Document:

Exhibit 10.2

 

 

CREDIT AGREEMENT

New York

 

December 16, 2011

 

Borrower:  Hardinge Inc.

 

a(n) o individual  x corporation  o general partnership   o limited liability company   o

 

organized under the laws of   New York

 

having its chief executive office at One Hardinge Drive, Elmira, New York 14902                                                           .

 

Bank:              M&T Bank, a New York banking corporation with its chief executive office at One M&T Plaza, Buffalo, NY 14240.  Attention:  Office of General Counsel.

 

The Bank and the Borrower agree as follows:

 

1.              DEFINITIONS.

 

a.               “Account Debtor” means any person(s) who is obligated on a receivable.

 

b.              “Capital Expenditures” means, for any fiscal year, the aggregate of all expenditures (whether paid in cash or accrued as liabilities, and including expenditures for obligations under any lease with respect to which Borrower’s obligations thereunder should, in accordance with G.A.A.P., be capitalized and reflected as a liability on the balance sheet of Borrower) by Borrower during such period that are required by G.A.A.P. to be included in or reflected by the property, plant or equipment or similar fixed asset accounts on the balance sheet of Borrower.

 

c.               “Cash Flow” means the sum of (i) net income after tax, dividends and distributions, plus (ii) depreciation expense and amortization, plus (iii) Interest Expense, all determined in accordance with G.A.A.P.

 

d.              “Cash Flow Coverage” means the ratio of Cash Flow to the sum of (i) the current portion of all Long Term Debt as specified in the financial statement dated twelve (12) months prior, plus (ii) Interest Expense, all determined in accordance with G.A.A.P

 

e.               “Credit” means any and all credit facilities and any other financial accommodations made by the Bank in favor of the Borrower whether now or hereafter in existence.

 

f.                 “Current Assets” means, at any time, the aggregate amount of all current assets, including, but not limited to, cash, cash equivalents, marketable securities, receivables maturing within twelve (12) months from such time, and inventory (net of LIFO Reserve), but excluding prepaid expenses and officer, stockholder, employee and related entity advances and receivables, all as determined in accordance with G.A.A.P.

 

g.              “Current Liabilities” means, at any time, the aggregate amount of all liabilities and obligations which are due and payable on demand or within twelve (12) months from such time, or should be properly reflected as attributable to such twelve (12) month period in accordance with G.A.A.P.

 

h.              “Current Ratio” means the ratio of Current Assets to Current Liabilities.

 

i.                  “Eligible Account” or “Eligible Accounts” shall mean an account receivable of the Borrower (net of any credit balance, trade discount, or unbilled amount or retention) for which each of the following statements is accurate and complete (and the Borrower by including such account receivable in any computation of the collateral value of the borrowing base shall be deemed to represent and warrant to the Bank the accuracy and completeness of such statements): (i) said account receivable is a binding and valid obligation of the obligor thereon, in full force and effect and enforceable in accordance with its terms; (ii) said account receivable is genuine, in all respects as appearing on its face or as represented in the books and records of the Borrower, and all information set forth therein is true and correct; (iii) said account receivable is free of all default of any party thereto, counterclaims, offsets, and defenses and from any rescission, cancellation, or avoidance, and all right thereof, whether by operation of law or otherwise; (iv) the payment of said account receivable is not more than sixty (60) days past the due date nor more than ninety (90) days past the invoice date thereof; (v) said account receivable is free of concessions or understandings with the obligor thereon of any kind not disclosed to and approved by Bank in writing; (vi) said account receivable is, and at all times will be, free and clear of all liens except in favor of the Bank; (vii) said account receivable is derived from sales made or services rendered to the obligor in the ordinary course of business; (viii) the obligor on said account receivable (a) is located within the United States, the District of Columbia or Canada or are foreign receivables that are covered by a letter of credit or appropriate credit insurance; (b) is not the subject of any bankruptcy or insolvency proceeding nor has a trustee or receiver been appointed for all or a substantial part of its property, nor has said obligor made an assignment for the benefit of creditors, admitted its inability to pay its debts as they mature or suspended its business; (c) is not affiliated, directly or indirectly, with the Borrower as a Subsidiary or other Affiliate, employee or otherwise; and (d) is not a state or federal governmental department, commission, board, bureau or agency; (ix) said account receivable did not arise from sales to an obligor as to whom twenty-five percent

 

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(25%) or more of the total accounts receivable owing by such obligor to the Borrower are more than ninety (90) days past due the invoice date thereof; (x) said account receivable arises from sales in excess of the amount of any account payable owed by the Borrower to the obligor unless said obligor has entered into a written agreement with the Borrower to waive its right of offset against said receivable; and (xi) said account receivable is otherwise satisfactory to the Bank, in its reasonable judgment.

 

j.                  “Eligible Inventory” shall mean inventory that consists of inventory that is reasonably acceptable as determined in the sole discretion of the Bank, valued at the lower of cost or market in accordance with GAAP on a first in first out basis.  Inventory, machinery, and equipment advance rates are subject to change based on the findings of any appraisals, field audits or other material information that would cause them to be unreasonable or ineligible in the Bank’s reasonable discretion.  Advances against Eligible Inventory shall not exceed 50% of gross availability.  Advances to be made on machinery and equipment are to be advanced at 60% of the forced liquidation thereof.  For the purposes of this provision, Eligible Inventory shall be those of Hardinge Inc. only.  Eligible Inventory shall be determined using the following formulas against the gross balance in each category: (a) raw material advance rate shall be 13.4%; (b) work in progress advance rate shall be 26.7%; (c) finished goods advance rate shall be 40.8%; (d) in-transit and other inventory advance rate shall be 42.5%.

 

k.               “G.A.A.P.” means, with respect to any date of determination, generally accepted accounting principles as used by the Financial Accounting Standards Board and/or the American Institute of Certified Public Accountants consistently applied and maintained throughout the periods indicated.

 

l.                  “Interest Expense” means all finance charges reflected on the income statement as interest expense for all obligations of Borrower to any person, including, but not limited to, Bank, as shown on the balance sheet in accordance with G.A.A.P.

 

m.            “Long Term Debt” means all obligations of Borrower to any person, including, but not limited to, the Obligations, payable more than twelve (12) months from the date of their creation, which in accordance with G.A.A.P. are shown on the balance sheet as a liability (excluding reserves for deferred income taxes) for the period then ended.

 

n.              “Obligations” means any and all indebtedness or other obligations of the Borrower to the Bank in any capacity, now existing or hereafter incurred, however created or evidenced, regardless of kind, class or form, whether direct, indirect, absolute or contingent (including obligations pursuant to any guaranty, endorsement, other assurance of payment or otherwise), whether joint or several, whether from time to time reduced and thereafter increased, or entirely extinguished and thereafter reincurred, together with all extensions, renewals and replacements thereof, and all interest, fees, charges, costs or expenses which accrue on or in connection with the foregoing, including any indebtedness or obligations (i) not yet outstanding but contracted for, or with regard to which any other commitment by the Bank exists; (ii) arising prior to, during or after any pendency of any bankruptcy, insolvency, receivership or other similar proceeding, regardless of whether allowed or allowable in such proceeding; (iii) owed by the Borrower to others and which the Bank obtained, or may obtain, by assignment or otherwise; and (iv) payable under this Agreement.

 

o.              “Quick Ratio” means the ratio of Current Assets less inventory (net of LIFO Reserve), to Current Liabilities.

 

p.              “Subordinated Debt” means all indebtedness of the Borrower which has been formally subordinated to payment and collection of the Obligations.

 

q.              “Subsidiary” means any corporation or other business entity of which at least fifty percent (50%) of the voting stock or other ownership interest is owned by the Borrower directly or indirectly through one or more Subsidiaries.  If the Borrower has no Subsidiaries, the provisions of this Agreement relating to the Subsidiaries shall be disregarded, without affecting the applicability of such provisions to the Borrower alone.

 

r.                 “Tangible Net Worth” means the aggregate assets of Borrower excluding all intangible assets, including, but not limited to, goodwill, licenses, trademarks, patents, copyrights, organization costs, appraisal surplus, officer, stockholder, related entity and employee advances or receivables, mineral rights and the like, less liabilities, plus Subordinated Debt, all determined in accordance with G.A.A.P. (except to the extent that under G.A.A.P. “tangible net worth” excludes leasehold improvements which are included in “Tangible Net Worth” as defined herein).

 

s.               “Total Liabilities” means the aggregate amount of all assets of the Borrower less the sum of shareholder equity and Subordinated Debt (if any), as shown on the balance sheet in accordance with G.A.A.P.

 

t.                 “Transaction Documents” means this Agreement and all documents, instruments or other agreements by the Borrower in favor of the Bank in connection (directly or indirectly) with the Obligations, whether now or hereafter in existence, including promissory notes, security agreements, guaranties and letter of credit reimbursement agreements.

 

u.              “Working Capital” means that amount which is equal to the excess of Current Assets over Current Liabilities.

 

2.              REPRESENTATIONS AND WARRANTIES.  The Borrower makes the following representations and warranties and any “Additional Representations and Warranties” on the schedule attached hereto and made part hereof (the “Schedule”), all of which shall be deemed to be continuing representations and warranties as long as this Agreement is in effect:

 

a.               Good Standing; Authority.  The Borrower and each Subsidiary (if either is not an individual) is duly organized, validly existing and in good standing under the laws of the jurisdiction in which it was formed.  The Borrower and each Subsidiary is duly authorized to do business in each jurisdiction in which failure to be so qualified might have a material adverse effect on its business or assets and has the power and authority to own each of its assets and to use them in the ordinary course of business now and in the future.

 

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b.              Compliance.  The Borrower and each Subsidiary conducts its business and operations and the ownership of its assets in compliance with each applicable statute, regulation and other law, including environmental laws.  All approvals, including authorizations, permits, consents, franchises, licenses, registrations, filings, declarations, reports and notices (the “Approvals”) necessary for the conduct of the Borrower’s and each Subsidiary’s business and for the Credit have been duly obtained and are in full force and effect.  The Borrower and each Subsidiary is in compliance with the Approvals.  The Borrower and each Subsidiary (if either is not an individual) is in compliance with its certificate of incorporation, by-laws, partnership agreement, articles of organization, operating agreement or other applicable organizational or governing document as may be applicable to the Borrower or a Subsidiary depending on its organizational structure (“Governing Documents”).  The Borrower and each Subsidiary is in compliance with each material agreement to which it is a party or by which it or any of its assets is bound.

 

c.               Legality.  The execution, delivery and performance by the Borrower of the Transaction Documents, (i) are in furtherance of the Borrower’s purposes and within its power and authority; (ii) do not (A) violate any statute, regulation or other law or any judgment, order or award of any court, agency or other governmental authority or of any arbitrator with respect to the Borrower or any Subsidiary or (B) violate the Borrower’s or any Subsidiary’s Governing Documents (if either is not an individual), constitute a default under any agreement binding on the Borrower or any Subsidiary or result in a lien or encumbrance on any assets of the Borrower or any Subsidiary; and (iii) if the Borrower or any Subsidiary is not an individual, have been duly authorized by all necessary organizational actions.

 

d.              Fiscal Year.  The fiscal year of the Borrower is the calendar year unless the following blank states otherwise:  year ending December 31.

 

e.               Title to Assets.  The Borrower and each Subsidiary has good and marketable title to each of its assets free of security interests, mortgages or other liens or encumbrances, except as set forth on the Schedule titled “Permitted Liens” or pursuant to the Bank’s prior written consent.

 

f.                 Judgments and Litigation.  Except for Weiner vs. Hardinge Inc., et al. (further described in the Schedule attached hereto and made a part hereof, there is no pending or threatened claim, audit, investigation, action or other legal proceeding or judgment, order or award of any court, agency or other governmental authority or arbitrator which involves the Borrower, its Subsidiaries or their respective assets and might have a material adverse effect upon the Borrower or any Subsidiary or threaten the validity of the Credit or any Transaction Document (any, an “Action”).

 

g.              Full Disclosure.  Neither this Agreement nor any certificate, financial statement or other writing provided to the Bank by or on behalf of the Borrower or any Subsidiary contains any statement of fact that is incorrect or misleading in any material respect or omits to state any fact necessary to make any such statement not incorrect or misleading.  The Borrower has not failed to disclose to the Bank any fact that might have a material adverse effect on the Borrower or any Subsidiary.

 

3.             AFFIRMATIVE COVENANTS.  So long as this Agreement is in effect, the Borrower will comply with any “Additional Affirmative Covenant” contained in the Schedule and shall:

 

a.               Financial Statements and Other Information.  Promptly deliver to the Bank (i) within ninety (90) days after the end of each of its first three fiscal quarters, an unaudited consolidating and consolidated financial statement of the Borrower and each Subsidiary as of the end of such quarter, which financial statement shall consist of income and cash flows for the quarter, for the corresponding quarter in the previous fiscal year and for the period from the end of the previous fiscal year, with a consolidating and consolidated balance sheet as of the quarter end all in such detail as the Bank may request; (ii) within ninety (90) days after the end of each fiscal year, consolidating and consolidated statements of the Borrower’s and each Subsidiary’s income and cash flows and its consolidating and consolidated balance sheet as of the end of such fiscal year, setting forth comparative figures for the preceding fiscal year and to be (check applicable box, if no box is checked the financial statements shall be audited):

 

	
x audited
    	
 
    	
o reviewed
    	
 
    	
o compiled
    

 

by an independent certified public accountant acceptable to the Bank; all such statements shall be certified by the Borrower’s chief financial officer to be correct and in accordance with the Borrower’s and each Subsidiary’s records and to present fairly the results of the Borrower’s and each Subsidiary’s operations and cash flows and its financial position at year end; and (iii) with each statement of income, a certificate executed by the Borrower’s chief executive and chief financial officers or other such person responsible for the financial management of the Borrower (A) setting forth the computations required to establish the Borrower’s compliance with each financial covenant, if any, during the statement period, (B) stating that the signers of the certificate have reviewed this Agreement and the operations and condition (financial or other) of the Borrower and each of its Subsidiaries during the relevant period and (C) stating that no Event of Default occurred during the period, or if an Event of Default did occur, describing its nature, the date(s) of its occurrence or period of existence and what action the Borrower has taken with respect thereto.  The Borrower shall also promptly provide the Bank with copies of all annual reports, proxy statements and similar information distributed to shareholders, partners or members, and copies of all filings with the Securities and Exchange Commission and the Pension Benefit Guaranty Corporation, and shall provide, in form satisfactory to the Bank, such additional information, reports or other information as the Bank may from time to time reasonably request regarding the financial and business affairs of the Borrower or any Subsidiary.  If the Borrower is an individual, the Borrower shall provide annually a personal financial statement in form and detail acceptable to the Bank and such other financial information as the Bank may from time to time reasonably request.  In addition, Borrower shall provide monthly accounts receivable, accounts payable aging reports and internally prepared financial statements within thirty (30) days of the month’s end and at any time upon the reasonable request by the Bank.   The Borrower shall provide to the Bank annually the Form 10-K that the Borrower files with the Securities and Exchange Commission (the “SEC”).  The Borrower shall provide to Bank quarterly the Form 10-Q that the

 

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Borrower files with the SEC.  Both the Form 10-K and the Form 10-Q shall be provided to the Bank in conformity with the requirements of the SEC.

 

b.              Accounting; Tax Returns and Payment of Claims.  The Borrower and each Subsidiary will maintain a system of accounting and reserves in accordance with generally accepted accounting principles, has filed and will file each tax return required of it and, except as disclosed in the Schedule, has paid and will pay when due each tax, assessment, fee, charge, fine and penalty imposed by any taxing authority upon it or any of its assets, income or franchises, as well as all amounts owed to mechanics, materialmen, landlords, suppliers and the like in the normal course of business.

 

c.               Inspections.  Promptly upon the Bank’s reasonable request the Borrower will permit, and cause its Subsidiaries to permit, the Bank’s officers, attorneys or other agents to inspect its and its Subsidiary’s premises, examine and copy its records and discuss its and its Subsidiary’s business, operations and financial or other condition with its and its Subsidiary’s responsible officers and independent accountants.

 

d.              Operating Accounts.  Maintain all of its principal bank accounts with the Bank.

 

e.               Changes in Management and Control.  If the Borrower is not an individual, immediately upon any change in the identity of the Borrower’s chief executive officers or any ownership change resulting in a change of control, the Borrower will provide to the Bank a certificate executed by its senior individual authorized to transact business on behalf of the Borrower, specifying such change.

 

f.                 Notice of Defaults and Material Adverse Changes.  Immediately upon acquiring reason to know of (i) any Event of Default, (ii) any event or condition that might have a material adverse effect upon the Borrower or any Subsidiary or (iii) any Action, the Borrower will provide to the Bank a certificate executed by the Borrower’s senior individual authorized to transact business on behalf of the Borrower, specifying the date(s) and nature of the event or the Action and what action the Borrower or its Subsidiary has taken or proposes to take with respect to it.

 

g.              Insurance.  Maintain its, and cause its Subsidiaries to maintain, property in good repair and will on request provide the Bank with evidence of insurance coverage satisfactory to the Bank, including fire and hazard, liability, workers’ compensation and business interruption insurance and flood hazard insurance as required.

 

h.              Further Assurances.  Promptly upon the request of the Bank, the Borrower will execute, and cause its Subsidiaries to execute, and deliver each writing and take each other action that the Bank deems necessary or desirable in connection with any transaction contemplated by this Agreement.

 

4.               NEGATIVE COVENANTS.  As long as this Agreement is in effect, the Borrower shall not violate, and shall not suffer or permit any of its Subsidiaries to violate, any of the following covenants and any “Additional Negative Covenant” on the Schedule.  The Borrower shall not:

 

a.               Indebtedness.  Permit any indebtedness (including direct and contingent liabilities) not described on the Schedule titled “Permitted Indebtedness” except for trade indebtedness or current liabilities for salary and wages incurred in the ordinary course of business and not substantially overdue.

 

b.              Guaranties.  Become a guarantor, a surety, or otherwise liable for the debts or other obligations of another, whether by guaranty or suretyship agreement, agreement to purchase indebtedness, agreement for furnishing funds through the purchase of goods, supplies or services (or by way of stock purchase, capital contribution, advance or loan) for the purpose of paying or discharging indebtedness, or otherwise, except as an endorser of instruments for the payment of money deposited to its bank account for collection in the ordinary course of business and except as may be specified in the Schedule titled “Permitted Guaranties”.

 

c.               Liens.  Permit any of its assets to be subject to any security interest, mortgage or other lien or encumbrance, except as set forth on the Schedule titled “Permitted Liens” and except for liens for property taxes not yet due; pledges and deposits to secure obligations or performance for workers’ compensation, bids, tenders, contracts other than notes, appeal bonds or public or statutory obligations; and materialmens’, mechanics’, carriers’ and similar liens arising in the normal course of business.

 

d.              Investments.  As to the Borrower only, make any investment other than in FDIC insured deposits or United States Treasury obligations of less than one year, or in money market or mutual funds administering such investments, except as set forth on the Schedule titled “Permitted Investments”.

 

e.               Loans.  Make any loan, advance or other extension of credit except as disclosed on the Schedule titled “Permitted Indebtedness”, except for endorsements of negotiable instruments deposited to the Borrower’s deposit account for collection, trade credit in the normal course of business and intercompany loans approved in writing by the Bank.

 

f.                 Distributions.  Intentionally Omitted.

 

g.              Changes In Form.  (i) Transfer or dispose of substantially all of its assets, (ii) do business under or otherwise use any name other than its true name or (iii) make any material change in its business, structure, purposes or operations that might have a material adverse effect on the Borrower or any of its Subsidiaries.  If the Borrower or any Subsidiary is not an individual, (i) participate in any merger, consolidation or other absorption, unless the Borrower or any Subsidiary is the survivor thereof, with notice of such participation provided to Lender in a timely manner or (ii) make, terminate or permit to be revoked any election pursuant to Subchapter S of the Internal Revenue Code.

 

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h.              Additional Funded Debt.  The Borrower nor any Subsidiary shall incur additional funded debt beyond the existing approved facilities without the Bank’s prior written consent with the following exceptions: (i) a potential $4,000,000.00 line of credit for the Borrower’s Chinese Subsidiary for the issuance of guarantees and for working capital; (ii) a potential increase to a maximum of $6,000,000.00 to the Taiwanese line of credit; and (iii) acquisition financing in Switzerland for a potential facility and related equipment in an amount not to exceed $6,500,000.00 to replace an existing leased facility.

 

5.              FINANCIAL COVENANTS.  During the term of this Agreement, the Borrower shall not violate, and shall not suffer or permit any of its Subsidiaries to violate, any of the following covenants (complete applicable financial covenant) or any Additional Financial Covenants on the Schedule.  For purposes of this Section, if the Borrower has any Subsidiaries all references to the Borrower shall include the Borrower and all of its Subsidiaries on a consolidated basis.  Unless a different measurement period is specified, compliance for the financial covenants shall be required at all times.

 

o            A.                                   Borrower shall maintain Tangible Net Worth of not less than $ N/A          , measured (select one: quarterly or annually)   N/A                            as of each (select one: quarter or fiscal year)        N/A                  end.

 

o            B.                                     Borrower shall maintain a ratio of Total Liabilities to Tangible Net Worth of not greater than       N/A       :  N/A         , measured (select one: quarterly or annually)        N/A                        as of each (select one; quarter or fiscal year )  N/A                        end.

 

o            C.                                     Borrower shall maintain a Current Ratio of not less than      N/A                               :  N/A                             , measured (select one: quarterly or annually)      N/A                            as of each (select one: quarter or fiscal year)        N/A                    end.

 

o            D.                                    Borrower shall maintain Working Capital of not less than $         N/A                                                       , measured (select one: quarterly or annually)        N/A                        as of each (select one: quarter or fiscal year)       N/A                    end.

 

o            E.                                      Borrower shall maintain Cash Flow Coverage of not less than        N/A                         :       N/A                       , measured for the previous four quarters as of each (select one: quarter or fiscal year)       N/A                    end.

 

o            F.                                      Without the prior written consent of Bank, Borrower shall not make any Capital Expenditures in excess of $       N/A                          in the aggregate during any fiscal year of Borrower.

 

o            G.                                     Borrower shall not pay or accrue during any fiscal year compensation (including but not limited to all salary, bonuses, consulting, management or other fees, rentals and other payments to any person owning or managing 5%or more of the Borrower or any relative or cohabitant of such a person, and to any entity under common control with or controlling the Borrower) exceeding $     N/A                              in the aggregate.

 

o            H.                                    Borrower shall not become obligated as lessee pursuant to operating leases exceeding $       N/A                            in the aggregate during any fiscal year.

 

6.              DEFAULT.

 

a.               Events of Default.  Any of the following events or conditions shall constitute an “Event of Default”:  (i) failure by the Borrower to pay when due (whether at the stated maturity, by acceleration, upon demand or otherwise) the Obligations, or to pay any interest thereon or any fee or other amount payable under the Transaction Documents and such failure continues unremedied for a period of three (3) business days; (ii) default by the Borrower in the performance of any obligation, term or condition of this Agreement, the other Transaction Documents or any other agreement with the Bank or any of its affiliates or subsidiaries (collectively, “Affiliates”); (iii) failure by the Borrower to pay when due (whether at the stated maturity, by acceleration, upon demand or otherwise) any material indebtedness or obligation owing to any third party or any Affiliate, the occurrence of any event which results in acceleration of payment of any such indebtedness or obligation or the failure to perform any agreement with any third party or any Affiliate; (iv) the Borrower is dissolved, becomes insolvent, generally fails to pay or admits in writing its inability generally to pay its debts as they become due; (v) the Borrower makes a general assignment, arrangement or composition agreement with or for the benefit of its creditors or makes, or sends notice of any intended, bulk sale; the sale, assignment, transfer or delivery of all or substantially all of the assets of the Borrower to a third party; or the cessation by the Borrower as a going business concern; (vi) the Borrower files a petition in bankruptcy or institutes any action under federal or state law for the relief of debtors or seeks or consents to the appointment of an administrator, receiver, custodian or similar official for the wind up of its business (or has such a petition or action filed against it and such petition action or appointment is not dismissed or stayed within sixty  (60)  days); (vii) the reorganization, merger, consolidation or dissolution of the Borrower (or the making of any agreement therefor); (viii) the death or judicial declaration of incompetency of the Borrower, if an individual; (ix) the entry of one or more judgments of any court, other governmental authority or arbitrator against the Borrower in an aggregate amount of $500,000.00 over and above any insurance coverage which has been determined by the insurance carrier to be applicable to the claim underlying the judgment, and any such judgments remain unbonded, unstayed or undismissed for a period of thirty (30) consecutive days; (x) falsity, material omission or inaccuracy of facts submitted to the Bank or any Affiliate (whether in a financial statement or otherwise); (xi) an adverse change in the Borrower, its business, assets, operations, affairs or condition (financial or otherwise) from the status shown on any financial statement or other document submitted to the Bank or any Affiliate, and which change the Bank reasonably determines will have a material adverse affect on (a)  the Borrower, its business, assets, operations or condition (financial or otherwise), or (b) the ability of the Borrower to pay or perform the Obligations; (xii) any pension plan of the Borrower fails to comply with applicable law or has vested unfunded liabilities that, in the opinion of the Bank, might have a material adverse effect on the Borrower’s ability to repay its debts; (xiii) any indication or evidence received by the Bank that the Borrower may have directly or indirectly been engaged in any type of activity which, in the Bank’s reasonable judgment, might result in the forfeiture or any property of the Borrower to any governmental

 

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authority; or (xiv) the occurrence of any event described in Section 6(a)(i) through and including 6(a)(xiii) with respect to any material Subsidiary or to any endorser, guarantor or any other party liable for, or whose assets or any interest therein secures, payment of any of the Obligations.

 

b.              Rights and Remedies Upon Default.  Upon the occurrence of any Event of Default, the Bank without demand of performance or other demand, presentment, protest, advertisement or notice of any kind (except any notice required by law) to or upon the Borrower, any Subsidiary or any other person (all and each of which demands, presentments, protests, advertisements and notices are hereby waived), may exercise all rights and remedies under the Borrower’s or its Subsidiaries’ agreements with the Bank or its Affiliates, applicable law, in equity or otherwise and may declare all or any part of any Obligations not payable on demand to be immediately due and payable without demand or notice of any kind and terminate any obligation it may have to grant any additional loan, credit or other financial accommodation to the Borrower or any Subsidiary.  All or any part of any Obligations whether or not payable on demand, shall be immediately due and payable automatically upon the occurrence of an Event of Default in Section 6(a)(vi) above.  The provisions hereof are not intended in any way to affect any rights of the Bank with respect to any Obligations which may now or hereafter be payable on demand.

 

7.              EXPENSES.  The Borrower shall pay to the Bank on demand all reasonable costs and expenses (including all fees and disbursements of counsel retained for advice, suit, appeal or other proceedings or purpose and of any experts or agents it may retain), which the Bank may incur in connection with (i) the administration of the Obligations, including any administrative fees the Bank may impose for the preparation of discharges, releases or assignments to third-parties; (ii) the enforcement and collection of any Obligations or any guaranty thereof; (iii) the exercise, performance, enforcement or protection of any of the rights of the Bank hereunder; or (iv) the failure of the Borrower or any Subsidiary to perform or observe any provisions hereof.  After such demand for payment of any cost, expense or fee under this Section or elsewhere under this Agreement, the Borrower shall pay interest at the highest default rate specified in any instrument evidencing any of the Obligations from the date payment is demanded by the Bank to the date reimbursed by the Borrower.  All such costs, expenses or fees under this Agreement shall be added to the Obligations.

 

8.              TERMINATION.  This Agreement shall remain in full force and effect until (i) all Obligations outstanding, or contracted or committed for (whether or not outstanding), shall be finally and irrevocably paid in full and (ii) all Transaction Documents have been terminated by the Bank.

 

9.               RIGHT OF SETOFF.  If an Event of Default occurs, the Bank shall have the right to set off against the amounts owing under this Agreement and the other Transaction Documents any property held in a deposit or other account or otherwise with the Bank or its Affiliates or otherwise owing by the Bank or its Affiliates in any capacity to the Borrower, its Subsidiary or any guarantor of, or endorser of any of the Transaction Documents evidencing, the Obligations.  Such setoff shall be deemed to have been exercised immediately at the time the Bank or such Affiliate elect to do so.

 

10.         MISCELLANEOUS.

 

a.               Notices.  Any demand or notice hereunder or under any applicable law pertaining hereto shall be in writing and duly given if delivered to Borrower (at its address on the Bank’s records) or to the Bank (at the address on page one and separately to the Bank officer responsible for Borrower’s relationship with the Bank).  Such notice or demand shall be deemed sufficiently given for all purposes when delivered (i) by personal delivery and shall be deemed effective when delivered, or (ii) by mail or courier and shall be deemed effective three (3) business days after deposit in an official depository maintained by the United States Post Office for the collection of mail or one (1) business day after delivery to a nationally recognized overnight courier service (e.g., Federal Express).  Notice by e-mail is not valid notice under this or any other agreement between Borrower and the Bank.

 

b.              Generally Accepted Accounting Principles.  Any financial calculation to be made, all financial statements and other financial information to be provided, and all books and records, system of accounting and reserves to be kept in connection with the provisions of this Agreement, shall be in accordance with generally accepted accounting principles consistently applied during each interval and from interval to interval; provided, however, that in the event changes in generally accepted accounting principles shall be mandated by the Financial Accounting Standards Board or any similar accounting body of comparable standing, or should be recommended by Borrower’s certified public accountants, to the extent such changes would affect any financial calculations to be made in connection herewith, such changes shall be implemented in making such calculations only from and after such date as Borrower and the Bank shall have amended this Agreement to the extent necessary to reflect such changes in the financial and other covenants to which such calculations relate.

 

c.               Indemnification.  If after receipt of any payment of all, or any part of, the Obligations, the Bank is, for any reason, compelled to surrender such payment to any person or entity because such payment is determined to be void or voidable as a preference, an impermissible setoff, or a diversion of trust funds, or for any other reason other than the gross negligence or willful misconduct of the Bank, the Transaction Documents shall continue in full force and the Borrower shall be liable, and shall indemnify and hold the Bank harmless for, the amount of such payment surrendered.  The provisions of this Section shall be and remain effective notwithstanding any contrary action which may have been taken by the Bank in reliance upon such payment, and any such contrary action so taken shall be without prejudice to the Bank’s rights under the Transaction Documents and shall be deemed to have been conditioned upon such payment having become final and irrevocable.  The provisions of this Section shall survive the termination of this Agreement and the Transaction Documents.

 

d.              Further Assurances.  From time to time, the Borrower shall take, and cause its Subsidiaries to take, such action and execute and deliver to the Bank such additional documents, instruments, certificates, and agreements as the Bank may reasonably request to effectuate the purposes of the Transaction Documents.

 

e.               Cumulative Nature and Non-Exclusive Exercise of Rights and Remedies.  All rights and remedies of the Bank pursuant to this Agreement and the Transaction Documents shall be cumulative, and no such right or remedy shall be exclusive of any other such right or remedy.  In the event of any unreconcilable inconsistencies, this Agreement shall control.  No single or partial exercise by the Bank of any right or remedy

 

6

 

pursuant to this Agreement or otherwise shall preclude any other or further exercise thereof, or any exercise of any other such right or remedy, by the Bank.

 

f.                 Governing Law; Jurisdiction.  This Agreement has been delivered to and accepted by the Bank and will be deemed to be made in the State of New York.  Except as otherwise provided under federal law, this Agreement will be interpreted in accordance with the laws of the State of New York excluding its conflict of laws rules. BORROWER HEREBY IRREVOCABLY CONSENTS TO THE EXCLUSIVE JURISDICTION OF ANY STATE OR FEDERAL COURT IN THE STATE OF NEW YORK IN A COUNTY OR JUDICIAL DISTRICT WHERE THE BANK MAINTAINS A BRANCH AND CONSENTS THAT THE BANK MAY EFFECT ANY SERVICE OF PROCESS IN THE MANNER AND AT BORROWER’S ADDRESS SET FORTH ABOVE FOR PROVIDING NOTICE OR DEMAND; PROVIDED THAT NOTHING CONTAINED IN THIS AGREEMENT WILL PREVENT THE BANK FROM BRINGING ANY ACTION, ENFORCING ANY AWARD OR JUDGMENT OR EXERCISING ANY RIGHTS AGAINST BORROWER INDIVIDUALLY, AGAINST ANY SECURITY OR AGAINST ANY PROPERTY OF BORROWER WITHIN ANY OTHER COUNTY, STATE OR OTHER FOREIGN OR DOMESTIC JURISDICTION.   Borrower acknowledges and agrees that the venue provided above is the most convenient forum for both the Bank and Borrower.  Borrower waives any objection to venue and any objection based on a more convenient forum in any action instituted under this Agreement.

 

g.              Joint and Several; Successors and Assigns.  If there is more than one Borrower, each of them shall be jointly and severally liable for all amounts, which become due, and the performance of all obligations under this Agreement, and the term “the Borrower” shall include each as well as all of them.  This Agreement shall be binding upon the Borrower and upon its heirs and legal representatives, its successors and assignees, and shall inure to the benefit of, and be enforceable by, the Bank, its successors and assignees and each direct or indirect assignee or other transferee of any of the Obligations; provided, however, that this Agreement may not be assigned by the Borrower without the prior written consent of the Bank.

 

h.              Waivers; Changes in Writing.  No failure or delay of the Bank in exercising any power or right hereunder shall operate as a waiver thereof, nor shall any single or partial exercise of any such right or power, or any abandonment or discontinuance of steps to enforce such a right or power, preclude any other or further exercise thereof or the exercise of any other right or power.  The Borrower expressly disclaims any reliance on any course of dealing or usage of trade or oral representation of the Bank (including representations to make loans to the Borrower) and agrees that none of the foregoing shall operate as a waiver of any right or remedy of the Bank.  No notice to or demand on the Borrower in any case shall entitle the Borrower to any other or further notice or demand in similar or other circumstances.  No waiver of any provision of this Agreement or consent to any departure by the Borrower therefrom shall in any event be effective unless made specifically in writing by the Bank and then such waiver or consent shall be effective only in the specific instance and for the purpose for which given.  No modification to any provision of this Agreement shall be effective unless made in writing in an agreement signed by the Borrower and the Bank.

 

i.                  Interpretation.  Unless the context otherwise clearly requires, references to plural includes the singular and references to the singular include the plural; references to “individual” shall mean a natural person and shall include a natural person doing business under an assumed name (e.g., a “DBA”); the word “or” has the inclusive meaning represented by the phrase “and/or”; the word “including”, “includes” and “include” shall be deemed to be followed by the words “without limitation”; and captions or section headings are solely for convenience and not part of the substance of this Agreement.  Any representation, warranty, covenant or agreement herein shall survive execution and delivery of this Agreement and shall be deemed continuous.  Each provision of this Agreement shall be interpreted as consistent with existing law and shall be deemed amended to the extent necessary to comply with any conflicting law.  If any provision nevertheless is held invalid, the other provisions shall remain in effect.  The Borrower agrees that in any legal proceeding, a photocopy of this Agreement kept in the Bank’s course of business may be admitted into evidence as an original.

 

j.                  Waiver of Jury Trial.  THE BORROWER AND THE BANK HEREBY KNOWINGLY, VOLUNTARILY, AND INTENTIONALLY WAIVE ANY RIGHT TO TRIAL BY JURY THE BORROWER AND THE BANK MAY HAVE IN ANY ACTION OR PROCEEDING, IN LAW OR IN EQUITY, IN CONNECTION WITH THIS AGREEMENT OR ANY TRANSACTIONS RELATED HERETO.  THE BORROWER REPRESENTS AND WARRANTS THAT NO REPRESENTATIVE OR AGENT OF THE BANK HAS REPRESENTED, EXPRESSLY OR OTHERWISE, THAT THE BANK WILL NOT, IN THE EVENT OF LITIGATION, SEEK TO ENFORCE THIS JURY TRIAL WAIVER.  THE BORROWER ACKNOWLEDGES THAT THE BANK HAS BEEN INDUCED TO ENTER INTO THIS AGREEMENT BY, AMONG OTHER THINGS, THE PROVISIONS OF THIS SECTION.

 

k.                                       Counterparts.  This Agreement may be executed in one or more counterparts, each of which shall be deemed an original and all of which shall constitute but one and the same instrument, and shall be binding upon each of the undersigned as fully and completely as if all had signed the same instrument.

 

7

 

Acknowledgment.  Borrower acknowledges that it has read and understands all the provisions of this Agreement, including the Governing Law, Jurisdiction and Waiver of Jury Trial, and has been advised by counsel as necessary or appropriate.

 

	
 
    	
M&T   BANK
    
	
 
    	
 
    
	
 
    	
By   
    	
/S/   Susan A. Burtis
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
Name:
    	
Susan   A. Burtis
    
	
 
    	
 
    	
 
    	
 
    
	
 
    	
 
    	
Title:
    	
Vice   President
    
	
 
    	
 
    	
 
    	
 
    
	
 
    	
 
    
	
 
    	
HARDINGE   INC.
    
	
 
    	
 
    
	
 
    	
 
    	
 
    	
 
    
	
 
    	
By   
    	
/S/   Edward J. Gaio
    
	
 
    	
 
    	
 
    	
 
    
	
 
    	
 
    	
Name:
    	
Edward   J. Gaio
    
	
 
    	
 
    	
 
    	
 
    
	
 
    	
 
    	
Title:
    	
Vice   President and CFO
    

 

ACKNOWLEDGMENT

 

	
STATE   OF NEW YORK
    	
)
    
	
 
    	
 
    
	
 
    	
:   SS.
    
	
 
    	
 
    
	
COUNTY   OF BROOME
    	
)
    

 

On the 16th day of December in the year 2011, before me, the undersigned, a Notary Public in and for said State, personally appeared SUSAN A. BURTIS, personally known to me or proved to me on the basis of satisfactory evidence to be the individual(s) whose name(s) is (are) subscribed to the within instrument and acknowledged to me that he/she/they executed the same in his/her/their capacity(ies), and that by his/her/their signature(s) on the instrument, the individual(s), or the person upon behalf of which the individual(s) acted, executed the instrument.

 

	
 
    	
/S/ Patricia A. Bugonian House
    
	
 
    	
Patricia A. Bugonian House
    
	
 
    	
Notary Public
    

 

ACKNOWLEDGMENT

 

 

	
STATE   OF NEW YORK
    	
)
    
	
 
    	
 
    
	
 
    	
:   SS.
    
	
 
    	
 
    
	
COUNTY   OF CHEMUNG
    	
)
    

 

On the 16th day of December, in the year 2011, before me, the undersigned, a Notary Public in and for said State, personally appeared EDWARD J. GAIO, personally known to me or proved to me on the basis of satisfactory evidence to be the individual(s) whose name(s) is (are) subscribed to the within instrument and acknowledged to me that he/she/they executed the same in his/her/their capacity(ies), and that by his/her/their signature(s) on the instrument, the individual(s), or the person upon behalf of which the individual(s) acted, executed the instrument.

 

	
 
    	
/S/ Nancy L. Curren
    
	
 
    	
Nancy L. Curren
    
	
 
    	
Notary Public
    

 

BANK USE ONLY

 

	
Authorization Confirmed:
    	
 
    
	
Signature
    

 

8

 

SCHEDULE

 

Additional Representations and Warranties (§2)

 

1.               Judgments and Litigation.   None

 

Additional Affirmative Covenants (§3)

 

1.               Accounts.  Borrower shall maintain a lock box with the Bank into which Borrower shall cause to be deposited monies payable to it by account debtors.  The Borrower shall maintain an interest bearing account for excess cash balances.

 

2.               The existing outstanding letters of credit of the Borrower and its Subsidiaries shall be blocked against the Loan and advances thereunder.

 

3.               Borrower shall provide to the Bank monthly, Borrowing Base Certificates in form and content satisfactory to the Bank.  “Borrowing Base Certificates” shall mean a report of the Borrower, in the form required by the Bank, certified as true and correct by a responsible officer of the Borrower.

 

Permitted Indebtedness (§4(a)):

 

1.               the Obligations;

 

2.               Guarantees by the Borrower of Indebtedness of any Subsidiary and by any Subsidiary of Indebtedness of the Borrower or any other Subsidiary;

 

3.               Indebtedness that is the subject of that certain Amended and Restated Intercreditor Agreement between Bank and Keybank International Association dated November 29, 2011 in the amount of $1,500,000.00, and any extension, renewal, or replacement thereof.

 

4.               Indebtedness of the Borrower to Chemung Canal Trust Company in the amount of up to $3,000,000.00, and any extension, renewal, or replacement thereof.

 

5.               Indebtedness of Hardinge Machine Tool, B.V., Taiwan Branch or any other Subsidiary of the Borrower to Bank of America, N.A. in an amount of up to $4,000,000.00 through February 29, 2012 and thereafter up to $3,000,000.00, and any extension, renewal, or replacement thereof.

 

Permitted Guaranties (§4(b)):

 

Guaranties by the Borrower of indebtedness of any Subsidiary and by any Subsidiary of indebtedness of the Borrower or any other Subsidiary, and any other Guaranties constituting indebtedness permitted by Section 4(a) hereof.

 

Permitted Liens (§4(c)) means and includes:

 

1.               pledges and deposits made in the ordinary course of business in compliance with workers’ compensation, unemployment insurance and other social security laws or regulations;

 

2.               deposits to secure the performance of bids, trade contracts, leases, statutory obligations, surety and appeal bonds, performance bonds and other obligations of a like nature, in each case in the ordinary course of business;

 

3.               judgment liens in respect of judgments that do not constitute an Event of Default under Section 6(a);

 

4.               easements, zoning restrictions, rights-of-way and similar encumbrances on real property imposed by law or arising in the ordinary course of business that do not secure any monetary obligations and do not materially detract from the value of the affected property or interfere with

 

9

 

the ordinary conduct of business of the Borrower or any Subsidiary; and

 

5.               existing liens set forth on Schedule 4(c) hereto.

 

Permitted Investments (§4(d)) means:

 

1.               direct obligations of, or obligations the principal of and interest on which are unconditionally guaranteed by, the United States of America (or by any agency thereof to the extent such obligations are backed by the full faith and credit of the United States of America), in each case maturing within one year from the date of acquisition thereof;

 

2.               investments in commercial paper maturing within 270 days from the date of acquisition thereof and having, at such date of acquisition, a short-term commercial paper rating of at least A-1 or the equivalent thereof by S&P or at least P-1 or the equivalent thereof by Moody’s, or being guaranteed by any industrial company with a long term unsecured debt rating of at least A or A2, or the equivalent of each thereof, from S&P or Moody’s, as the case may be;

 

3.               investments in certificates of deposit, banker’s acceptances and time deposits maturing within 180 days from the date of acquisition thereof issued or guaranteed by or placed with, and money market deposit accounts issued or offered by, any domestic office of any commercial bank organized under the laws of the United States of America or any State thereof which has a combined capital and surplus and undivided profits of not less than $500,000,000;

 

4.               fully collateralized repurchase agreements with a term of not more than thirty (30) days for securities described in clause #1 above and entered into with a financial institution satisfying the criteria described in clause #3 above;

 

5.               money market funds that (i) comply with the criteria set forth in Securities and Exchange Commission Rule 2a-7 under the Investment Company Act of 1940, (ii) are rated AAA by S&P and Aaa by Moody’s and (iii) have portfolio assets of at least $5,000,000,000;

 

Permitted Loans (§4(e)):

 

Investments, capital contributions, loans or advances made by the Borrower in or to any Subsidiary and made by any Subsidiary to the Borrower in excess of an aggregate amount of $10,000,000.00 outstanding at any one time.  Existing investments and capital contributions by Borrower in any Subsidiary are permitted and are not considered Loans for purposes of the limitations of this Section. In addition, the Parties hereto acknowledge that the Borrower is in the process of contributing its shares of Hardinge Taiwan Precision Machinery Limited to Hardinge Holdings, B.V. in exchange for the shares of Hardinge Holdings, B.V. after which time Borrower will then contribute its shares in Hardinge Holdings, B.V. to Hardinge Holdings, GmbH in exchange for additional capital in Hardinge Holdings, GmbH.  This transfer and subsequent additional capital shall not be considered Loans for the purposes of the limitations of this Section.

 

Additional Miscellaneous Covenants (§11)

 

1.               Advance Formula.  Advances made pursuant to this revolving credit facility shall be limited to a maximum of the line amount or the sum of 80% of Eligible Accounts and Eligible Inventory.

 

2.               Unused Portion Fee.  The Bank will assess an unused portion fee of 3/8% quarterly on the daily unused portion of the commitment to be assessed in arrears at the end of each quarter.  The Bank will bill the Borrower based on this calculation at the end of each quarter during the Loan.  The Borrower shall pay the Bank such unused portion fee promptly upon receipt of invoice for same.

 

10

 

SCHEDULE 4(C)

 

EXISTING LIENS

 

(A)

 

	
Debtor
    	
 
    	
Secured Party
    	
 
    	
Jurisdiction
    	
 
    	
Filing Information
    	
 
    	
Collateral
    
	
Hardinge   Machine Tools Limited
    	
 
    	
Hormann   (UK) Limited
    	
 
    	
UC   Companies House; England and Wales
    	
 
    	
Registered   02/09/2005
    	
 
    	
The   deposit account and all money from time to time placed in the deposit account   in accordance with a certain rent deposit deed
    
	
Hardinge   Machine Tools Limited
    	
 
    	
HMT   Trustees Limited, as Trustee of the Hardinge Machine Tools Limited Staff
    	
 
    	
UK   Companies House; England and Wales
    	
 
    	
To   be registered following completion
    	
 
    	
Debenture   granting security over all assets to secure performance of obligations under   deficit recovery plan in connection with £0.9 million deficit of the Hardinge   Machine Tools Limited Staff Pensions Scheme
    
	
L.   Kellenberger & Co. AG (as successor by merger to HTT Hauser Tripet   Tschudin, Ag)
    	
 
    	
UBS   AG
    	
 
    	
Switzerland
    	
 
    	
10/30/2009
    	
 
    	
Mortgage   on real property in Biel, Switzerland
    
	
Hardinge   Taiwan Precision Machinery Limited
    	
 
    	
Mega   International Commercial Bank
    	
 
    	
Taiwan
    	
 
    	
06/2006
    	
 
    	
Mortgage   on real property in Taiwan
    
	
L.   Kellenberger & Co. AG
    	
 
    	
Credit   Suisse
    	
 
    	
Switzerland
    	
 
    	
8/20/2009
    	
 
    	
Mortgage   on real property in St. Gallen, Switzerland
    
	
Hardinge, Inc.
    	
 
    	
KeyBank   National Association
    	
 
    	
New   York
    	
 
    	
New   York SOS — Filing No. 201112018402949
    	
 
    	
All   personal property
    
	
Hardinge   Precision Machinery (Jiaxing) Co., Ltd
    	
 
    	
China   Construction Bank, Jiaxing Branch
    	
 
    	
China
    	
 
    	
N/A
    	
 
    	
Mortgage   on land use right and construction in process
    

 

(B)                                A lien in favor of Bank of America, N.A. on all personal property assets of Borrower, securing Borrower’s guaranty of the indebtedness of Hardinge Machine Tool, B.V., Taiwan Branch or any other Subsidiary of the Borrower to Bank of America, N.A. as set forth in the Schedule to the Credit Agreement, to the extent set forth in an intercreditor agreement between Bank and Bank of America, N.A.Exhibit 10.6

 

AMENDED AND RESTATED

PURCHASE, SALE, CONTRIBUTION, CONVEYANCE AND

ASSUMPTION AGREEMENT

 

AMONG

 

LIME ROCK RESOURCES A, L.P.,

 

LIME ROCK RESOURCES B, L.P.,

 

LIME ROCK RESOURCES C, L.P.,

 

LRE GP, LLC,

 

LRR ENERGY, L.P.

 

AND

 

LRE OPERATING, LLC

 

 

TABLE OF CONTENTS

 

	
ARTICLE I DEFINITIONS
    	
4
    
	
 
    	
 
    
	
ARTICLE II CONTRIBUTIONS,   ACKNOWLEDGMENTS AND DISTRIBUTIONS
    	
6
    
	
 
    	
 
    	
 
    
	
2.01
    	
Contribution of the MLP Assets by LRR-A
    	
6
    
	
2.02
    	
Contribution and Sale of Net Profit Interests by LRR-B
    	
7
    
	
2.03
    	
Contribution and Sale of Net Profit Interests by LRR-C
    	
7
    
	
2.04
    	
Public Cash Contribution
    	
8
    
	
2.05
    	
Distribution by the Partnership of the Credit Facility   Borrowings
    	
8
    
	
2.06
    	
Payment of Indebtedness Assumed from LRR-A by the   Partnership; Payment of Expenses by the Partnership; Cash Distribution by the   Partnership to the Property Contributors
    	
8
    
	
2.07
    	
Contribution of the MLP Assets by the Partnership to LRE   Operating
    	
9
    
	
2.08
    	
Direct Contribution of MLP Assets
    	
9
    
	
 
    	
 
    	
 
    
	
ARTICLE III ADDITIONAL   TRANSACTIONS
    	
9
    
	
 
    	
 
    	
 
    
	
3.01
    	
Purchase of Additional Common Units
    	
9
    
	
3.02
    	
Issuance of Additional Common Units to LRR-A
    	
9
    
	
3.03
    	
Issuance of Additional Common Units to LRR-B
    	
10
    
	
3.04
    	
Issuance of Additional Common Units to LRR-C
    	
10
    
	
 
    	
 
    	
 
    
	
ARTICLE IV TITLE MATTERS
    	
10
    
	
 
    	
 
    	
 
    
	
4.01
    	
Encumbrances
    	
10
    
	
4.02
    	
Disclaimer of Warranties; Subrogation; Waiver of Bulk Sales   Laws
    	
11
    
	
 
    	
 
    	
 
    
	
ARTICLE V FURTHER ASSURANCES
    	
12
    
	
 
    	
 
    	
 
    
	
5.01
    	
Further Assurances
    	
12
    
	
5.02
    	
Other Assurances
    	
12
    
	
 
    	
 
    	
 
    
	
ARTICLE VI REPRESENTATIONS   AND WARRANTIES
    	
13
    
	
 
    	
 
    	
 
    
	
6.01
    	
Representations and Warranties of All Parties
    	
13
    
	
 
    	
 
    	
 
    
	
ARTICLE VII MISCELLANEOUS
    	
14
    
	
 
    	
 
    	
 
    
	
7.01
    	
Notices
    	
14
    
	
7.02
    	
Order of Completion of Transactions
    	
15
    
	
7.03
    	
Costs
    	
15
    
	
7.04
    	
Headings; References; Interpretation
    	
15
    
	
7.05
    	
Successors and Assigns
    	
15
    
	
7.06
    	
No Third Party Rights
    	
15
    
	
7.07
    	
Counterparts
    	
15
    
	
7.08
    	
Governing Law
    	
16
    
	
7.09
    	
Severability
    	
16
    
	
7.10
    	
Amendment or Modification
    	
16
    
	
7.11
    	
Integration
    	
16
    

 

i

 

	
SCHEDULE   I
    	
 
    
	
 
    	
 
    
	
SCHEDULE   II
    	
 
    
	
 
    	
 
    
	
ANNEX   A  
    	
Form of   Assignment and Bill of Sale
    

 

ii

 

AMENDED AND RESTATED

PURCHASE, SALE, CONTRIBUTION, CONVEYANCE AND

ASSUMPTION AGREEMENT

 

This Amended and Restated Purchase, Sale, Contribution, Conveyance and Assumption Agreement (this “Agreement”), dated effective as of November 16, 2011 (the “Closing Date”), is entered into by and among Lime Rock Resources A, L.P., a Delaware limited partnership (“LRR-A”), Lime Rock Resources B, L.P., a Delaware limited partnership (“LRR-B”), Lime Rock Resources C, L.P., a Delaware limited partnership (“LRR-C,” and together with LRR-A and LRR-B, the “Property Contributors”), LRE GP, LLC, a Delaware limited liability company (the “General Partner”), LRR Energy, L.P., a Delaware limited partnership (the “Partnership”), and LRE Operating, LLC, a Delaware limited liability company (“LRE Operating”).  LRR-B and LRR-C are referred to collectively as the “NPI Owners.” The above-named entities are sometimes referred to in this Agreement each as a “Party” and collectively as the “Parties.” Capitalized terms used herein shall have the meaning assigned to such terms in Article I.

 

RECITALS:

 

WHEREAS, the General Partner and Lime Rock Management LP, a Delaware limited partnership (“Lime Rock Management”), formed the Partnership pursuant to the Delaware Revised Uniform Limited Partnership Act, as amended (the “Delaware LP Act”) to engage in any lawful activity for which limited partnerships may be organized under the Delaware LP Act; and

 

WHEREAS, to accomplish the objectives and purposes in the preceding recital, each of the following actions has been taken prior to the date hereof:

 

1.             Lime Rock Management formed the General Partner pursuant to the Delaware Limited Liability Company Act, as amended (the “Delaware LLC Act’) and contributed $1,000 in exchange for all of the membership interests in the General Partner;

 

2.             the General Partner and Lime Rock Management formed the Partnership pursuant to the Delaware LP Act, and the General Partner contributed $1 to the Partnership in exchange for a 0.1% general partner interest in the Partnership, and Lime Rock Management contributed $999 to the Partnership in exchange for a 99.9% limited partner interest in the Partnership;

 

3.             the Partnership formed LRE Operating pursuant to the Delaware LLC Act and contributed $1,000 to LRE Operating in exchange for all of the membership interests in LRE Operating; and

 

WHEREAS, LRR-A owns certain working interests in the MLP Assets; and

 

WHEREAS, the NPI Owners own net profits interests that burden, among other properties, the MLP Assets; and

 

 

WHEREAS, concurrently with the consummation of the transactions contemplated hereby, each of the following actions shall occur on the Closing Date:

 

1.             Lime Rock Management will contribute $175,600.00 on the Closing Date and agree to contribute an additional $250,000.00 in the aggregate, to the General Partner in exchange for 100% of the Class A Interests in the General Partner;

 

2.             LRR-A will contribute $28,578.80 representing its pro rata share of the fair market value of the Incentive Distribution Rights, in the aggregate, to the General Partner in exchange for 14.2894% of the Class B Interests in the General Partner;

 

3.             LRR-B will contribute $9,475.20 representing its pro rata share of the fair market value of the Incentive Distribution Rights, in the aggregate, to the General Partner in exchange for 4.7376% of the Class B Interests in the General Partner;

 

4.             LRR-C will contribute $161,946.00 representing its pro rata share of the fair market value of the Incentive Distribution Rights, in the aggregate, to the General Partner in exchange for 80.9730% of the Class B Interests in the General Partner;

 

5.             Lime Rock Resources II-A, L.P., a Delaware limited partnership, will contribute $8,195.00 representing its pro rata share of the fair market value of the Incentive Distribution Rights, in the aggregate, to the General Partner in exchange for 16.39% of the Class C Interests in the General Partner;

 

6.             Lime Rock Resources II-C, L.P., a Delaware limited partnership, will contribute $41,805.00 representing its pro rata share of the fair market value of the Incentive Distribution Rights, in the aggregate, to the General Partner in exchange for 83.61% of the Class C Interests in the General Partner;

 

7.             the General Partner will contribute $425,600.00 (the “LRM GP Contribution”) to the Partnership in exchange for a continuation of its prior 0.1% general partner interest in the Partnership, represented by 22,400 general partner units;

 

8.             LRR-A will contribute the MLP Assets to the Partnership pursuant to the Assignment Document (as defined herein) in exchange for (i) 960,247 subordinated units representing a 4.29% limited partner interest in the Partnership, (ii) 691,378 common units representing a 3.09% limited partner interest in the Partnership, (iii) the right to receive a distribution of $28,562,659.05 (such distribution to be sourced from Credit Facility Borrowings (as defined below) to reimburse LRR-A for pre-formation capital expenditures), (iv) LRE Operating’s assumption of $27,251,250.00 of LRR-A’s existing indebtedness, and LRE Operating’s agreement to pay such indebtedness immediately following LRR-A’s contribution of the MLP Assets to the Partnership in exchange for a release of the lien on such MLP Assets securing such indebtedness, and (v) the right to receive, upon the expiration of the Option Period, (A) the number of additional common units that is equal to (x) the Additional Units minus the aggregate number of common units, if any, actually purchased by and issued to the Underwriters (as defined herein) pursuant to the exercise of the Over-Allotment Option during the Option Period, multiplied by (y) 14.2894% (rounded down to the nearest whole number of common units), and (B) as reimbursement for pre-

 

2

 

formation capital expenditures an amount equal to (x) the aggregate amount of net proceeds, if any, paid by the Underwriters to the Partnership with respect to common units purchased by and issued to the Underwriters pursuant to the exercise of the Over-Allotment Option, multiplied by (y) 14.2894%;

 

9.             LRR-B will sell, transfer and assign those net profits interests described on Schedule I, insofar and only insofar as the same burden the MLP Assets, to the Partnership pursuant to the Assignment Document in exchange for (i) the right to receive sales proceeds of $14,470,067.69 (such amount to be sourced first from the proceeds from the Offering and then, to the extent necessary, from Credit Facility Borrowings), and (ii) the right to receive, upon the earlier to occur of the expiration of the Over-Allotment Option period or the Option Closing Date, an additional amount equal to (A) the aggregate amount of net proceeds, if any, paid by the Underwriters to the Partnership on the Option Closing Date with respect to common units purchased by and issued to the Underwriters pursuant to the exercise of the Over-Allotment Option, multiplied by (B) 4.7376%; and LRR-B will contribute its remaining net profits interests that burden the MLP Assets to the Partnership pursuant to the Assignment Document in exchange for (i) 318,368 subordinated units representing a 1.42% limited partner interest in the Partnership, (ii) 229,224 common units representing a 1.02% limited partner interest in the Partnership, and (iii) the right to receive, upon the expiration of the Option Period, the number of additional common units that is equal to (A) the Additional Units minus the aggregate number of common units, if any, actually purchased by and issued to the Underwriters pursuant to the exercise of the Over-Allotment Option, multiplied by (B) 4.7376% (rounded down to the nearest whole number of common units);

 

10.           LRR-C will sell, transfer and assign those net profits interests described on Schedule II, insofar and only insofar as the same burden the MLP Assets, to the Partnership pursuant to the Assignment Document in exchange for (i) the right to receive sales proceeds of $246,849,143.26 (such amount to be sourced first from the proceeds from the Offering and then, to the extent necessary, from Credit Facility Borrowings), and (ii) the right to receive, upon the earlier to occur of the expiration of the Over-Allotment Option period or the Option Closing Date, an additional amount equal to (A) the aggregate amount of net proceeds, if any, paid by the Underwriters to the Partnership on the Option Closing Date with respect to common units purchased by and issued to the Underwriters pursuant to the exercise of the Over-Allotment Option, multiplied by (B) 80.9730%; and LRR-C will contribute its remaining net profits interests that burden the MLP Assets to the Partnership pursuant to the Assignment Document in exchange for (i) 5,441,385 subordinated units representing a 24.29% limited partner interest in the Partnership, (ii) 3,917,798 common units representing a 17.5% limited partner interest in the Partnership, and (iii) the right to receive, upon the expiration of the Option Period, the number of additional common units that is equal to (A) the Additional Units minus the aggregate number of common units, if any, actually purchased by and issued to the Underwriters pursuant to the exercise of the Over-Allotment Option, multiplied by (B) 80.9730% (rounded down to the nearest whole number of common units);

 

11.           in connection with the Partnership’s initial public offering of common units representing limited partner interests in the Partnership (the “Offering”), the public, through the Underwriters, will purchase from the Partnership for $178,752,000.00 in cash, less the

 

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Underwriters’ discount and commission of $1.1875 per common unit (or $11,172,000.00 in the aggregate) and a structuring fee of 0.25% of the gross proceeds of the Offering (or $446,880.00 in the aggregate), 9,408,000 common units representing a 42.00% limited partner interest in the Partnership;

 

12.           LRE Operating will enter into the Credit Agreement (as defined herein) and borrow $155,800,000.00 (the “Credit Facility Borrowings”), the proceeds of which will be used to make distributions to the Property Contributors in accordance with the Property Contributor Cash Distributions (as defined below);

 

13.           the Partnership will use the proceeds from the Offering and proceeds from the Credit Facility Borrowings to pay (i) the indebtedness of LRR-A assumed by LRE Operating, (ii) transaction expenses, which are estimated to be $5,800,000.00 (exclusive of the Underwriters’ discount and commission and the structuring fee) and (iii) payments and distributions to the Property Contributors in accordance with the cash distributions described in steps 8 through 10 above (the “Property Contributor Cash Distributions”);

 

14.           the Partnership will contribute the MLP Assets to LRE Operating in exchange for the continuation of its membership interest in LRE Operating; and

 

15.           for purposes of convenience and recording, the Partnership will direct (i) LRR-A to directly transfer the MLP Assets and (ii) the NPI Owners to directly sell, assign, transfer or contribute, as the case may be, their net profits interests that burden the MLP Assets, each to LRE Operating pursuant to the terms of the Assignment Document.

 

NOW, THEREFORE, in consideration of the mutual covenants, representations, warranties and agreements herein contained, the parties hereto agree as follows:

 

ARTICLE I
 DEFINITIONS

 

“Additional Units” means 1,411,200 additional common units that may be issued by the MLP and sold by the Underwriters to the public pursuant to the Over-Allotment Option.

 

“Agreement” has the meaning assigned to such term in the preamble.

 

“Assignment Document” means the form of Assignment and Bill of Sale attached hereto as Exhibit A.

 

“Class A Interests” means the Class A member interests in the General Partner.

 

“Class B Interests” means the Class B member interests in the General Partner.

 

“Class C Interests” means the Class C member interests in the General Partner.

 

“Closing Date” has the meaning assigned to such term in the preamble.

 

“Commission” means the United States Securities and Exchange Commission.

 

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“Credit Agreement” means the Credit Agreement, dated as of July 22, 2011, as amended to date, among Wells Fargo Bank, National Association, as Administrative Agent and Bank of America, N.A. as Syndication Agent, and the lenders party thereto on the one hand, and the Partnership and LRE Operating, on the other hand.

 

“Credit Facility Borrowings” has the meaning assigned to such term in the recitals.

 

“Delaware LLC Act” has the meaning assigned to such term in the recitals.

 

“Delaware LP Act” has the meaning assigned to such term in the recitals.

 

“General Partner” has the meaning assigned to such term in the preamble.

 

“Governmental Authority” means the United States, any foreign country, state, county, city or other incorporated or unincorporated political subdivision, agency or instrumentality thereof.

 

“Incentive Distribution Rights” has the meaning assigned to such term in the Partnership Agreement.

 

“Lime Rock Management” has the meaning assigned to such term in the recitals.

 

“LRE Operating” has the meaning assigned to such term in the preamble.

 

“LRM GP Contribution” has the meaning assigned to such term in the recitals.

 

“LRR-A” has the meaning assigned to such term in the preamble.

 

“LRR-B” has the meaning assigned to such term in the preamble.

 

“LRR-C” has the meaning assigned to such term in the preamble.

 

“Material Adverse Effect” has the meaning assigned to such term in Section 6.01(c)(i) hereof.

 

“MLP Assets” means the assets that will be transferred to LRE Operating pursuant to Section 2.1 of the Assignment Document.

 

“NPI Owners” has the meaning assigned to such term in the preamble.

 

“Offering” has the meaning assigned to such term in the recitals.

 

“Option Closing Date” has the meaning assigned to such term in the Underwriting Agreement.

 

“Option Period” has the meaning assigned to such term in the Underwriting Agreement.

 

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“Over-Allotment Option” means the option to purchase all or any portion of the Additional Units to cover over-allotments, if any, granted by the Partnership to the Underwriters pursuant to the Underwriting Agreement.

 

“Partnership” has the meaning assigned to such term in the preamble.

 

“Partnership Agreement” means the First Amended and Restated Agreement of Limited Partnership of the Partnership to be entered into as of the Closing Date.

 

“Partnership Entities” means the General Partner, the Partnership and LRE Operating, collectively.

 

“Party” and “Parties” have the meanings assigned to such terms in the preamble.

 

“Property Contributor Cash Distributions” has the meaning assigned to such term in the recitals.

 

“Property Contributors” has the meaning assigned to such term in the preamble.

 

“Registration Statement” means the Registration Statement on Form S-1 initially filed with the Commission on May 6, 2011 (Registration No. 333-174017), as amended and effective on the date hereof.

 

“Transaction Documents” means those documents and instruments to be delivered hereunder by one or more Parties.

 

“Underwriters” means the underwriters named in Exhibit A to the Underwriting Agreement.

 

“Underwriting Agreement” means the underwriting agreement, dated as of November 10, 2011, by and among the Partnership, the General Partner and Wells Fargo Securities, LLC, Citigroup Global Markets Inc., Raymond James & Associates, Inc., RBC Capital Markets Corporation and Barclays Capital Inc., as representatives of the Underwriters.

 

ARTICLE II

CONTRIBUTIONS, ACKNOWLEDGMENTS AND DISTRIBUTIONS

 

2.01         Contribution of the MLP Assets by LRR-A.

 

LRR-A hereby agrees to contribute, assign, transfer, set over and deliver to the Partnership, for its own use forever, all of its right, title and interest to and in the MLP Assets on the Closing Date, as a capital contribution, which contribution shall be deemed made pursuant to the terms set forth in the Assignment Document, in exchange for (i) 960,247 subordinated units representing a 4.29% limited partner interest in the Partnership, (ii) 691,378 common units representing a 3.09% limited partner interest in the Partnership, (iii) the right to receive a distribution of $28,562,659.05 (such distribution will be sourced first from Credit Facility Borrowings and then, to the extent necessary, from the proceeds received from the Offering to reimburse LRR-A for pre-formation capital expenditures), (iv) LRE Operating’s assumption of

 

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$27,251,250.00 of LRR-A’s existing indebtedness, and LRE Operating does hereby assume such indebtedness and agree to pay such indebtedness immediately following LRR-A’s contribution of the MLP Assets to the Partnership in exchange for a release of the lien on such MLP Assets securing such indebtedness, provided that LRE Operating’s assumption of such indebtedness shall not affect the obligations of LRR-A to its lenders; LRR-A shall remain fully liable to such lenders for such indebtedness and LRR-A shall deal with such lenders as if such assumption had not occurred (however, between LRR-A, on the one hand, and LRE Operating, on the other, LRE Operating shall be deemed the obligor with respect to such indebtedness), and (v) the right to receive, upon the expiration of the Option Period, (A) the number of additional common units that is equal to (x) the Additional Units minus the aggregate number of common units, if any, actually purchased by and issued to the Underwriters pursuant to the exercise of the Over-Allotment Option during the Option Period, multiplied by (y) 14.2894% (rounded down to the nearest whole number of common units), and (B) as reimbursement for pre-formation capital expenditures, an amount equal to (x) the aggregate amount of net proceeds, if any, paid by the Underwriters to the Partnership with respect to Additional Units purchased by and issued to the Underwriters pursuant to the exercise of the Over-Allotment Option, multiplied by (y) 14.2894%.

 

2.02         Contribution and Sale of Net Profit Interests by LRR-B.

 

LRR-B hereby agrees to sell, assign and transfer those net profits interests described on Schedule I, insofar and only insofar as the same burden the MLP Assets, to the Partnership on the Closing Date, which sale shall be deemed made pursuant to the terms set forth in the Assignment Document, in exchange for (i) the right to receive sales proceeds of $14,470,067.69 (such amount will be sourced first from proceeds from the Offering and then, to the extent necessary, from Credit Facility Borrowings), and (ii) the right to receive, upon the earlier to occur of the expiration of the Over-Allotment Option period or the Option Closing Date, an additional amount equal to (A) the aggregate amount of net proceeds, if any, paid by the Underwriters to the Partnership on the Option Closing Date with respect to common units purchased by and issued to the Underwriters pursuant to the exercise of the Over-Allotment Option, multiplied by (B) 4.7376%.  LRR-B hereby agrees to contribute its remaining net profits interests, insofar and only insofar as the same burden the MLP Assets, to the Partnership as a capital contribution on the Closing Date, which contribution shall be deemed made pursuant to the terms set forth in the Assignment Document, in exchange for (i) 318,368 subordinated units representing a 1.42% limited partner interest in the Partnership, (ii) 229,224 common units representing a 1.02% limited partner interest in the Partnership, and (iii) the right to receive, upon the expiration of the Option Period, the number of additional common units that is equal to (A) the Additional Units minus the aggregate number of common units, if any, actually purchased by and issued to the Underwriters pursuant to the exercise of the Over-Allotment Option, multiplied by (B) 4.7376% (rounded down to the nearest whole number of common units).

 

2.03         Contribution and Sale of Net Profit Interests by LRR-C.

 

LRR-C hereby agrees to sell, assign and transfer those net profits interests described on Schedule II, insofar and only insofar as the same burden the MLP Assets, to the Partnership on the Closing Date, which sale shall be deemed made pursuant to the terms set forth in the

 

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Assignment Document, in exchange for (i) the right to receive sales proceeds of $246,849,143.26 (such amount will be sourced first from proceeds from the Offering and then, to the extent necessary, from Credit Facility Borrowings), and (ii) the right to receive, upon the earlier to occur of the expiration of the Over-Allotment Option period or the Option Closing Date, an additional amount equal to (A) the aggregate amount of net proceeds, if any, paid by the Underwriters to the Partnership on the Option Closing Date with respect to common units purchased by and issued to the Underwriters pursuant to the exercise of the Over-Allotment Option, multiplied by (B) 80.9730%.  LRR-C hereby agrees to contribute its remaining net profits interests, insofar and only insofar as the same burden the MLP Assets, to the Partnership as a capital contribution on the Closing Date, which contribution shall be deemed made pursuant to the terms set forth in the Assignment Document, in exchange for (i) 5,441,385 subordinated units representing a 24.29% limited partner interest in the Partnership, (ii) 3,917,798 common units representing a 17.5% limited partner interest in the Partnership, and (iii) the right to receive, upon the expiration of the Option Period, the number of additional common units that is equal to (A) the Additional Units minus the aggregate number of common units, if any, actually purchased by and issued to the Underwriters pursuant to the exercise of the Over-Allotment Option, multiplied by (B) 80.9730% (rounded down to the nearest whole number of common units).

 

2.04         Public Cash Contribution.

 

The Parties acknowledge a cash contribution to be made on the Closing Date by the public through the Underwriters to the Partnership of $178,752,000.00, less the Underwriters’ discount and commission of $1.1875 per common unit (or $11,172,000.00 in the aggregate) and a structuring fee of 0.25% of the gross proceeds of the Offering (or $446,880.00 in the aggregrate), in exchange for 9,408,000 common units representing a 42.00% limited partner interest in the Partnership.

 

2.05         Distribution by the Partnership of the Credit Facility Borrowings.

 

The Parties acknowledge the distribution of the Credit Facility Borrowings to the Property Contributors to be made on the Closing Date in accordance with the Property Contributor Cash Distributions.

 

2.06         Payment of Indebtedness Assumed from LRR-A; Payment of Expenses by the Partnership; Cash Distribution by the Partnership to the Property Contributors.

 

The Parties acknowledge (a) the payment to be made on the Closing Date by LRE Operating of the indebtedness assumed from LRR-A with proceeds from the Credit Facility Borrowings, (b) the payment to be made on the Closing Date by the Partnership, in connection with the Offering and the other transactions contemplated hereby, of transaction expenses in the amount of approximately $5,800,000.00 (exclusive of the Underwriters’ discount and the structuring fee) and (c) the payment and distribution of cash to be made on the Closing Date by the Partnership to the Property Contributors in accordance with the Property Contributor Cash Distributions.

 

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2.07         Contribution of the MLP Assets by the Partnership to LRE Operating.

 

The Partnership hereby agrees to contribute, assign, transfer, set over and deliver to LRE Operating, for its own use forever, all of its right, title and interest to and in the MLP Assets on the Closing Date, as a capital contribution, which contribution shall be deemed made pursuant to the terms set forth in the Assignment Document, in exchange for a continuation of its membership interest in LRE Operating.

 

2.08         Direct Contribution of MLP Assets.

 

For convenience and purposes of recording the Assignment Document in the applicable counties where the MLP Assets are located, the Partnership hereby directs the Property Contributors to directly transfer and assign the MLP Assets to LRE Operating on the Closing Date pursuant to the Assignment Document and such other additional instruments and agreements as may be necessary to effect the same. Notwithstanding the terms of the Assignment Document, the MLP Assets shall be deemed to have been contributed and transferred from the Property Contributors to the Partnership and, immediately thereafter, from the Partnership to LRE Operating.

 

2.09         Redemption of the Initial Partner Interests in the Partnership and Return of Initial Capital Contributions.

 

The Partnership (a) hereby redeems (i) the 99.9% limited partner interest in the Partnership held by Lime Rock Management and (ii) the 0.1% general partner interest in the Partnership held by the General Partner and (b) hereby refunds and distributes (i) to Lime Rock Management the initial capital contribution made by it to the Partnership along with 99.9% of any interest or other profit that resulted from the investment or other use of such initial capital contribution and (ii) to the General Partner the initial capital contribution made by it to the Partnership along with 0.1% of any interest or other profit that resulted from the investment or other use of such initial capital contribution.

 

ARTICLE III
 ADDITIONAL TRANSACTIONS

 

3.01         Purchase of Additional Common Units.

 

At the end of the Option Period, if the Over-Allotment Option is exercised in whole or in part, the public, through the Underwriters, will contribute additional cash to the Partnership in exchange for up to an additional 1,411,200 common units on the basis of the initial public offering price per common unit set forth in the Registration Statement.

 

3.02         Issuance of Additional Common Units to LRR-A.

 

At the end of the Option Period, (A) the Partnership will issue to LRR-A a number of additional common units that is equal to (x) the Additional Units minus the aggregate number of common units, if any, actually purchased by and issued to the Underwriters pursuant to the exercise of the Over-Allotment Option during the Option Period, multiplied by (y) 14.2894% (rounded down to the nearest whole number of common units), and (B) LRR-A will receive a cash distribution as reimbursement for pre-formation capital expenditures equal to (x) the aggregate amount of net proceeds, if any, paid by the Underwriters to the Partnership with

 

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respect to Additional Units purchased by and issued to the Underwriters pursuant to the exercise of the Over-Allotment Option, multiplied by (y) 14.2894%, representing a portion of the cash, if any, contributed by the Underwriters to the Partnership on each Option Closing Date pursuant to Section 3.01.

 

3.03         Issuance of Additional Common Units to LRR-B.

 

At the end of the Option Period, (A) the Partnership will issue to LRR-B a number of additional common units that is equal to (x) the Additional Units minus the aggregate number of common units, if any, actually purchased by and issued to the Underwriters pursuant to the exercise of the Over-Allotment Option during the Option Period, multiplied by (y) 4.7376% (rounded down to the nearest whole number of common units), and (B) LRR-B will receive a cash payment as additional purchase price for the net profits interests described on Schedule I equal to (x) the aggregate amount of net proceeds, if any, paid by the Underwriters to the Partnership with respect to Additional Units purchased by and issued to the Underwriters pursuant to the exercise of the Over-Allotment Option, multiplied by (y) 4.7376%, representing a portion of the cash, if any, contributed by the Underwriters to the Partnership on each Option Closing Date pursuant to Section 3.01.

 

3.04         Issuance of Additional Common Units to LRR-C.

 

At the end of the Option Period, (A) the Partnership will issue to LRR-C a number of additional common units that is equal to (x) the Additional Units minus the aggregate number of common units, if any, actually purchased by and issued to the Underwriters pursuant to the exercise of the Over-Allotment Option during the Option Period, multiplied by (y)  80.9730% (rounded down to the nearest whole number of common units), and (B) LRR-C will receive a cash payment as additional purchase price for the net profits interests described on Schedule II equal to (x) the aggregate amount of net proceeds, if any, paid by the Underwriters to the Partnership with respect to Additional Units purchased by and issued to the Underwriters pursuant to the exercise of the Over-Allotment Option, multiplied by (y) 80.9730%, representing a portion of the cash, if any, contributed by the Underwriters to the Partnership on each Option Closing Date pursuant to Section 3.01.

 

ARTICLE IV
 TITLE MATTERS

 

4.01         Encumbrances.

 

(a)           Except to the extent expressly provided in any other document executed in connection with this Agreement or the Offering, the contribution of the MLP Assets pursuant to this Agreement are made expressly subject to all recorded and unrecorded liens (other than consensual liens), easements, rights-of-way, contracts, permits, licenses, instruments, commitments, conveyances, encumbrances, agreements, defects, restrictions, advance claims and all laws, rules, regulations, ordinances, judgments and orders of Governmental Authorities or tribunals having or asserting jurisdiction over the MLP Assets and operations conducted thereon or in connection therewith, in each case to the extent the same are valid and enforceable and

 

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affect the MLP Assets, including all matters that a current survey or visual inspection of the MLP Assets would reflect.

 

(b)           To the extent that certain jurisdictions in which the MLP Assets are located may require that documents be recorded in order to evidence the transfers of titles reflected in this Agreement, then the provisions set forth in Section 4.01(a) shall also be applicable to the transfers under such documents.

 

4.02         Disclaimer of Warranties; Subrogation; Waiver of Bulk Sales Laws.

 

(a)           EXCEPT TO THE EXTENT PROVIDED IN ANY OTHER DOCUMENT EXECUTED OR DELIVERED IN CONNECTION WITH THIS AGREEMENT OR THE OFFERING, THE PARTIES ACKNOWLEDGE AND AGREE THAT NONE OF THE PARTIES HAS MADE, DOES NOT MAKE, AND EACH SUCH PARTY SPECIFICALLY NEGATES AND DISCLAIMS, ANY REPRESENTATIONS, WARRANTIES, PROMISES, COVENANTS, AGREEMENTS OR GUARANTIES OF ANY KIND OR CHARACTER WHATSOEVER, WHETHER EXPRESS, IMPLIED OR STATUTORY, ORAL OR WRITTEN, PAST OR PRESENT, REGARDING (A) THE VALUE, NATURE, QUALITY OR CONDITION OF THE MLP ASSETS, INCLUDING THE WATER, SOIL, GEOLOGY OR ENVIRONMENTAL CONDITION OF THE MLP ASSETS GENERALLY, INCLUDING THE PRESENCE OR LACK OF HAZARDOUS SUBSTANCES OR OTHER MATTERS ON THE MLP ASSETS, (B) THE INCOME TO BE DERIVED FROM THE MLP ASSETS, (C) THE SUITABILITY OF THE MLP ASSETS FOR ANY AND ALL ACTIVITIES AND USES THAT MAY BE CONDUCTED THEREON, (D) THE COMPLIANCE OF OR BY THE MLP ASSETS OR THEIR OPERATION WITH ANY LAWS (INCLUDING ANY ZONING, ENVIRONMENTAL PROTECTION, POLLUTION OR LAND USE LAWS, RULES, REGULATIONS, ORDERS OR REQUIREMENTS), OR (E) THE HABITABILITY, MERCHANTABILITY, MARKETABILITY, PROFITABILITY OR FITNESS FOR A PARTICULAR PURPOSE OF THE MLP ASSETS. EXCEPT TO THE EXTENT PROVIDED IN ANY OTHER DOCUMENT EXECUTED OR DELIVERED IN CONNECTION WITH THIS AGREEMENT OR THE OFFERING, THE PARTIES ACKNOWLEDGE AND AGREE THAT EACH HAS HAD THE OPPORTUNITY TO INSPECT THE MLP ASSETS, AND EACH IS RELYING SOLELY ON ITS OWN INVESTIGATION OF THE MLP ASSETS AND NOT ON ANY INFORMATION PROVIDED OR TO BE PROVIDED BY ANY OF THE PARTIES. NONE OF THE PARTIES IS LIABLE OR BOUND IN ANY MANNER BY ANY VERBAL OR WRITTEN STATEMENTS, REPRESENTATIONS OR INFORMATION PERTAINING TO THE MLP ASSETS FURNISHED BY ANY AGENT, EMPLOYEE, SERVANT OR THIRD PARTY. EACH OF THE PARTIES ACKNOWLEDGES THAT TO THE FULLEST EXTENT PERMITTED BY LAW, THE CONTRIBUTION OF THE MLP ASSETS AS PROVIDED FOR HEREIN IS MADE IN AN “AS IS, WHERE IS” CONDITION WITH ALL FAULTS, AND THE MLP ASSETS ARE CONTRIBUTED AND CONVEYED SUBJECT TO ALL OF THE MATTERS CONTAINED IN THIS SECTION. THIS SECTION SHALL SURVIVE SUCH CONTRIBUTION AND CONVEYANCE OR THE TERMINATION OF THIS AGREEMENT. THE PROVISIONS OF THIS SECTION HAVE BEEN NEGOTIATED BY THE PARTIES AFTER DUE CONSIDERATION AND ARE INTENDED TO BE A COMPLETE EXCLUSION AND NEGATION OF ANY REPRESENTATIONS OR WARRANTIES, WHETHER EXPRESS, IMPLIED OR

 

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STATUTORY, WITH RESPECT TO THE MLP ASSETS THAT MAY ARISE PURSUANT TO ANY LAW NOW OR HEREAFTER IN EFFECT, OR OTHERWISE.

 

(b)           Each contribution under the Assignment Document shall include all of the assigning party’s right, title and interest under and by virtue of all warranties pertaining to the MLP Assets, express or implied (including, without limitation, title warranties and manufacturers’, suppliers’ and contractors’ warranties), that have, prior to the date of such contribution, been made by any of the assigning party’s predecessors in title (excluding any affiliate of such assigning party) or by any third party manufacturers, suppliers and contractors. Each sale and contribution under the Assignment Document shall be made with full substitution and subrogation in and to all of the warranties that the assigning party has or may have against predecessors in title (excluding any affiliate of such assigning party) and with full subrogation of all rights accruing under the applicable statutes of limitations and all rights and actions of warranty against all former owners of the MLP Assets (excluding any affiliate of the assigning party).

 

(c)           Each of the Parties agrees that the disclaimers contained in this Section 4.02 are “conspicuous” disclaimers. Any covenants implied by statute or law by the use of the words “contribute,” “distribute,” “assign,” “transfer,” “deliver” or “set over” or any of them or any other words used in this Agreement are hereby expressly disclaimed, waived or negated.

 

(d)           Each of the Parties hereby waives compliance with any applicable bulk sales law or any similar law in any applicable jurisdiction in respect of the transactions contemplated by this Agreement.

 

ARTICLE V
 FURTHER ASSURANCES

 

5.01         Further Assurances.

 

From and after the date hereof, and without any further consideration, the Parties agree to execute, acknowledge and deliver all such additional deeds, assignments, bills of sale, instruments, notices, releases, acquittances and other documents, and will do all such other acts and things, all in accordance with applicable law, as may be necessary or appropriate to (a) more fully assure that the applicable Parties own all of the properties, rights, titles, interests, estates, remedies, powers and privileges granted by this Agreement or (b) more fully and effectively vest in the applicable Parties and their respective successors and assigns beneficial and record title to the interests contributed and assigned by this Agreement or intended so to be and more fully and effectively carry out the purposes of this Agreement.

 

5.02         Other Assurances.

 

(a)           From time to time after the date hereof, and without any further consideration, each of the Parties shall execute, acknowledge and deliver all such additional instruments, notices and other documents, and will do all such other acts and things, all in accordance with applicable law, as may be necessary or appropriate to more fully and effectively carry out the purposes and intent of this Agreement.

 

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(b)           Without limiting the generality of the foregoing, the Parties acknowledge that they have used their good faith efforts to identify all of the assets being contributed to the Partnership in connection with the Offering. However, it is possible that assets intended to be sold and contributed to the Partnership were not identified and therefore are not included in the MLP Assets. To the extent that such assets are identified at a later date, the Parties shall take the appropriate actions required in order to convey all such assets to the Partnership (or its successors or assigns).

 

ARTICLE VI
 REPRESENTATIONS AND WARRANTIES

 

6.01         Representations and Warranties of All Parties.

 

Each of the Parties to this Agreement hereby represents and warrants severally as to itself as follows:

 

(a)           Formation and Good Standing. Such Party is a limited partnership or limited liability company, duly formed, validly existing and in good standing as a limited partnership or limited liability company, as applicable, under the laws of its jurisdiction of formation.  Such Party is duly qualified to do business and is in good standing as a foreign limited partnership or limited liability company, as applicable, in each jurisdiction where the character of the properties owned or leased by it or the nature of the businesses transacted by it requires it to be so qualified.

 

(b)           Authority, Execution and Enforceability. Such Party has full limited partnership or limited liability company, as applicable, power and authority to enter into this Agreement and the Transaction Documents to be delivered by such Party hereunder and to perform its obligations hereunder and thereunder. The execution, delivery and performance of this Agreement and the Transaction Documents to be delivered by such Party hereunder and the consummation of the transactions contemplated hereby and thereby have been duly authorized and approved by such Party. Such Party has duly executed and delivered this Agreement and the Transaction Documents to be delivered by such Party hereunder, and this Agreement and the Transaction Documents to be delivered by such Party hereunder constitute such Party’s legal, valid and binding obligation, enforceable against it in accordance with its terms (except as enforceability may be limited by applicable bankruptcy, insolvency, reorganization, moratorium or similar laws affecting creditors’ rights generally or by the principles governing the availability of equitable remedies).

 

(c)           No Conflicts. Neither the execution, delivery nor performance of this Agreement or the Transaction Documents to be delivered by such Party hereunder by such Party will:

 

(i)            require the approval or consent of any Governmental Authority, other than such approvals or consents that have been obtained or, if not obtained, would not, individually or in the aggregate, result in a material adverse effect on the business, properties, financial condition or results of operations of the Partnership Entities taken as a whole (a “Material Adverse Effect”);

 

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(ii)           result in the breach or violation of any term or provision of its certificate of limited partnership, certificate of formation, agreement of limited partnership, limited liability company agreement, as applicable, or other formation and governing documents;

 

(iii)          result in the breach or violation or constitute a default or give rise to any right of termination, cancellation or acceleration under any material agreement to which it is bound or by which its property or business is affected, except for such breaches, violations or defaults (or rights of termination, cancellation or acceleration) that would not, individually or in the aggregate, have a Material Adverse Effect; or

 

(iv)          violate any federal, state, local or other governmental law or ordinance, or any order, writ, injunction, decree, rule or regulation of any Governmental Authority applicable to such Party, except such violations that would not, individually or in the aggregate, have a Material Adverse Effect.

 

ARTICLE VII
 MISCELLANEOUS

 

7.01         Notices.

 

All notices and other communications provided for or permitted hereunder shall be made in writing by facsimile, courier service or personal delivery:

 

(a)           if to the General Partner, the Partnership or LRE Operating:

 

	
 
    	
Heritage   Plaza
    
	
 
    	
1111   Bagby Street, Suite 4600
    
	
 
    	
Houston,   TX 77002
    
	
 
    	
Attention:
    	
Chief   Executive Officer
    
	
 
    	
Telephone:
    	
(713)   292-9510
    
	
 
    	
Facsimile:
    	
(713)   292-9560
    

 

(b)           if to the Property Contributors:

 

	
 
    	
Heritage   Plaza
    
	
 
    	
1111   Bagby Street, Suite 4600
    
	
 
    	
Houston,   TX 77002
    
	
 
    	
Attention:
    	
Chief   Executive Officer
    
	
 
    	
Telephone:
    	
(713)   292-9510
    
	
 
    	
Facsimile:
    	
(713)   292-9560
    

 

All such notices and communications shall be deemed to have been received at the time delivered by hand, if personally delivered, when receipt acknowledged, if sent via facsimile; and when actually received, if sent by any other means.

 

14

 

7.02         Order of Completion of Transactions.

 

The transactions provided for in Article II of this Agreement shall be completed on the Closing Date in the order set forth in Article II of this Agreement.

 

7.03         Costs.

 

Except for the transaction expenses set forth in Section 2.06, the Partnership shall pay all expenses, fees and costs, including sales, use and similar taxes, arising out of the contributions, conveyances and deliveries to be made hereunder, and shall pay all documentary, filing, recording, transfer, deed and conveyance taxes and fees required in connection therewith. In addition, the Partnership shall be responsible for all costs, liabilities and expenses (including court costs and reasonable attorneys’ fees) incurred in connection with the delivery of any document pursuant to Article V.

 

7.04         Headings; References; Interpretation.

 

All Article and Section headings in this Agreement are for convenience only and shall not be deemed to control or affect the meaning or construction of any of the provisions hereof. The words “hereof,” “herein” and “hereunder” and words of similar import, when used in this Agreement, shall refer to this agreement as a whole, including, without limitation, all Schedules, Annexes, and Exhibits attached hereto, and not to any particular provision of this Agreement. All references herein to Articles, Sections, and Exhibits shall, unless the context requires a different construction, be deemed to be references to the Articles and Sections of this Agreement, and the Annexes and Exhibits attached hereto, and all such Schedules, Annexes and Exhibits attached hereto are hereby incorporated herein and made a part hereof for all purposes. All personal pronouns used in this Agreement, whether used in the masculine, feminine, or neuter gender, shall include all other genders, and the singular shall include the plural and vice versa. The terms “include,” “includes,” “including” or words of like import shall be deemed to be followed by the words “without limitation.”

 

7.05         Successors and Assigns.

 

This Agreement shall be binding upon and shall inure to the benefit of the Parties and their respective successors and assigns.

 

7.06         No Third Party Rights.

 

The provisions of this Agreement are intended to bind the Parties as to each other and are not intended to and do not create rights in any other person or confer upon any other person any benefits, rights or remedies, and no person is or is intended to be a third party beneficiary of any of the provisions of this Agreement.

 

7.07         Counterparts.

 

This Agreement may be executed in any number of counterparts, all of which together shall constitute one agreement binding on the Parties.

 

15

 

7.08         Governing Law.

 

This Agreement shall be governed by, and construed in accordance with, the laws of the State of Texas applicable to contracts made and to be performed wholly within such state, without giving effect to conflict of laws principles thereof that would require the application of the laws of another jurisdiction.

 

7.09         Severability.

 

If any of the provisions of this Agreement are held by any court of competent jurisdiction to contravene, or to be invalid under, the laws of any political body having jurisdiction over the subject matter hereof, such contravention or invalidity shall not invalidate the entire Agreement. Instead, this Agreement shall be construed as if it did not contain the particular provision or provisions held to be invalid, and an equitable adjustment shall be made and necessary provision added so as to give effect to the intention of the Parties as expressed in this Agreement at the time of execution of this Agreement.

 

7.10         Amendment or Modification.

 

This Agreement may be amended or modified from time to time only by the written agreement of all of the Parties. Each such instrument shall be reduced to writing and shall be designated on its face as an amendment to this Agreement.

 

7.11         Integration.

 

This Agreement and the instruments referenced herein supersede all previous understandings or agreements among the Parties, whether oral or written, with respect to the subject matter hereof and thereof. This document and such instruments contain the entire understanding of the Parties. No understanding, representation, promise or agreement, whether oral or written, is intended to be or shall be included in or form part of this Agreement unless it is contained in a written amendment hereto executed by the Parties after the date hereof.

 

[Signature Page Follows]

 

16

 

IN WITNESS WHEREOF, this Agreement has been duly executed by the Parties as of the date first written above.

 

	
 
    	
LRR   ENERGY, L.P.
    
	
 
    	
 
    
	
 
    	
By:
    	
LRE   GP, LLC, its general partner
    
	
 
    	
 
    	
 
    
	
 
    	
By:
    	
/s/   Jaime R. Casas
    
	
 
    	
Name:
    	
Jaime   R. Casas
    
	
 
    	
Title:
    	
Chief   Financial Officer
    
	
 
    	
 
    	
 
    
	
 
    	
LRE   GP, LLC
    
	
 
    	
 
    	
 
    
	
 
    	
By:
    	
/s/   Jaime R. Casas
    
	
 
    	
Name:
    	
Jaime   R. Casas
    
	
 
    	
Title:
    	
Chief   Financial Officer
    
	
 
    	
 
    	
 
    
	
 
    	
LRE   OPERATING, LLC
    
	
 
    	
 
    	
 
    
	
 
    	
By:
    	
LRR   Energy, L.P., its sole member
    
	
 
    	
By:
    	
LRE   GP, LLC, its general partner
    
	
 
    	
 
    	
 
    
	
 
    	
By:
    	
/s/   Jaime R. Casas
    
	
 
    	
Name:
    	
Jaime   R. Casas
    
	
 
    	
Title:
    	
Chief   Financial Officer
    
	
 
    	
 
    	
 
    
	
 
    	
LIME   ROCK RESOURCES A, L.P.
    
	
 
    	
 
    	
 
    
	
 
    	
By:
    	
Lime   Rock Resources A GP, LLC,
    
	
 
    	
 
    	
its   general partner
    
	
 
    	
By:
    	
Lime   Rock Resources GP, L.P.,
    
	
 
    	
 
    	
its   sole member
    
	
 
    	
By:
    	
LRR   GP, LLC, its general partner
    
	
 
    	
 
    	
 
    
	
 
    	
By:
    	
/s/   Eric Mullins
    
	
 
    	
Name:
    	
Eric   Mullins
    
	
 
    	
Title:
    	
Co-Chief   Executive Officer
    
	
 
    	
 
    	
 
    
	
 
    	
LIME   ROCK RESOURCES B, L.P.
    
	
 
    	
 
    	
 
    
	
 
    	
By:
    	
Lime   Rock Resources GP, L.P.,
    
	
 
    	
 
    	
its   general partner
    
	
 
    	
By:
    	
LRR   GP, LLC, it general partner
    
	
 
    	
 
    	
 
    
	
 
    	
By:
    	
/s/   Eric Mullins
    
	
 
    	
Name:
    	
Eric   Mullins
    
	
 
    	
Title:
    	
Co-Chief   Executive Officer
    

 

Signature Page to Amended and Restated Contribution Agreement

 

 

	
 
    	
LIME   ROCK RESOURCES C, L.P.
    
	
 
    	
 
    	
 
    
	
 
    	
By:
    	
Lime   Rock Resources C GP, LLC,
    
	
 
    	
 
    	
its   general partner
    
	
 
    	
By:
    	
Lime   Rock Resources GP, L.P.,
    
	
 
    	
 
    	
its   sole member
    
	
 
    	
By:
    	
LRR   GP, LLC, its general partner
    
	
 
    	
 
    	
 
    
	
 
    	
By:
    	
/s/   Eric Mullins
    
	
 
    	
Name:
    	
Eric   Mullins
    
	
 
    	
Title:
    	
Co-Chief   Executive Officer
    

 

Signature Page to Amended and Restated Contribution Agreement

 

 

SCHEDULE I

 

An undivided 55.35% interest in the net profits interests owned by LRR-B that burden the MLP Assets

 

I-1

 

SCHEDULE II

 

An undivided 55.30% interest in the net profits interests owned by LRR-C that burden the MLP Assets

 

II-1

 

ANNEX A

 

Form of Assignment and Bill of Sale

 

 

ASSIGNMENT AND BILL OF SALE

 

This Assignment and Bill of Sale (this “Assignment”) is among (a) Lime Rock Resources A, L.P., a Delaware limited partnership (the “Assignor”), Lime Rock Resources B, L.P., a Delaware limited partnership (“LRR-B”), and Lime Rock Resources C, L.P., a Delaware limited partnership (“LRR-C,” and together with LRR-B, the “NPI Owners”), each of whose address is Heritage Plaza, 1111 Bagby Street, Suite 4600, Houston, Texas 77002, and (b) LRE Operating, LLC, a Delaware limited liability company (“Assignee”), whose address is Heritage Plaza, 1111 Bagby Street, Suite 4600, Houston, Texas 77002, and is effective as of 12:01 a.m., Central Time, on November 16, 2011 (the “Effective Time”).

 

RECITALS

 

WHEREAS, Assignor owns certain oil and gas properties and related assets in the States of New Mexico, Oklahoma and Texas; and

 

WHEREAS, the NPI Owners own net profits interests that burden, among other properties, the Assets (as hereinafter defined) pursuant to the instruments described in Exhibit B hereto (the “Existing NPI Interests”); and

 

WHEREAS, Assignor, Assignee and the NPI Owners have entered into that certain Purchase, Sale, Contribution, Conveyance and Assumption Agreement, dated as of Novewmber 16, 2011 (the “Contribution Agreement”), among Assignor, Assignee, the NPI Owners, LRE GP, LLC, a Delaware limited liability company (the “General Partner”), and LRR Energy, L.P., a Delaware limited partnership (the “Partnership”), pursuant to which (a) Assignor has agreed to contribute, assign, transfer, set over and deliver to the Partnership all of its right, title and interest to and in the MLP Assets (as defined in the Contribution Agreement), as a capital contribution, upon the terms and conditions set forth in the Contribution Agreement; (b) the Partnership has agreed to contribute, assign, transfer, set over and deliver to Assignee all of its right, title and interest to and in the MLP Assets, including the Assets, as a capital contribution, upon the terms set forth in the Contribution Agreement; and (c) the NPI Owners have agreed to sell and contribute their net profits interests insofar and only insofar as the same burden the Assets, upon the terms set forth in the Contribution Agreement and this Assignment; and

 

WHEREAS, the Partnership has requested that Assignor convey directly to Assignee all of Assignor’s right, title and interest to and in the MLP Assets for convenience and recording purposes.

 

NOW, THEREFORE, in consideration of the mutual benefits derived and to be derived from the Contribution Agreement and this Assignment by each of the parties hereto and other good and valuable consideration, the parties hereby agree as follows:

 

A-1

 

ARTICLE 1
 DEFINED TERMS; CONSTRUCTION

 

Section 1.1            Definitions. Capitalized terms used in this Assignment and not otherwise defined herein shall have the meanings given to such terms in the Contribution Agreement.

 

Section 1.2            Construction. Unless the context requires otherwise: (a) any pronoun used in this Assignment shall include the corresponding masculine, feminine or neuter forms, and the singular form of nouns, pronouns and verbs shall include the plural and vice versa; (b) references to Articles and Sections refer to Articles and Sections of this Assignment; (c) the terms “include,” “includes,” “including” and words of like import shall be deemed to be followed by the words “without limitation”; and (d) the terms “hereof,” “herein” and “hereunder” refer to this Assignment as a whole and not to any particular provision of this Assignment. The headings contained in this Assignment are for reference purposes only, and shall not affect in any way the meaning or interpretation of this Assignment.

 

ARTICLE 2
 ASSIGNMENT OF ASSETS

 

Section 2.1            Assignment. Assignor, for good and valuable consideration, the receipt and sufficiency of which are acknowledged, hereby contributes, assigns, transfers, sets over and delivers to Assignee all of Assignor’s right, title and interest in and to the following (excepting the Excluded Assets defined below) (individually, an “Asset,” and collectively, the “Assets”):

 

(a)           (i) the oil and gas leases more particularly described in Exhibit A—Part 1 (Assignor’s interests in such leases, collectively, the “Leases”), (ii) the mineral fee interests, royalty interests, overriding royalty interests, production payments, net profits interests, carried interests and reversionary interests described in Exhibit A—Part 1 and/or relating to the lands described in any instrument described in Exhibit A—Part 1 (Assignor’s interests in the foregoing, the “Mineral Interests”) and (iii) the interests in any units arising on account of the Leases or Mineral Interests having been pooled or unitized into such units (Assignor’s interests in such units, the “Unit Interests”);

 

(b)           all existing oil and gas wells attributable to the Leases, Mineral Interests or Unit Interests (Assignor’s interests in such wells, collectively and including the wells set forth on Exhibit A—Part 2, the “Wells,” and the Leases, Mineral Interests, Unit Interests and Wells being hereinafter collectively referred to as the “Properties”);

 

(c)           all production facilities, structures, tubular goods, well equipment, lease equipment, production equipment, pipelines, inventory and all other personal property, fixtures and facilities to the extent appurtenant to or used primarily in connection with the Properties (collectively, the “Facilities”);

 

(d)           to the extent transferable, all permits, licenses, servitudes, easements, rights-of-way, surface fee interests and other surface use agreements to the extent used primarily in connection with the ownership or operation of the Properties or the Facilities;

 

A-2

 

(e)           all oil, gas and other hydrocarbons produced or processed in association therewith (collectively, “Hydrocarbons”) from or attributable to the Properties from and after the Effective Time and all Hydrocarbons produced therefrom prior to the Effective Time that are in storage prior to the Effective Time and that are upstream of the sales metering point as of the Effective Time;

 

(f)            to the extent transferable, all contracts, agreements, commitments and other arrangements (“Contracts”) relating to the ownership or operation of the Properties or other Assets, including the production, storage, treatment, transportation, processing, purchase, sale, disposal or other disposition of production therefrom or in connection therewith, including the commodity derivative contracts listed on Exhibit A—Part 3;

 

(g)           all gas or pipeline imbalances relating to the Properties; and

 

(h)           all records, files, orders, maps, and data that relate to the Properties, Facilities or other Assets that are in Assignor’s possession, to the extent that Assignor has the right to transfer same to Assignee without the payment of any fee, penalty or other consideration, but excluding any of the foregoing to the extent that (i) transfer is restricted by third party agreement or applicable law and (ii) Assignor is unable to obtain, using commercially reasonable efforts, a waiver of, or otherwise satisfy, such transfer restriction (provided that Assignor shall not be required to provide consideration or undertake obligations to or for the benefit of the holders of such rights in order to obtain any necessary consent or waiver of such transfer restriction) (subject to such exclusion, collectively referred to as the “Files”).

 

TO HAVE AND TO HOLD the Assets unto Assignee forever, subject, however, to all the terms and conditions of this Assignment.

 

Section 2.2            Excluded Assets. The Assets shall not include, and there is excepted, reserved and excluded from the sale and assignment contemplated hereby, the following (the “Excluded Assets”):

 

(a)           all corporate, financial, tax and legal records of Assignor that relate to Assignor’s business generally (including the ownership and operation of the Assets) or that relate to the other Excluded Assets, together with a duplicate copy (electronic or otherwise) of all of the Files;

 

(b)           any trade credits, accounts receivable, proceeds or revenues attributable to the Assets and accruing prior to the Effective Time;

 

(c)           all Hydrocarbons produced from or attributable to the Properties with respect to any periods of time prior to the Effective Time that are not upstream of the sales metering point as of the Effective Time, and all proceeds attributable thereto;

 

(d)           all refunds of costs, taxes or expenses attributable to any periods of time prior to the Effective Time;

 

(e)           all proceeds from the settlements of Contract disputes with purchasers of Hydrocarbons from or attributable to the Properties, including settlement of take-or-pay disputes, insofar as said proceeds are attributable to any periods of time prior to the Effective Time;

 

A-3

 

(f)            all bonds, letters of credit and guarantees, if any, posted by Assignor or its Affiliates with Governmental Authorities and relating to the Assets;

 

(g)           all rights, titles, claims and interests of Assignor or its Affiliates under any insurance policy or agreement, to any insurance proceeds or to or under any bond or bond proceeds and attributable to periods of time prior to the Effective Time;

 

(h)           all rights and claims relating to the Assets and attributable to periods of time prior to the Effective Time, including audit rights;

 

(i)            all privileged attorney-client (i) communications and (ii) other documents (other than title opinions);

 

(j)            all materials and information that cannot be disclosed to Assignee as a result of confidentiality obligations to third parties;

 

(k)           all amounts paid by third parties to Assignor or its Affiliates as overhead for periods of time accruing prior to the Effective Time under any joint operating agreements burdening the Assets;

 

(l)            all commodity derivative contracts not listed on Exhibit A—Part 3; and

 

(m)          any matter required to be excluded pursuant to the provisions of Section 2.1(h) of this Assignment.

 

Section 2.3            Retained Rights and Obligations. The execution and delivery of this Assignment by Assignor, and the execution and acceptance of this Assignment by Assignee, shall not operate to release or impair any surviving rights or obligations of Assignor or Assignee under the Contribution Agreement or any other document executed in connection with the Offering, including that certain Omnibus Agreement, dated as of November 16, 2011 among the General Partner, the Partnership, Assignee, LRR GP, LLC, Assignor, the NPI Owners and Lime Rock Management LP (the “Omnibus Agreement”).

 

ARTICLE 3
 ENCUMBRANCES DISCLAIMERS

 

Section 3.1            Disclaimers and Subrogation of Warranties and Representations.

 

(a)           Except to the extent expressly provided in any other document executed in connection with the Contribution Agreement or the Offering, the contribution of the Assets pursuant to this Assignment is made expressly subject to all recorded and unrecorded liens (other than consensual liens), easements, rights-of-way, contracts, permits, licenses, instruments, commitments, conveyances, encumbrances, agreements, defects, restrictions, advance claims and all laws, rules, regulations, ordinances, judgments and orders of Governmental Authorities or tribunals having or asserting jurisdiction over the Assets and operations conducted thereon or in connection therewith, including Existing NPI Interests, in each case, to the extent the same are valid and enforceable and affect the Assets, including all matters that a current survey or visual inspection of the Assets would reflect.

 

A-4

 

(b)           EXCEPT TO THE EXTENT PROVIDED IN ANY OTHER DOCUMENT EXECUTED OR DELIVERED IN CONNECTION WITH THE CONTRIBUTION AGREEMENT OR THE OFFERING, ASSIGNOR, THE NPI OWNERS AND ASSIGNEE ACKNOWLEDGE AND AGREE THAT NO PARTY HAS MADE, NO PARTY DOES MAKE, AND EACH SUCH PARTY SPECIFICALLY NEGATES AND DISCLAIMS, ANY REPRESENTATIONS, WARRANTIES, PROMISES, COVENANTS, AGREEMENTS OR GUARANTIES OF ANY KIND OR CHARACTER WHATSOEVER, WHETHER EXPRESS, IMPLIED OR STATUTORY, ORAL OR WRITTEN, PAST OR PRESENT, REGARDING (A) THE VALUE, NATURE, QUALITY OR CONDITION OF THE ASSETS OR THE EXISTING NPI INTERESTS, INCLUDING THE WATER, SOIL, GEOLOGY OR ENVIRONMENTAL CONDITION OF THE PROPERTIES GENERALLY, INCLUDING THE PRESENCE OR LACK OF HAZARDOUS SUBSTANCES OR OTHER MATTERS THEREON, (B) THE INCOME TO BE DERIVED FROM THE PROPERTIES, (C) THE SUITABILITY OF THE PROPERTIES FOR ANY AND ALL ACTIVITIES AND USES THAT MAY BE CONDUCTED THEREON, (D) THE COMPLIANCE OF OR BY THE PROPERTIES OR THEIR OPERATION WITH ANY LAWS (INCLUDING ANY ZONING, ENVIRONMENTAL PROTECTION, POLLUTION OR LAND USE LAWS, RULES, REGULATIONS, ORDERS OR REQUIREMENTS), OR (E) THE HABITABILITY, MERCHANTABILITY, MARKETABILITY, PROFITABILITY OR FITNESS FOR A PARTICULAR PURPOSE OF THE PROPERTIES. EXCEPT TO THE EXTENT PROVIDED IN ANY OTHER DOCUMENT EXECUTED OR DELIVERED IN CONNECTION WITH THE CONTRIBUTION AGREEMENT OR THE OFFERING, ASSIGNOR AND ASSIGNEE ACKNOWLEDGE AND AGREE THAT ASSIGNEE HAS HAD OPPORTUNITY TO INSPECT THE PROPERTIES, AND IT IS RELYING SOLELY ON ITS OWN INVESTIGATION OF THE PROPERTIES AND NOT ON ANY INFORMATION PROVIDED OR TO BE PROVIDED BY ANY OTHER PARTY. NONE OF ASSIGNOR NOR ASSIGNEE IS LIABLE OR BOUND IN ANY MANNER BY ANY VERBAL OR WRITTEN STATEMENTS, REPRESENTATIONS OR INFORMATION PERTAINING TO THE PROPERTIES FURNISHED BY ANY AGENT, EMPLOYEE, SERVANT OR THIRD PARTY. EACH SUCH PARTY ACKNOWLEDGES THAT TO THE MAXIMUM EXTENT PERMITTED BY LAW, THE CONTRIBUTION OF THE ASSETS AS PROVIDED FOR HEREIN IS MADE IN AN “AS IS, WHERE IS” CONDITION WITH ALL FAULTS, AND THE ASSETS ARE CONTRIBUTED AND TRANSFERRED SUBJECT TO ALL OF THE MATTERS CONTAINED IN THIS SECTION. THE PROVISIONS OF THIS SECTION HAVE BEEN NEGOTIATED BY ASSIGNOR, THE NPI OWNERS AND ASSIGNEE AFTER DUE CONSIDERATION AND ARE INTENDED TO BE A COMPLETE EXCLUSION AND NEGATION OF ANY REPRESENTATIONS OR WARRANTIES, WHETHER EXPRESS, IMPLIED OR STATUTORY, WITH RESPECT TO THE ASSETS OR THE EXISTING NPI INTERESTS THAT MAY ARISE PURSUANT TO ANY LAW NOW OR HEREAFTER IN EFFECT, OR OTHERWISE.

 

(c)           Each of Assignor, the NPI Owners and Assignee agrees that the disclaimers contained in this Section 3.1 are “conspicuous” disclaimers. Any covenants implied by statute or law by the use of the words “contribute,” “distribute,” “assign,” “transfer,” “deliver” or “set over” or any of them or any other words used in this Assignment are hereby expressly disclaimed, waived or negated.

 

A-5

 

Section 3.2            Subrogation. Assignor hereby transfers and assigns unto Assignee, its successors and assigns, all of its right, title and interest under and by virtue of all warranties pertaining to the Assets, express or implied (including title warranties and manufacturers’, suppliers’  and contractors’ warranties), that have heretofore been made by any of Assignor’s predecessors in title (excluding any affiliate of Assignor) or by any third party manufacturers, suppliers and contractors. This Assignment is made with full substitution and subrogation in and to all of the warranties that Assignor has or may have against predecessors in title (excluding any affiliate of Assignor) and with full subrogation of all rights accruing under the applicable statutes of limitations and all rights and actions of warranty against all former owners of the Assets (excluding any affiliate of Assignor).

 

ARTICLE 4
 ASSUMED OBLIGATIONS

 

Section 4.1            Assumed Obligations. Assignee agrees to assume, and does hereby assume, all of Assignor’s obligations under the Leases, Mineral Interests, Unit Interests and Contracts, including the obligation to properly plug and abandon, or to replug if subsequently required, the Wells and any previously plugged wells located on the lands covered by the Leases and otherwise comply with all applicable restoration or reclamation requirements according to the terms of the Leases and Unit Interests and the rules and regulations of governmental authorities having jurisdiction (the “Plugging Obligations”).  Subject to the indemnification obligations set forth in the Omnibus Agreement, in addition to the Plugging Obligations and other obligations discussed in the foregoing sentence, Assignee agrees to assume and does hereby (and Assignee’s successors and assigns will) assume and agree to be bound by and bear all costs, expenses and liabilities arising out of the ownership and/or operation of the Assets, whether or not such costs, expenses or liabilities accrued prior to, on or after the Effective Time, including, without limitation, the environmental condition of the Assets.

 

ARTICLE 5
 SALE AND CONTRIBUTION OF EXISTING NPI INTERESTS

 

Section 5.1            Sale and Contribution. In consideration of the premises, including the mutual benefits derived and to be derived from the Contribution Agreement and this Assignment, effective immediately following the assignment described in Section 2.1, the NPI Owners hereby sell, transfer and assign to Assignee, without warranty, express, implied or statutory, the Existing NPI Interests and any other net profits interests owned by the NPI Owners, to the extent and only to the extent that such Existing NPI Interests and any other net profits interests affect the Assets (the NPI Owners and Assignee acknowledging that to the extent that the Existing NPI Interests and other net profits interests affect properties other than the Assets, such Existing NPI Interests and other net profits interests shall remain in full force and effect and shall not be transferred hereby).

 

Section 5.2            Merger. Assignee and the NPI Owners hereby agree that effective upon the sale and contribution described in Section 5.1, the Existing NPI Interests and other net profits interests affecting the Assets shall be merged into the greater estate owned by Assignee in the Assets and extinguished.

 

A-6

 

ARTICLE 6
 MISCELLANEOUS

 

Section 6.1            Separate Assignments. Where separate assignments of the Assets or releases of the Existing NPI Interests have been or will be executed for filing with, and approval by, applicable Governmental Authorities, any such separate assignments (a) shall evidence this Assignment and assignment of the applicable Assets and/or the applicable Existing NPI Interests herein made and shall not constitute any additional assignment of such properties, (b) are not intended to modify, and shall not modify, any of the terms, covenants and conditions or limitations on warranties set forth in this Assignment and are not intended to create, and shall not create, any representations, warranties or additional covenants of or by Assignor to Assignee and (c) shall be deemed to contain all of the terms and provisions of this Assignment, as fully and to all intents and purposes as though the same were set forth at length in such separate assignments.

 

Section 6.2            Exhibits. All exhibits attached hereto are hereby made part hereof and incorporated herein by this reference. References in such exhibits to instruments on file in the public records are notice of such instruments for all purposes. Unless provided otherwise, all recording references in such exhibits are to the appropriate records of the counties in which the Assets are located.

 

Section 6.3            Governing Law. THIS ASSIGNMENT SHALL BE GOVERNED AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF TEXAS, EXCLUDING ANY CONFLICTS OF LAW RULE OR PRINCIPLE THAT MIGHT REFER CONSTRUCTION OF SUCH PROVISIONS TO THE LAWS OF ANOTHER JURISDICTION, EXCEPT TO THE EXTENT THAT THE LAWS OF ANOTHER STATE ARE MANDATORILY APPLIED TO THE DISPUTED MATTER.

 

Section 6.4            Successors and Assigns.  This Assignment shall bind and inure to the benefit of the parties hereto and their respective successors and assigns.

 

Section 6.5            Counterparts. This Assignment may be executed in any number of counterparts, and each counterpart hereof shall be deemed to be an original instrument, but all such counterparts shall constitute but one instrument. Any signature hereto delivered by a party by facsimile transmission shall be deemed an original signature hereto. Exhibit A may be redacted for filing in each county or parish, such that the exhibit filed in any county or parish will describe only those Assets located in such county or parish.

 

A-7

 

Section 1.1

 

EXECUTED as of the date of the parties’ acknowledgments below, but effective as of the Effective Time.

 

	
ASSIGNOR:
    	
 
    	
WITNESSES:
    
	
 
    	
 
    	
 
    
	
LIME ROCK RESOURCES A, L.P.
    	
 
    	
 
    
	
 
    	
 
    	
 
    	
 
    
	
By:
    	
Lime   Rock Resources A GP, LLC,
    	
 
    	
 
    
	
 
    	
its   general partner
    	
 
    	
 
    
	
By:
    	
Lime   Rock Resources GP, L.P.,
    	
 
    	
 
    
	
 
    	
its   sole member
    	
 
    	
 
    
	
By:
    	
LRR   GP, LLC, its general partner
    	
 
    	
 
    
	
 
    	
 
    	
 
    	
 
    
	
By:
    	
 
    	
 
    	
 
    
	
Name:
    	
Eric   D. Mullins
    	
 
    	
 
    
	
Title:
    	
Co-Chief   Executive Officer
    	
 
    	
 
    
	
 
    	
 
    	
 
    	
 
    
	
LIME ROCK RESOURCES B, L.P.
    	
 
    	
WITNESSES:
    
	
 
    	
 
    	
 
    	
 
    
	
By:
    	
Lime   Rock Resources GP, L.P.,
    	
 
    	
 
    
	
 
    	
its   general partner
    	
 
    	
 
    
	
By:
    	
LRR   GP, LLC, it general partner
    	
 
    	
 
    
	
 
    	
 
    	
 
    	
 
    
	
By:
    	
 
    	
 
    	
 
    
	
Name:
    	
Eric   D. Mullins
    	
 
    	
 
    
	
Title:
    	
Co-Chief   Executive Officer
    	
 
    	
 
    
	
 
    	
 
    	
 
    	
 
    
	
LIME ROCK RESOURCES C, L.P.
    	
 
    	
WITNESSES:
    
	
 
    	
 
    	
 
    	
 
    
	
By:
    	
Lime   Rock Resources C GP, LLC,
    	
 
    	
 
    
	
 
    	
its   general partner
    	
 
    	
 
    
	
By:
    	
Lime   Rock Resources GP, L.P.,
    	
 
    	
 
    
	
 
    	
its   sole member
    	
 
    	
 
    
	
By:
    	
LRR   GP, LLC, its general partner
    	
 
    	
 
    
	
 
    	
 
    	
 
    	
 
    
	
By:
    	
 
    	
 
    	
 
    
	
Name:
    	
Eric   D. Mullins
    	
 
    	
 
    
	
Title:
    	
Co-Chief   Executive Officer
    	
 
    	
 
    

 

SIGNATURE PAGE TO
 ASSIGNMENT AND BILL OF SALE

 

A-8

 

	
ASSIGNEE:
    	
 
    	
WITNESSES:
    
	
 
    	
 
    	
 
    
	
LRE OPERATING, LLC
    	
 
    	
 
    
	
 
    	
 
    	
 
    	
 
    
	
By:
    	
LRR   Energy, L.P., its sole member
    	
 
    	
 
    
	
By:
    	
LRE   GP, LLC, its general partner
    	
 
    	
 
    
	
 
    	
 
    	
 
    	
 
    
	
By:
    	
 
    	
 
    	
 
    
	
Name:
    	
Jaime   R. Casas
    	
 
    	
 
    
	
Title:
    	
Chief   Financial Officer
    	
 
    	
 
    

 

	
Prepared   By:
    	
Return   To:
    
	
Randolph   W. Bryant
    	
 
    
	
Andrews   Kurth LLP
    	
 
    
	
600   Travis, Suite 4200
    	
 
    
	
Houston,   TX 77002
    	
 
    
	
(713)   220-4200
    	
 
    

 

[Sample forms of acknowledgment.]

 

	
STATE   OF TEXAS
    	
§
    
	
 
    	
§
    
	
COUNTY   OF HARRIS
    	
§
    

 

BE IT REMEMBERED, THAT I, the undersigned authority, a notary public duly qualified, commissioned, sworn and acting in and for Harris County, Texas, and being authorized in such county and state to take acknowledgments, hereby certifies that, on this      day of                          2011, there personally appeared before me                                  of LRR GP, LLC, a Delaware limited liability company (“LRR GP”), the general partner of Lime Rock Resources GP, L.P., a Delaware limited partnership (“Lime Rock GP”), the sole member of Lime Rock Resources A GP, LLC, the general partner of Lime Rock Resources A, L.P. (“LRR-A”), known to me to be such authorized signatory on behalf of LRR-A, such limited partnership being a party to the foregoing instrument, and I hereby further certify as follows:

 

	
[NEW   MEXICO],
    	
This   instrument was acknowledged before me by the foregoing individual on behalf   of LRR-A, in the capacity stated above.
    
	
 
    	
 
    
	
[OKLAHOMA],
    	
This   instrument was acknowledged before me by the foregoing individual as the   holder of the offices stated above, on behalf of LRR-A, as stated above.
    
	
 
    	
 
    
	
[TEXAS],
    	
This   instrument was acknowledged before me on this day, by the foregoing individual,   in his capacity as an officer of the aforementioned entities, on behalf of   LRR-A.
    

 

A-9

 

	
STATE   OF TEXAS
    	
§
    
	
 
    	
§
    
	
COUNTY   OF HARRIS
    	
§
    

 

BE IT REMEMBERED, THAT I, the undersigned authority, a notary public duly qualified, commissioned, sworn and acting in and for Harris County, Texas, and being authorized in such county and state to take acknowledgments, hereby certifies that, on this      day of                          2011, there personally appeared before me                                  of LRR GP, the general partner of Lime Rock GP, the general partner of Lime Rock Resources B, L.P., a Delaware limited partnership (“LRR-B”), known to me to be such authorized signatory on behalf of LRR-B, such limited partnership being a party to the foregoing instrument, and I hereby further certify as follows:

 

	
[NEW   MEXICO],
    	
This   instrument was acknowledged before me by the foregoing individual on behalf   of LRR-B, in the capacity stated above.
    
	
 
    	
 
    
	
[OKLAHOMA],
    	
This   instrument was acknowledged before me by the foregoing individual as the   holder of the offices stated above, on behalf of LRR-B, as stated above.
    
	
 
    	
 
    
	
[TEXAS],
    	
This   instrument was acknowledged before me on this day, by the foregoing   individual, in his capacity as an officer of the aforementioned entities, on   behalf of LRR-B.
    

 

	
STATE   OF TEXAS
    	
§
    
	
 
    	
§
    
	
COUNTY   OF HARRIS
    	
§
    

 

BE IT REMEMBERED, THAT I, the undersigned authority, a notary public duly qualified, commissioned, sworn and acting in and for Harris County, Texas, and being authorized in such county and state to take acknowledgments, hereby certifies that, on this      day of                          2011, there personally appeared before me                                  of LRR GP, the general partner of Lime Rock GP, the sole member of Lime Rock Resources C GP, LLC, the general partner of Lime Rock Resources C, L.P. (“LRR-C”), known to me to be such authorized signatory on behalf of LRR-C, such limited partnership being a party to the foregoing instrument, and I hereby further certify as follows:

 

	
[NEW   MEXICO],
    	
This   instrument was acknowledged before me by the foregoing individual on behalf   of LRR-C, in the capacity stated above.
    
	
 
    	
 
    
	
[OKLAHOMA],
    	
This   instrument was acknowledged before me by the foregoing individual as the   holder of the offices stated above, on behalf of LRR-C, as stated above.
    

 

A-10

 

	
[TEXAS],
    	
This   instrument was acknowledged before me on this day, by the foregoing   individual, in his capacity as an officer of the aforementioned entities, on   behalf of LRR-C.
    

 

	
STATE   OF TEXAS
    	
§
    
	
 
    	
§
    
	
COUNTY   OF HARRIS
    	
§
    

 

BE IT REMEMBERED, THAT I, the undersigned authority, a notary public duly qualified, commissioned, sworn and acting in and for Harris County, Texas, and being authorized in such county and state to take acknowledgments, hereby certifies that, on this      day of                          2011, there personally appeared before me                                  of LRE GP, LLC, a Delaware limited liability company (“LRE GP”), the general partner of LRR Energy, L.P., a Delaware limited partnership (the “Partnership”), the sole member of LRE Operating, LLC, a Delaware limited liability company (“LRE Operating”), known to me to be such authorized signatory on behalf of LRE Operating, such limited partnership being a party to the foregoing instrument, and I hereby further certify as follows:

 

	
[NEW   MEXICO],
    	
This   instrument was acknowledged before me by the foregoing individual on behalf   of LRE Operating, in the capacity stated above.
    
	
 
    	
 
    
	
[OKLAHOMA],
    	
This   instrument was acknowledged before me by the foregoing individual as the   holder of the offices stated above, on behalf of LRE Operating, as stated   above.
    
	
 
    	
 
    
	
[TEXAS],
    	
This   instrument was acknowledged before me on this day, by the foregoing   individual, in his capacity as an officer of the aforementioned entities, on   behalf of LRE Operating.
    

 

IN WITNESS WHEREOF, I have hereunto set my hand and official seal in the City of Houston, Texas, on the day and year first above written.

 

 

	
 
    	
 
    
	
 
    	
Notary   Public in and for the State of Texas
    

 

A-11

 

Exhibit A

 

Part 1 — Leases

 

	
Unique ID
    	
 
    	
Field Name
    	
 
    	
Original
   Lessor/Grantor
    	
 
    	
Original Lessee/Grantee
    	
 
    	
Effective
   Date
    	
 
    	
Book/
   volume
    	
 
    	
Page
    	
 
    	
State
    	
 
    	
County
    
	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    

 

Exhibit A-1

 

Page 1

 

Exhibit A

 

Part 2 — Wells

 

	
Aries Propnum
    	
 
    	
API
    	
 
    	
County
    	
 
    	
State
    	
 
    	
Field Name
    	
 
    	
Well #
    	
 
    	
Well name
    
	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    

 

Exhibit A-2

 

Page 1

 

Exhibit A

 

Part 3 — Commodity Derivative Contracts

 

Exhibit A-3

 

Page 1

 

Exhibit B

 

Instruments Governing Net Profits Interest

 

Exhibit B

 

Page 1

Source: [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00197-of-00352.parquet"}, [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00197-of-00352.parquet"}]]