indemnification. 
(a)
From and 
after Closing, 
Buyer, shall indemnify 
and hold 
harmless the 
Seller 
Group from 
and against 
all Damages 
incurred by 
or suffered 
by such 
Persons, and 
shall defend 
such Persons (in accordance 
with Section 9.2) from and 
against (and indemnify and hold 
harmless 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Exhibit 10.1
- 46 - 
such Persons from 
and against 
all Damages incurred 
or suffered 
by such Persons 
with respect to 
or related to) all Proceedings asserted against such Persons, that are: 
(i)
caused by, related 
to, arising 
out of, 
or resulting 
from Buyer’s 
breach 
of 
any 
of 
such 
Buyer’s 
covenants 
or 
agreements 
contained 
in 
this 
Agreement, 
including in respect of Buyer’s obligations in Section 5.20; 
(ii)
caused by, related to, arising out of, or resulting from any breach of 
any 
of 
the 
representations 
and 
warranties 
of 
Buyer 
(including 
the 
Buyer 
Fundamental 
Representations) 
contained 
in 
this 
Agreement, 
or 
confirmed 
in 
the 
certificate delivered by 
Buyer at Closing pursuant 
to Section 7.3(b) (without 
regard 
to 
the 
Buyer 
Material Adverse 
Effect 
or 
other 
materiality 
qualifiers 
contained 
in 
such certificate) with respect to such representations and warranties; or 
(iii)
subject 
to 
Seller’s 
indemnity 
and 
defense 
obligations 
in 
Section 
9.1(b), 
caused 
by, 
related 
to, 
arising 
out 
of, 
or 
resulting 
from 
the 
Assumed 
Liabilities. 
(b)
From and 
after Closing, 
subject to 
the limitations 
set forth 
in Section 
9.3, 
Seller shall indemnify and hold harmless the Buyer Group from and 
against all Damages incurred 
by or 
suffered by 
such Persons, 
and shall 
defend such 
Persons (in 
accordance with 
Section 9.2) 
from and 
against (and 
indemnify and 
hold harmless 
such Persons 
from and 
against all 
Damages 
incurred or suffered by such Persons with respect to or related to) 
all Proceedings asserted against 
such Persons, that are: 
(i)
caused by, related 
to, arising 
out of, 
or resulting 
from Seller’s breach 
of Seller’s covenants or agreements contained in this Agreement; 
(ii)
caused by, related to, arising out of, or resulting from any breach of 
any of the representations and warranties of Seller contained in this Agreement, or 
confirmed in 
the certificate 
delivered by 
Seller at 
Closing pursuant 
to Section 
7.2(c) 
(without regard to the Seller 
Material Adverse Effect or other materiality qualifiers 
contained in such certificate) with respect to such representations and warranties; 

(iii)
caused by, 
related to, arising 
out of, or 
resulting from the 
Retained 
Liabilities; 

(iv)
caused 
by, 
related 
to, 
arising 
out 
of, 
or 
resulting 
from 
any 
Seller 
Taxes; or 
(v)
caused 
by, 
related 
to, 
arising 
out 
of, 
or 
resulting 
from 
any 
of 
the 
Previously-Divested Properties. 
(c)
Notwithstanding 
anything 
to 
the 
contrary 
contained 
in 
this 
Agreement, 
subject 
to 
Section 
5.1(d), 
Section 
5.9 
(including 
Schedule 
5.9(a) 
and 
Schedule 
5.9(b)), 
Section 
5.15, Article 
8, Article 
10, Section 
11.16, 
and, from 
and after 
the Closing, 
absent Fraud, 
this Article 
9 
contains 
the 
Parties’ 
exclusive 
remedies 
against 
each 
other 
with 
respect 
to 
the 
transactions 
contemplated 
hereby, 
including 
any 
breaches of 
the 
representations, 
warranties, 
covenants, 
and 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Exhibit 10.1
- 47 - 
agreements of the 
Parties in 
this Agreement. Except 
for the remedies 
contained in 
this Article 
9, 
Section 
5.1(d), 
Section 
5.9 
(including 
Schedule 
5.9(a) 
and 
Schedule 
5.9(b)), 
Article 
10, 
and 
Section 
11.16, 
if 
Closing 
occurs 
SELLER 
(ON 
BEHALF 
OF 
ITSELF 
AND 
ON 
BEHALF 
OF 
THE SELLER GROUP) AND BUYER (ON BEHALF OF ITSELF AND ON BEHALF 
OF THE 
BUYER GROUP) 
EACH RELEASE, 
REMISE, AND 
FOREVER DISCHARGE 
THE OTHER 
AND ITS 
AFFILIATES AND ALL SUCH 
PARTIES’ 
OFFICERS, DIRECTORS, 
EMPLOYEES, 
AGENTS, ADVISORS, 
AND OTHER 
REPRESENTATIVES 
FROM ANY 
AND ALL 
SUITS, 
LEGAL 
OR 
ADMINISTRATIVE 
PROCEEDINGS, 
CLAIMS, 
DEMANDS, 
DAMAGES, 
LOSSES, COSTS, LIABILITIES, INTEREST, 
OR CAUSES OF ACTION WHATSOEVER, 
IN 
LAW 
OR 
IN 
EQUITY, 
KNOWN 
OR 
UNKNOWN, 
WHICH 
SUCH 
PARTIES 
MIGHT 
NOW 
OR SUBSEQUENTLY 
MAY 
HAVE, 
BASED ON, RELATING 
TO, OR ARISING OUT OF (i) 
THIS 
AGREEMENT, 
(ii) 
NON-PERMIAN 
NEWCO’S 
OWNERSHIP 
OF 
THE 
SUBJECT 
INTERESTS 
OR 
SELLER’S 
OWNERSHIP 
OF 
NON-PERMIAN 
NEWCO 
OR 
SWEPI, 
(iii) 
SWEPI OR NEWCO’S USE, OWNERSHIP OR 
OPERATION 
OF THE ASSETS, OR (iv) THE 
CONDITION, QUALITY, 
STATUS, 
OR NATURE 
OF THE ASSETS, INCLUDING, IN 
EACH 
SUCH 
CASE, 
RIGHTS 
TO 
CONTRIBUTION 
UNDER 
CERCLA 
OR 
ANY 
OTHER 
ENVIRONMENTAL 
LAW, 
BREACHES 
OF 
STATUTORY 
OR 
IMPLIED 
WARRANTIES, 
NUISANCE 
OR 
OTHER 
TORT 
ACTIONS, 
RIGHTS 
TO 
PUNITIVE 
DAMAGES 
AND 
COMMON 
LAW 
RIGHTS 
OF 
CONTRIBUTION, 
RIGHTS 
UNDER 
AGREEMENTS 
BETWEEN SELLER, SWEPI, NEWCO, OR NON-PERMIAN NEWCO 
AND ANY PERSONS 
WHO 
ARE 
AFFILIATES 
OF 
SUCH 
PERSONS, 
AND 
RIGHTS 
UNDER 
INSURANCE 
MAINTAINED 
BY 
SELLER 
OR 
ANY 
PERSON 
WHO 
IS 
AN 
AFFILIATE 
OF 
SELLER 
(INCLUDING SWEPI 
AND NON-PERMIAN 
NEWCO), EVEN 
IF CAUSED 
IN WHOLE 
OR 
IN PART 
BY THE NEGLIGENCE (WHETHER SOLE, JOINT, 
OR CONCURRENT), STRICT 
LIABILITY, 
OR OTHER LEGAL FAULT 
OF ANY RELEASED PERSON. 
(d)
The indemnity and defense of 
each Party provided in this 
Section 9.1 shall 
be for the benefit of and extend to each Person included 
in the Seller Group and the Buyer Group, 
as applicable. 
Any claim 
for indemnity 
or defense 
under Section 
5.1(d), Schedule 
5.9(a) or 
this 
Section 9.1 to which any member of the Seller Group or 
Buyer Group is entitled must be brought 
and 
administered 
by 
a 
Party 
to 
this 
Agreement. 
No 
Indemnified 
Person 
(including 
any 
Person 
within the 
Seller Group 
or the 
Buyer Group) 
other than 
the Parties 
shall have 
any rights 
against 
Seller or 
Buyer under 
the terms 
of Section 
5.1(d), 
Schedule 5.9(a) 
or this 
Section 9.1 
except as 
may be exercised on its behalf 
by Buyer or Seller, as applicable, pursuant to this Section 
9.1(d). A 
Party 
may 
elect 
to 
exercise 
or 
not 
exercise 
its 
indemnification 
or 
defense 
rights 
under 
Section 
5.1(d), Schedule 
5.9(a) or 
this 
Section 9.1 
on behalf 
of the 
other Indemnified 
Persons affiliated 
with it 
in its 
sole discretion 
and shall 
have no 
liability to 
any such 
other Indemnified 
Person for 
any action or inaction under this Section 9.1(d). 
(e)
Notwithstanding 
anything 
herein 
to 
the 
contrary, 
for 
purposes 
of 
Section 
9.1(b)(ii), 
when 
determining 
the 
amount 
of 
Damages 
resulting 
from 
a 
breach 
of 
a 
Seller 
representation and warranty or in 
the certificate delivered by Seller pursuant 
to Section 7.2(c) (but 
not whether 
a breach 
has occurred) 
all materiality 
qualifications (including 
Seller Material 
Adverse 
Effect) contained 
in the representations 
and warranties of 
Seller made in 
this Agreement or 
such 
certificate related thereto 
shall be disregarded.
For the avoidance 
of doubt, this 
Section 9.1(e) shall 
not 
be 
deemed 
to 
disregard 
any 
dollar 
amounts 
or 
monetary 
thresholds 
set 
forth 
in 
any 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Exhibit 10.1
- 48 - 
representation or warranty 
in Article 3 
(and, for the 
avoidance of doubt, 
in no event 
shall “Material 
Contract” be read to mean “Contract”). 
Section 9.2
Indemnity Actions. All 
claims for indemnification 
or defense under 
Section 
5.1(d), Schedule 5.9(a) and Section 9.1 shall be asserted and resolved as follows: 
(a)
For 
purposes 
hereof, 
(i) 
the 
term 
“Indemnifying 
Person” 
when 
used 
in 
connection with particular Damages or Proceedings, as 
applicable, shall mean the Party having an 
obligation 
to 
indemnify 
or 
defend 
another 
Person 
or 
Persons 
with 
respect 
to 
such 
Damages 
or 
Proceedings, as applicable, 
pursuant to Section 
5.1(d), Schedule 5.9(a) or 
this Article 9 and 
(ii) the 
term “Indemnified Person” 
when used in 
connection with particular 
Damages or Proceedings, 
as 
applicable, shall mean the Person 
or Persons having the right 
to be indemnified or defended 
with 
respect to such 
Damages or 
Proceedings, as applicable, 
by a Party 
or Parties pursuant 
to Section 
5.1(d), Schedule 5.9(a) or this Article 9. 
(b)
To 
make 
a 
claim 
for 
indemnification 
or 
defense 
under 
Section 
5.1(d), 
Schedule 5.9(a) or Section 9.1, an Indemnified Person 
shall notify the Indemnifying Person of its 
claim 
under 
this 
Section 
9.2 
including 
the 
specific 
details 
of 
and 
specific 
basis 
under 
this 
Agreement for 
its claim 
(the “Claim 
Notice”). In 
the event 
that the 
claim for 
indemnification or 
defense is 
based upon 
a claim 
by a 
Third Party 
against the 
Indemnified Person (a 
“Third Person 
Claim”), 
the 
Indemnified Person 
shall 
provide 
its 
Claim 
Notice 
promptly 
after the 
Indemnified 
Person has actual knowledge of 
the Third Person Claim 
and shall enclose a copy 
of all papers (if 
any) served with respect to 
the Third Person Claim; 
provided
, that the failure of 
any Indemnified 
Person to give notice of a Third Person Claim 
as provided in this Section 9.2 shall 
not relieve the 
Indemnifying Person of its 
obligations under Section 5.1(d), 
Schedule 5.9(a) or Section 
9.1 except 
(i) to the extent such failure results 
in insufficient time being available to permit the Indemnifying 
Person to effectively defend against 
the Third Person Claim or 
otherwise materially prejudices 
the 
Indemnifying Person’s ability 
to defend 
against the 
Third Person 
Claim, or 
(ii) if 
such Third 
Person 
Claim is in respect of 
a Retained Liability or 
an Assumed Liability, as the case may be, 
then to the 
extent 
any 
legal 
action 
taken 
by 
the 
Indemnified 
Person 
(prior 
to 
the 
giving 
of 
such 
notice) 
in 
response to such 
Third Person Claim without 
the consent of 
the Indemnifying Person 
increases the 
amount of such 
Third Person Claim. 
In the event 
that the claim 
for indemnification or 
defense is 
based 
upon 
an 
inaccuracy 
or 
breach 
of 
a 
representation, 
warranty, 
covenant, 
or 
agreement, 
the 
Claim 
Notice 
shall 
specify 
the 
representation, 
warranty, 
covenant, 
or 
agreement 
that 
was 
inaccurate or breached. 
(c)
In the 
case of 
a 
claim 
for 
indemnification 
or 
defense 
based upon 
a 
Third 
Person Claim, the Indemnifying Person shall have 30 days from its receipt of the Claim Notice to 
notify the Indemnified Person whether it admits or 
denies its obligation to defend the Indemnified 
Person against such Third Person Claim under Section 5.1(d), Schedule 5.9(a) or this Article 9. If 
the 
Indemnifying 
Person 
does 
not 
notify 
the 
Indemnified 
Person 
within 
such 
30-day 
period 
whether the Indemnifying 
Person admits or 
denies its obligation 
to defend 
the Indemnified Person, 
it 
shall 
be 
conclusively 
deemed 
to 
have 
denied 
such 
indemnification 
or 
defense 
obligation 
hereunder. 
The Indemnified 
Person is 
authorized, prior 
to and 
during such 
30-day 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 
Person and 
that is 
not prejudicial 
to the 
Indemnifying Person; 
provided
, 
that 
if 
such 
Third 
Person 
Claim 
is 
in 
respect 
of 
a 
Retained 
Liability 
or 
an 
Assumed 

 

 

 

 

 

Exhibit 10.1
- 49 - 
Liability, 
as the case may be, 
then the Indemnified Person shall 
not take any other legal 
action in 
response to such Third Person Claim without the consent of the Indemnifying Person. 
(d)
If the Indemnifying Person admits its obligation, 
it shall have the right and 
obligation to diligently defend, 
at its sole cost 
and expense, the 
Third Person Claim; 
provided
, that 
Buyer (and not Seller) shall be entitled 
to defend any Third Person Claim that 
is a Tax Proceeding 
to the extent 
that such Third 
Person Claim could 
reasonably be expected 
to have an 
adverse impact 
on Buyer 
or any 
of its 
Affiliates 
or the 
Assets following 
the Closing 
or is 
not fully 
indemnified 
under this Agreement, but Seller may, at its own expense, reasonably participate in the defense of 
such Third Person Claim to the 
extent the resolution of such Third 
Person Claim could reasonably 
result in 
liability 
for Seller 
under this 
Agreement 
and in 
such 
case Buyer 
shall not, 
without 
the 
written 
consent 
of 
Seller, 
settle 
such 
Third 
Person 
Claim 
(such 
consent 
not 
to 
be 
unreasonably 
withheld, conditioned or delayed). Except 
as otherwise provided in this 
Section 9.2(d) or Section 
9.2(e), 
(i) 
the 
Indemnifying 
Person 
shall 
have 
full 
control 
of 
such 
defense 
and 
proceedings, 
including any compromise or settlement 
thereof, and (ii) if such 
Third Person Claim is 
in respect 
of a Retained Liability or 
an Assumed Liability, 
as the case may be, then 
the Indemnified Person 
shall not 
take any other 
legal action 
in response to 
such Third Person 
Claim without 
the consent 
of 
the 
Indemnifying 
Person. 
If 
requested 
by 
the 
Indemnifying 
Person, 
the 
Indemnified 
Person 
agrees to cooperate 
in contesting 
any Third 
Person Claim 
that the 
Indemnifying Person 
elects to 
contest 
(
provided
, 
however
, 
that 
the 
Indemnified 
Person 
shall 
not 
be 
required 
to 
bring 
any 
counterclaim 
or 
cross-complaint 
against 
any 
Person). 
The 
Indemnified 
Person 
may 
at 
its 
own 
expense participate in, but not control, any defense 
or settlement of any Third Person Claim to 
the 
extent 
controlled 
by 
the 
Indemnifying 
Person 
pursuant 
to 
this 
Section 
9.2(d). 
An 
Indemnifying 
Person shall 
not, without 
the written 
consent of 
the Indemnified 
Person, settle 
any Third 
Person 
Claim or consent to the 
entry of any judgment 
with respect thereto that 
(i) does not result in 
a final 
resolution of the Indemnified Person’s liability with respect to the Third Person Claim (including, 
in the case 
of a settlement, 
an unconditional written 
release of the 
Indemnified Person), (ii) 
may 
materially and adversely 
affect the Indemnified 
Person (other than 
as a result 
of money damages 
covered by the indemnity), (iii) requires a non-monetary commitment by the Indemnified Person, 
including compliance 
with an injunction 
or other 
equitable relief, 
(iv) includes 
any admission 
of 
guilt or culpability, or (v) relates to the payment or calculation of Royalties or Taxes. 
(e)
If 
the 
Indemnifying 
Person 
does 
not 
admit 
its 
obligation 
or 
admits 
its 
obligation 
but 
fails 
to 
diligently 
defend 
or 
settle 
the 
Third 
Person 
Claim, 
then 
the 
Indemnified 
Person shall have the right to defend against the Third Person Claim (at the sole cost and expense 
of 
the 
Indemnifying Person, 
if 
the 
Indemnified Person 
is 
entitled 
to 
defense 
or 
indemnification 
hereunder) 
with 
counsel 
of 
the 
Indemnified 
Person’s 
choosing, 
subject 
to 
the 
right 
of 
the 
Indemnifying Person to admit its obligation and assume the 
defense of the Third Person Claim to 
the extent provided in Section 
9.2(d) at any time prior to 
settlement or final determination thereof. 
If 
the 
Indemnifying 
Person 
has 
not 
yet 
admitted 
its 
obligation 
to 
provide 
indemnification 
or 
defense with respect to a Third Person Claim, the 
Indemnified Person shall send written notice to 
the Indemnifying Person 
of any proposed 
settlement and the 
Indemnifying Person shall 
have the 
option for ten days following receipt 
of such notice to (i) admit in 
writing its obligation to provide 
indemnification or 
defense with 
respect to 
the Third 
Person Claim 
and (ii) 
if its 
obligation is 
so 
admitted, 
assume 
the 
defense 
of 
the 
Third 
Person 
Claim, 
including 
the 
power 
to 
reject, 
in 
its 
reasonable judgment, 
the proposed 
settlement; 
provided
, that 
the Indemnifying 
Person shall 
not, 
without the written 
consent of the 
Indemnified Person, settle 
any Third Person 
Claim or consent 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Exhibit 10.1
- 50 - 
to the 
entry of 
any judgment 
with respect 
thereto that 
relates to 
the payment 
or calculation 
of Taxes. 
If the Indemnified 
Person settles any 
Third Person Claim 
over the objection 
of the Indemnifying 
Person after 
the Indemnifying 
Person has 
timely admitted 
its obligation 
in writing 
and assumed 
the 
defense 
of 
a 
Third 
Person 
Claim 
that 
the 
Indemnifying 
Person 
is 
entitled 
to 
control, 
the 
Indemnified Person shall be deemed to have waived any right to indemnity therefor. 
(f)
In the case 
of a claim for 
indemnification or defense 
not based upon 
a Third 
Person Claim, the Indemnifying Person shall have 30 days from its receipt of the Claim Notice to 
(i) 
cure 
the 
Damages 
complained 
of 
or 
Proceedings 
occurring, 
as 
applicable, 
(ii) 
admit 
its 
obligation to provide indemnification or defense with respect to such 
Damages or Proceedings, as 
applicable, 
or 
(iii) 
dispute 
the 
claim 
for 
such 
indemnification 
or 
defense. 
If 
the 
Indemnifying 
Person 
does 
not 
notify 
the 
Indemnified 
Person 
within 
such 
30-day 
period 
that 
it 
has 
cured 
the 
Damages or 
Proceedings, as 
applicable, or 
that it 
disputes the 
claim for 
such indemnification 
or 
defense, the Indemnifying 
Person shall be 
deemed to have 
disputed such claim 
for indemnification 
or defense. 
Section 9.3
Limitation on Actions. 
(a)
The representations and warranties of 
the Parties in Article 
3 and Article 4 
and the covenants and agreements 
of the Parties 
in Article 5 and Article 10 
(other than the proviso 
appearing 
in 
the 
last 
sentence 
of 
Section 
5.5, 
Section 
5.7, 
Section 
5.16, 
Section 
5.17, 
Section 
5.19(d), 
Section 
5.20, 
and 
Section 
5.22) 
and 
the 
corresponding 
representations, 
warranties, 
covenants and 
agreements confirmed 
in the 
certificates delivered 
at Closing 
pursuant to 
Section 
7.2(c) 
and 
Section 
7.3(b), 
as 
applicable, 
shall 
terminate 
at 
Closing, 
except 
that 
(i) 
the 
Seller 
Fundamental 
Representations, 
the 
Buyer 
Fundamental 
Representations 
and 
the 
corresponding 
representations 
and 
warranties 
confirmed 
in 
the 
certificates 
delivered 
at 
Closing 
pursuant 
to 
Section 7.2(c) and Section 7.3(b) shall survive the Closing for seven years 
following the Closing, 
(ii) the 
representations and 
warranties of 
Seller in 
Section 3.8, 
the covenants 
and agreements 
of 
Seller in Article 5 
that relate to Taxes, 
the covenants and agreements 
of the Parties 
in Article 10, 
and 
the 
corresponding 
representations, 
warranties, 
covenants 
and 
agreements 
confirmed 
in 
the 
certificates 
delivered 
at 
Closing 
pursuant 
to 
Section 
7.2(c) 
and 
Section 
7.3(b) 
shall 
survive 
the 
Closing until 
the earlier 
of seven 
years following 
the Closing 
or the 
expiration of 
the applicable 
statute of limitations, 
(iii) the other 
representations and warranties 
of Seller in 
Article 3 (other 
than 
the Seller Fundamental 
Representations and the 
representations and warranties 
of Seller in 
Section 
3.8, 
Section 
3.15, 
Section 
3.20, 
Section 
3.22, 
and 
Section 
3.27), 
the 
other 
covenants 
and 
agreements 
set 
forth 
in 
Section 
5.3, 
Section 
5.4, 
Section 
5.9, 
and 
Section 
5.13 
and 
the 
corresponding representations, warranties, covenants 
and agreements confirmed in 
the certificate 
delivered at Closing pursuant to 
Section 7.2(c) shall survive the 
Closing for a period of one 
year, 
(iv) the 
representations and 
warranties set 
forth in 
Section 3.20 
and Section 
3.22, the 
covenants 
and 
agreements 
set 
forth 
in 
Section 
5.6 
and 
the 
corresponding 
representations, 
warranties, 
covenants 
and 
agreements 
confirmed in 
the 
certificate 
delivered 
at 
Closing 
pursuant 
to 
Section 
7.2(c) shall survive 
the Closing 
for a period 
of four 
years, (v) 
the representations 
and warranties 
set forth 
in Section 
3.15 
and the 
corresponding representations 
and warranties 
confirmed in 
the 
certificate delivered at Closing pursuant to Section 7.2(c) shall survive the Closing for a period of 
two years, 
and (vi) 
the representations 
and warranties 
set forth 
in Section 
3.27 and 
Section 4.13 
and 
the 
corresponding 
representations 
and 
warranties 
confirmed 
in 
the 
certificates 
delivered 
at 
Closing pursuant to Section 7.2(c) 
and Section 7.3(b) shall survive the 
Closing for a period of five 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Exhibit 10.1
- 51 - 
years. 
The 
remainder 
of 
this 
Agreement 
(including 
the 
disclaimers 
and 
acknowledgments 
in 
Section 
3.32 
and 
Section 
4.10) 
shall 
survive 
the 
Closing 
without 
time 
limit 
except 
(A) 
as 
may 
otherwise 
be 
expressly 
provided 
herein, 
(B) 
for 
covenants 
and 
agreements 
set 
forth 
in 
this 
Agreement that, by their terms, are to be completed prior to Closing, which shall 
only survive for 
one 
year 
after 
the 
Closing 
Date, 
and 
(C) 
all 
other 
covenants 
and 
agreements 
set 
forth 
in 
this 
Agreement, which 
shall survive until 
fully satisfied and/or 
performed in accordance 
with the terms 
hereof 
(unless 
otherwise 
specifically 
provided 
in 
this 
Agreement). 
Representations, 
warranties, 
covenants, and agreements shall be of no further force and 
effect after the date of their expiration; 
provided
, 
that 
there 
shall 
be 
no 
termination 
of 
any 
bona 
fide 
claim 
asserted 
pursuant 
to 
this 
Agreement 
with 
respect 
to 
such 
a 
representation, 
warranty, 
covenant, 
or 
agreement 
prior 
to 
its 
expiration date. 
(b)
The 
indemnity 
and 
defense 
obligations 
in 
Section 
9.1(a)(i), 
Section 
9.1(a)(ii), 
Section 9.1(b)(i), 
and Section 9.1(b)(ii) 
shall terminate as 
of the termination 
date of each 
respective representation, warranty, covenant, 
or agreement that is subject to indemnification and 
defense 
thereunder, 
except 
in 
each 
case 
as 
to 
matters 
for 
which 
a 
specific 
written 
claim 
for 
indemnity or defense 
has been delivered to 
the Indemnifying Person 
on or before such 
termination 
date. The 
indemnity and 
defense obligation 
in Section 
9.1(a)(iii) shall 
not terminate. 
The indemnity 
and defense obligation 
in Section 9.1(b)(iii) 
shall terminate 
10 years 
after the 
Closing Date. 
The 
indemnity and 
defense obligations 
in Section 
9.1(b)(iv) and 
Section 9.1(b)(v) 
shall terminate 
on 
the date 
that is 
the earlier 
of 7 
years following 
the Closing 
or the 
expiration of 
the applicable 
statute 
of limitations. 
(c)
Seller shall not have any 
liability for any indemnification or 
defense under 
Section 9.1(b)(ii) (other than with respect to Section 3.8, Section 3.20 
and the Seller Fundamental 
Representations) 
or 
Section 
9.1(b)(v) 
for 
any 
individual 
Damage 
(whether 
the 
subject 
of 
a 
Proceeding subject to an obligation 
to defend or otherwise) or 
Proceeding, unless the amount with 
respect 
to 
such 
Damage 
or 
the 
Damages 
involved 
in 
such 
Proceeding 
exceeds 
$400,000 
(the 
“Individual Indemnity 
Threshold”); 
provided, 
however
, that, 
with respect 
to a 
breach of 
Section 
3.15, Seller shall not have any liability for 
any indemnification or defense under Section 
9.1(b)(ii) 
for any individual Damage (whether the 
subject of a Proceeding subject to an 
obligation to defend 
or 
otherwise) 
or 
Proceeding 
unless 
the 
amount 
with 
respect 
to 
such 
Damage 
or 
the 
Damages 
involved 
in 
such 
Proceeding 
exceeds 
$250,000 
(the 
“Individual 
Environmental 
Indemnity 
Threshold”); 
provided, further
, that with respect to a breach of Section 3.20, Seller shall 
not have 
any 
liability 
for 
any 
indemnification 
or 
defense 
under 
Section 
9.1(b)(ii) 
for 
(x) any 
individual 
Damage (whether 
the 
subject 
of 
Proceeding subject 
to 
an 
obligation 
to 
defend or 
otherwise) 
or 
Proceeding 
in 
respect 
of 
such 
breach 
unless 
the 
amount 
with 
respect 
to 
such 
Damage 
or 
the 
Damages involved in such 
Proceeding exceeds $250,000 
or (y) Damages (whether the 
subject of 
Proceeding 
subject 
to 
an 
obligation 
to 
defend 
or 
otherwise) 
or 
Proceedings 
in 
respect 
of 
such 
breach 
to 
the 
extent 
such 
Damages 
or 
the 
Damages 
involved 
in 
such 
Proceeding 
exceed 
the 
Allocated Value 
of the affected Asset. 
(d)
Seller shall not have any 
liability for any indemnification or 
defense under 
Section 9.1(b)(ii) (other than with 
respect to the Seller Fundamental Representations, 
Section 3.8 
and Section 3.20) until and 
unless the aggregate amount of the 
liability for all Damages (whether 
the 
subject 
of 
a 
Proceeding 
subject 
to 
an 
obligation 
to 
defend 
or 
otherwise) 
that 
exceed 
the 
Individual 
Indemnity 
Threshold 
or 
the 
Individual 
Environmental 
Indemnity 
Threshold, 
as 

 

 

 

 

 

 

 

 

 

 

 

 

 

Exhibit 10.1
- 52 - 
applicable, and for which 
Claim Notices are delivered 
by Buyer exceeds 
$200,000,000, and then 
only to the extent such Damages exceed $200,000,000. 
(e)
Notwithstanding 
anything 
to 
the 
contrary 
contained 
elsewhere 
in 
this 
Agreement, (i) Seller shall not be required to indemnify or defend the 
Buyer Group under Section 
9.1(b)(ii) 
(other 
than 
with 
respect 
to 
the 
Seller 
Fundamental 
Representations, 
Section 
3.8 
and 
Section 3.20) for aggregate 
Damages (whether the subject 
of a Proceeding subject 
to an obligation 
to defend or 
otherwise) in excess 
of ten percent 
(10%) of the 
Purchase Price, (ii) 
Seller shall not 
be 
required 
to 
indemnify 
or 
defend 
the 
Buyer 
Group 
under 
Section 
9.1(b)(iii) 
for 
aggregate 
Damages (whether 
the subject 
of Proceeding 
subject to 
an obligation 
to defend 
or otherwise) 
in 
excess of $2,000,000,000, 
and (iii) Seller 
shall not 
be required to 
indemnify or defend 
the Buyer 
Group under Section 9.1(b) for aggregate Damages 
(whether the subject of Proceeding subject to 
an obligation to defend or otherwise) in excess of the Purchase Price. 
(f)
The amount of 
any Damages 
(whether the 
subject of 
a Proceeding 
subject 
to an obligation to defend 
or otherwise) for which an 
Indemnified Person is entitled to 
indemnity 
under this Article 9 shall be reduced 
by the amount of insurance proceeds actually 
received by the 
Indemnified Person or its 
Affiliates with respect to such 
Damages (net of any collection 
costs, and 
excluding the proceeds of any insurance policy issued 
or underwritten by the Indemnified Person 
or its Affiliates). 
(g)
In 
no 
event 
shall 
any 
Indemnified 
Person 
be 
entitled 
to 
duplicate 
compensation with respect to the 
same Damage (whether the subject of 
a Proceeding subject to an 
obligation to defend 
or otherwise), liability, 
loss, cost, expense, claim, 
award, or judgment 
under 
more than one provision of this Agreement and the Transaction Documents. 
(h)
Notwithstanding anything to the contrary in this Agreement, (i) in no event 
shall Seller’s indemnity or 
defense obligation under 
Section 9.1(b)(iii) nullify 
any prior or 
existing 
indemnity, 
assumption of 
liability or 
right of 
contribution from 
Buyer or 
any of 
its Affiliates 
in 
favor 
of 
Seller 
or 
any 
of 
its 
Affiliates, 
and 
(ii) 
Seller 
shall 
have 
no 
indemnification 
or 
defense 
obligation 
pursuant 
to 
Section 
9.1(b)(iii) 
to 
the 
extent 
of 
any 
such 
prior 
or 
existing 
indemnity, 
assumption of liability or 
right of contribution 
from Buyer or any 
of its Affiliates in 
favor of Seller 
or any of its Affiliates. 
ARTICLE 10 
TAX MATTERS 
Section 10.1
Tax Allocations; Tax 
Returns. 
(a)
Seller shall be 
allocated, bear and 
be responsible for 
all Asset Taxes that are 
attributable to 
(i) any 
Tax 
period ending 
at or 
prior to 
the Effective 
Time 
and (ii) 
the portion 
of 
any 
Straddle 
Period 
ending 
at 
the 
Effective 
Time. 
Subject 
to 
Seller’s 
indemnity 
and 
defense 
obligations in Section 9.1(b), Buyer shall be 
allocated, bear and be responsible for 
all Asset Taxes 
that are attributable 
to (x) 
any Tax 
period beginning 
after the Effective 
Time 
and (y) the 
portion 
of any Straddle Period beginning after the Effective Time. For purposes of allocating Asset Taxes 
pursuant 
to 
this 
Section 
10.1(a), 
(A) Asset 
Taxes 
that 
are 
attributable 
to 
the 
severance 
or 
production 
of 
Hydrocarbons 
(other 
than 
such 
Asset 
Taxes 
described 
in 
clause (C)) 
shall 
be 

 

 

 

 

 

 

 

 

 

Exhibit 10.1
- 53 - 
allocated 
to 
the 
period 
in 
which 
the 
severance 
or 
production 
giving 
rise 
to 
such 
Asset 
Taxes 
occurred, 
(B) Asset 
Taxes 
that 
are 
based 
upon 
or 
related 
to 
sales 
or 
receipts 
or 
imposed 
on 
a 
transactional basis (other than such Asset Taxes 
described in clause (A) or (C)) shall be 
allocated 
to the 
period in 
which the 
transaction giving 
rise to such 
Asset Taxes occurred and 
(C) Asset Taxes 
that 
are 
ad 
valorem, 
property 
or 
other 
Asset 
Taxes 
imposed 
on 
a 
periodic 
basis 
pertaining 
to 
a 
Straddle Period shall 
be allocated between 
the portion of 
such Straddle Period 
ending immediately 
prior to the 
Effective Time and the 
portion of such 
Straddle Period 
beginning at the 
Effective Time 
by prorating each 
such Asset 
Tax 
based on the 
number of days 
in the applicable 
Straddle Period 
that 
occur 
on 
or 
before 
the 
date 
on 
which 
the 
Effective 
Time 
occurs, 
on 
the 
one 
hand, 
and 
the 
number 
of 
days 
in 
such 
Straddle 
Period 
that 
occur 
after 
the 
date 
on 
which 
the 
Effective 
Time 
occurs, 
on the other hand. 
(b)
Seller shall be 
allocated, bear 
and be responsible 
for (i) all 
Taxes (other than 
Asset Taxes) 
of, imposed 
on or 
attributable to 
Newco or 
SWEPI that 
are attributable 
to (A) 
any 
Tax 
period ending 
on or 
before the 
Closing Date 
and (B) 
the portion 
of any 
Current Tax 
Period 
ending on 
and including 
the Closing 
Date and 
(ii) all 
Taxes 
imposed with 
respect to 
or that 
are 
attributable 
to 
any 
Combined 
Return. 
For 
purposes 
of 
allocating 
Taxes 
pursuant 
to 
Section 
10.1(b)(i) for any Current Tax Period, such Taxes shall be allocated based on a deemed closing of 
the 
books 
of 
Newco 
or 
SWEPI, 
as 
applicable, 
as 
of 
the 
end 
of 
the 
day 
on 
the 
Closing 
Date. 
Notwithstanding anything herein to the 
contrary, any franchise or similar Tax shall be allocated to 
the period during which the income, operations, assets or capital comprising the base of such Tax 
is measured, 
regardless of 
whether the 
right to 
do business 
for another 
period is 
obtained by 
the 
payment of such Tax. 
(c)
To the extent the actual amount of an Asset Tax is not known at 
the time an 
adjustment is to be made with respect to such Asset Tax pursuant to Section 2.5 or Section 7.4, as 
applicable, the Parties shall utilize the most recent information available in estimating the amount 
of such 
Asset Tax 
for purposes 
of such 
adjustment. To 
the extent 
the actual 
amount of 
an Asset 
Tax (or the 
amount thereof paid or economically borne by a 
Party) is ultimately determined to be 
different 
than 
the 
amount 
(if 
any) 
that 
was 
taken 
into 
account 
in 
the 
Purchase 
Price 
as 
finally 
determined pursuant to Section 7.4(b), 
timely payments will be made 
from one Party to the 
other 
(without 
duplication 
of 
Section 
2.2(d)) 
to 
the 
extent 
necessary 
to 
cause 
each 
Party 
to 
bear 
the 
amount of such Asset Tax that is allocable to such Party under Section 10.1(a). 
(d)
With respect to Tax Returns required to be filed by or with respect 
to Seller 
or Newco, Seller shall and shall cause Newco to prepare and timely 
file all such Tax 
Returns that 
are required 
to 
be 
filed 
prior 
to 
the 
Closing 
Date in 
a 
manner consistent 
with 
past 
practice and 
Seller 
shall 
and 
shall 
cause 
Newco 
to 
pay 
to 
the 
applicable 
Governmental 
Authority 
all 
Taxes 
shown to be due on such Tax 
Returns. Seller shall prepare and timely file or cause to 
be prepared 
and timely filed, in a manner consistent with 
past practice, all Tax 
Returns that are required to be 
filed 
by 
or 
with 
respect to 
SWEPI and 
pay 
or 
cause 
to 
be 
paid 
to 
the 
applicable Governmental 
Authority all Taxes required to be paid with respect to such Tax 
Returns. Seller shall also prepare 
and timely file or cause to be prepared and timely filed, in a manner consistent with past practice, 
all Combined 
Returns that 
are required 
to be 
filed and 
pay or 
cause to 
be paid 
to the 
applicable 
Governmental Authority all 
Taxes required to be paid 
with respect to 
such Combined Returns 
and, 
for the 
avoidance of 
doubt, neither 
Buyer nor 
any of 
its Affiliates 
shall have 
any liability, obligation 
or responsibility 
with respect 
to any 
Combined Return 
or any 
Taxes 
imposed with 
respect to 
or 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Exhibit 10.1
- 54 - 
that are attributable to any Combined Return. Newco shall prepare and timely file 
all Tax Returns 
that are required to be filed 
by or with respect to Newco 
on or after the Closing Date 
for any Tax 
period that 
ends before 
or includes 
the Closing 
Date (other 
than Combined 
Returns) and 
Buyer 
shall pay or cause Newco to pay to the applicable Governmental Authority 
all Taxes shown 
to be 
due on 
such Tax 
Returns; 
provided
, 
however
, that 
to the 
extent any 
such Taxes 
constitute Seller 
Taxes, 
the payment 
of such 
Seller Taxes 
shall be 
on behalf 
of Seller 
and, within 
five days 
after 
such payment, Seller shall 
pay to Buyer 
such Seller Taxes. 
The Parties agree 
that (i) this 
Section 
10.1(d) is intended to solely address the timing and manner 
in which certain Tax Returns are filed 
and the Taxes 
shown thereon are paid to the 
applicable Governmental Authority, 
and (ii) nothing 
in this Section 10.1(d) shall 
be interpreted as altering 
the manner in which 
Taxes 
are allocated to 
and economically borne by the Parties. 
Section 10.2
Tax Refunds. 
To 
the extent that Newco actually receives a 
refund or credit 
within 
two 
years 
following 
the 
Closing 
Date 
with 
respect 
to 
Taxes 
paid 
by 
Seller 
prior 
to 
the 
Effective Time 
(excluding any such 
refund or credit to 
the extent it (a) 
was taken into 
account in 
the Purchase 
Price as 
finally determined pursuant 
to Section 
7.4(b) or 
(b) is 
attributable to any 
loss, 
credit 
or 
other 
Tax 
attribute 
arising 
in 
a 
taxable 
year 
(or 
portion 
thereof) 
beginning 
after 
the 
Effective Time that is carried back to a 
taxable year (or a portion thereof) 
ending on or prior to 
the 
Effective Time) (each non-excluded 
refund, a “Pre-Effective 
Refund”), such Pre-Effective 
Refund 
shall be for the account of Seller. Buyer shall forward, and shall cause its Affiliates to forward, to 
Seller any such Pre-Effective Refund that is for Seller’s account pursuant to this Section 10.2 (net 
of (x) any Taxes 
payable by Buyer or 
any of its Affiliates 
(including Newco) attributable to such 
Pre-Effective Refund and (y) any expenses incurred 
by Buyer or any of its Affiliates 
in obtaining 
such amounts) 
within 30 
days after 
such Pre-Effective Refund 
is received 
or realized. 
To the extent 
that Seller or any 
of its Affiliates receives a 
refund or credit with 
respect to Taxes for which Buyer 
is responsible 
pursuant to 
this Agreement 
(including Asset 
Taxes 
allocable to 
Buyer pursuant 
to 
Section 10.1(a)), excluding any such refund or credit to the extent it was taken into account in the 
Purchase Price as finally determined pursuant to 
Section 7.4(b), such refund or credit 
shall be for 
the account of Buyer, 
and Seller shall forward, 
and shall cause its 
Affiliates to forward, 
to Buyer 
any such refund or 
credit (net of (1) 
any Taxes payable by Seller or any 
of its Affiliates (excluding 
Newco) 
attributable 
to 
such 
refund 
or 
credit 
and 
(2) 
any 
reasonable 
out-of-pocket 
expenses 
incurred by 
Seller 
or 
any 
of its 
Affiliates 
in obtaining 
such amounts) 
within 
30 days 
after such 
refund 
or 
credit 
is 
received 
or 
realized. 
If 
any 
amount 
actually 
paid 
to 
a 
Party 
pursuant 
to 
this 
Section 10.2 is subsequently challenged successfully by 
any Governmental Authority, 
such Party 
shall repay 
to the 
other Party 
such amount 
(together with 
any interest 
and penalties 
assessed by 
such Governmental Authority in respect of such amount). 
Section 10.3
Tax Cooperation. Buyer and Seller shall reasonably cooperate as and to the 
extent 
reasonably 
requested 
by 
the 
other 
Party, 
in 
connection 
with 
obtaining 
any 
Pre-Effective 
Refund, 
the 
filing 
of 
Tax 
Returns 
and 
any 
audit, 
litigation 
or 
other 
proceeding 
with 
respect 
to 
Taxes (each a “Tax 
Proceeding”) that is related to Taxes imposed on or with 
respect to the assets, 
operations or activities of SWEPI or Newco. 
Section 10.4
Characterization of Certain Payments. The Parties agree that any payments 
made pursuant to 
Section 7.4, Article 
9 or this 
Article 10 shall 
be treated for 
all Tax 
purposes as 
an adjustment to the Purchase Price unless otherwise required by Law. 

 

 

 

 

 

 

 

Exhibit 10.1
- 55 - 
Section 10.5
Transfer 
Taxes. 
Notwithstanding 
anything 
to 
the 
contrary 
in 
this 
Agreement, any sales, use, transfer, real 
property transfer, registration, documentary, stamp, value 
added or 
similar 
Taxes 
imposed 
on 
or 
payable 
in 
connection 
with 
the 
purchase 
and 
sale 
of 
the 
Subject Interests contemplated by 
this Agreement (“Transfer Taxes”) shall be borne 50 percent 
by 
Seller 
and 
50 
percent 
by 
Buyer. 
The 
Party 
responsible 
under applicable 
Law for 
filing 
the 
Tax 
Returns with 
respect to 
any such 
Transfer Taxes 
shall prepare 
and timely 
file such 
Tax 
Returns, 
promptly provide 
a copy 
of such 
Tax Return to the 
other Party, and 
pay such Transfer 
Taxes shown 
to be due on 
such Tax Return. Seller and Buyer shall, 
and shall cause their 
respective Affiliates to, 
cooperate in good 
faith to minimize, 
to the extent 
permissible under applicable 
Law, 
the amount 
of any such Transfer Taxes and timely prepare and file any 
Tax Returns or other filings relating to 
such 
Transfer 
Taxes, 
including 
any 
claim 
for 
exemption 
or 
exclusion 
from 
the 
application 
or 
imposition of any Transfer Taxes. 
One half of the amount of any Transfer Taxes 
due with respect 
to any Tax Return to be filed under this Section 10.5 shall be paid by the 
other Party to the paying 
Party at least two Business Days prior to the due date for the filing of such Tax Returns. 
Section 10.6
Termination 
of 
Tax 
Agreements. 
Any 
Tax 
sharing, 
Tax 
indemnity, 
Tax 
receivable, Tax 
allocation or 
similar Contract 
(other than 
any Customary 
Agreement) involving 
Newco or pursuant to 
which Newco could otherwise have 
any liability shall be terminated 
prior to 
the 
Closing 
Date 
and, 
after 
the 
Closing, 
none 
of 
the 
Buyer, 
Newco, 
or 
any 
of 
their 
respective 
Affiliates shall be bound thereby or have any liability thereunder. 
Section 10.7
Purchase Price Allocation. It is 
the intent of the Parties 
that the acquisition 
by Buyer of the Subject 
Interests is treated as an 
acquisition by Buyer of 
the assets of Newco 
for 
U.S. federal (and applicable state and local) Income Tax purposes and Buyer and Seller shall, and 
shall cause their respective Affiliates to, not take any position for Tax 
purposes (including on any 
Tax 
Return, 
in 
any 
Tax 
Proceeding 
or 
otherwise) 
that 
is 
inconsistent 
with 
such 
intended 
Tax 
treatment unless otherwise 
required by applicable 
Law. 
Buyer and Seller 
shall use commercially 
reasonable efforts to agree, within 60 days after the Closing Date, to an allocation of 
the Purchase 
Price 
(and any 
other 
item 
included 
in 
computing consideration 
for 
applicable 
U.S. 
federal 
(and 
applicable state and 
local) income tax purposes 
to the extent known 
at such time) 
among the assets 
of 
Newco 
in 
accordance 
with 
Section 
1060 
of 
the 
Code, 
as 
applicable, 
and 
the 
Treasury 
Regulations 
promulgated 
thereunder 
(the 
“Tax 
Allocation”). 
If 
Seller 
and 
Buyer 
reach 
an 
agreement 
with 
respect 
to 
the 
Tax 
Allocation, 
(i) 
Buyer 
and 
Seller 
shall 
use 
commercially 
reasonable 
efforts 
to 
update 
the 
Tax 
Allocation 
in 
accordance 
with 
Section 
1060 
of 
the 
Code 
following 
any 
adjustment 
to 
the Purchase 
Price 
pursuant 
to 
this 
Agreement, 
and 
(ii) 
Buyer 
and 
Seller 
shall, 
and 
shall 
cause 
their 
Affiliates 
to, 
report 
consistently 
with 
the 
Tax 
Allocation, 
as 
adjusted, on 
all Tax 
Returns, including 
Internal Revenue 
Service Form 
8594 (Asset 
Acquisition 
Statement under Section 
1060), which Buyer 
and Seller shall 
timely file with 
the Internal Revenue 
Service, and neither 
Seller nor Buyer 
shall take any position 
on any Tax Return that is 
inconsistent 
with 
the 
Tax 
Allocation, 
as 
adjusted, 
unless 
otherwise 
required 
by 
applicable 
Law; 
provided, 
however
, that neither 
Party shall be 
unreasonably impeded 
in its ability 
and discretion to 
negotiate, 
compromise and/or settle any Tax Proceeding in connection with such Tax 
Allocation. 
Section 10.8
Amended Returns. Unless required 
by applicable Law or 
except as set forth 
below, no amended Tax Return with respect to 
a Tax period (or portion thereof) 
ending on or 
prior 
to the Effective Time shall 
be filed by or on behalf of Newco without the prior written 
consent of 
Seller (such 
consent not 
to be 
unreasonably withheld, 
conditioned, or 
delayed) if 
such amended 

 

 

 

Exhibit 10.1
- 56 - 
Tax 
Return would increase the 
Taxes 
for which Seller is 
obligated to indemnify or 
defend Buyer 
under Section 9.1(b)(iv). 
ARTICLE 11 
MISCELLANEOUS 
Section 11.1
Counterparts. 
This 
Agreement 
may 
be 
executed 
in 
counterparts, 
each 
of 
which shall 
be deemed 
an original 
instrument, but 
all such 
counterparts together 
shall constitute 
but one agreement. 
Either Party’s 
delivery of an 
executed counterpart signature 
page by email 
is 
as effective as 
executing and 
delivering this 
Agreement in 
the presence 
of the 
other Party. No Party 
shall be bound until such time as all of the Parties have executed counterparts of this Agreement. 
Section 11.2
Notice. All 
notices and 
other communications 
that are 
required or 
may be 
given 
pursuant 
to 
this 
Agreement must 
be 
given 
in 
writing, 
in 
English, 
and shall 
be 
deemed to 
have been given (a) when delivered personally, by courier, to the addressee, (b) when received by 
the 
addressee if 
sent 
by 
registered or 
certified 
mail, 
postage 
prepaid, 
or 
(c) 
on 
the 
date 
sent 
by 
email (upon affirmative or automated 
reply by email by the 
intended recipient that such 
email was 
received) if sent during normal business hours of the recipient or on the next Business Day if sent 
after normal business hours of the recipient. Such notices and other communications must be sent 
to the following addresses or email addresses: 
If to Buyer: 
Danny Yick 
Sr. Director, 
Acquisitions & Divestitures 

925 N. Eldridge Parkway 
Houston, Texas 77079 
SP1-21-21-N096 
Email: Danny.H.Yick@conocophillips.com 
With a copy (which shall not constitute notice) to: 
Joseph Adams 
Lead Counsel, L48 Transactions 

925 N. Eldridge Parkway 
Houston, Texas 77079 
SP1-16-16-N154 
E-mail: 
joseph.adams@conocophillips.com
If to Seller: 
Parag Mathur 
Deal Lead, Deepwater and Shales 
Shell Enterprises LLC 
150 N. Dairy Ashford 
Houston, Texas 77079 

 

 

 

Exhibit 10.1
- 57 - 
E-mail: 
parag.mathur@shell.com 

Either Party may change its address or email address for notice purposes by written notice 
to the other Party in the manner set forth above. 
Section 11.3
Newco 
Transaction 
Expenses. 
All 
Newco 
Transaction 
Expenses 
shall 
be 
borne by Seller (and not Newco), regardless of whether 
payable prior to or on the Closing Date or 
thereafter. 
Section 11.4
Governing Law. 
(a)
THIS AGREEMENT AND 
THE LEGAL RELATIONS 
BETWEEN THE 
PARTIES 
SHALL BE GOVERNED 
BY AND CONSTRUED 
IN ACCORDANCE WITH 
THE 
LAWS 
OF THE STATE 
OF TEXAS WITHOUT REGARD TO PRINCIPLES 
OF CONFLICTS 
OF 
LAW 
THAT 
WOULD 
REQUIRE 
THE 
APPLICATION 
OF 
THE 
LAWS 
OF 
ANOTHER 
JURISDICTION. 
(b)
THE 
PARTIES 
HEREBY 
IRREVOCABLY 
SUBMIT 
TO 
THE 
EXCLUSIVE JURISDICTION 
OF THE 
FEDERAL COURTS 
OF THE 
UNITED STATES 
OF 
AMERICA 
LOCATED 
IN 
HARRIS 
COUNTY, 
TEXAS 
(OR, 
IF 
REQUIREMENTS 
FOR 
FEDERAL 
JURISDICTION 
ARE 
NOT 
MET, 
STATE 
COURTS 
LOCATED 
IN 
HARRIS 
COUNTY, 
TEXAS) AND 
APPROPRIATE 
APPELLATE 
COURTS 
THEREFROM FOR 
THE 
RESOLUTION OF ANY DISPUTE, CONTROVERSY, 
OR CLAIM ARISING OUT OF OR IN 
RELATION 
TO 
THIS 
AGREEMENT, 
AND 
EACH 
PARTY 
HEREBY 
IRREVOCABLY 
AGREES 
THAT 
ALL 
ACTIONS, 
SUITS, 
AND 
PROCEEDINGS 
IN 
RESPECT 
OF 
SUCH 
DISPUTE, CONTROVERSY, 
OR CLAIM MAY 
BE HEARD 
AND DETERMINED 
IN SUCH 
COURTS. EACH PARTY 
HEREBY IRREVOCABLY WAIVES, 
TO THE FULLEST EXTENT 
PERMITTED 
BY 
APPLICABLE 
LAWS, 
(i) 
ANY 
OBJECTION 
IT 
MAY 
NOW 
OR 
HEREAFTER 
HAVE 
TO 
THE 
LAYING 
OF 
VENUE 
OF 
ANY 
SUCH 
ACTION, 
SUIT, 
OR 
PROCEEDING IN 
ANY OF THE 
AFORESAID COURTS, (ii) ANY 
CLAIM IT MAY NOW OR 
HEREAFTER 
HAVE 
THAT 
ANY 
SUCH 
ACTION, 
SUIT, 
OR 
PROCEEDING 
HAS 
BEEN 
BROUGHT 
IN 
AN 
INCONVENIENT 
FORUM, 
AND 
(iii) 
THE 
RIGHT 
TO 
OBJECT, 
IN 
CONNECTION 
WITH 
SUCH 
ACTION, 
SUIT, 
OR 
PROCEEDING, 
THAT 
ANY 
SUCH 
COURT 
DOES 
NOT 
HAVE 
ANY 
JURISDICTION 
OVER 
SUCH 
PARTY. 
EACH 
PARTY 
HEREBY IRREVOCABLY CONSENTS TO THE 
SERVICE OF ANY PAPERS, NOTICES, OR 
PROCESS 
AT 
THE 
OFFICE 
(BUT 
NOT 
ELECTRONIC 
MAIL) 
ADDRESS 
SET 
OUT 
IN 
SECTION 11.2 
OF THIS AGREEMENT 
FOR SUCH PARTY 
IN CONNECTION WITH 
ANY 
ACTION, 
SUIT, 
OR 
PROCEEDING 
AND 
AGREES 
THAT 
NOTHING 
HEREIN 
WILL 
AFFECT THE RIGHT OF 
THE OTHER PARTY 
TO SERVE ANY SUCH PAPERS, NOTICES, 
OR 
PROCESS 
IN 
ANY 
OTHER 
MANNER 
PERMITTED 
BY 
APPLICABLE 
LAW. 
EACH 
PARTY 
AGREES 
THAT 
A 
JUDGMENT 
IN 
ANY 
SUCH 
DISPUTE, 
CONTROVERSY, 
OR 
CLAIM MAY 
BE ENFORCED IN OTHER JURISDICTIONS BY SUIT ON THE JUDGMENT 
OR IN ANY OTHER MANNER PROVIDED BY APPLICABLE LAW. 
(c)
EACH 
PARTY 
HERETO 
WAIVES, 
TO 
THE 
FULLEST 
EXTENT 
PERMITTED BY APPLICABLE LAW, 
ANY RIGHT IT MAY 
HAVE 
TO A TRIAL BY JURY 

 

 

 

 

 

 

 

 

 

 

Exhibit 10.1
- 58 - 
IN 
RESPECT 
OF 
ANY 
ACTION, 
SUIT, 
OR 
PROCEEDING 
ARISING 
OUT 
OF 
OR 
RELATING 
TO 
THIS 
AGREEMENT 
OR 
ANY 
TRANSACTION 
CONTEMPLATED 
HEREBY. 
Section 11.5
Waivers. 
Any failure by either Party 
to comply with any of 
its obligations, 
agreements or conditions herein contained may be waived by the Party to whom such compliance 
is owed by an instrument signed by such 
Party and expressly identified as a waiver, but not in any 
other manner. 
No waiver 
of, consent to 
a change in, 
or any delay 
in timely 
exercising any rights 
arising from, any of the provisions of this Agreement shall be deemed or shall constitute a waiver 
of, or 
consent to 
a change 
in, other 
provisions hereof 
(whether or 
not similar), 
nor shall 
such waiver 
constitute a continuing waiver unless otherwise expressly provided. 
Section 11.6
Assignment. No 
Party shall 
assign or 
otherwise transfer 
all or 
any part 
of 
this Agreement, 
nor shall any 
Party assign or 
delegate any 
of its rights 
or duties hereunder, without 
the 
prior 
written 
consent 
of 
the 
other 
Party 
(which 
consent 
may 
be 
withheld 
for 
any 
reason); 
provided, 
that Buyer may 
assign this Agreement 
to an Affiliate 
without the prior 
written consent 
of Seller, 
but no 
such assignment 
shall relieve 
or discharge 
Buyer of 
any liability 
or obligations 
under or in 
connection with 
this Agreement. Any 
assignment, transfer or 
delegation made not 
in 
accordance with this Section 11.6 shall be void. Subject to the foregoing, 
this Agreement shall be 
binding upon and inure to 
the benefit of the Parties 
and their respective successors 
and permitted 
assigns. 
Section 11.7
Entire Agreement. 
This Agreement 
(including, for 
purposes of 
certainty, the 
Appendices, Exhibits and 
Schedules attached hereto), 
the Transaction 
Documents, and any 
other 
documents to 
be executed 
hereunder, constitute 
the entire 
agreement between 
the Parties 
pertaining 
to the subject matter hereof, and supersede all prior agreements, understandings, negotiations and 
discussions, whether oral or written, of the Parties pertaining to the subject matter hereof. 
Section 11.8
Amendment. 
This 
Agreement 
may 
be 
amended 
or 
modified 
only 
by 
an 
agreement 
in 
writing 
executed 
by 
all 
Parties 
and 
expressly 
identified 
as 
an 
amendment 
or 
modification. 
Section 11.9
No Third Party Beneficiaries. 
Except (solely with respect to Section 11.13) 
the Nonparty Affiliates, 
nothing in 
this Agreement shall 
entitle any Person 
other than Buyer 
and 
Seller and their respective successors and 
permitted assigns to any claim, 
cause of action, remedy, 
or right of any kind, 
except the rights expressly 
provided in Section 5.1(d) 
and Section 9.1 to 
the 
Persons 
described 
therein, 
in 
which 
case 
such 
Persons 
will 
be 
regarded 
as 
intended 
third-party 
beneficiaries for the sole purpose of those provisions. 
Section 11.10
Construction. 
The 
Parties 
acknowledge 
that 
(a) 
the 
Parties 
have 
had 
the 
opportunity 
to 
exercise 
business 
discretion 
in 
relation 
to 
the 
negotiation 
of 
the 
details 
of 
the 
transaction contemplated hereby, (b) this Agreement 
is the result 
of arms-length negotiations from 
equal 
bargaining 
positions, 
and 
(c) 
the 
Parties 
and 
their 
respective 
counsel 
participated 
in 
the 
preparation 
and 
negotiation 
of 
this 
Agreement. 
Any 
rule 
of 
construction 
that 
a 
contract 
be 
construed against 
the drafter 
shall not apply 
to the 
interpretation or 
construction of this 
Agreement. 

 

 

 

 

 

Exhibit 10.1
- 59 - 
Section 11.11
Limitation on Damages. 
NOTWITHSTANDING ANYTHING TO 
THE 
CONTRARY, 
EXCEPT 
FOR 
ANY 
DAMAGES 
INCURRED BY 
THIRD PARTIES 
FOR 
WHICH 
INDEMNIFICATION 
IS 
SOUGHT 
UNDER 
THE 
TERMS 
OF 
THIS 
AGREEMENT, 
NONE 
OF 
BUYER, 
SELLER, 
NOR 
ANY 
MEMBER 
OF 
THE 
BUYER 
GROUP 
OR 
SELLER 
GROUP, 
RESPECTIVELY, 
SHALL 
BE 
ENTITLED 
TO 
CONSEQUENTIAL, 
SPECIAL, 
INDIRECT, 
PUNITIVE 
OR 
EXEMPLARY 
DAMAGES 
IN 
CONNECTION 
WITH 
THIS 
AGREEMENT 
AND 
THE 
TRANSACTIONS 
CONTEMPLATED 
HEREBY 
AND, 
EXCEPT 
AS 
OTHERWISE 
PROVIDED 
IN 
THIS 
SENTENCE, 
EACH 
OF 
BUYER 
AND 
SELLER, 
FOR 
ITSELF 
AND 
ON 
BEHALF 
OF 
EACH 
MEMBER 
OF 
THE 
BUYER 
GROUP 
OR 
SELLER 
GROUP, 
AS 
APPLICABLE, 
HEREBY 
EXPRESSLY 
WAIVES 
ANY 
RIGHT 
TO 
CONSEQUENTIAL, 
SPECIAL, 
INDIRECT, 
PUNITIVE OR 
EXEMPLARY 
DAMAGES IN 
CONNECTION 
WITH THIS 
AGREEMENT AND THE TRANSACTIONS CONTEMPLATED HEREBY. 
Section 11.12
Conspicuous. 
THE 
PARTIES 
AGREE 
THAT, 
TO 
THE 
EXTENT 
REQUIRED 
BY 
APPLICABLE 
LAW 
TO 
BE 
EFFECTIVE 
OR 
ENFORCEABLE, 
THE 
PROVISIONS 
IN 
THIS 
AGREEMENT 
IN 
BOLD-TYPE 
OR 
ALL-CAPS 
FONT 
ARE 
“
CONSPICUOUS
” FOR THE PURPOSE OF ANY APPLICABLE LAW. 
Section 11.13
Affiliate 
Liability. 
All 
obligations 
and/or 
other 
liabilities 
(whether 
in 
contract or in tort, in law or in equity, granted 
by statute or otherwise) that may be based upon, in 
respect 
of, 
arise 
under, 
out 
or 
by 
reason 
of, 
be 
connected 
with, 
or 
relate 
in 
any 
manner 
to 
this 
Agreement, 
the 
Transaction 
Documents, 
or 
the 
negotiation, 
execution, 
or 
performance 
of 
this 
Agreement or 
the Transaction 
Documents (including 
any representation 
or warranty 
made in, 
in 
connection with, or 
as an inducement 
to, this Agreement 
or any Transaction 
Document), may be 
made only against (and are 
expressly limited to) the entities that 
are expressly identified as Parties 
in the preamble 
to this Agreement 
(or any successor 
or permitted assign 
of any the 
Parties) or, with 
respect 
to 
any 
Transaction 
Document, 
the 
entities 
and 
individuals 
(if 
applicable) 
identified 
as 
parties to 
such Transaction 
Document (collectively, 
the “Contracting 
Parties”). Notwithstanding 
anything to 
the contrary 
in this 
Agreement, any 
Transaction 
Document or 
otherwise, no 
Person 
who is not 
a Contracting Party, 
including any director, 
officer, 
employee, incorporator, 
member, 
partner, manager, direct 
or indirect 
equity holder, Affiliate, 
agent, attorney, or 
other Representative 
of, and 
any financial 
advisor or 
lender to, 
any Contracting 
Party, or any director, officer, employee, 
incorporator, member, partner, manager, direct or indirect equity holder, Affiliate, agent, attorney, 
or 
other 
Representative 
of, 
and 
any 
financial 
advisor 
or 
lender 
to, 
any 
of 
the 
foregoing 
(collectively, the “Nonparty 
Affiliates”), shall have any liability (whether in contract or in 
tort, in 
law or in equity, or granted by statute or otherwise) for any obligations or liabilities 
arising under, 
out of, in 
connection with, 
or related in 
any manner 
to this 
Agreement or 
any of the 
Transaction 
Documents or 
based on, 
in respect 
of, or 
by reason 
of this 
Agreement or 
any of 
the Transaction 
Documents 
or 
the 
negotiation, 
execution, 
performance, 
or 
breach 
of 
this 
Agreement 
or 
any 
Transaction Document; and, to the 
maximum extent permitted 
by Law, each Contracting Party, on 
behalf of 
itself and 
all other 
Persons, hereby 
waives and 
releases all 
such liabilities 
against any 
such 
Nonparty 
Affiliates. 
Without 
limiting 
the 
foregoing, 
to 
the 
maximum 
extent 
permitted 
by 
Law, each Contracting Party, 
on behalf of itself and all other Persons, hereby waives and releases 
any and all rights, 
claims, demands, or causes 
of action that may otherwise 
be available (including 
at law 
or in 
equity, 
or granted 
by statute 
or otherwise) 
to avoid 
or disregard 
the entity 
form of 
a 
Contracting Party or otherwise impose 
liability of a Contracting Party 
on any Nonparty Affiliate, 

 

 

 

 

Exhibit 10.1
- 60 - 
whether granted 
by statute 
or based 
on theories 
of equity, 
agency, 
control, instrumentality, 
alter 
ego, 
domination, 
sham, 
single 
business 
enterprise, 
piercing 
the 
corporate 
or 
other 
veil, 
distributions, unfairness, undercapitalization, or otherwise. 
Section 11.14
Time of Essence. This Agreement contains a number of dates and times by 
which performance or the exercise 
of rights is due, and 
the Parties intend that each and 
every such 
date and 
time be 
the firm 
and final 
date and 
time, as 
agreed. For 
this reason, 
each Party 
hereby 
waives 
and 
relinquishes 
any 
right 
it 
might 
otherwise 
have 
to 
challenge 
its 
failure 
to 
meet 
any 
performance 
or 
rights 
election 
date 
applicable 
to 
it 
on 
the 
basis 
that 
its 
late 
action 
constitutes 
substantial performance, to require 
the other Party to 
show prejudice, or on 
any equitable grounds. 
Without 
limiting the 
foregoing, time 
is of 
the essence 
in this 
Agreement. If 
the date 
specified in 
this Agreement for 
giving any notice 
or taking any 
action is not 
a Business Day 
(or if the 
period 
during which any notice is required to be given or any action taken expires on a date 
which is not 
a Business Day), 
then the date for 
giving such notice or 
taking such action (and 
the expiration date 
of such 
period during 
which notice 
is required 
to be 
given or 
action taken) 
shall be 
the next 
day 
that is a Business Day. 
Section 11.15
Severability. The invalidity 
or unenforceability of any term or provision of 
this Agreement in any situation or jurisdiction shall not 
affect the validity or enforceability of the 
other terms or 
provisions hereof or 
the validity or 
enforceability of the 
offending term or provision 
in 
any 
other 
situation 
or 
in 
any 
other 
jurisdiction 
and 
the 
remaining 
terms 
and 
provisions 
shall 
remain in full force and effect, unless doing so 
would result in an interpretation of this Agreement 
that is manifestly unjust. 
Section 11.16
Specific Performance. Each 
Party agrees that 
if any of the 
provisions of this 
Agreement 
were 
not 
performed 
by 
the 
other 
Party 
in 
accordance 
with 
their 
specific 
terms, 
irreparable damage would occur, 
no adequate remedy at 
Law would exist and damages 
would be 
difficult to determine, and the non-breaching Party shall be entitled to specific 
performance of the 
terms hereof and 
immediate injunctive relief, 
without the necessity 
of proving the 
inadequacy of 
money damages 
as a 
remedy, 
in addition 
to any 
other remedy 
available at 
law or 
in equity 
that 
such 
Party 
is 
entitled 
to 
seek 
pursuant 
to 
the 
terms 
of 
this 
Agreement. 
Neither 
Party 
shall 
be 
required to 
provide any 
bond or 
other security 
in connection 
with seeking 
any specific 
performance 
or other 
equitable remedy 
to enforce 
specifically the 
terms and 
provisions of 
this Agreement 
in 
accordance with this Section 11.16. 
[Signature Pages Follow] 

 

 

Exhibit 10.1
- 1 - 
IN WITNESS WHEREOF
, this Agreement has been signed by 
each of the Parties on the 
Execution Date. 
SELLER: 
SHELL ENTERPRISES LLC 
By: 

Scott S. Porter 
Attorney-in-Fact 
BUYER: 
CONOCOPHILLIPS COMPANY 
By: 

Andrew D. Hastings 
Attorney-in-Fact 

 

 

 

 

 

 

 

 

 

 

 

 

Exhibit 10.1
- 1 - 
APPENDIX A 
ATTACHED 
TO AND MADE A PART 
OF THAT 

CERTAIN 
PURCHASE AND SALE AGREEMENT 
DATED 
AS OF THE EXECUTION DATE 
BY AND BETWEEN SELLER AND BUYER 

DEFINITIONS 
 
“AAPL” means the American Association of Petroleum Landmen. 
“Accounting Firm” has the meaning set forth in Section 7.4(b). 

“AFEs” 
means authorization for expenditures issued pursuant to a Contract. 
“Affiliate” 
means, with 
respect to 
(a) any 
Person other 
than Newco, 
any Person 
that directly 
or 
indirectly 
Controls, 
is 
Controlled 
by 
or 
is 
under 
common 
Control 
with 
such 
Person 
and 
(b) 
Seller 
or 
Newco, 
Shell 
Oil 
Company, 
a 
Delaware 
corporation, 
and 
its 
direct 
and 
indirect 
Subsidiaries. Notwithstanding 
anything to 
the contrary 
herein, (a) 
prior to 
Closing, Newco 
shall 
be deemed to be an Affiliate of Seller and not Buyer, and (b) from and after Closing, Newco shall 
be deemed to be an Affiliate of Buyer. 
“Agreement” has the meaning set forth in the Preamble of this Agreement. 
“Allocated 
Value” 
means, 
with 
respect 
to 
any 
Lease 
or 
Well, 
the 
portion 
of 
the 
Base 
Purchase Price that is allocated to such Lease or Well on Exhibit 
B. 
“Anti-Corruption 
Laws” 
means 
(a) 
the 
United 
States 
Foreign 
Corrupt 
Practices 
Act 
of 
1977; 
(b) 
the 
United 
Kingdom 
Bribery 
Act 
2010; 
and 
(c) 
all 
applicable 
national, 
regional, 
provincial, 
state, 
municipal 
or 
local 
Laws 
and 
regulations 
that 
prohibit 
tax 
evasion, 
money 
laundering 
or 
otherwise 
dealing 
in 
the 
proceeds 
of 
crime 
or 
the 
bribery 
of, 
or 
the 
providing 
of 
unlawful 
gratuities, 
facilitation 
payments, 
or 
other 
benefits 
to, 
any 
Government 
Official 
or 
any 
other Person. 
“Asset Taxes” 
means any 
ad valorem, 
property, 
excise, severance, 
production, sales, 
use 
and other 
similar Taxes 
based upon 
or measured 
by the 
operation or 
ownership of 
the Assets 
or 
the 
production 
of 
Hydrocarbons 
therefrom, 
but 
excluding, 
for 
the 
avoidance 
of 
doubt, 
Income 
Taxes and Transfer 
Taxes. 
“Assets” means 
all of 
SWEPI’s 
right, title 
and interest in 
and to 
the following 
assets and 
properties as of the Effective Time (excluding any Retained Assets): 
(a)
the Real Property Interests; 
(b)
the Wells; 
(c)
the Units; 

 

Exhibit 10.1
- 2 - 
(d)
all Surface Contracts; 
(e)
all Equipment; 

(f)
all 
Contracts 
(including, 
(x) 
without 
limiting 
any 
disclaimer 
by 
Seller 
hereunder, with respect to 
each joint operating agreement where SWEPI 
is 
named 
or 
acting 
as 
the 
operator, 
all 
of 
SWEPI’s 
rights 
and 
obligations 
(including operatorship) 
in and 
to such 
joint 
operating 
agreement 
and (y) 
the Related Party Contracts 
set forth on 
Schedule 5.7) to the 
extent related 
to 
or 
used 
or 
held 
for 
use 
in 
connection 
with 
(i) the 
exploration, 
development 
or 
operation 
of 
the 
Real 
Property 
Interests 
or 
the 
transportation, 
marketing 
or 
disposition 
of 
Hydrocarbons, 
water 
or 
other 
substances produced 
therefrom 
or 
(ii) the 
Previously-Divested 
Properties, 
but excluding Contracts to the extent related to the IT Systems; 
(g)
all Permits with respect to the exploration, development or operation of the 
Properties, 
the 
Surface 
Contracts 
or 
the 
Equipment 
or 
the 
transportation, 
marketing 
or 
disposition 
of 
Hydrocarbons, 
water 
or 
other 
substances 
produced therefrom, to the extent the foregoing Permits are not included in 
the Surface Contracts; 
(h)
all Records; 
(i)
all 
(i) 
trade 
credits, 
accounts 
receivable, 
notes 
receivable, 
take-or-pay 
amounts 
receivable, 
and 
other 
receivables 
and 
general 
intangibles, 
attributable 
to 
the 
other 
Assets 
with 
respect to 
periods 
of 
times 
from 
and 
after 
the 
Effective 
Time; 
and 
(ii) 
liens 
and 
security 
interests 
in 
favor 
of 
SWEPI 
or 
its 
Affiliates, 
whether 
choate 
or 
inchoate, 
under 
any 
Law 
or 
Contract to the extent arising from, or 
relating to, the ownership, operating, 
or sale or 
other disposition on 
or after the 
Effective Time of any of 
the other 
Assets or to the extent arising in favor of SWEPI as to the 
operator or non-
operator of any Property; 
(j)
all rights 
of SWEPI 
to audit the 
records of 
any Person 
and to 
receive refunds 
or 
payments 
of 
any 
nature, 
and 
all 
amounts 
of 
money 
relating 
thereto, 
whether before, on, or after the Effective Time; 
(k)
all claims 
for 
refunds (whether 
by 
way of 
refund, 
credit, rebate, 
offset 
or 
otherwise) of, 
Tax assets or credits 
attributable to 
and rights 
to receive 
funds 
from any 
Governmental Authority or 
any loss carryforwards 
with respect or 
related to 
any Taxes, 
whether attributable 
to the 
period before, 
at or 
after 
the Effective Time; and 
(l)
all 
(i) 
Hydrocarbons 
produced 
from 
and 
to 
the 
extent 
attributable 
to 
the 
Properties with respect to all 
periods subsequent to the Effective 
Time, (ii) 
Hydrocarbon 
inventories 
from 
or 
attributable 
to 
the 
Properties 
that 
are 
in 
storage on the 
Effective Time, (iii) to the 
extent related 
or attributable to 
the 
Properties, 
all 
production, 
plant, 
and 
transportation 
imbalances 
as 
of 
the 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Exhibit 10.1
- 3 - 
Effective 
Time, 
and 
all 
make-up 
rights 
with 
respect 
to 
take-or-pay 
payments, 
(iv) 
proceeds 
from 
or 
of 
such 
Hydrocarbons; 
and 
(v) 
all 
proprietary seismic 
data, geological 
data, engineering 
data, and 
other data 
and interpretations, files and records 
(in whatever form), in each 
case to the 
extent 
related 
to 
the 
Assets, 
if 
any, 
provided 
that 
Buyer 
obtains 
any 
sublicense 
or 
other 
similar 
arrangement 
required 
to 
receive 
such 
data, 
interpretations, files, and records; 

(m)
the SCADA Systems; and 
(n)
all 
claims 
against 
Third 
Parties 
(including 
those 
described 
on 
Schedule 
3.7(b)) 
to 
the 
extent 
relating 
to 
the 
ownership, 
use, 
construction, 
maintenance or operation of the Assets, whether 
or not previously asserted 
by 
SWEPI, but 
excluding 
any 
such 
claims 
to the 
extent 
relating 
to 
Seller 
Taxes. 
“Assignment 
Agreement” 
means 
the 
assignment 
of 
membership 
interest 
substantially 
in 
the form attached hereto as Exhibit A assigning the Subject Interests to Buyer. 
“Assumed 
Liabilities” 
means 
all 
duties, 
obligations, 
claims 
and 
liabilities 
of 
SWEPI 
relating 
to, 
arising 
out 
of, 
or 
resulting 
from 
the 
Assets 
or 
SWEPI’s 
or 
Newco’s 
ownership 
or 
operation of the Assets or 
of any Previously-Divested Properties, 
prior to, on or after 
the Effective 
Time, but excluding any Seller Taxes. 
“Base Purchase Price” has the meaning set forth in Section 2.4. 
“Benefit Plan” means any “employee benefit plan,” within the meaning of Section 3(3) of 
ERISA, and any bonus, deferred compensation, incentive compensation, employment, 
consulting 
or other 
compensation agreement, 
equity, equity purchase 
or any 
other equity-based 
compensation, 
change 
in 
control, 
termination 
or 
severance, 
sick 
leave, 
pay, 
salary 
continuation 
for 
disability, 
hospitalization, medical insurance, 
retiree welfare, life insurance, 
scholarship, cafeteria, employee 
assistance, education or tuition assistance, or fringe benefit policy, plan, program or arrangement. 
“Business 
Day” 
means 
any 
day 
that 
is 
not 
a 
Saturday, 
a 
Sunday 
or 
other 
day 
on 
which 
banks are required or authorized by Law to be closed in the State of Texas. 
“Buyer” has the meaning set forth in the Preamble of this Agreement. 
“Buyer Fundamental 
Representations” means 
Section 4.2, 
Section 4.3, 
Section 4.4, 
Section 
4.5, Section 4.6, Section 4.9, and Section 4.12. 
“Buyer Group” means Buyer, its Affiliates, and each of their respective officers, directors, 
employees, agents, advisors and other Representatives. 
“Buyer Material Adverse Effect” means a Material Adverse Effect with respect to Buyer. 
“Central Time” 
means the central time zone of the United States of America. 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Exhibit 10.1
- 4 - 
“CERCLA” 
means 
the 
Comprehensive 
Environmental 
Response, 
Compensation 
and 
Liability Act, 42 U.S.C. § 9601 et seq., as amended. 
“Claim Notice” has the meaning set forth in Section 9.2(b). 
“Closing” has the meaning set forth in Section 7.1. 
“Closing Date” has the meaning set forth in Section 7.1. 
“Closing Payment” has the meaning set forth in Section 7.4(a). 

“Code” means the United States Internal Revenue Code of 1986, as amended. 
“Combined 
Return” 
means 
any 
affiliated, 
aggregate, 
consolidated, 
combined 
or 
unitary 
Tax 
Return with 
respect to 
any “affiliated 
group” as 
defined in 
Section 1504(a) 
of the 
Code (or 
any analogous affiliated, aggregate, combined, consolidated or 
unitary group under state, local or 
foreign Income Tax Law) (a) of which Newco 
or any predecessor thereof (including 
SWEPI) is or 
has 
been 
a 
member, 
(b) 
of 
which 
Seller 
or 
any 
of 
its 
direct 
or 
indirect 
owners, 
Affiliates 
or 
Subsidiaries or 
any predecessor 
thereof (in 
each case, 
other than 
Newco) is 
or was 
the common 
parent and (c) which includes Newco (or any predecessor thereof, including SWEPI). 
“Confidentiality Agreement” means that certain 
Confidentiality Agreement dated May 24, 
2021 between SWEPI and Buyer. 
“Confidentiality Restrictions” has the meaning set forth in Section 5.3(b). 
“Consent” 
means 
any 
approval, 
consent, 
change 
of 
control 
provision, 
permission, 
ratification, waiver, 
notification or 
other authorization 
that may 
be applicable 
to the 
transactions 
contemplated by this Agreement and, 
for the avoidance of 
doubt, does not include 
any change of 
control provision if such provision 
is subject to a carve-out 
for the sale of all 
or substantially all of 
the 
assets 
of 
a 
party, 
which 
carve-out 
alone, 
if 
satisfied, 
is 
sufficient 
to 
entirely 
negate 
the 
application of such change of control provision to any particular transaction. 
“Contracting Parties” has the meaning set forth in Section 11.13. 
“Contracts” 
means 
all 
contracts, 
agreements 
(including 
any 
side 
letter 
agreements 
or 
purchase 
orders 
or 
other 
similar 
agreements 
entered 
into 
under 
any 
master 
agreement 
(such 
as 
master services agreements or fleet agreements)), or other legally binding arrangements presently 
existing to which SWEPI is a party or by which SWEPI is bound or to which any of the Assets or 
the 
Subject 
Interests 
is 
subject, 
but 
excluding 
the 
Leases, 
the 
Surface 
Contracts, 
and 
any 
other 
instrument 
creating 
or 
memorializing 
the 
ownership 
of 
any 
Properties 
or 
Surface 
Contracts 
included in the Assets. 
“Control” means 
with respect 
to any 
Person, the 
possession, directly 
or indirectly, 
of the 
power 
to 
direct 
or 
cause 
the 
direction 
of 
the 
management 
or 
policies 
of 
such 
Person, 
whether 
through the ownership of voting securities, as 
trustee or executor, as 
general partner or managing 
member, 
by 
contract 
or 
otherwise, 
including 
the 
ownership, 
directly 
or 
indirectly, 
of 
securities 
having the power to elect 
a majority of the board 
of directors or similar body governing 
the affairs 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Exhibit 10.1
- 5 - 
of such Person. 
The terms “Controls” 
and “Controlled by” 
and other derivatives 
shall be construed 
accordingly. 
“Controlled Group Liability” means any and all 
liabilities (i) under Title IV of ERISA, (ii) 
under Sections 
206(g), 302 
or 303 
of ERISA, 
(iii) under 
Sections 412, 
430, 431, 
436 or 
4971 of 
the 
Code, 
and 
(iv) 
as 
a 
result 
of 
the 
failure 
to 
comply 
with 
the 
continuation 
of 
coverage 
requirements of Section 601 et seq. of ERISA and Section 4980B of the Code. 
“Conversion” has the meaning set forth in Section 5.19(a). 
“COPAS 
” 
has the meaning set forth in Section 2.3(a). 

“COVID-19” means SARS-CoV-2 or COVID-19, and any evolutions thereof or related or 
associated epidemics, pandemic or disease outbreaks. 
“Current Insurance Policies” has the meaning set forth in Section 5.14(a). 
“Current Tax 
Period” means any Tax 
period beginning on or before, and 
ending after, the 
Closing Date. 
“Customary 
Agreement” 
means 
an 
agreement, 
contract, 
arrangement 
or 
commitment 
entered into with customers, vendors, lessors or the like in 
the ordinary course of business and the 
primary purpose of which does not relate to Taxes. 
“Customary 
Post-Closing 
Consents” 
means 
consents 
and 
approvals 
from 
Governmental 
Authorities for the transfer of 
the Subject Interests to Buyer 
that are customarily obtained 
after the 
transfer of similar Interests. 
“Cut-off Date” has the meaning set forth in Section 2.5. 
“Damages” 
means, 
subject 
to 
Section 
11.11, 
any 
liability, 
loss, 
cost, 
expense, 
award, 
obligation, assessment, penalty, fine or judgment 
of any kind or character, whether attributable to 
personal 
injury 
or 
death, 
property 
damage, 
contract 
claims, 
torts, 
or 
otherwise, 
and 
including 
penalties and 
interest on 
any amount 
payable as 
a result 
of any 
of the 
foregoing and 
reasonable 
fees and expenses of attorneys, consultants, accountants 
or other agents and experts (which, 
in the 
case of 
indemnification, are reasonably 
incident to matters 
indemnified against, and 
the reasonable 
costs of enforcement of the indemnity). 
“Deposit” has the meaning set forth in Section 2.7. 
“DOJ” means the Department of Justice. 
“Dollars” means U.S. Dollars. 
“Effective Time” 
has the meaning set forth in Section 2.2(a). 
“Encumbrance(s)” 
means 
any 
charge, 
claim, 
license, 
limitation, 
condition, 
equitable 
interest, mortgage, lien, pledge, option, warrant, security interest, right of first refusal 
and/or right 

 

 

 

 

Exhibit 10.1
- 6 - 
of first offer, pre-emptive 
right, adverse claim or restriction of any kind, 
including any restriction 
on or transfer or other assignment, as security or otherwise, of or relating to use, quiet enjoyment, 
voting, transfer, receipt of income or exercise of any other attribute of ownership. 
“Environmental Condition” means (a) a condition with 
respect to the air, 
soil, subsurface, 
surface waters, ground waters and/or sediments that causes an Asset (or Seller, 
SWEPI or Newco 
with respect to an 
Asset) not to 
be in compliance with 
any Environmental Law, 
(b) the existence 
with respect to the Assets or the operation thereof of any environmental pollution, contamination, 
degradation, damage or injury caused 
by or related to an 
Asset for which Remediation 
is presently 
required 
(or 
if 
known, 
would 
be 
presently 
required) 
under 
Environmental 
Laws, 
or 
(c) 
any 
condition, act or omission with respect to 
an Asset or operation thereof that gives rise 
to liabilities 
or obligations under Environmental Laws. 
“Environmental Laws” means, 
as the same have 
been amended as of 
the Execution Date, 
any 
Law 
(including 
common 
law) 
relating 
to 
pollution, 
the 
protection 
or 
restoration 
of 
the 
environment or, as 
such relates to Hazardous 
Substances, Hydrocarbons or NORM, 
occupational 
health 
and 
safety, 
natural 
resources 
including 
flora 
and 
fauna, 
or 
natural 
resource 
damages, 
including any such 
law relating to 
the generation, manufacture, 
treatment, storage, disposal, 
use, 
handling, transportation or Release of any Hazardous Substances, Release of Hydrocarbons, or to 
exposure to 
Hazardous Substances, 
Hydrocarbons or 
NORM, including 
CERCLA, the 
Resource 
Conservation and 
Recovery Act, 
42 U.S.C. 
§ 6901 
et seq.; 
the 
Federal Water 
Pollution Control 
Act, 33 
U.S.C. § 
1251 et 
seq.; the 
Clean Air 
Act, 42 
U.S.C. § 
7401 et 
seq.; the 
Hazardous Materials 
Transportation 
Act, 
49 
U.S.C. 
§ 
5101 
et 
seq.; 
the 
Toxic 
Substances 
Control 
Act, 
15 
U.S.C. 
§§ 
2601 through 2629; the Oil Pollution 
Act, 33 U.S.C. § 2701 et seq.; the 
Emergency Planning and 
Community 
Right-to-Know 
Act, 
42 
U.S.C. 
§ 
11001 
et 
seq.; 
the 
Safe 
Drinking 
Water 
Act, 
42 
U.S.C. 
§§ 
300f 
through 
300j; 
the 
Occupational 
Safety 
and 
Health 
Act, 
and 
their 
implementing 
regulations, along with and all similar state or local acts and regulations. 
“Equipment” means SWEPI’s 
right, title 
and interest in 
and to all 
equipment, machinery, 
fixtures, and other 
tangible personal property 
and improvements used 
or held for 
use in connection 
with the operation of 
the Properties or the handling, 
production, storage, transportation, treatment, 
or processing, marketing, or disposition of Hydrocarbons from the Properties (whether located on 
or off the Properties), 
including all rigs, 
platforms, constructions, extraction plants, 
facilities, gas 
systems (for gathering, treating, injection 
and compression), water systems (for treating, 
disposal 
and 
injection), 
well 
heads, 
compressors, 
casing, 
tubing, 
rods, 
flow 
lines, 
transmission 
lines, 
gathering lines, pipelines, derricks, vessels, tanks, boilers, separators, treating equipment, 
pumps, 
motors, gauges, 
valves, heaters, 
treaters, machinery, 
tools, automation 
systems including 
meters 
and 
related 
telemetry 
on 
Wells, 
power 
lines, 
telephone 
and 
communication 
lines, 
and 
all 
other 
movable 
property 
and 
fixtures 
located 
upon 
or 
used 
or 
held 
for 
use 
in 
connection 
with 
the 
Properties, together with 
all additions, accessories, 
parts, attachments, special 
tools and accessions 
affixed 
thereto 
or 
used 
in 
connection therewith, 
and 
including 
any 
such 
equipment, 
machinery, 
fixtures, and other 
tangible personal property 
and improvements that 
is leased pursuant 
to a master 
services agreement or fleet agreement, but excluding the IT Systems. 
“ERISA” means the Employee Retirement Income Security Act of 1974, as amended. 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Exhibit 10.1
- 7 - 
“ERISA Affiliate” 
means any 
person or 
entity under 
common control 
with Seller 
within 
the meaning 
of Section 
414(b), (c), 
(m), or 
(o) of 
the Code 
and the 
rules and 
regulations issued 
thereunder. 
“Execution Date” has the meaning set forth in the Preamble of this Agreement. 
“FFCRA” means 
the Families 
First Coronavirus 
Response Act, 
Pub. L. 
No. 116-127 (116th 
Cong.) (Mar. 18, 2020). 
“Fraud” means 
actual fraud by 
a Party, which involves 
a knowing 
and intentional or 
willful 
misrepresentation 
or 
omission 
of 
a 
material 
fact 
with 
respect 
to 
the 
making 
of 
(a) 
any 
representation or warranty set forth in Article 3 
or confirmed in the certificate delivered by Seller 
at Closing 
pursuant to Section 
7.2(c) or (b) 
Article 4 
or confirmed in 
the certificate delivered 
by 
Buyer 
at 
Closing 
pursuant 
to 
Section 
7.3(b), 
as 
applicable, 
and 
in 
each 
case, 
with 
the 
intent 
of 
inducing any other Party hereto to enter into this Agreement and upon which such other Party has 
relied 
under 
applicable 
tort 
Laws, 
and 
does 
not 
include 
any 
fraud 
claim 
based 
on 
negligent 
misrepresentation, recklessness or any equitable fraud or promissory fraud. 
“FTC” means the Federal Trade Commission. 
“GAAP” means 
United States 
generally accepted 
accounting principles 
as in 
effect from 
time to time. 
“Government 
Official” 
means 
an 
official 
or 
employee 
of 
any 
Governmental 
Authority, 
including any person acting 
in official capacity for 
a Governmental Authority, 
regardless of rank 
or position; any official or employee 
of a company wholly or 
partially controlled by a government 
(e.g., 
a 
state-owned 
oil 
company), 
but 
excluding 
employees 
seconded 
to 
such 
companies; 
a 
political party or any official of one; any candidate for political office; any officer or employee of 
a 
public 
international 
organization, 
such 
as 
the 
United 
Nations 
or 
World 
Bank; 
and 
immediate 
family 
members 
(spouse, 
dependent 
child, 
parent 
or 
household 
member) 
of 
any 
of 
the 
Persons 
listed above. 
“Governmental Authority” 
means any 
instrumentality, 
subdivision, 
court, administrative 
agency, 
commission, official 
or other 
authority of 
the United 
States or 
any other 
country or 
any 
state, province, prefect, 
municipality, locality or other government 
or political subdivision 
thereof, 
or 
any 
quasi-governmental 
or 
private 
body 
exercising 
any 
administrative, 
executive, 
judicial, 
legislative, 
arbitral, 
police, 
regulatory, 
taxing, 
importing 
or 
other 
governmental 
or 
quasi-
governmental authority. 
“Governmental Transition Filing” has the meaning set forth in Section 5.20. 

“Hard Required Consent” means a Required Consent that is not a Soft Required Consent. 
“Hazardous 
Substances” 
means 
any 
pollutants, 
contaminants, 
toxic 
or 
hazardous 
substances, materials, wastes, constituents, compounds or chemicals that are regulated by, or may 
form 
the 
basis 
of 
liability 
under, 
any 
Environmental 
Laws, 
including 
asbestos-containing 
materials, produced water, poly-chlorinated bi-phenyls, or per- or poly-fluoroalkyl substances. 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Exhibit 10.1
- 8 - 
“Hedging Transaction” means a transaction that is (a) a swap, basis swap, option, forward 
contract, 
future 
contract, 
collar, 
three-way 
collar, 
or 
similar 
transaction 
entered 
into 
“over-the-
counter”, (b) involving, 
or settled by 
reference to, 
one or more 
commodities, and (c) 
intended to 
hedge the risks associated with the production of Hydrocarbons. 
“HSR 
Act” 
means 
the 
Hart-Scott-Rodino 
Antitrust 
Improvements 
Act 
of 
1976, 
as 
amended. 
“Hydrocarbons” means oil, gas, condensate and other gaseous and liquid 
hydrocarbons or 
any combination thereof, 
and all 
minerals, products and 
substances extracted, separated, 
processed 
and produced therefrom or therewith. 
“Imbalances” means any imbalance at the wellhead between the amount 
of Hydrocarbons 
produced from 
any of 
the Wells and allocated 
to, the interests 
of SWEPI (as 
of the 
Execution Date) 
or Newco (as 
of the 
consummation of the 
Merger) therein 
and the shares 
of production 
from the 
relevant 
Well 
to 
which 
such 
Person 
was 
entitled, 
or 
at 
the 
pipeline 
flange 
(or 
inlet 
flange 
at 
a 
processing 
plant 
or 
similar 
location) 
between 
the 
amount 
of 
Hydrocarbons 
nominated 
by 
or 
allocated to such Person and the Hydrocarbons actually delivered on behalf of such Person at that 
point. 
“Income Taxes” 
means any income, capital gain, gross receipts, franchise or 
other similar 
Taxes. 
“Indebtedness” of any 
Person means, without 
duplication: 
(a) indebtedness of 
such Person 
for borrowed 
money, 
(b) 
obligations of 
such Person 
to pay 
the deferred 
purchase or 
acquisition 
price 
for 
any 
property 
of 
such 
Person, 
(c) 
obligations 
of 
such 
Person 
with 
respect 
to 
unpaid 
management fees, (d) all deposits and monies received in advance, (e) indebtedness evidenced by 
notes, debentures, 
bonds, or 
other similar 
instruments, (f) 
obligations 
of such 
Person to 
pay the 
deferred purchase 
price of 
goods and 
services, including 
any earn 
out liabilities 
associated with 
past acquisitions, (g) 
reimbursement obligations 
of such 
Person in respect 
of drawn 
letters of 
credit 
or similar instruments issued or accepted by banks and other 
financial institutions for the account 
of 
such 
Person, 
(h) 
obligations 
of 
such 
Person 
under 
a 
lease 
to 
the 
extent 
such 
obligations 
are 
required to 
be 
classified 
and accounted 
for 
as a 
capital 
lease on 
a balance 
sheet of 
such 
Person 
under 
GAAP, 
and 
(i) 
indebtedness 
of 
others 
as 
described 
in 
clauses 
(a) 
through 
(h) 
above 
guaranteed by 
such Person 
or for 
which such 
Person is 
liable as 
obligor, 
surety, 
by Contract, 
or 
otherwise; but 
Indebtedness does 
not include 
(x) 
accounts payable 
to trade 
creditors or 
accrued 
expenses, in each case arising in the ordinary course of business 
consistent with past practice and 
that 
are 
not 
yet 
due 
and 
payable, 
or 
are 
being 
disputed 
in 
good 
faith, 
and 
the 
endorsement 
of 
negotiable instruments for 
collection in the 
ordinary course of 
business, (y) the 
arrangements set 
forth on Schedule 3.24, or (z) the Material Contracts. 

“Indemnified Person” has the meaning set forth in Section 9.2(a). 
“Indemnifying Person” has the meaning set forth in Section 9.2(a). 
“Individual 
Environmental 
Indemnity 
Threshold” 
has 
the 
meaning 
set 
forth 
in 
Section 
9.3(c). 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Exhibit 10.1
- 9 - 
“Individual Indemnity Threshold” has the meaning set forth in Section 9.3(c). 
“Intellectual 
Property” 
means 
all 
intellectual 
property 
pertaining 
to 
the 
other 
Assets, 
including (a) all registered and 
unregistered names, trademarks, service names and 
service marks 
(and 
applications 
for 
registration 
of 
the 
same) 
of 
SWEPI 
and 
(b) 
all 
trade 
secrets, 
technical 
information, 
know-how 
and 
other 
confidential 
information 
which 
are 
not 
disclosed 
in 
issued 
patents, published patent applications or copyright registrations of SWEPI. 

“Intellectual Property Rights” means rights in any of the following to the extent subject to 
protection under 
applicable Law: 
(a) trademarks, 
service marks, 
logos and 
trade names; 
(b) patents; 
(c) copyrights; (d) internet domain names; (e) trade secrets and other proprietary 
and confidential 
information; and (f) any registrations or applications for registration for any of the foregoing. 
“Interests” means, 
with respect 
to any 
Person, (a) 
capital stock, 
membership interests, 
units, 
partnership 
interests, 
other 
equity 
interests, 
rights 
to 
profits 
or 
revenue 
and 
any 
other 
similar 
interest 
of 
such 
Person 
(including 
the 
right 
to 
participate 
in 
the 
management 
and 
business 
and 
affairs 
or 
otherwise 
Control 
such 
Person), 
(b) 
any 
security 
or 
other 
interest 
convertible 
into 
or 
exchangeable or exercisable 
for any of 
the foregoing, and 
(c) any right 
(contingent or otherwise) 
to subscribe for, purchase or otherwise acquire any of the foregoing. 
“IT 
Systems” 
means 
all 
information 
technology 
equipment 
and 
services, 
networks 
and 
associated 
information 
systems, 
whether 
owned, 
used 
or 
held 
for 
use 
by 
Seller 
or 
any 
of 
its 
Affiliates, 
including 
SWEPI, 
including: 
(i) 
all 
computer 
hardware 
(including 
network 
and 
telecommunications 
devices, 
laptops, 
mobile 
devices, 
peripherals, 
printers, 
scanners, 
storage, 
racks); 
(ii) 
all 
software 
(including 
firmware, 
associated 
user 
manuals, 
object 
code 
and 
source 
code); and (iii) all databases, but excluding the SCADA Systems. 
“Known/Knowledge” means, 
whenever a 
statement regarding 
the existence 
(or absence) 
of any fact, circumstance or condition in this 
Agreement is qualified by a phrase such as “to 
such 
Party's Knowledge”, 
“Known to 
such Party,” 
or “had 
actual Knowledge”, 
the Parties 
intend that 
the 
only 
information 
to 
be 
attributed 
to 
such 
Party 
with 
respect 
to 
such 
fact, 
circumstance 
or 
condition is information 
actually known to 
(a) the person 
in the case of 
an individual or (b) 
subject 
to 
Section 
3.1(a) 
and 
Section 
4.1(a), 
in 
the 
case 
of 
a 
corporation 
(or 
other 
business 
entity), 
the 
current officer and manager who devotes substantial attention to matters 
of such nature during the 
ordinary 
course 
of 
such 
person’s 
employment. 
Unless 
otherwise 
specifically 
provided 
in 
this 
Agreement, 
no 
Party 
is 
represented 
or 
obligated 
to 
have 
undertaken 
a 
separate 
investigation 
in 
connection 
with 
the 
transaction 
contemplated 
in 
this 
Agreement 
to 
determine 
the 
existence 
(or 
absence) 
of 
any 
statement 
or 
representation 
qualified 
by 
a 
phrase 
such 
as 
“to 
such 
Party's 
Knowledge”, “Known to such Party” or “had actual Knowledge”. 
“Laws” means all 
Permits, statutes, 
laws, ordinances, 
regulations, rules, 
codes, executive 
orders, injunctions, judgments, decrees, rulings, or orders of any Governmental Authority. 
“Leases” 
has 
the 
meaning 
set 
forth 
in 
the 
definition 
of 
“Real 
Property 
Interests” 
in 
this 
Appendix A. 
“Material Adverse 
Effect” 
means, with 
respect to 
any Person, 
any change, 
circumstance, 
development, state of facts, effect, or 
condition that, individually or in the 
aggregate, (a) has been, 

 

 

 

 

Exhibit 10.1
- 10 - 
or 
would 
be 
reasonably 
likely 
to 
be, 
materially 
adverse 
to 
the 
business, 
liabilities, 
financial 
condition, or results 
of operations 
of such 
Person, or (b) 
materially and 
adversely affects the 
ability 
of 
such 
Person 
to 
consummate 
the 
transactions 
contemplated 
hereby 
or 
would 
reasonably 
be 
expected 
to 
do 
so; 
provided
, 
however
, 
that 
in 
the 
case 
of 
subsection 
(a) 
above, 
none 
of 
the 
following, either alone or in 
combination, shall be deemed 
to constitute or contribute to 
a Material 
Adverse 
Effect, 
or 
otherwise 
be 
taken 
into 
account 
in 
determining 
whether 
a 
Material 
Adverse 
Effect has 
occurred or 
is existing: 
(i) any change 
in applicable 
Laws or accounting 
standards or 
the 
interpretation 
or 
enforcement 
thereof 
after 
the 
date 
of 
this 
Agreement; 
(ii) 
any 
change 
in 
general 
economic 
or 
political 
conditions 
or 
business 
conditions 
or 
financial, 
credit, 
debt, 
or 
securities 
market 
conditions 
generally, 
including 
changes 
in 
supply, 
demand, 
interest 
rates, 
exchange rates, commodity prices (including Hydrocarbons), electricity prices, or fuel costs, sand 
or proppants; (iii) 
any legal, regulatory, or other 
change generally affecting the 
industries, industry 
sectors, or geographic sectors 
of such Person, any 
increase in operating costs 
or capital expenses 
or any reduction in drilling activity or production or the demand for 
related gathering, processing, 
transportation, 
and 
storage 
services; 
(iv) 
any 
change 
resulting 
or 
arising 
from 
the 
execution 
or 
delivery 
of 
this 
Agreement 
or 
the 
other 
Transaction 
Documents, 
the 
consummation 
of 
the 
transactions contemplated 
hereby, or the 
announcement or 
other publicity 
or pendency 
with respect 
to any 
of the 
foregoing (including 
the impact 
thereof on 
relationships, contractual 
or otherwise, 
with 
customers, 
suppliers, 
distributors, 
partners, 
employees 
or 
labor 
unions); 
(v) 
any 
change 
resulting or arising from hostilities, sabotage, terrorism, or 
the escalation of any of the foregoing; 
(vi) 
any 
epidemic, 
pandemic, 
disease outbreak 
(including 
the 
COVID-19 
virus) 
or 
other 
public 
health crisis or public health 
event, or the worsening 
of any of the foregoing; 
(vii) any disruption 
in the 
purchase or 
transportation of 
crude oil 
or natural 
gas produced 
or otherwise 
sold by 
such 
Person or its Subsidiaries as a result of 
any shutdown, interruption or declaration of force majeure 
by 
any 
pipeline 
operator 
or 
other 
purchaser 
of 
such 
products; 
(viii) 
natural 
declines 
in 
well 
performance or reclassification or recalculation 
of reserves in the ordinary 
course of business; (ix) 
seasonal reductions 
in revenues 
and/or earnings 
of such 
Person or 
any of 
its Subsidiaries 
in the 
ordinary course 
of their 
respective businesses; 
(x) any 
actions taken 
or omitted 
to be 
taken by 
a 
Party 
at 
the 
written 
direction 
of 
the 
other 
Party 
(for 
the 
avoidance 
of 
doubt 
any 
action 
by, 
or 
omission of, a 
Party for which 
such Party sought 
or requested, and the 
other Party 
provided
, that 
consent shall not be deemed 
to be “at the written direction 
of” such Party); (xi) any change, 
in and 
of itself, in the market price or trading 
volume of such Person’s securities; (xii) any failure, in and 
of 
itself, 
by 
such 
Person 
to 
meet 
any 
internal 
or 
published 
projections, 
forecasts, 
estimates 
or 
predictions in respect of revenues, earnings, production or other financial or operating metrics for 
any 
period 
(it 
being 
understood 
that 
the 
events, 
changes, 
circumstances, 
occurrences 
or 
effects 
giving rise to or contributing to such failure may be deemed to constitute or be taken into account 
in determining whether there has occurred or 
would occur a Material Adverse Effect) or (xiii) any 
change 
resulting 
or 
arising 
from 
compliance 
with 
this 
Agreement, 
including 
the 
taking 
of 
any 
action required hereby or the failure to take any action that is not permitted hereby; 
provided, 
that 
the exceptions in clauses 
(ii) and (iii) above 
shall apply only to the 
extent that such changes 
do not 
have a 
disproportionate 
impact 
on such 
Person as 
compared to 
other 
Persons 
in the 
oil 
and gas 
industry related 
to similarly 
situated operations 
in the 
geographic region 
in which 
the such 
Person’s 
assets are located. 
“Material Contracts” has the meaning set forth in Section 3.11(a). 
“Merger” 
has the meaning set forth in Section 5.19(b). 

 

 

 

 

 

 

 

 

 

 

 

 

 

Exhibit 10.1
- 11 - 
“Net Mineral 
Acres” 
means, 
as 
computed 
separately 
with 
respect to 
each 
Lease, (a) 
the 
number of gross acres in the land 
covered by such Lease, multiplied by (b) 
the lessor’s or owner’s 
undivided mineral 
interest in 
the Hydrocarbons 
covered by 
such Lease 
in such 
lands, multiplied 
by (c) SWEPI’s Working 
Interest in such Lease. 
“Net Revenue Interest” 
means, (a) with respect 
to any Well, 
SWEPI’s interest 
(expressed 
as 
a 
percentage 
or 
a 
decimal) 
in 
and 
to 
the 
Hydrocarbons 
produced, 
saved 
and 
sold 
from 
or 
allocated to such Well, (b) with respect to any 
Lease, SWEPI’s interest (expressed as a percentage 
or a decimal on an “8/8ths” basis with respect to SWEPI’s Working Interest in such Lease) in and 
to the Hydrocarbons produced, saved and sold from or 
allocated to such Lease, or (c) with respect 
to any Unit, SWEPI’s 
interest (expressed as a percentage or 
decimal) in and to the 
Hydrocarbons 
produced, saved and sold 
from or allocated to 
such Unit, in the 
case of each 
of items (a), 
(b) and 
(c), after giving effect to all Royalties. 
“Newco” has the meaning set forth in Section 5.19(b). 
“Newco 
Transaction 
Expenses” 
means 
the 
aggregate 
amount 
of 
any 
and 
all 
fees 
and 
expenses incurred by or 
on behalf of, or 
paid or to be 
paid directly by, 
Newco or any Person 
that 
Newco pays 
or 
reimburses 
or is 
otherwise legally 
obligated to 
pay 
or 
reimburse (including 
any 
such fees 
and expenses 
incurred by 
or on 
behalf of 
Seller or 
SWEPI) in 
connection with 
the process 
of selling 
the Subject 
Interests or 
the negotiation, 
preparation or 
execution of 
this Agreement 
or 
the Transaction Documents or the 
performance or consummation of 
the transactions contemplated 
hereby or 
thereby, including (a) all fees 
and expenses of 
counsel, advisors, consultants, 
investment 
bankers, 
accountants, 
auditors 
and 
any 
other 
experts 
in 
connection 
with 
the 
transactions 
contemplated hereby (including 
any process run 
by or on 
behalf of Newco 
in connection with 
such 
transactions); 
(b) 
all 
brokers’, 
finders’ 
or 
similar 
fees 
in 
connection 
with 
the 
transactions 
contemplated hereby (including 
any process run 
by or on 
behalf of Newco 
in connection with 
such 
transactions); (c) subject 
to Section 5.2, 
any fees 
and expenses 
associated with obtaining 
necessary 
or appropriate waivers, consents, or approvals of any Governmental Authority or Third Parties on 
behalf of Newco in connection 
with the transactions contemplated hereby 
(including any process 
run 
by 
or 
on 
behalf 
of 
Newco 
in 
connection 
with 
such 
transactions); 
(d) 
any 
fees 
or 
expenses 
associated with obtaining the 
release and termination of 
any Encumbrances in connection 
with the 
transactions 
contemplated 
hereby 
(including 
any 
process 
run 
by 
or 
on 
behalf 
of 
Newco 
in 
connection 
with 
such 
transactions); 
and 
(e) 
any 
fees 
and 
expenses 
associated 
with 
any 
of 
the 
matters set forth on Schedule 3.13. 
“Non-Permian Newco” has the meaning set forth in Section 5.19(b). 
“Nonparty Affiliates” 
has the meaning set forth in Section 11.13. 
“NORM” means naturally occurring radioactive material. 
“Organizational Documents” 
means (a) with 
respect to a 
corporation, the charter, 
articles 
or 
certificate 
of 
incorporation, 
as 
applicable, 
and 
bylaws 
thereof, 
(b) 
with 
respect 
to 
a 
limited 
liability company, 
the certificate of formation or organization, 
as applicable, and the operating or 
limited 
liability 
company 
agreement 
thereof, 
(c) 
with 
respect to 
a 
partnership, 
the 
certificate of 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Exhibit 10.1
- 12 - 
formation 
and 
the 
partnership 
agreement 
thereof, 
and 
(d) 
with 
respect 
to 
any 
other 
Person, 
the 
organizational, constituent or governing documents or instruments of such Person. 
“Outside Date” 
means the 
date that 
is 120 
days after 
the Execution 
Date; 
provided
, 
however
that if 
the applicable 
waiting 
periods (and 
any 
extensions 
thereof) under 
the 
HSR 
Act have 
not 
expired or otherwise been 
terminated on or prior 
to such date, but 
all other conditions precedent 
to 
Closing set forth in Section 
6.1 and Section 6.2 have 
been satisfied or waived (except 
for any such 
conditions 
that by 
their nature 
may only 
be satisfied 
at or 
in connection 
with 
the occurrence 
of 
Closing), then 
the Outside 
Date will 
automatically be 
extended to 
the date 
that is 
150 days 
after 
the Execution Date. 
“Party” and “Parties” have the meanings set forth in the Preamble of this Agreement. 
“Permits” 
means 
federal, 
state 
and 
local 
government 
licenses, 
permits, 
registrations, 
franchises, orders, 
consents, 
approvals, variances, 
waivers, exemptions 
and other 
authorizations 
by, or filings with, any Governmental Authority. 
“Permitted Encumbrance(s)” means any or all of the following: 
(a)
Royalties to 
the extent 
that the 
net cumulative 
effect of 
such burdens 
on a 
property does not, individually or in the aggregate, (i) reduce SWEPI’s Net 
Revenue Interest 
in such 
Property below 
that shown 
in Schedule 
1.1(a) or 
Schedule 1.1(b), 
as applicable, 
(ii) increase 
SWEPI’s 
Working 
Interest in 
such Property 
above that 
shown in 
Schedule 1.1(a) 
or Schedule 
1.1(b), as 
applicable, without a proportionate increase 
in the Net Revenue 
Interest of 
SWEPI in 
such Property, or (iii) 
reduce SWEPI’s Net Mineral 
Acres in 
such 
Property below that shown in Schedule 1.1(a); 
(b)
all 
unit 
agreements, 
pooling 
agreements, 
operating 
agreements, 
farmout 
agreements, 
Hydrocarbon 
production 
sales 
contracts, 
division 
orders 
and 
other contracts, agreements and instruments applicable to the Properties, in 
each case 
to the 
extent 
that 
the net 
cumulative 
effect 
of 
such 
instruments 
does not, individually or in 
the aggregate, (i) reduce SWEPI’s Net Revenue 
Interest 
in 
a 
Property 
below 
that 
shown 
therefor 
in 
Schedule 
1.1(a) 
or 
Schedule 1.1(b), as applicable, (ii) increase SWEPI’s Working 
Interest in a 
Property 
above 
that 
shown 
in 
Schedule 
1.1(a) 
or 
Schedule 1.1(b), 
as 
applicable, without a proportionate increase 
in the Net Revenue 
Interest of 
SWEPI in 
such Property, or (iii) 
reduce SWEPI’s Net 
Mineral Acres 
in such 
Property below that shown therefor in Schedule 1.1(a); 
(c)
the Required Consents, or the 
failure to obtain the Required 
Consents, that 
are triggered by the consummation of the transactions contemplated 
by this 
Agreement; 
(d)
liens for 
Taxes 
or assessments 
not yet 
due and 
payable or 
being contested 
in good faith by appropriate proceedings, for which adequate cash reserves 
are maintained by SWEPI (as of the Execution Date) and Newco (as of 
the 

 

 

 

 

 

Exhibit 10.1
- 13 - 
Closing) for the payment thereof in accordance 
with GAAP and that are set 
forth on Schedule 3.8(h); 
(e)
materialman’s, 
mechanic’s, 
repairman’s, 
employee’s, 
contractor’s, 
operator’s and 
other similar liens 
or charges 
arising in 
the ordinary course 
of business for amounts not yet delinquent 
or if delinquent, being contested 
reasonably and 
by appropriate 
actions, and 
for which 
adequate cash 
reserves 
are 
maintained 
for 
the 
payment 
thereof 
in 
accordance 
with 
GAAP 
(including any amounts being withheld as provided by Law); 
(f)
all rights to consent, by required notices to, filings with, or 
other actions by 
Governmental 
Authorities 
that 
do 
not 
apply 
to 
the 
transactions 
contemplated 
by 
this 
Agreement 
or, 
if 
they 
do 
apply, 
are 
customarily 
obtained 
subsequent 
to 
the 
closing 
of 
transactions 
that 
are 
similar 
to 
the 
transactions 
contemplated 
by 
this 
Agreement 
if 
such 
Governmental 
Authority 
is, 
pursuant 
to 
applicable 
Law, 
without 
discretion 
to 
refuse 
to 
grant such 
consent 
if specifically 
enumerated 
conditions 
set forth 
in such 
applicable Law are satisfied, including Customary Post-Closing Consents; 
(g)
excepting 
circumstances 
where 
such 
rights 
have 
already 
been 
triggered, 
rights of reassignment arising upon 
final intention to abandon 
or release the 
Assets, or any of them, and requiring notice to the holders of such rights; 
(h)
easements, rights-of-way, covenants, 
servitudes, Permits, 
surface leases 
and 
other rights 
in respect 
of surface 
operations that 
do not, 
individually or 
in 
the aggregate, materially interfere with the use, development, or ownership 
of the Assets subject thereto or affected thereby; 
(i)
gas balancing 
and other 
production balancing 
obligations, and 
obligations 
to 
balance 
or 
furnish 
make-up 
Hydrocarbons 
under 
Hydrocarbon 
sales, 
gathering, processing or transportation contracts; 
(j)
all rights reserved 
to or vested 
in any Governmental 
Authorities to control 
or regulate any of the Assets in any manner or 
to assess Tax with respect to 
the Assets, the 
ownership, use or 
operation thereof, 
or revenue, income 
or 
capital gains 
with respect 
thereto, and 
all obligations 
and duties 
under all 
applicable 
Laws 
of 
any 
such 
Governmental 
Authority 
or 
under 
any 
franchise, grant, license or Permit issued by any Governmental Authority; 
(k)
the terms and conditions of the Leases, 
to the extent that the net cumulative 
effect 
of 
such 
terms 
and 
conditions 
does 
not, 
individually 
or 
in 
the 
aggregate, 
(i) 
reduce 
SWEPI’s 
Net 
Revenue 
Interest 
in 
a 
Property 
below 
that 
shown 
therefor 
in 
Schedule 
1.1(a) 
or 
Schedule 
1.1(b), 
as 
applicable, 
(ii) increase 
SWEPI’s 
Working 
Interest 
in 
a 
Property 
above 
that 
shown 
therefor 
in 
Schedule 
1.1(a) 
or 
Schedule 
1.1(b), 
as 
applicable, 
without 
a 
proportionate 
increase 
in 
the 
Net 
Revenue 
Interest 
of 
SWEPI 
in 
such 

 

 

 

 

 

 

 

Exhibit 10.1
- 14 - 
Property, 
or (iii) 
reduce 
SWEPI’s 
Net Mineral 
Acres in 
a Property 
below 
that shown therefor in Schedule 1.1(a); 
(l)
zoning and planning ordinances and municipal regulations promulgated by 
any Governmental Authority; 
(m)
any 
Encumbrance burdening 
a 
third 
party 
lessor’s 
or 
grantor’s 
interest 
in 
the 
Assets 
(including 
any 
Encumbrances 
created 
under 
deeds 
of 
trust, 
mortgages and similar instruments by any such lessor or grantor), which, if 
not subordinated to the rights 
of SWEPI (or Newco 
after the consummation 
of the Merger), is 
not currently in default or 
subject to foreclosure or other 
enforcement proceedings by the holder; 
(n)
depth severances expressly 
identified on Schedule 
1.1(a) or Schedule 
1.1(b) 
to 
the 
extent 
that 
they 
do 
not, 
individually 
or 
in 
the 
aggregate, 
reduce 
SWEPI’s 
Net 
Revenue 
Interest 
or 
Net 
Mineral 
Acre 
ownership 
in 
any 
Property 
below 
that 
shown 
on 
Schedule 
1.1(a) 
or 
Schedule 
1.1(b), 
as 
applicable, for such Property or increase SWEPI’s 
Working 
Interest in any 
Property 
beyond 
that 
shown 
on 
Schedule 
1.1(b) 
without 
a 
corresponding 
and 
proportionate 
increase 
in 
SWEPI’s 
Net 
Revenue 
Interest 
for 
such 
Property; 
(o)
the terms and conditions of, and any rights 
of third parties to back into any 
interest in the Properties to the extent such 
terms, conditions and rights are 
expressly shown as 
binding on 
the applicable Property 
on Schedule 
1.1(a) 
and/or Schedule 1.1(b); 
(p)
normal 
and 
customary 
liens 
of 
co-owners 
under 
operating 
agreements 
relating to the Properties, which obligations are not yet due and 
pursuant to 
which SWEPI 
(or Newco 
after the 
consummation of 
the Merger) 
is not 
in 
default; 
(q)
defective 
acknowledgements, 
name 
variations, 
lack 
of 
power of 
attorney, 
lack 
of 
trustee 
authorization, 
lack 
of 
representative 
capacity, 
lack 
of 
evidence of corporate or entity authorization, failure to recite marital status 
or omissions 
of successions 
of heirship 
or estate 
proceedings, except 
in each 
case where 
evidence is 
available that 
reasonably supports 
a Third 
Party’s 
claim to superior title; 
(r)
lack of a survey of the surface of the Properties, unless a survey is required 
by Law; 
(s)
any matter that 
has been cured, 
released or waived by 
any Law of 
limitation 
or prescription, and which can be substantiated by the affirmative 
ruling of 
a court of competent jurisdiction; 
(t)
failure to record Leases issued by any Governmental 
Authority (which, for 
the avoidance 
of doubt, 
includes any 
state or 
county agency 
or any 
successor 

 

 

 

 

 

 

 

 

Exhibit 10.1
- 15 - 
agency 
thereto) 
in 
the 
real 
property, 
conveyance, 
or 
other 
records 
of 
the 
county 
in 
which 
such 
Leases 
are 
located, 
provided
, 
that 
the 
instruments 
evidencing 
the 
conveyance 
of 
such 
title 
to 
SWEPI 
from 
its 
immediate 
predecessor 
in 
title 
are 
recorded 
with 
and, 
if 
applicable, 
approved 
by 
the 
Governmental Authority that issued any such Lease; 
(u)
rights of 
any (i) 
common owner of 
any interest 
in any 
fee mineral 
interest 
as tenants 
in common 
or through 
common ownership, 
(ii) owner 
or lessee 
of any 
oil and 
gas interests 
in formations, 
strata, horizons, 
or depths 
other 
than 
the 
depths 
described 
for 
the 
applicable 
Lease 
described 
on 
Schedule 1.1(a) 
or 
(iii) 
common 
owner 
of 
any 
interest 
in 
surface 
rights 
currently held by 
SWEPI and such 
common owner as 
tenants in common 
or 
through common ownership, 
to the extent that 
the net cumulative effect 
of 
the matter 
referenced in 
clause (i), 
(ii) or 
(iii) does 
not, individually 
or in 
the aggregate, 
(i) reduce SWEPI’s Net 
Revenue Interest in 
a Property 
below 
that 
shown 
therefor 
in 
Schedule 
1.1(a) 
or 
Schedule 
1.1(b), 
as 
applicable, 
(ii) increase 
SWEPI’s 
Working 
Interest 
in 
a 
Property 
above 
that 
shown 
therefor 
in 
Schedule 
1.1(a) 
or 
Schedule 
1.1(b), 
as 
applicable, 
without 
a 
proportionate 
increase 
in 
the 
Net 
Revenue 
Interest 
of 
SWEPI 
in 
such 
Property, 
or (iii) 
reduce 
SWEPI’s 
Net Mineral 
Acres in 
a Property 
below 
that shown therefor in Schedule 1.1(a); 
(v)
(i) lack of a 
division order or 
an operating agreement covering 
any Property 
(including portions 
of a 
Property that 
were formerly 
within a 
unit but 
that 
have been excluded from the unit as a result 
of a contraction of the unit) to 
the extent 
that they 
do not, 
individually or 
in the 
aggregate, reduce 
SWEPI’s 
Net Revenue Interest 
or Net Mineral 
Acre ownership in any 
Property below 
that shown in on Schedule 
1.1(a) or Schedule 1.1(b), as 
applicable, for such 
Property or 
increase SWEPI’s Working Interest in 
any Property 
beyond that 
shown 
on 
Schedule 
1.1(b) 
without 
a 
corresponding 
and 
proportionate 
increase in SWEPI’s 
Net Revenue Interest for such 
Property, or 
(ii) failure 
to 
obtain 
waivers 
of 
maintenance 
of 
uniform 
interest, 
restriction 
on 
zone 
transfer, 
or 
similar 
provisions 
in 
operating 
agreements 
with 
respect 
to 
assignments 
in 
SWEPI’s 
chain 
of 
title 
to 
the 
Property 
unless 
(A) 
the 
underlying provisions of 
such operating agreement 
provide that 
such failure 
voids or nullifies (automatically or at the election of the holder thereof) the 
assignment 
with 
respect 
to 
such 
asset 
or 
(B) 
there 
is 
an 
outstanding 
and 
pending, unresolved 
claim from 
a third 
party with 
respect to 
the failure 
to 
obtain such waiver; 
(w)
defects 
arising 
from 
prior 
expired 
Hydrocarbon 
leases 
that 
are 
not 
surrendered or released of record absent affirmative evidence of an 
adverse 
claim by another Person that such 
lease is in full force and 
effect; 
provided,
that 
SWEPI 
has 
held 
the 
affected 
Properties 
for 
at 
least 
five 
consecutive 
years on the Execution Date; 

 

 

 

 

 

 

 

 

 

 

 

Exhibit 10.1
- 16 - 
(x)
defects 
based 
solely 
on 
SWEPI’s 
failure 
to 
have 
a 
title 
opinion 
or 
title 
insurance policy on any Property; 

(y)
the Retained Litigation; 
(z)
decreases 
in 
SWEPI’s 
Net 
Revenue 
Interest 
(i) 
in 
connection 
with 
those 
operations 
in 
which 
SWEPI 
may 
be 
a 
non-consenting 
co-owner 
after 
the 
Execution Date 
in accordance 
with the 
terms of 
Section 5.4, 
(ii) resulting 
from the reversion of interests 
to co-owners with 
operations in which such 
co-owners elect after the Execution Date not to consent, (iii) 
resulting from 
the establishment or amendment, 
after the Execution Date, 
of pools or units 
permitted 
under 
the 
terms 
of 
Section 
5.4, 
or 
(iv) 
required 
to 
allow 
other 
working 
interest 
owners 
to 
make 
up 
past 
underproduction 
or 
pipelines 
to 
make up past under-deliveries 
to the extent accounted 
for and described in 
Schedule 3.12; 
(aa)
increases 
in 
SWEPI’s 
Working 
Interest 
in 
a 
Property 
above 
that 
shown 
therefor 
in 
Schedule 
1.1(a) 
or 
Schedule 
1.1(b), 
as 
applicable 
(i) 
that 
are 
accompanied by at least a proportionate increase in 
SWEPI’s Net Revenue 
Interest in 
such Property 
above that 
shown 
therefor 
in 
Schedule 1.1(a) 
or 
Schedule 
1.1(b), 
as 
applicable, 
or 
(ii) 
resulting 
from 
contribution 
requirements with respect to defaulting or non-consenting co-owners 
under 
the applicable operating agreement; 
(bb)
decreases in SWEPI’s Net Mineral Acres or Net Revenue Interest listed on 
Schedule 
1.1(a) 
or 
Schedule 
1.1(b), 
as 
applicable, 
where 
there 
is 
a 
proportionate Net 
Revenue Interest 
or Net 
Mineral Acres 
increase related 
to 
a 
different 
Property 
(the 
value 
of 
which 
Net 
Revenue 
Interest 
or 
Net 
Mineral Acres increase, as 
applicable, is in 
each case on a 
basis comparable 
to or 
more 
favorable 
than 
the corresponding 
Net 
Revenue Interest 
or 
Net 
Mineral Acres that are the subject of 
such decrease), and such decrease and 
correlating increase are due to an acreage 
swap that has not been accounted 
for in SWEPI’s leasing systems;
(cc)
decreases 
in 
SWEPI’s 
Net 
Mineral 
Acres 
(i) 
in 
connection 
with 
those 
operations 
in 
which 
SWEPI 
may 
be 
a 
non-consenting 
co-owner 
after 
the 
Execution Date in 
accordance with the 
terms of Section 5.4, 
or (ii) resulting 
from the establishment or 
amendment, after the Execution 
Date, of pools or 
units permitted under the terms of Section 5.4; 
(dd)
defects which 
are based 
solely on 
(i) a 
lack of 
information in 
SWEPI’s 
or 
Newco’s files or of record, 
(ii) references to 
any document if 
a copy of 
such 
document 
is 
not 
in 
SWEPI’s 
or 
Newco’s 
files 
or 
of 
record, 
or 
(iii) 
the 
inability 
to 
locate 
an 
unrecorded 
instrument 
of 
which 
Buyer 
has 
constructive or 
inquiry notice 
by virtue 
of a 
reference to 
such unrecorded 
instrument in a recorded instrument 
(or a reference to a 
further unrecorded 
instrument in such 
unrecorded instrument), unless, 
in each of 
(i), (ii) or 
(iii), 

 

 

 

 

 

 

 

 

 

 

 

 

Exhibit 10.1
- 17 - 
such 
lack 
of 
information, 
referenced 
document 
or 
unlocated 
unrecorded 
instrument is required to establish the existence or validity of a Property; 
(ee)
any 
defect 
as 
a 
consequence 
of 
cessation 
of 
production, 
insufficient 
production, 
or 
failure to 
conduct 
operations 
on 
any 
of 
the 
Assets 
held 
by 
production, or lands pooled, 
communitized, or unitized therewith, 
except to 
the extent (i) the cessation 
of production, insufficient 
production or failure 
to conduct operations is 
affirmatively shown to exist 
such that it has given 
rise to a 
right of the 
lessor or other 
third party to 
terminate all or 
any portion 
of the underlying Lease 
or (ii) of a third party’s 
claim of termination of 
all 
or 
any 
portion 
of 
the 
underlying 
Lease; 
provided, 
however
, 
that 
defects 
based 
upon 
a 
determination 
that 
(A) 
there 
has 
been 
no 
Hydrocarbon 
production 
from 
wells 
located 
on 
the 
Property 
or 
lands 
pooled, 
communitized 
or 
unitized 
therewith, 
and 
(B) 
there 
has 
been 
no 
activity 
conducted 
on 
the 
Property 
or 
lands 
pooled, 
communitized 
or 
unitized 
therewith 
that 
would 
otherwise maintain 
the 
Property 
in 
force and 
effect, 
may be 
considered as 
a breach 
of Seller’s special 
warranty of 
title in Section 
3.20; and 
(ff)
the Material 
Contracts and 
the matters 
set forth 
on any 
Schedule, in 
each 
case to the extent 
that the net cumulative 
effect of such Material 
Contracts 
and matters 
do not, 
individually or 
in the 
aggregate, (i) reduce 
SWEPI’s Net 
Revenue Interest 
in a Property 
below that 
shown therefor in 
Schedule 1.1(a) 
or Schedule 
1.1(b), as 
applicable, (ii) 
increase SWEPI’s 
Working 
Interest 
in 
a 
Property 
above 
that 
shown 
in 
Schedule 
1.1(a) 
or 
Schedule 1.1(b), 
as 
applicable, without a proportionate increase 
in the Net Revenue 
Interest of 
SWEPI in 
such Property, or (iii) 
reduce SWEPI’s Net 
Mineral Acres 
in such 
Property below that shown therefor in Schedule 1.1(a). 
“Person” means an individual, corporation, partnership, limited liability company, 
limited 
liability 
partnership, 
joint 
venture, 
syndicate, 
person, 
trust, 
association, 
organization 
or 
other 
entity, 
including 
any 
Governmental 
Authority, 
and 
including 
any 
successor, 
by 
merger 
or 
otherwise, of any of the foregoing. 
“Phase 
I 
Environmental 
Site 
Assessment” 
means 
an 
environmental 
site 
assessment 
performed pursuant 
to ASTM 
E1527-13 Standard 
Practice for 
Environmental Site 
Assessments: 

Phase 
I 
Environmental 
Site 
Assessment 
Process 
or 
any 
similar 
environmental 
assessment, 
including a limited 
assessment of a 
facility’s or operation’s compliance with Environmental 
Laws; 
provided,
 
that the Phase I Environmental Site Assessment shall not include any sampling, testing, 
or invasive activities. 
“Pre-Effective Refund” has the meaning set forth in Section 10.2. 
“Preferential Rights” 
means any 
right or 
agreement that 
may enable 
any Person 
to purchase 
or acquire any Asset or 
any interest therein or 
portion thereof as a 
result of or in 
connection with 
the execution or 
delivery of this Agreement 
or the consummation of 
the transactions contemplated 
hereby, including any preferential purchase rights, rights of first refusal, or other similar rights. 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Exhibit 10.1
- 18 - 
“Previously-Divested Properties” 
means the 
leases and 
wells that 
have been 
divested by 
SWEPI in the Subject Area and that are set forth on Schedule A-1. 
“Proceeding” 
means any 
proceeding, claim, 
charge, complaint, 
lawsuit, direct 
or indirect 
demand, inquiry, hearing, notice of violation, investigation, 
action, cause of action, 
suit, litigation, 
arbitration, citation, summons, 
subpoena, audit, controversy, discovery 
request, or other 
dispute or 
legal proceeding, 
whether civil, 
criminal, administrative 
or otherwise, 
made pursuant 
to federal, 
state or other Laws. 
“Properties” means, collectively, the Real Property Interests, the Units and the Wells. 
“Property Costs” means each of 
the following to the extent 
incurred in and attributable 
to 
the ownership 
and operation 
of the 
Assets in 
the ordinary 
course of 
business and, 
where applicable, 
the 
applicable 
operating 
agreement 
and 
not 
otherwise 
prohibited 
under 
Section 
5.4: 
(a) all 
operating expenses (including costs of 
Seller personnel dedicated to 
the Assets, insurance, rentals, 
shut-in payments, 
title examination 
and curative 
actions taken 
in connection 
with the 
drilling of 
Wells, 
and gathering, 
marketing, processing 
and transportation 
costs in 
respect of 
Hydrocarbons 
produced from the Properties), (b) capital expenditures (including bonuses, broker fees, and other 
Lease acquisition costs, costs of drilling and completing wells, cost 
of building site pads, costs of 
acquiring Equipment, and 
other Lease acquisition, 
extension or renewal 
costs); and 
(c) overhead 
costs 
charged 
to 
the 
Assets 
under 
any 
applicable 
Third 
Party 
operating 
agreement; 
provided
, 
however
, that “Property Costs” 
shall exclude Seller’s 
and its Affiliates’ general 
and administrative 
expenses 
and 
any 
liabilities, 
losses 
and 
expenses 
attributable 
to 
(i) 
any 
matters 
with 
respect 
to 
which 
Buyer 
Group 
or 
Seller 
Group 
is 
entitled 
to 
indemnity 
from 
the 
other 
Party 
under 
this 
Agreement or (ii) Taxes. 

“Public Announcement Restrictions” has the meaning set forth in Section 5.3(a). 
“Purchase Price” 
has the meaning set forth in Section 2.4. 
“Real Property 
Interests” means 
SWEPI’s 
right, title 
and interest 
in and 
to (a) 
all oil 
and 
gas 
leases, oil, 
gas, 
and 
mineral 
leases and 
subleases, 
royalties, 
overriding 
royalties, 
net 
profits 
interests, payments 
out of 
production, reversionary 
rights, mineral 
fee interests, 
carried interests 
and any 
contractual rights to 
production relating 
thereto, including 
as described on 
Schedule 1.1(a) 
to the 
extent and 
only to 
the extent 
the same 
are located within 
the Subject 
Area (the “Leases”), 
and (b) 
all other 
rights in 
the lands 
covered by 
the Units 
and the 
foregoing Leases, 
including all 
Royalties, 
Working 
Interests, 
Net 
Revenue 
Interests, 
and 
other 
interests 
and 
rights 
to 
Hydrocarbons, to the extent and only to the extent the same are located within the Subject Area. 
“Records” means, to the extent reasonably in Seller or SWEPI’s possession 
or control, (a) 
any 
files, 
records, 
maps, 
information, 
and 
data, 
whether 
written 
or 
electronically 
stored, 
to 
the 
extent relating to 
the Assets, including: 
(i) land and title 
records (including abstracts of 
title, title 
opinions, 
and 
title 
curative 
documents); 
(ii) contract 
files; 
(iii) correspondence; 
(iv) operations, 
environmental, 
production, 
and 
accounting 
records 
(including 
equipment 
lists, 
repair 
notes 
and 
archives, and technical drawings); (v) production, facility and well records and data; 
(vi) supplier 
lists and records; (vii) training materials and training records (including certifications) and (b) the 
corporate, 
financial, 
Tax 
and 
legal 
records 
of 
SWEPI 
and 
Newco 
(including 
Tax 
Returns); 

 

 

 

 

 

 

 

 

 

 

 

Exhibit 10.1
- 19 - 
provided
, 
however
, that 
the term 
“Records” shall 
not include 
(i) any 
of Seller’s 
or its 
Affiliates’ 
business 
plans, 
strategies, 
cost 
and 
pricing 
information, 
accounting 
records, 
supplier 
lists 
and 
records, 
proprietary 
training 
materials 
and 
equipment, 
equipment 
lists, 
technical 
drawings, 
and 
contracts and financial records 
that address or reflect 
activities outside of the 
business of SWEPI 
related to the Assets; (ii) any of Seller’s or its Affiliates’ company minute books and records, Tax 
Returns, Tax 
records that relate 
to Seller’s 
or its Affiliates’ 
business generally or 
other materials 
that do 
not pertain 
to the 
business of 
Newco or 
ongoing day-to-day 
operation of 
the Assets; 
(iii) 
training, 
personnel, 
and 
medical 
records 
(including 
certifications) 
of 
employees, 
including 
Transferred Employees 
(as defined 
in Schedule 
5.9(a)), except 
as specified 
in Section 
1.02(f) of 
Schedule 5.9(a); (iv) hiring exams for Transferred Employees (as defined in Schedule 5.9(a)); (v) 
any transfer pricing information; 
(vi) materials that are subject 
to any applicable legal 
privileges, 
including attorney work product 
and attorney-client communications that 
extend beyond Newco; 
and (vii) 
any files, 
records, information, 
and data 
to the extent 
related to the 
IT Systems (for 
the 
avoidance of 
doubt, 
such 
files, 
records, 
information 
and 
data 
shall 
not 
include 
information 
that 
may be stored on the IT Systems that would otherwise constitute a Record). 
“Related Party 
Contract” means 
any Contract 
between (a) 
SWEPI, on 
the one 
hand, and 
(b) 
Seller, 
any 
Affiliate 
of 
Seller 
(other 
than 
SWEPI) 
or 
any 
Person 
that 
directly 
or 
indirectly 
controls or is under 
common control with Shell 
Oil Company, 
or any of their 
respective officers, 
directors, 
stockholders, 
members, 
partners, 
managers, 
investors, 
private 
equity 
sponsors, 
or 
employees, on the other hand. 
“Release” 
means 
any 
releasing, 
disposing, 
discharging, 
injecting, 
spilling, 
leaking, 
pumping, pouring, leaching, migrating, dumping, 
emitting, escaping or emptying into 
or upon any 
soil, air, sediment, subsurface strata, surface water, groundwater, 
or drinking water supply. 
“Release of Hydrocarbons” means any Release 
of Hydrocarbons into or upon any soil, 
air, 
sediment, subsurface strata, surface 
water, groundwater, or drinking water supply that 
triggers any 
reporting 
obligations 
to 
any 
Governmental 
Authority, 
including 
the 
Railroad 
Commission 
of 
Texas, under any applicable Law. 
“Remediation” including the correlative term “Remediate” means the implementation and 
completion 
of 
any 
investigative, 
remedial, 
removal, 
response, 
monitoring, 
construction, 
repair, 
closure, 
disposal, 
restoration 
or 
other 
corrective 
actions 
(including 
any 
necessary 
filings 
or 
interactions with 
Governmental 
Authorities) required 
under Environmental 
Laws to 
respond, to 
the extent 
required by 
applicable Environmental 
Laws, to 
any Release 
or 
threatened Release 
of 
any 
Hazardous 
Substances 
at, 
on, 
under 
or 
from 
any 
Asset, 
in 
the 
most 
cost-effective 
manner 
allowed under 
applicable Environmental 
Laws, considering 
ongoing operation 
and maintenance 
and any operational or use limitations or controls. 
“Reorganization” 
has the meaning set forth in Section 5.19. 

“Representatives” 
means 
(a) 
partners, 
employees, 
officers, 
directors, 
members, 
equity 
owners and counsel of a Party 
or any of its Affiliates or any 
prospective purchaser of a Party or 
an 
interest in a Party; 
(b) any investment bank, 
consultant or agent retained 
by a Party or 
the parties 
listed 
in subsection 
(a) above; 
and (c) 
any bank, 
other financial 
institution 
or entity 
funding, or 

 

 

 

 

 

 

 

Exhibit 10.1
- 20 - 
proposing to fund, such 
Party’s operations in connection with the Assets, 
including any consultant 
retained by such bank, other financial institution or entity. 
“Required Consent” has the meaning set forth in Section 3.13. 
“Required Consent Asset” means an Asset subject to a Required Consent. 

“Restricted Party” means any 
Person (a) targeted by national, 
regional or multilateral trade 
or economic sanctions under 
Trade Control Laws; or (b) directly 
or indirectly owned or 
controlled 
or acting on behalf of such Persons, including their Affiliates and Representatives. 
“Retained Assets”
means 
(a)
any 
and 
all 
real 
property 
owned 
by 
SWEPI 
or 
any 
of 
its 
wholly-owned 
subsidiaries 
on 
or 
prior 
to 
the 
Execution 
Date 
and 
located 
outside 
of 
the 
Subject Area (the “Retained Properties”); 

(b)
all 
contracts, 
agreements, 
and 
instruments 
to 
the 
extent 
relating 
to 
the 
Retained 
Properties, 
including 
operating 
agreements, 
letter 
agreements, 
unitization 
agreements, 
declarations 
and 
orders, 
farmin 
and 
farmout 
agreements, 
exploration 
and 
participation 
agreements, 
joint 
development 
agreements, 
area 
of 
mutual 
interest 
agreements, 
agreements 
pursuant 
to 
which the 
Retained Properties 
(or any 
portion thereof) 
were purchased 
or 
sold by 
SWEPI, and 
the transfers, 
assignments or 
conveyances relating 
to 
the 
Retained 
Properties, 
and 
any 
rights 
under 
any 
such 
contracts, 
agreements, or 
instruments, including 
any audit 
rights or 
rights to 
receive 
refunds 
or 
reimbursements 
in 
connection 
with 
any 
such 
contracts, 
agreements, 
or 
instruments 
and 
any 
master 
services 
agreements, 
fleet 
agreements, or other similar master 
agreements, including those that 
relate 
to 
the 
Assets 
or 
that 
otherwise would 
constitute 
an 
Asset, 
except 
in 
each 
case any 
purchase orders or 
other similar agreements 
entered into under 
any 
master agreement (such as master services agreements or fleet agreements) 
(collectively, the “Retained Contracts”); 

(c)
all claims 
and 
causes of 
action arising 
under 
and 
to the 
extent 
relating to 
any Retained Contract (including claims for adjustments or refunds) or any 
other Retained Asset; 
(d)
the Retained Litigation; 
(e)
all 
rights 
and 
interests 
of 
SWEPI 
(i) under 
any 
policy 
or 
agreement 
of 
insurance 
or 
indemnity, 
(ii) under 
any 
bond 
or 
(iii) to 
any 
insurance 
or 
condemnation proceeds or 
awards, in each 
case, to the 
extent relating to 
any 
other Retained Asset; 
(f)
all 
surety 
agreements, 
bonds, 
letters 
of 
credit, 
guarantees 
and 
any 
other 
financial 
assurances 
or 
credit 
support 
to 
the 
extent 
relating 
to 
any 
other 
Retained Asset; 

 

 

 

 

 

 

 

 

 

 

 

 

 

Exhibit 10.1
- 21 - 
(g)
all personal property used, or held for use, in 
connection with the Retained 
Properties; 
(h)
all easements, permits, 
well licenses, servitudes, 
rights-of-way, 
subsurface 
leases, and other subsurface rights appurtenant to, and to the extent used or 
held for use in connection with, the Retained Properties; 
(i)
all records relating exclusively to any other Retained Asset; 

(j)
all Related Party Contracts (other than those set forth on Schedule 5.7); 
(k)
all matters set forth on Schedule 3.22 (the “Retained Royalties”); 
(l)
any Contract for a Hedging Transaction; 
(m)
any Required 
Consent Assets 
retained by 
SWEPI 
pursuant and 
subject to 
the terms of Section 5.16(c); 
(n)
all 
end 
user 
computing 
devices 
used 
in 
connection 
with 
the 
Assets, 
including laptops, iPhones and iPads; 
(o)
subject 
to 
Section 
5.22, 
all 
non-proprietary 
seismic, 
geological, 
engineering, 
and 
other 
data 
and 
interpretations, 
files 
and 
records 
(in 
whatever form) 
in 
each 
case to 
the 
extent related 
to the 
Assets 
(“Seismic 
Data”); 
(p)
the IT Systems; and 
(q)
any 
and 
all 
other 
real 
property, 
personal 
property, 
Permits, 
contracts, 
agreements, leases, instruments, claims, rights and other interests owned or 
held by SWEPI 
or any 
of their 
wholly-owned subsidiaries, in 
each case to 
the extent not comprising a part of, or unrelated to, the Assets. 
“Retained Contracts” 
has the 
meaning set 
forth in 
item (b) 
of the 
definition of 
“Retained 
Assets”. 
“Retained 
Liabilities” 
means 
any 
and 
all 
duties, 
obligations, 
claims 
and 
liabilities 
of 
SWEPI 
other 
than 
the 
Assumed 
Liabilities, 
and 
all 
duties, 
obligations, 
claims 
and 
liabilities 
attributable to the Retained Assets, the Retained Litigation and the Retained Royalties. 
“Retained Litigation” has the meaning set forth in Section 5.17. 
“Retained Properties” has 
the meaning set 
forth in item 
(a) of the 
definition of “Retained 
Assets”. 
“Retained Royalties” 
has the 
meaning set 
forth in 
item (k) 
of the 
definition of 
“Retained 
Assets”. 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Exhibit 10.1
- 22 - 
“Royalties” means 
royalties, overriding 
royalties, production 
payments, carried 
interests, 
net 
profits 
interests, 
reversionary 
interests, 
options, 
back-in 
interests, 
contractual 
rights 
to 
production, and other burdens upon, measured by or payable out of production. 
“SCADA 
Systems” 
means 
the 
field 
based 
operating 
system 
software 
and 
hardware 
components of the 
Supervisory Control and Data 
Acquisition systems exclusively used 
by SWEPI 
to monitor 
and control 
the operation 
of the 
Wells 
(including field 
based sensors 
which interface 
with field based Well 
Equipment) and to provide 
data in relation to 
the operation of those 
Wells, 
excluding 
telecommunications 
links 
between 
the 
Supervisory 
Control 
and 
Data 
Acquisition 
systems and 
the IT 
Systems and 
any software 
and hardware 
components which 
are shared 
with, 
used or held for use by Seller or any of its Affiliates other than SWEPI. 
“SEC” shall mean the Securities and Exchange Commission. 
“Securities Act” shall 
mean the United States 
Securities Act of 1933, 
as amended, together 
with the rules and regulations of the SEC promulgated thereunder. 
“Seismic Data” 
has the 
meaning set 
forth in 
item (o) 
of the 
definition of 
“Retained Assets”. 
“Seller” has the meaning set forth in the Preamble of this Agreement. 
“Seller Fundamental Representations” 
means the representations 
and warranties in Section 
3.2, Section 
3.3, Section 
3.4, Section 
3.5, Section 
3.6, Section 
3.17, Section 
3.18, Section 
3.24, 
Section 3.26 and Section 3.29. 
“Seller Group” 
means Seller, 
its 
Affiliates 
(other 
than SWEPI 
and Newco), 
and each 
of 
their respective officers, directors, employees, agents, advisors and other Representatives. 
“Seller Material Adverse Effect” means a Material Adverse Effect with respect to Newco, 
taken as a whole. 
“Seller Parent Guaranty” has the meaning set forth in Section 5.18. 
“Seller Taxes” 
means 
(a) 
all Taxes 
of, 
attributable 
to or 
imposed on 
Seller 
or 
any of 
its 
direct 
or 
indirect 
owners 
or 
Affiliates 
(other 
than 
Newco), 
(b) 
any 
Taxes 
allocable 
to 
Seller 
pursuant 
to 
Section 
10.1(a) 
(taking 
into 
account, 
and 
without 
duplication 
of, 
any 
Asset 
Taxes 
effectively borne 
by Seller 
as a 
result of 
the adjustments 
to the 
Purchase Price 
made pursuant 
to 
Section 2.5 or 
Section 7.4, 
as applicable, 
and any 
payments made 
from one 
Party to 
the other 
in 
respect of 
Asset Taxes 
pursuant to 
Section 2.2(d) 
or Section 
10.1(c)) or 
Section 10.1(b), 
(c) any 
Taxes attributable 
to or imposed on or with 
respect to the ownership or operation 
of the Retained 
Assets 
or 
the 
production 
of 
Hydrocarbons 
or 
the 
receipt 
of 
proceeds 
therefrom, 
(d) 
all 
Taxes 
attributable to or 
resulting from the 
Reorganization, (e) any 
Taxes imposed on Newco or 
for which 
Newco 
becomes 
liable 
(i) 
by 
reason 
of 
having 
been 
a 
member 
of 
an 
affiliated, 
aggregate, 
combined, consolidated 
or unitary 
group on 
or prior 
to the 
Closing 
Date (including 
pursuant to 
Treasury 
Regulations 
Section 
1.1502-6 
or 
any 
analogous 
or 
similar 
provision 
of 
state, 
local 
or 
foreign Law) or (ii) as a transferee or successor or by 
contract or other agreement or arrangement 
(other than 
a 
Customary 
Agreement), assumption, 
operation 
of 
Law or 
otherwise, which 
Taxes 
relate to an 
event or transaction 
occurring, or a 
contract or other 
agreement or arrangement 
entered 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Exhibit 10.1
- 23 - 
into, 
on or 
prior to 
the Closing 
Date, (f) 
50 percent 
of any 
Transfer 
Taxes, 
(g) any 
other Taxes 
relating 
to 
the 
ownership 
or 
operation 
of 
the 
Assets 
or 
the 
production 
of 
Hydrocarbons 
or 
the 
receipt of 
proceeds therefrom 
that are 
attributable to 
any Tax 
period (or 
portion of 
any Straddle 
Period) ending 
at or 
prior to 
the Effective 
Time 
and (h) 
any Taxes 
caused by, 
related to, 
arising 
out of 
or resulting 
from Seller’s 
breach of 
any of 
Seller’s covenants 
or agreements 
contained in 
this Agreement. 
“Soft Required Consent” means 
a Required Consent that by 
its express terms provides 
that 
Consent may not be unreasonably 
withheld and for which the 
failure to obtain would not 
(a) cause 
the 
transfer 
or 
assignment 
(whether 
by 
operation 
of 
law 
or 
otherwise) 
of 
any 
portion 
of 
the 
Required 
Consent 
Asset 
subject 
to 
such 
Consent 
to 
be 
void, 
(b) cause 
the 
termination 
of 
the 
Required Consent 
Asset subject 
to such 
Consent under 
the express 
terms of 
such Required 
Consent 
Asset, or (c) result in a penalty of any sort, including a requirement to make a payment. 
“Straddle 
Period” 
means 
any 
Tax 
period 
beginning 
at 
or 
before, 
and 
ending 
after, 
the 
Effective Time. 
“Subject Area” means Culberson, Loving, Ward, Winkler, 
and Reeves Counties, Texas. 
“Subject Interests” 
has the meaning set forth in the Recitals of this Agreement. 
“Subsidiary” means, with respect to any Person, any other Person Controlled by such first 
Person, directly or indirectly, through one or more intermediaries. 
“Surface 
Contracts” 
means 
SWEPI’s 
right, 
title 
and 
interest 
in 
and 
to 
all 
easements, 
Permits, licenses, servitudes, rights-of-way, 
surface fee interests, surface use 
agreements, surface 
leases, right 
of use 
and easement, 
and other 
rights to 
use the 
surface and subsurface 
appurtenant 
thereto, 
to 
the 
extent 
used 
or 
held 
for 
use 
in 
connection 
with 
the 
Properties, 
including 
those 
described on Schedule 1.1(c). 
“SWEPI” has the meaning set forth in the Recitals of this Agreement. 
“Tax Allocation” has the meaning set forth in Section 10.7. 
“Tax Incentive” has the meaning set forth in Section 3.8(m). 
“Tax Proceeding” has the meaning set forth in Section 10.3. 
“Tax 
Return” 
means 
any 
return 
(including 
any 
information 
return 
and 
any 
estimated 
return), report, statement, 
schedule, notice, form, 
election, estimated Tax 
filing, claim 
for refund 
or 
other 
document 
(including 
any 
attachments 
thereto 
and 
amendments 
thereof) 
filed 
with 
or 
submitted to, 
or required 
to be filed 
with or 
submitted to, 
any Governmental 
Authority with 
respect 
to any Tax. 
“Taxes” 
means 
(a) 
all 
federal, 
state, 
local, 
foreign 
and 
other 
net 
income, 
gross 
income, 
gross 
receipts, 
alternative, 
estimated, 
sales, 
use, 
ad 
valorem, 
value 
added, 
transfer, 
franchise, 
profits, registration, license, lease, service, service use, withholding, payroll, employment, 
excise, 
severance, 
social 
security, 
welfare, 
workers’ 
compensation, 
unemployment, 
disability, 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Exhibit 10.1
- 24 - 
environmental, stock, stamp, occupation, premium, 
real, personal, or intangible 
property, windfall 
profits, 
customs, 
duties, 
levies, 
tariffs, 
imposts, 
amounts 
due 
under 
any 
escheat 
or 
unclaimed 
property 
Law 
or 
other 
taxes, 
fees, 
assessments 
or 
charges 
of 
any 
kind 
whatsoever 
(whether 
imposed 
directly 
or 
through 
withholding, 
whether 
or 
not 
disputed, 
and 
including 
any 
amounts 
resulting 
from 
the 
failure 
to 
file 
any 
Tax 
Return 
and 
any 
amounts 
that 
have 
been 
deferred 
(including amounts deferred under the rules of Code Section 965)), together with any interest and 
any penalties, additions 
to tax or additional 
amounts imposed with respect 
thereto; (b) any 
liability 
for payment 
of amounts 
described in 
clause (a) 
whether as 
a result 
of assumption, 
transferee or 
successor 
liability, 
of 
being 
a 
member 
of 
an 
affiliated, 
aggregate, 
consolidated, 
combined 
or 
unitary group for any period, operation of Law or otherwise; and (c) any liability 
for the payment 
of 
amounts 
described 
in 
clauses 
(a) 
or 
(b) 
as 
a 
result 
of 
any 
tax 
sharing, 
tax 
indemnity 
or 
tax 
allocation 
agreement 
or 
any 
other 
express 
or 
implied 
contract, 
agreement 
or 
arrangement 
to 
indemnify any other Person. 
“TBOC” has the meaning set forth in Section 5.19(a). 
“Third Party” means 
any Person 
other than a 
Party to 
this Agreement or 
an Affiliate 
of a 
Party to this Agreement. 
“Third Person Claim” has the meaning set forth in Section 9.2(b). 
“Trade 
Control 
Laws” means 
any applicable 
trade 
or economic 
sanctions or 
embargoes, 
Restricted Party 
lists issued 
by the 
respective authorities, 
controls on 
the imports, 
export, re-export, 
use, 
sale, 
transfer, 
trade, 
or 
otherwise 
disposal 
of 
goods, 
services 
or 
technology, 
anti-boycott 
legislation 
or 
similar 
laws 
or 
regulations, 
rules, 
restrictions, 
licenses, 
orders 
or 
requirements 
in 
force from time to time, 
including those of the European Union, 
the United Kingdom, the United 
States of America or under applicable Laws. 

“Transaction 
Documents” 
means 
this 
Agreement 
and 
any 
other 
documents 
executed 
in 
connection with this Agreement. 
“Transfer Taxes 
” 
has the meaning set forth in Section 10.5. 
“Transition Services Agreement” has the meaning set forth in Section 5.11. 
“Treasury 
Regulations” 
means 
the 
final, 
temporary, 
and 
proposed 
United 
States 
Department of the Treasury regulations promulgated under the Code. 
“Units” 
means 
SWEPI’s 
right, 
title 
and 
interest 
in 
and 
to 
all 
pooled, 
communitized, 
or 
unitized acreage, which 
includes all 
or any part 
of the 
lands located within 
the Subject Area 
and 
covered 
by 
the 
Leases, 
and 
all 
tenements, 
hereditaments, 
and 
appurtenance 
belonging 
thereto, 
including the pools and units described on Schedule 1.1(a). 
“U.S.” means the United States of America. 
“Wells” 
means 
SWEPI’s 
right, 
title 
and 
interest 
in 
and 
to 
all 
Hydrocarbons, 
water, 
monitoring, 
disposal 
or 
injection 
wells 
in 
the 
Subject 
Area, 
including 
the 
wells 
described 
on 

 

 

Exhibit 10.1
- 25 - 
Schedule 
1.1(b), 
whether 
producing, 
non-producing, 
temporarily 
plugged 
and 
abandoned, 
and 
whether or not fully described on any exhibit or schedule hereto. 

“Working 
Interest” 
means, 
with 
respect 
to 
any 
(a) 
Well, 
the 
interest 
(expressed 
as 
a 
percentage or 
a decimal) 
in such 
Well 
that is 
burdened with 
the obligation 
to bear 
and pay 
costs 
and 
expenses 
of 
maintenance, 
development 
and 
operations 
on 
or 
in 
connection 
with 
such 
Well 
(with respect to 
those formations 
in which such 
Well 
is currently producing, 
or with respect 
to a 
Well that is not currently producing, 
the last depth or 
formation at which 
it produced), or (b) 
Lease 
or Unit, the 
interest (expressed as 
a percentage or 
a decimal) in 
such Lease or 
Unit that is 
burdened 
with 
the 
obligation 
to 
bear 
and 
pay 
costs 
and 
expenses 
of 
maintenance, 
development 
and 
operations on 
or in 
connection with 
such Lease 
or Unit, 
in the 
case of 
each of 
items (a) 
and (b) 
without regard to the effect of any Royalties.

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