Document:

ex10_2.htm

    Exhibit
      10.2

    

    FOURTH
      AMENDMENT

    TO

    AMENDED
      AND RESTATED CREDIT AGREEMENT

    

    

    THIS
      FOURTH AMENDMENT
TO AMENDED AND RESTATED
CREDIT AGREEMENT (this
      “Amendment”), dated as of July 11, 2007, is entered into by and among
      HERCULES INCORPORATED, a Delaware corporation (the “Company”), the
      Guarantors signatory hereto, the Lenders signatory hereto, CREDIT SUISSE, CAYMAN
      ISLANDS BRANCH (formerly known as Credit Suisse First Boston, acting through
      its
      Cayman Islands Branch), as Administrative Agent for the Lenders (in such
      capacity, the “Administrative Agent”) and WACHOVIA BANK, NATIONAL
      ASSOCIATION, as Syndication Agent and Issuing Lender (together with the
      Administrative Agent, the “Agents”).

    

    

    RECITALS

    

    A.           The
      Company, the Guarantors, the Lenders and the Agents are party to that certain
      Amended and Restated Credit Agreement dated as of April 8,
      2004 (as amended by that certain First Amendment to Amended and Restated Credit
      Agreement dated as of August 12, 2004, that certain Second Amendment to Amended
      and Restated Credit Agreement dated as of June 29, 2005, that certain Third
      Amendment to Amended and Restated Credit Agreement dated as of March 2, 2006
      and
      as further amended, restated, modified or supplemented, the “Existing Credit
      Agreement”).  Unless otherwise defined herein or the context
      otherwise requires, terms used in this Amendment, including its preamble and
      recitals, have the meanings provided in the Existing Credit
      Agreement.

    

    B.           The
      Company has requested certain modifications to the Existing Credit
      Agreement.

    

    C.           Such
      modifications require the consent of the Required Lenders.

    

    D.           The
      Required Lenders have consented to the requested modifications on the terms
      and
      conditions set forth herein.

    

    AGREEMENT

    

    NOW,
      THEREFORE, IN
      CONSIDERATION of the premises and other good and valuable
      consideration, the receipt and sufficiency of which are hereby acknowledged,
      the
      parties hereto agree as follows:

    
      
         

      

      
         

        
          

        

      

      
         

      

    

    

    I.           AMENDMENTS
      TO EXISTING CREDIT AGREEMENT

    

    Subject
      to the satisfaction of the
      conditions precedent set forth in Section 4 of Article II hereof, from and
      after
      the Fourth Amendment Effective Date (as defined below), the Existing Credit
      Agreement is hereby amended in the following respects:

    

    1.           Section
      5.1(l) of the Existing Credit Agreement is hereby amended by deleting the first
      parenthetical therein in its entirety and replacing it with the
      following:

    

    “(other
      than a Receivables Financing
      SPC, a Preferred Stock SPC or the R&D Joint Venture or as otherwise agreed
      to by the Administrative Agent)”

    

    2.           Section
      5.2(b)(iii) of the Existing Credit Agreement is hereby amended by (i) inserting
      “or” immediately prior to the reference to clause (B), (ii) deleting “or”
immediately prior to the reference to clause (C), (iii) deleting clause (C)
      in
      its entirety and (iv) replacing clause (C) with the following:

    

    “and
      except (C) so long as no Default
      or Event of Default then exists or would result therefrom, any other sale,
      lease
      or disposition of assets as long as (x) at least 85% of the consideration
      received by the Company and/or its Subsidiaries in connection with each such
      transaction shall be in cash or Cash Equivalents and (y) the Company uses the
      Net Cash Proceeds thereof to make Eligible Reinvestments or prepay the Loans
      in
      accordance with Section 2.6(b)(iii) hereof.”

    

    3.           Section
      5.2(d)(iii) of the Existing Credit Agreement is hereby amended by deleting
      the
      reference to “$100,000,000” set forth in the grid contained therein and
      replacing it with a reference to “$150,000,000”.

    

    4.           Section
      5.2(f)(viii) of the Existing Credit Agreement is hereby amended by deleting
      the
      reference to “$50,000,000” set forth therein and replacing it with a reference
      to “$150,000,000”.

    

    5.           Section
      5.2(j)(ii) of the Existing Credit Agreement is hereby amended by deleting clause
      (ii) in its entirety and replacing it with the following:

    

    “(ii)
      the Company may make cash
      dividends on the Company’s common stock and/or repurchase shares of its common
      stock, in an aggregate amount not to exceed $100,000,000 in any fiscal year
      of
      the Company”

    

    6.           Section
      7 of the Existing Credit Agreement is hereby amended by inserting the following
      definition in the appropriate alphabetical order:

    

    “R&D
      Joint Venture”: H2H
      Innovations, LLC, a joint venture organized as a Delaware limited liability
      company and created for purposes of research and development, in which the
      Company owns a 51% interest.”

    
      
         

      

      
        -
          2
          -

        
          

        

      

      
         

      

    

    

    7.           The
      Schedules to the Existing Credit Agreement are hereby amended by replacing
      each
      of Schedule 1.13 and Schedule 1.19 with the corresponding Schedule attached
      hereto as Exhibit A and Exhibit B, respectively.

    

    II.           MISCELLANEOUS

    

    1.           Representations
      and Warranties.  Each of the Credit Parties represents and
      warrants to the Lenders and the Administrative Agent as follows:

    

    
      	
            	
              (i) 
                

            	
              It
                has taken all necessary action to authorize the execution, delivery
                and
                performance of this Amendment.

            

    

    

    
      	
              (ii) 
                

            	
              This
                Amendment has been duly executed and delivered by such Credit Party
                and
                constitutes such Credit Party’s legal, valid and binding obligation,
                enforceable in accordance with its terms, except as such enforceability
                may be limited (x) by general principles of equity and conflicts
                of laws
                (whether enforcement is sought by proceedings in equity or at law)
                or (y)
                by bankruptcy, reorganization, insolvency, moratorium or other laws
                of
                general application relating to or affecting the enforcement, of
                creditors' rights.

            

    

    

    
      	
              (iii) 
                

            	
              No
                consent, approval, authorization or order of, or filing, registration
                or
                qualification with, any court or governmental authority or third
                party is
                required in connection with the execution, delivery or performance
                by such
                Credit Party of this Amendment (except for those which have been
                obtained
                on or prior to the Fourth Amendment Effective
                Date).

            

    

    

    
      	
              (iv) 
                

            	
              The
                execution and delivery of this Amendment does not diminish or reduce
                its
                obligations under the Credit Documents (including, without limitation,
                in
                the case of each Guarantor, such Guarantor’s guaranty pursuant to
                Section 3A of the Existing Credit Agreement) in any manner, except as
                specifically set forth herein.

            

    

    

    
      	
            	
              (v) 
                

            	
              Such
                Credit Party has no claims, counterclaims, offsets, or defenses to
                the
                Credit Documents and the performance of its obligations thereunder,
                or if
                such Credit Party has any such claims, counterclaims, offsets, or
                defenses
                to the Credit Documents or any transaction related to the Credit
                Documents, the same are hereby waived, relinquished and released
                in
                consideration of the Required Lenders’ and the Term B Lenders’ execution
                and delivery of this Amendment.

            

    

    

    
      	
              (vi) 
                

            	
              The
                representations and warranties of the Credit Parties set forth in
                Section
                1 of the Existing Credit Agreement are true and correct in all material
                respects as of the date hereof (except those that expressly relate
                to an
                earlier date, in which case such representations and warranties are
                true
                and correct in all material respects as of such earlier date) and
                all of
                the provisions of the Credit Documents, except as amended hereby,
                are in
                full force and effect.

            

    

    
      
         

      

      
        -
          3
          -

        
          

        

      

      
         

      

    

    

    
      	
              (vii) 
                

            	
              Subsequent
                to the execution and delivery of this Amendment and after giving
                effect
                hereto, no unwaived event has occurred and is continuing on the date
                hereof which constitutes a Default or an Event of
                Default.

            

    

    

    2.           Reaffirmations.  Each
      Credit Party affirms the liens and security interests created and granted by
      it
      in the Credit Documents (including, but not limited to, the Security Agreement
      and the Mortgages) and agrees that this Amendment shall in no manner adversely
      affect or impair such liens and security interests.

    

    3.           Effect
      of Amendment.  Except as expressly modified and amended in this
      Amendment, all of the terms, provisions and conditions of the Credit Documents
      shall remain unchanged and in full force and effect.  The Credit
      Documents and any and all other documents heretofore, now or hereafter executed
      and delivered pursuant to the terms of or otherwise in connection with the
      Credit Documents are hereby amended so that any reference to the Existing Credit
      Agreement shall mean a reference to the Existing Credit Agreement as amended
      hereby.

    

    4.           Conditions
      Precedent.   This Amendment shall become effective as of the
      date first above written (the “Fourth Amendment Effective Date”) when,
      and only when, each of the following conditions shall have been satisfied (it
      being understood that the satisfaction of one or more of the following
      conditions may occur concurrently with the effectiveness of this
      Amendment):

    

      
      (a)           Execution
      of Counterparts of Amendment.  The Administrative Agent shall have
      received counterparts of this Amendment, which collectively shall have been
      duly
      executed on behalf of the Company, each of the Guarantors and the Required
      Lenders.

    

    (b)           Fees
      and Expenses.  The payment by the Company to the Agents (or their
      Affiliates) of (i) an amendment fee for the benefit of each Lender who delivers
      to the Agent a signature page to this Amendment on or before 5:00 p.m. Eastern
      time on July 10, 2007 equal to 5.0 basis points on such Lender’s Revolving
      Commitment and such Lender’s portion of the outstanding principal amount of the
      Term B Loan and (ii) all other fees and expenses relating to this Amendment
      and
      the Existing Credit Agreement which are due and payable on the Fourth Amendment
      Effective Date, including, without limitation, payment by the Company on the
      date hereof of all out-of-pocket costs and expenses of the Agents in connection
      with the preparation, execution and delivery of this Amendment, including
      without limitation the fees and expenses of Moore & Van Allen PLLC, special
      counsel to the Agents.

     

    5.           Construction.  This
      Amendment is a Credit Document executed pursuant to the Existing Credit
      Agreement and shall (unless otherwise expressly indicated therein) be construed,
      administered and applied in accordance with the terms and provisions of the
      Existing Credit Agreement as amended hereby.

    
      
         

      

      
        -
          4
          -

        
          

        

      

      
         

      

    

    

    6.           Counterparts.  This
      Amendment may be executed in any number of counterparts and by the parties
      hereto in separate counterparts, each of which when so executed and delivered
      shall be deemed to be an original and all of which taken together shall
      constitute one and the same instrument.

    

    7.           GOVERNING
      LAW.  THIS AGREEMENT AND THE RIGHTS AND OBLIGATIONS OF THE PARTIES
      HEREUNDER SHALL BE GOVERNED BY AND CONSTRUED AND INTERPRETED IN ACCORDANCE
      WITH
      THE LAWS OF THE STATE OF NEW YORK.

    

    8.           Binding
      Effect.  This Amendment, the Existing Credit Agreement as amended
      hereby and the other Credit Documents embody the entire agreement between the
      parties and supersede all prior agreements and understandings, if any, relating
      to the subject matter hereof. These Credit Documents represent the final
      agreement between the parties and may not be contradicted by evidence of prior,
      contemporaneous or subsequent oral agreements of the parties. Except as
      expressly modified and amended in this Amendment, all the terms, provisions
      and
      conditions of the Credit Documents shall remain unchanged and shall continue
      in
      full force and effect.

    

    9.           Severability.   If
      any provision of this Amendment is determined to be illegal, invalid or
      unenforceable, such provision shall be fully severable and the remaining
      provisions shall remain in full force and effect and shall be construed without
      giving effect to the illegal, invalid or unenforceable provisions.

    

    

    

    [Remainder
      of Page Intentionally Left Blank]

    

    
      
         

      

      
        -
          5
          -

        
          

        

      

      
         

      

    

    

    IN
      WITNESS WHEREOF,
      each of the parties hereto has caused a counterpart of this Amendment to be
      duly
      executed and delivered as of the date first above written.

    

    COMPANY:                                                                HERCULES
      INCORPORATED,

    a
      Delaware corporation

    

     
By:
      /s/ Stuart C.
      Shears

     
      Name: Stuart C. Shears

    
      	
               

            	
              Title:
                Vice President and Treasurer

            

    

    

    

    GUARANTORS:                                                 
      AQUALON COMPANY,

    a
      Delaware general
      partnership

    EAST
      BAY REALTY SERVICES,
      INC.,

    a
      Delaware corporation

    HERCULES
      COUNTRY CLUB,
      INC.,

    a
      Delaware corporation

    HERCULES
      EURO HOLDINGS,
      LLC,

    a
      Delaware limited liability
      company

    HERCULES
      FINANCE
      COMPANY,

    a
      Delaware general
      partnership

    HERCULES
      FLAVOR,
      INC.,

     a
      Delaware
      corporation

    HERCULES
      HYDROCARBON HOLDINGS,
      INC.,

    a
      Delaware corporation

    HERCULES
      INTERNATIONAL LIMITED,
      LLC,

    a
      Delaware limited liability
      company

    HERCULES
      PAPER HOLDINGS,
      INC.,

    a
      Delaware corporation

    WSP,
      INC.,

    a
      Delaware corporation

    

    

    By:
      /s/ Stuart C. Shears

    Name:
      Stuart C. Shears

    Title:
      Authorized
      Representative

    for
      each of the foregoing
      Guarantors

     

     

     

    
      
         

      

      
         

        
          

        

      

      
         

      

    

    
 

    
      	
              
                ADMINISTRATIVE
                  AGENT

              

            	
            

    

    
      	
              AND
                LENDER:

            	
              CREDIT
                SUISSE, CAYMAN ISLANDS BRANCH (formerly known as Credit Suisse
                First Boston, acting through its Cayman Islands Branch), in its capacity
                as Administrative Agent, Collateral Agent and
                Lender

            

    

    

    By:
      /s/ Thomas
      Cantello                                                                

    Name:
      Thomas Cantello

    Title:
      Director

    

    By:
      /s/ Shaheen
      Malik                                                                

    Name:
      Shaheen Malik

    Title:
      Associate

    

    

    
      
         

      

      
         

        
          

        

      

      
         

      

    

    LENDERS:                                                                    WACHOVIA
      BANK, NATIONAL ASSOCIATION

    

    By:
      /s/ C. Jeffery
      Seaton                                                                

    Name:
      C.
      Jeffrey Seaton

    Title:
      Managing Director

    

    

    

    

    

    
      
         

      

      
         

        
          

        

      

      
         

      

    

    ____________________________________

    [Name
      of Institution or
      Fund]

    

    By:                                                                

    Name:

    Title:Unassociated Document

                   
      Exhibit
      10.1

     

    

     

     

    

     

    ALABAMA/MICHIGAN/PERMIAN
      PACKAGE

    PURCHASE
      AGREEMENT

    

    

    

    BETWEEN

    

    

    

    DOMINION
      EXPLORATION & PRODUCTION, INC.

    DOMINION
      ENERGY, INC.

    DOMINION
      OKLAHOMA TEXAS EXPLORATION & PRODUCTION, INC.

    DOMINION
      RESERVES, INC.

    LDNG
      TEXAS HOLDINGS, LLC

    DEPI
      TEXAS HOLDINGS, LLC

     

    

     

    

     

    AS
      SELLERS,

     

    

     

    

     

    AND

     

    

     

    

     

    

     

    L
      O &
G ACQUISITION CORP.,

     

    

     

    

     

    AS
      PURCHASER,

     

    

     

    

     

     

    

     

    Dated
      as
      of June 1, 2007

     

     

    

     

    
      
        
           

        

        
        

      

      
        
        

        
          

        

      

      
        
        

        
        

      

    

    
 

    
      TABLE
        OF CONTENTS

      

      

      
        	
                   

              	
                   

              	
                Page

              

      

      

      
        	
                ARTICLE
                  1.  PURCHASE
                  AND SALE

              	 	
                1

              

      

      

      
        	
                Section
                  1.1

              	
                Purchase
                  and Sale

              	
                1

              
	
                Section
                  1.2

              	
                Certain
                  Definitions

              	
                1

              
	
                Section
                  1.3

              	
                Excluded
                  Assets

              	
                15

              
	
                Section
                  1.4

              	
                Transfer
                  of Certain Assets Not Held by Sellers

              	
                17

              
	 	 	 

      

      

      
        	
                ARTICLE
                  2.  PURCHASE
                  PRICE

              	 	
                17

              

      

      

      
        	
                Section
                  2.1

              	
                Purchase
                  Price

              	
                17

              
	
                Section
                  2.2

              	
                Allocation
                  of Purchase Price

              	
                18

              
	
                Section
                  2.3

              	
                Adjustments
                  to Purchase Price

              	
                20

              
	
                Section
                  2.4

              	
                Ordinary
                  Course Pre-Effective Date Costs Paid and Revenues Received

              	
                 

              
	 	
                Post-Closing

              	
                25

              
	
                Section
                  2.5

              	
                Procedures

              	
                26

              

      

      

      
        	
                ARTICLE
                  3.  TITLE
                  MATTERS

              	 	
                27

              

      

      

      
        	
                Section
                  3.1

              	
                Company’s
                  Title

              	
                27

              
	
                Section
                  3.2

              	
                Definition
                  of Defensible Title

              	
                27

              
	
                Section
                  3.3

              	
                Definition
                  of Permitted Encumbrances

              	
                28

              
	
                Section
                  3.4

              	
                Allocated
                  Values

              	
                30

              
	
                Section
                  3.5

              	
                Notice
                  of Title Defects; Defect Adjustments

              	
                31

              
	
                Section
                  3.6

              	
                Consents
                  to Assignment and Preferential Rights to Purchase

              	
                35

              
	
                Section
                  3.7

              	
                Limitations
                  on Applicability

              	
                38

              

      

      

      
        	
                ARTICLE
                  4.  REPRESENTATIONS
                  AND WARRANTIES OF SELLERS

              	 	
                38

              

      

      

      
        	
                Section
                  4.1

              	
                Sellers

              	
                38

              
	
                Section
                  4.2

              	
                The
                  Companies

              	
                39

              
	
                Section
                  4.3

              	
                The
                  Subsidiaries

              	
                42

              
	
                Section
                  4.4

              	
                Litigation

              	
                44

              
	
                Section
                  4.5

              	
                Taxes
                  and Assessments

              	
                44

              
	
                Section
                  4.6

              	
                Environmental
                  Laws

              	
                46

              
	
                Section
                  4.7

              	
                Compliance
                  with Laws

              	
                46

              
	
                Section
                  4.8

              	
                Contracts

              	
                47

              
	
                Section
                  4.9

              	
                Payments
                  for Production

              	
                47

              
	
                Section
                  4.10

              	
                Production
                  Imbalances

              	
                47

              
	
                Section
                  4.11

              	
                Consents
                  and Preferential Purchase Rights

              	
                47

              
	
                Section
                  4.12

              	
                Liability
                  for Brokers’ Fees

              	
                48

              
	
                Section
                  4.13

              	
                Equipment
                  and Personal Property

              	
                48

              
	
                Section
                  4.14

              	
                Non-Consent
                  Operations

              	
                48

              
	
                Section
                  4.15

              	
                Wells

              	
                48

              
	
                Section
                  4.16

              	
                Outstanding
                  Capital Commitments

              	
                49

              
	
                Section
                  4.17

              	
                Insurance

              	
                49

              

      

      

      
        
          
          

        

        
          
          

          
            

          

        

        
          
          

        

      

      

      
        	
                Section
                  4.18

              	
                Absence
                  of Certain Changes

              	
                49

              
	
                Section
                  4.19

              	
                Assets
                  of the E&P Business

              	
                49

              
	
                Section
                  4.20

              	
                Limitations

              	
                49

              
	
                Section
                  4.21

              	
                Production
                  Allowables

              	
                51

              
	
                Section
                  4.22

              	
                Accuracy
                  of Data

              	
                51

              

      

      

      
        	
                ARTICLE
                  5.  REPRESENTATIONS
                  AND WARRANTIES OF PURCHASER

              	 	
                52

              

      

      

      
        	
                Section
                  5.1

              	
                Existence
                  and Qualification

              	
                52

              
	
                Section
                  5.2

              	
                Power

              	
                52

              
	
                Section
                  5.3

              	
                Authorization
                  and Enforceability

              	
                52

              
	
                Section
                  5.4

              	
                No
                  Conflicts

              	
                52

              
	
                Section
                  5.5

              	
                Consents,
                  Approvals or Waivers

              	
                53

              
	
                Section
                  5.6

              	
                Litigation

              	
                53

              
	
                Section
                  5.7

              	
                Financing

              	
                53

              
	
                Section
                  5.8

              	
                Investment
                  Intent

              	
                53

              
	
                Section
                  5.9

              	
                Independent
                  Investigation

              	
                53

              
	
                Section
                  5.10

              	
                Liability
                  for Brokers’ Fees

              	
                54

              
	
                Section
                  5.11

              	
                Qualification

              	
                54

              

      

      

      
        	
                ARTICLE
                  6.  COVENANTS
                  OF THE PARTIES

              	 	
                54

              

      

      

      
        	
                Section
                  6.1

              	
                Access

              	
                54

              
	
                Section
                  6.2

              	
                Notification
                  of Breaches

              	
                54

              
	
                Section
                  6.3

              	
                Press
                  Releases

              	
                55

              
	
                Section
                  6.4

              	
                Operation
                  of Business

              	
                55

              
	
                Section
                  6.5

              	
                Conduct
                  of the Companies and Wholly-Owned Subsidiaries

              	
                57

              
	
                Section
                  6.6

              	
                Indemnity
                  Regarding Access

              	
                58

              
	
                Section
                  6.7

              	
                Governmental
                  Reviews

              	
                59

              
	
                Section
                  6.8

              	
                Intercompany
                  Indebtedness

              	
                59

              
	
                Section
                  6.9

              	
                Third
                  Person Indebtedness

              	
                59

              
	
                Section
                  6.10

              	
                Operatorship

              	
                60

              
	
                Section
                  6.11

              	
                Volumetric
                  Production Payments

              	
                60

              
	
                Section
                  6.12

              	
                Hedges

              	
                60

              
	
                Section
                  6.13

              	
                Vehicles
                  and Equipment

              	
                60

              
	
                Section
                  6.14 

              	
                Certain
                  Beneficial Interests

              	
                60

              
	
                Section
                  6.15

              	
                Further
                  Assurances

              	
                62

              
	
                Section
                  6.16

              	
                DEPI/Purchaser
                  Transition Services Agreement

              	
                62

              
	
                Section
                  6.17

              	
                Dominion
                  Resources Black Warrior Trust

              	
                63

              
	
                Section
                  6.18

              	
                Financial
                  Statements

              	
                63

              
	
                Section
                  6.19

              	
                Carlsbad
                  Royalties; CoEnergy Contract

              	
                65

              

      

      

      
        	
                ARTICLE
                  7.  CONDITIONS
                  TO CLOSING

              	 	
                65

              

      

      

      
        	
                Section
                  7.1

              	
                Conditions
                  of Sellers to Closing

              	
                65

              
	
                Section
                  7.2

              	
                Conditions
                  of Purchaser to Closing

              	
                66

              

      

      

      
        
          
          

        

        
          ii

          
            

          

        

        
          
          

        

      

      

      
        	
                ARTICLE
                  8.  CLOSING

              	 	
                67

              

      

      

      
        	
                Section
                  8.1

              	
                Time
                  and Place of Closing

              	
                67

              
	
                Section
                  8.2

              	
                Obligations
                  of Sellers at Closing

              	
                67

              
	
                Section
                  8.3

              	
                Obligations
                  of Purchaser at Closing

              	
                69

              
	
                Section
                  8.4

              	
                Closing
                  Payment and Post-Closing Purchase Price Adjustment

              	
                69

              

      

      

      
        	
                ARTICLE
                  9.  TAX
                  MATTERS

              	 	
                71

              

      

      

      
        	
                Section
                  9.1

              	
                Liability
                  for Taxes

              	
                71

              
	
                Section
                  9.2

              	
                Preparation
                  and Filing of Company Tax Returns

              	
                74

              
	
                Section
                  9.3

              	
                Allocation
                  Arrangements

              	
                75

              
	
                Section
                  9.4

              	
                Access
                  to Information

              	
                75

              
	
                Section
                  9.5

              	
                Contest
                  Provisions

              	
                76

              
	
                Section
                  9.6

              	
                Post-Closing
                  Actions Which Affect Seller’s Tax Liability

              	
                77

              
	
                Section
                  9.7

              	
                Refunds

              	
                77

              
	
                Section
                  9.8

              	
                Conflict

              	
                78

              
	
                Section
                  9.9

              	
                Election
                  Under Section 338(h)(10)

              	
                78

              
	
                Section
                  9.10

              	
                Section
                  754 Election

              	
                78

              

      

      

      
        	
                ARTICLE
                  10.  U.S.
                  EMPLOYMENT MATTERS

              	 	
                79

              

      

      

      
        	
                Section
                  10.1

              	
                Employees

              	
                79

              
	
                Section
                  10.2

              	
                Continued
                  Employment

              	
                80

              
	
                Section
                  10.3

              	
                Plan
                  Participation

              	
                82

              
	
                Section
                  10.4

              	
                Participation
                  in Purchaser Plans

              	
                83

              
	
                Section
                  10.5

              	
                Service
                  Credit

              	
                85

              
	
                Section
                  10.6

              	
                Vacation
                  and Leave

              	
                85

              
	
                Section
                  10.7

              	
                Defined
                  Contribution Plan

              	
                85

              
	
                Section
                  10.8

              	
                Vesting
                  

              	
                86

              
	
                Section
                  10.9

              	
                Welfare
                  Benefit Plans; Workers’ Compensation; Other Benefits

              	
                86

              
	
                Section
                  10.10

              	
                WARN
                  Act

              	
                88

              
	
                Section
                  10.11

              	
                Postretirement
                  Benefits

              	
                88

              
	
                Section
                  10.12

              	
                Annual
                  Incentive Plan

              	
                89

              
	
                Section
                  10.13

              	
                Immigration
                  Matters

              	
                90

              
	
                Section
                  10.14

              	
                No
                  Plan or Amendment

              	
                90

              

      

      

      
        	
                ARTICLE
                  11.  TERMINATION
                  AND AMENDMENT

              	 	
                90

              

      

      

      
        	
                Section
                  11.1

              	
                Termination

              	
                90

              
	
                Section
                  11.2

              	
                Effect
                  of Termination

              	
                90

              

      

      

      
        	
                ARTICLE
                  12.  INDEMNIFICATION;
                  LIMITATIONS

              	 	
                91

              

      

      

      
        	
                Section
                  12.1

              	
                Assumption

              	
                91

              
	
                Section
                  12.2

              	
                Indemnification

              	
                92

              
	
                Section
                  12.3

              	
                Indemnification
                  Actions

              	
                98

              
	
                Section
                  12.4

              	
                Casualty
                  and Condemnation

              	
                100

              
	
                Section
                  12.5

              	
                Limitation
                  on Actions

              	
                100

              

      

      

      
        
          
          

        

        
          iii

          
            

          

        

        
          
          

        

      

      

      
        	
                ARTICLE
                  13.  MISCELLANEOUS

              	 	
                102

              

      

      

      
        	
                Section
                  13.1

              	
                Counterparts

              	
                102

              
	
                Section
                  13.2

              	
                Notices

              	
                102

              
	
                Section
                  13.3

              	
                Sales
                  or Use Tax, Recording Fees and Similar Taxes and Fees

              	
                103

              
	
                Section
                  13.4

              	
                Expenses

              	
                103

              
	
                Section
                  13.5

              	
                Replacement
                  of Bonds, Letters of Credit and Guarantees

              	
                103

              
	
                Section
                  13.6

              	
                Records

              	
                104

              
	
                Section
                  13.7

              	
                Name
                  Change

              	
                105

              
	
                Section
                  13.8

              	
                Governing
                  Law and Venue

              	
                105

              
	
                Section
                  13.9

              	
                Jurisdiction;
                  Service of Process

              	
                105

              
	
                Section
                  13.10

              	
                Captions

              	
                106

              
	
                Section
                  13.11

              	
                Waivers

              	
                106

              
	
                Section
                  13.12

              	
                Assignment

              	
                106

              
	
                Section
                  13.13

              	
                Entire
                  Agreement

              	
                106

              
	
                Section
                  13.14

              	
                Amendment

              	
                106

              
	
                Section
                  13.15

              	
                No
                  Third-Person Beneficiaries

              	
                107

              
	
                Section
                  13.16

              	
                Guarantees

              	
                107

              
	
                Section
                  13.17

              	
                References

              	
                107

              
	
                Section
                  13.18

              	
                Construction

              	
                107

              
	
                Section
                  13.19

              	
                Limitation
                  on Damages

              	
                108

              

      

      

      
        	
                EXHIBITS:

              	 	 

      

      

      
        	 	
                Exhibit
                  A

              	
                Companies

              	 
	 	
                Exhibit
                  B-1

              	
                Company
                  Leases

              	 
	 	
                Exhibit
                  B-2

              	
                Company
                  Wells

              	 
	 	
                Exhibit
                  B-3

              	
                Company
                  Midstream Assets

              	 
	 	
                Exhibit
                  B-4

              	
                Company
                  Office Leases

              	 
	 	
                Exhibit
                  C

              	
                Subsidiaries

              	 
	 	
                Exhibit
                  D-1

              	
                Additional
                  Leases

              	 
	 	
                Exhibit
                  D-2

              	
                Additional
                  Wells

              	 
	 	
                Exhibit
                  D-3

              	
                Additional
                  Midstream Assets

              	 
	 	
                Exhibit
                  D-4

              	
                Additional
                  Office Leases

              	 
	 	
                Exhibit
                  D-5

              	
                Additional
                  Inventory

              	 
	 	
                Exhibit
                  D-6

              	
                Additional
                  Radio Licenses

              	 
	 	
                Exhibit
                  E

              	
                Form
                  of Conveyance

              	 
	 	
                Exhibit
                  F

              	
                Form
                  of DEPI/Purchaser Transition Services Agreement

              	 
	 	
                Exhibit
                  H

              	
                Form
                  of DRI Guarantee

              	 
	 	
                Exhibit
                  I

              	
                Form
                  of Loews Corporation Guarantee

              	 

      

      

      
        	
                SCHEDULES

              	 	 

      

      

      
        	 	
                Schedule
                  1.2

              	
                Executives,
                  Managing Directors and Key Employees

              	 
	 	
                Schedule
                  1.2(jj)

              	
                Non-Excluded
                  Texas Counties

              	 
	 	
                Schedule
                  1.3

              	
                Certain
                  Excluded Assets

              	 
	 	
                Schedule
                  1.4

              	
                Assets
                  Not Owned By Sellers

              	 
	 	
                Schedule
                  2.2

              	
                Allocation
                  of Purchase Price

              	 
	 	
                Schedule
                  2.3(e)

              	
                Imbalance
                  Values

              	 

      

      

      
        
          
          

        

        
          iv

          
            

          

        

        
          
          

        

      

      

      
        	 	
                Schedule
                  3.3(j)

              	
                Certain
                  Calls on Production

              	 
	 	
                Schedule
                  3.4

              	
                Allocation
                  of Unadjusted Purchase Price

              	 
	 	
                Schedule
                  4.2(g)

              	
                Balance
                  Sheets and Income Statements

              	 
	 	
                Schedule
                  4.2(j)(i)

              	
                Employee
                  Benefits and Compensation Programs List

              	 
	 	
                Schedule
                  4.4

              	
                Litigation

              	 
	 	
                Schedule
                  4.5

              	
                Tax
                  Disclosures

              	 
	 	
                Schedule
                  4.6

              	
                Environmental
                  Disclosures

              	 
	 	
                Schedule
                  4.7

              	
                Violations
                  of Laws

              	 
	 	
                Schedule
                  4.8

              	
                Contracts

              	 
	 	
                Schedule
                  4.9

              	
                Production
                  Payments

              	 
	 	
                Schedule
                  4.10

              	
                Production
                  Imbalances

              	 
	 	
                Schedule
                  4.11

              	
                Consents
                  and Preferential Rights

              	 
	 	
                Schedule
                  4.13(a)

              	
                Equipment
                  Disclosures

              	 
	 	
                Schedule
                  4.16

              	
                Outstanding
                  Capital Commitments

              	 
	 	
                Schedule
                  4.17

              	
                Insurance

              	 
	 	
                Schedule
                  4.18

              	
                Absence
                  of Certain Changes

              	 
	 	
                Schedule
                  4.20(c)

              	
                Persons
                  with Knowledge

              	 
	 	
                Schedule
                  4.21

              	
                Production
                  Allowables

              	 
	 	
                Schedule
                  5.5

              	
                Consents,
                  Approvals or Waivers

              	 
	 	
                Schedule
                  6.4

              	
                2007
                  Plan

              	 
	 	
                Schedule
                  6.9

              	
                Third
                  Party Indebtedness

              	 
	 	
                Schedule
                  6.11

              	
                Terms
                  of Volumetric Production Payment Contracts

              	 
	 	
                Schedule
                  8.4(d)

              	
                Bank
                  Account Information

              	 
	 	
                Schedule
                  10.2(c)(i)

              	
                Summary
                  of the Dominion E&P Special Severance Program

              	 
	 	
                Schedule
                  10.2(c)(ii)

              	
                Special
                  Package - Managing Directors

              	 
	 	
                Schedule
                  10.2(c)(iii)

              	
                Special
                  Package - Key Employees

              	 
	 	
                Schedule
                  10.2(d)

              	
                Executive
                  Agreements - Terms and Conditions

              	 
	 	
                Schedule
                  13.5

              	
                Guarantees
                  to be Replaced

              	 

      

      

      

      
        
          
          

        

        
          v

          
            

          

        

        
          
          

        

      

      Index
        of Defined Terms

      

      Defined
        Term

      

      
        	
                2007
                  Plan

              	
                Section
                  6.4

              
	
                Accounting
                  Arbitrator

              	
                Section
                  8.4(b)

              
	
                Accounting
                  Principles

              	
                Section
                  2.3

              
	
                Additional
                  Assets

              	
                Section
                  1.2(a)

              
	
                Additional
                  Contracts

              	
                Section
                  1.2(a)(iv)

              
	
                Additional
                  Equipment

              	
                Section
                  1.2(a)(vi)

              
	
                Additional
                  Excluded Records

              	
                Section
                  1.2(a)(xi)

              
	
                Additional
                  Leases

              	
                Section
                  1.2(a)(i)

              
	
                Additional
                  Midstream Assets

              	
                Section
                  1.2(a)(iii)

              
	
                Additional
                  Properties

              	
                Section
                  1.2(a)(iii)

              
	
                Additional
                  Records

              	
                Section
                  1.2(a)(xi)

              
	
                Additional
                  Units

              	
                Section
                  1.2(a)(ii)

              
	
                Additional
                  Wells

              	
                Section
                  1.2(a)(i)

              
	
                Adjustment
                  Period

              	
                Section
                  2.3(h)(i)(A)

              
	
                Administrative
                  Services Agreement

              	
                Section
                  1.2(b)

              
	
                Adverse
                  Environmental Condition

              	
                Section
                  1.2(c)

              
	
                Affiliate

              	
                Section
                  1.2(d)

              
	
                Agreed
                  Environmental Concern

              	
                Section
                  12.2(g)(ii)

              
	
                Agreed
                  Rate

              	
                Section
                  2.3(h)(iv)

              
	
                Agreement

              	
                Preamble

              
	
                Allocated
                  Value

              	
                Section
                  3.4

              
	
                Annual
                  Incentive Plan

              	
                Section
                  1.2(e)

              
	
                Appalachian
                  Business

              	
                Section
                  1.2(a)(xi)(A)

              
	
                Assets

              	
                Section
                  1.2(f)

              
	
                Assumed
                  Seller Obligations

              	
                Section
                  12.1

              
	
                Audited
                  S-1 Financial Statements

              	
                Section
                  6.18(c)

              
	
                Audited
                  Statements of Revenue and Expenses

              	
                Section
                  6.18(b)

              
	
                Balance
                  Sheets

              	
                Section
                  4.2(g)

              
	
                Business
                  Day

              	
                Section
                  1.2(g)

              
	
                Carlsbad
                  Royalties

              	
                Section
                  6.19(a)

              
	
                Claim

              	
                Section
                  12.3(b)

              
	
                Claim
                  Notice

              	
                Section
                  12.3(b)

              
	
                Closing

              	
                Section
                  8.1

              
	
                Closing
                  Date

              	
                Section
                  8.1

              
	
                Closing
                  Payment

              	
                Section
                  8.4(a)

              
	
                COBRA

              	
                Section
                  10.9

              
	
                Code

              	
                Section
                  1.2(i)

              
	
                Company;
                  Companies

              	
                Recitals

              
	
                Company
                  Assets

              	
                Section
                  1.2(j)

              
	
                Company
                  Contracts

              	
                Section
                  1.2(j)(iv)

              
	
                Company
                  Equipment

              	
                Section
                  1.2(j)(vi)

              
	
                Company
                  Excluded Records

              	
                Section
                  1.2(j)(xi)

              
	
                Company
                  Leases

              	
                Section
                  1.2(j)(i)

              

      

      

      
        
          
          

        

        
          vi

          
            

          

        

        
          
          

        

      

      

      
        	
                Company
                  Midstream Asserts

              	
                Section
                  1.2(j)(iii)

              
	
                Company
                  Onshore Employees

              	
                Section
                  10.1(a)

              
	
                Company
                  Properties

              	
                Section
                  1.2(j)(iii)

              
	
                Company
                  Records

              	
                Section
                  1.2(j)(xi)

              
	
                Company’s
                  U.S. Benefit Plans

              	
                Section
                  10.3(a)(i)

              
	
                Company
                  Units

              	
                Section
                  1.2(j)(ii)

              
	
                Company
                  Wells

              	
                Section
                  1.2(j)(i)

              
	
                Comparability
                  Period

              	
                Section
                  10.2(a)

              
	
                Computer/Vehicle
                  Buy-Out Costs

              	
                Section
                  6.13

              
	
                Confidentiality
                  Agreement

              	
                Section
                  6.1

              
	
                Consolidated
                  Group

              	
                Section
                  1.2(n)

              
	
                Consolidated
                  Onshore E&P Business

              	
                Section
                  1.2(o)

              
	
                Contracts

              	
                Section
                  1.2(p)

              
	
                Conveyances

              	
                Section
                  8.2(d)

              
	
                Cut-Off
                  Date

              	
                Section
                  2.3

              
	
                Damages

              	
                Section
                  12.2(d)

              
	
                Defensible
                  Title

              	
                Section
                  3.2(a)

              
	
                DEI

              	
                Preamble

              
	
                DEPI

              	
                Preamble

              
	
                DEPI
                  I, LP

              	
                Section
                  1.2(q)

              
	
                DEPI/Purchaser
                  Transition Services Agreement

              	
                Section
                  8.2(m)

              
	
                DEPI
                  Survivor LP

              	
                Section
                  6.14(c)

              
	
                DEPI
                  Texas

              	
                Preamble

              
	
                DEPI
                  Texas Beneficial Interests

              	
                Section
                  1.2(r)

              
	
                Deloitte
                  

              	
                Section
                  6.18(b)

              
	
                Designated
                  Affiliates

              	
                Section
                  10.1(a)

              
	
                Designated
                  Employees

              	
                Section
                  10.1(b)

              
	
                DNG
                  I, LP

              	
                Section
                  1.2(u)

              
	
                DOTEPI

              	
                Preamble

              
	
                DOTEPI
                  Survivor LP

              	
                Section
                  6.14(c)

              
	
                DOTEPI
                  Texas Beneficial Interests

              	
                Section
                  1.2(v)

              
	
                DRI

              	
                Section
                  1.2(w)

              
	
                Due
                  Date

              	
                Section
                  9.2(d)

              
	
                E&P
                  Business

              	
                Section
                  1.2(x)

              
	
                Effective
                  Date

              	
                Section
                  1.2(y)

              
	
                Employee
                  Plans

              	
                Section
                  1.2(z)

              
	
                Environmental
                  Arbitrator

              	
                Section
                  12.2(g)(v)

              
	
                Environmental
                  Concern

              	
                Section
                  12.2(g)(i)

              
	
                Environmental
                  Laws

              	
                Section
                  4.6

              
	
                Environmental
                  Liabilities

              	
                Section
                  1.2(aa)

              
	
                Equipment

              	
                Section
                  1.2(bb)

              
	
                Equity
                  Interests

              	
                Section
                  4.3(e)

              
	
                ERISA

              	
                Section
                  1.2(cc)

              
	
                ERISA
                  Affiliate

              	
                Section
                  1.2(dd)

              
	
                Excluded
                  Assets

              	
                Section
                  1.3

              
	
                Excluded
                  Employees

              	
                Section
                  1.2(ee)

              

      

      

      
        
          
          

        

        
          vii

          
            

          

        

        
          
          

        

      

      

      
        	
                Excluded
                  Midcontinent Pipeline Interests

              	
                Section
                  1.3(xxii)

              
	
                Excluded
                  New Mexico County; Excluded New Mexico Counties

              	
                Section
                  1.2(gg)

              
	
                Excluded
                  Onshore Areas

              	
                Section
                  1.2(hh)

              
	
                Excluded
                  Records

              	
                Section
                  1.2(ii)

              
	
                Excluded
                  Texas County; Excluded Texas Counties

              	
                Section
                  1.2(jj)

              
	
                Excluded
                  Utah Interests

              	
                Section
                  1.3(xxi)

              
	
                Executives

              	
                Section
                  1.2(kk)

              
	
                Governmental
                  Authority

              	
                Section
                  1.2(ll)

              
	
                Hart-Scott-Rodino
                  Act

              	
                Section
                  1.2(mm)

              
	
                Hazardous
                  Substances

              	
                Section
                  1.2(nn)

              
	
                Income
                  Statements

              	
                Section
                  4.2(g)

              
	
                Indemnified
                  Person

              	
                Section
                  12.3(a)

              
	
                Indemnifying
                  Person

              	
                Section
                  12.3(a)

              
	
                Independent
                  Appraiser

              	
                Section
                  2.2

              
	
                Interest
                  Purchase Price

              	
                Section
                  2.2(a)

              
	
                Interest
                  Unadjusted Purchase Price

              	
                Section
                  2.2(a)

              
	
                Interests

              	
                Section
                  1.1

              
	
                Key
                  Employees

              	
                Section
                  1.2(oo)

              
	
                Laws

              	
                Section
                  1.2(pp)

              
	
                LDNG

              	
                Preamble

              
	
                Leases

              	
                Section
                  1.2(qq)

              
	
                Leadership
                  Team

              	
                Section
                  10.1(f)

              
	
                Loan

              	
                Section
                  6.5(c)

              
	
                Managing
                  Directors

              	
                Section
                  1.2(ss)

              
	
                Material
                  Adverse Effect

              	
                Section
                  4.20(d)

              
	
                Material
                  Contract

              	
                Section
                  1.2(tt)

              
	
                Midstream
                  Assets

              	
                Section
                  1.2(uu)

              
	
                Multiemployer
                  Plan

              	
                Section
                  1.2(vv)

              
	
                NORM

              	
                Section
                  4.6

              
	
                Offshore
                  Package Areas

              	
                Section
                  1.2(ww)

              
	
                Oil
                  and Gas Leases

              	
                Section
                  1.2(a)(i)

              
	
                PBGC

              	
                Section
                  1.2(xx)

              
	
                Party;
                  Parties

              	
                Preamble

              
	
                Permitted
                  Encumbrances

              	
                Section
                  3.3

              
	
                Person

              	
                Section
                  1.2(yy)

              
	
                Phase
                  I Investigation

              	
                Section
                  6.1

              
	
                Post-Closing
                  Period

              	
                Section
                  9.1(c)

              
	
                Potential
                  Adverse Environmental Condition

              	
                Section
                  12.2(g)(i)

              
	
                Pre-Closing
                  Period

              	
                Section
                  9.1(b)

              
	
                Properties

              	
                Section
                  1.2(zz)

              
	
                Property
                  Costs

              	
                Section
                  1.2(aaa)

              
	
                Purchase
                  Price

              	
                Section
                  2.1

              
	
                Purchaser

              	
                Preamble

              
	
                Purchaser
                  Group

              	
                Section
                  12.2(b)

              
	
                Purchaser
                  Holdco

              	
                Section
                  6.14(c)

              
	
                Purchaser
                  Subs

              	
                Section
                  6.14(c)

              

      

      

      
        
          
          

        

        
          viii

          
            

          

        

        
          
          

        

      

      

      
        	
                Purchaser
                  U.S. Employee Plans

              	
                Section
                  10.4(a)

              
	
                Records

              	
                Section
                  1.2(ccc)

              
	
                Reserve
                  Report

              	
                Section
                  4.22

              
	
                Reserves

              	
                Preamble

              
	
                Retained
                  Seller Obligations

              	
                Section
                  12.1

              
	
                S-1
                  Financial Statements

              	
                Section
                  6.18(c)

              
	
                SEC

              	
                Section
                  6.18(a)

              
	
                Section
                  338(h)(10) Elections

              	
                Section
                  9.9

              
	
                Selected
                  Employees

              	
                Section
                  10.1(c)

              
	
                Seller
                  Employment Indemnified Persons

              	
                Section
                  10.1(f)

              
	
                Sellers

              	
                Preamble

              
	
                Shares

              	
                Recitals

              
	
                Special
                  Benefits

              	
                Section
                  10.11(b)

              
	
                Statements
                  of Revenues and Expenses

              	
                Section
                  6.18(a)

              
	
                Stonewater
                  LP

              	
                Error!
                  Reference source not found.

              
	
                Sublease

              	
                Section
                  8.2(n)

              
	
                Subsidiary

              	
                Section
                  1.2(fff)

              
	
                Survivor
                  LPs

              	
                Section
                  6.14(c)

              
	
                Target
                  Closing Date

              	
                Section
                  8.1

              
	
                Tax

              	
                Section
                  1.2(ggg)

              
	
                Tax
                  Audit

              	
                Section
                  9.5(a)

              
	
                Tax
                  Expenses

              	
                Section
                  1.2(hhh)

              
	
                Tax
                  Indemnified Person

              	
                Section
                  9.5(a)

              
	
                Tax
                  Indemnifying Person

              	
                Section
                  9.5(a)

              
	
                Tax
                  Items

              	
                Section
                  9.2(a)

              
	
                Tax
                  Payor

              	
                Section
                  9.2(d)

              
	
                Tax
                  Return

              	
                Section
                  9.2(a)

              
	
                Tax
                  Return Preparer

              	
                Section
                  9.2(d)

              
	
                Tax
                  Sharing Agreement

              	
                Section
                  9.3

              
	
                Title
                  Arbitrator

              	
                Section
                  3.5(i)

              
	
                Title
                  Benefit

              	
                Section
                  3.2(b)

              
	
                Title
                  Benefit Amount

              	
                Section
                  3.5(e)

              
	
                Title
                  Claim Date

              	
                Section
                  3.5(a)

              
	
                Title
                  Defect

              	
                Section
                  3.2(b)

              
	
                Title
                  Defect Amount

              	
                Section
                  3.5(d)

              
	
                Title
                  IV Plan

              	
                Section
                  4.2(j)(iv)

              
	
                Transferred
                  Derivatives

              	
                Section
                  1.2(jjj)

              
	
                Trust
                  Agreement

              	
                Section
                  1.2(kkk)

              
	
                Unadjusted
                  Purchase Price

              	
                Section
                  2.1

              
	
                U.S.
                  Temporary Employees

              	
                Section
                  1.2(lll)

              
	
                Units

              	
                Section
                  1.2(mmm)

              
	
                WARN
                  Act

              	
                Section
                  10.10(a)

              
	
                Wells

              	
                Section
                  1.2(ooo)

              
	
                Wholly-Owned
                  Subsidiary

              	
                Section
                  1.2(qqq)

              

      

      
 

      
        
          
          

        

        
          ix

          
            

          

        

        
          
          

        

      

    

     

     

    ALABAMA/MICHIGAN/PERMIAN
      PACKAGE PURCHASE AGREEMENT

     

    This
      Alabama/Michigan/Permian Package Purchase Agreement (this “Agreement”),
      is
      dated as of June 1, 2007, by and between Dominion Exploration &
Production, Inc., a corporation organized under the Laws of Delaware
      (“DEPI”),
      Dominion Energy, Inc., a corporation organized under the Laws of Virginia
      (“DEI”),
      Dominion Oklahoma Texas Exploration & Production, Inc., a corporation
      organized under the Laws of Delaware (“DOTEPI”),
      Dominion Reserves, Inc., a corporation organized under Laws of Virginia
      (“Reserves”),
      LDNG
      Texas Holdings, LLC, a limited liability company organized under the laws of
      Oklahoma (“LDNG”)
      and
      DEPI Texas Holdings, LLC, a limited liability company organized under the laws
      of Delaware (“DEPI
      Texas”)
      (collectively “Sellers”),
      and L
      O & G Acquisition Corp., a company organized under the Laws of Delaware
      (“Purchaser”).
      Sellers and Purchaser are sometimes referred to collectively as the
“Parties”
and
      individually as a “Party.”

     

    RECITALS:

     

    Each
      Seller desires to sell and Purchaser desires to purchase all of the issued
      and
      outstanding shares or partnership interests, as applicable, owned of record
      by
      each Seller (the “Shares”)
      of the
      corporations and partnerships described opposite each Seller’s name in
      Exhibit A (each, a “Company”
and
      collectively, the “Companies”),
      and,
      in the case of LDNG, listed opposite such Seller’s name in Exhibit C, and
      DEPI, DOTEPI and Reserves desire to sell and Purchaser desires to purchase
      those
      certain interests in oil and gas properties, rights and related assets that
      are
      defined and described as “Additional Assets” herein.

     

    NOW,
      THEREFORE, in consideration of the premises and of the mutual promises,
      representations, warranties, covenants, conditions and agreements contained
      herein, and for other valuable consideration, the receipt and sufficiency of
      which are hereby acknowledged, the Parties agree as follows:

     

     

    ARTICLE 1.

    PURCHASE
      AND SALE

     

    Section 1.1 
      Purchase
      and Sale. 
      On the terms and conditions contained in this Agreement, each Seller agrees
      to
      sell to Purchaser and Purchaser agrees to purchase, accept and pay for
      (i) the Shares set forth opposite such Seller’s name in Exhibit A and
      Exhibit C and (ii) in the case of DEPI, DOTEPI and Reserves as
      Sellers, the Additional Assets owned by such Seller (collectively, the
“Interests”).

     

    Section 1.2 
      Certain
      Definitions. 
      As used herein:

     

    (a) “Additional
      Assets”
means
      all of DEPI’s, DOTEPI’s and Reserves’ right, title, and interest in and to the
      following:

     

    (i) The
      oil
      and gas leases, oil, gas and mineral leases and subleases, royalties, overriding
      royalties, net profits interests, mineral fee interests, carried interests,
      and
      other rights to oil and gas in place, and mineral servitudes (“Oil
      and Gas Leases”),
      that
      are described on Exhibit D-1 and all other Oil and Gas Leases

     

     

    
      
        
        

      

      
        1

        
          

        

      

      
        
        

      

       

       

      located
        in (A) any county in Michigan or in any county referred to on Exhibit D-1
        or (B)
        any county in New Mexico or Texas other than the Excluded New Mexico Counties
        or
        Excluded Texas Counties (collectively, the “Additional
        Leases”),
        and
        any and all oil, gas, water, CO2
        or
        injection wells thereon or on pooled, communitized or unitized acreage that
        includes all or any part of the Additional Leases, including the interests
        in
        the wells shown on Exhibit D-2 attached hereto (the “Additional
        Wells”);

    

     

    (ii) All
      pooled, communitized or unitized acreage which includes all or part of any
      Additional Leases (the “Additional
      Units”),
      and
      all tenements, hereditaments and appurtenances belonging to the Additional
      Leases and Additional Units.

     

    (iii) The
      gas
      processing plants, gas gathering systems, pipelines, and other mid-stream
      equipment described on Exhibit D-3 (the “Additional
      Midstream Assets”
and,
      together with the Additional Leases, Additional Wells and Additional Units,
      the
“Additional
      Properties”);

     

    (iv) The
      Material Contracts listed on Schedule 4.8, Part I and all other currently
      existing contracts, agreements and instruments with respect to the Additional
      Properties, to the extent applicable to the Additional Properties, including
      operating agreements, unitization, pooling, and communitization agreements,
      declarations and orders, area of mutual interest agreements, joint venture
      agreements, farmin and farmout agreements, leases, easements, rights-of-way,
      exploration agreements, participation agreements, marketing agreements,
      balancing agreements, exchange agreements, transportation agreements, gathering
      agreements, agreements for the sale, storage and purchase of oil and gas and
      treating and processing agreements, but excluding any contracts, agreements
      and
      instruments included within the definition of “Excluded Assets,” and provided
      that the defined term “Additional Contracts” shall not include the Additional
      Leases, conveyances and assignments of Additional Leases and other similar
      instruments constituting such Seller’s chain of title to the Additional Leases
      (subject to such exclusion and proviso, the “Additional
      Contracts”);

     

    (v) All
      surface fee interests, easements, permits, licenses, servitudes, rights-of-way,
      surface leases and other surface rights appurtenant to, and used or held for
      use
      primarily in connection with, the Additional Properties, but excluding any
      permits and other appurtenances included within the definition of “Excluded
      Assets;”

     

    (vi) All
      equipment, machinery, facilities, fixtures and other tangible personal property
      and improvements, including pipelines and well equipment (both surface and
      subsurface), located on the Additional Properties or used or held for use
      primarily in connection with the operation of the Additional Properties or
      the
      exploration, production, transportation or processing of oil and gas from the
      Additional Properties, but excluding (A) office furniture, fixtures and
      equipment except as described in Section 1.2(a)(vii),
      (B) materials and equipment inventory 

     

     

    
      
        
        

      

      
        2

        
          

        

      

      
        
        

      

       

       

      except
        as
        described in Section 1.2(a)(viii),
        (C) vehicles except as described in Section 1.2(a)(ix)
        and
        (D) any such items included within the definition of “Excluded Assets”
(subject to such exclusions, the “Additional
        Equipment”);

    

     

    (vii) The
      offices leases, office subleases or buildings described on Exhibit D-4,
      Part I and Part II, and the furniture, fixtures and equipment located
      in those offices and buildings (or the applicable portion thereof indicated
      on
      such Exhibit), less furniture, fixture and equipment assigned to any employee
      of
      Sellers or their Affiliates presently located in that space who does not become
      a Company Onshore Employee, plus furniture, fixtures and equipment assigned
      to
      any employee of Sellers or their Affiliates in the same building but outside
      of
      the space indicated on Exhibit D-4 who does become a Company Onshore
      Employee, but excluding in any case any such items included within the
      definition of “Excluded Assets;”

     

    (viii) The
      materials and equipment inventory, if any, described on
      Exhibit D-5;

     

    (ix) The
      vehicles acquired pursuant to Section 6.13;

     

    (x) All
      oil
      and gas produced from or attributable to the Additional Leases, Additional
      Units
      or Additional Wells after the Closing Date, all oil, condensate and scrubber
      liquids inventories and ethane, propane, iso-butane, nor-butane and gasoline
      inventories of Sellers from the Additional Properties in storage as of the
      end
      of the Closing Date, and all production, plant and transportation imbalances
      of
      Sellers with respect to the Additional Properties as of the end of the Closing
      Date; and

     

    (xi) The
      information, books, records, trade secrets and confidential information,
      including but not limited to geophysical and geological information, drilling
      operations, production data, customer information, operational data, research
      and development studies, reservoir modeling information and models, engineering
      information, and know-how (but excluding any trade secrets and confidential
      information of third parties) and other data, information and records of each
      Seller and its Affiliates, whether in hard copy or electronic or digital format,
      to the extent relating primarily to the Additional Properties or other
      Additional Assets, excluding, however,
      in each
      case:

     

    (A) all
      corporate, financial, Tax and legal data, information and records of such Seller
      that relates primarily to: (1) such Seller’s business generally (whether or not
      relating to the Additional Assets); (2) such Seller’s business and operations in
      Virginia, West Virginia, Ohio, Pennsylvania, New York, Kentucky, and Maryland
      (the “Appalachian
      Business”);
      (3)
      such Seller’s business and operations in the Excluded Onshore Areas; (4) such
      Seller’s business and operations in the Offshore Package Areas; or (5) the
      businesses of such Seller and its Affiliates (other 

     

     

    
      
        
        

      

      
        3

        
          

        

      

      
        
        

      

       

       

      than
        the
        Companies and Subsidiaries) other than the exploration and production of
        oil and
        gas, each of which is being retained by such Seller;

    

     

    (B) any
      data,
      information and records to the extent disclosure or transfer is prohibited
      or
      subjected to payment of a fee or other consideration by any license agreement
      or
      other agreement with a Person other than Affiliates of Seller, or by applicable
      Law, and for which no consent to transfer has been received or for which
      Purchaser has not agreed in writing to pay the fee or other consideration,
      as
      applicable;

     

    (C) all
      legal
      records and legal files of Sellers including all work product of and
      attorney-client communications with any Seller’s legal counsel (other than
      Additional Leases, title opinions, Additional Contracts and Sellers’ working
      files for litigation of DEPI, DOTEPI and Reserves listed on Schedule 4.4
      which is assumed by Purchaser pursuant to Section 12.1);

     

    (D) all
      software;

     

    (E) data,
      information and records relating to any sale of all or any portion of the
      Additional Assets proposed or considered by Sellers and their Affiliates
      pursuant to that sales process commenced in the fall of 2006 and announced
      pursuant to a press release dated November 1, 2006, including bids received
      from and records of negotiations with third Persons in connection
      therewith;

     

    (F) any
      data,
      information and records relating primarily to the other Excluded
      Assets;

     

    (G) those
      original information, data and records retained by any Seller pursuant to
Section 13.6;
      and

     

    (H) originals
      of well files and division order files with respect to Additional Wells and
      Additional Units for which DEPI, DOTEPI or Reserves is operator but for which
      Purchaser does not become operator (provided that copies of such files will
      be
      included in the Additional Records).

     

    (Clauses
      (A) through (G) shall hereinafter be referred to as the “Additional
      Excluded Records”
and
      subject to such exclusions, the data, information and records described in
      this
Section 1.2(a)(xi)
      shall
      hereinafter be referred to as the “Additional
      Records.”)
      For
      the avoidance of doubt, employment records of each Company Onshore Employee
      who
      becomes an employee of Purchaser or any Designated Affiliate pursuant to Article
      10 shall not be included in the Additional Records except to the extent:
      (i) permitted by applicable Law; and (ii) such employee expressly
      authorizes the transfer of such employment records from Sellers to Purchaser
      pursuant to a written waiver.

     

     

    
      
        
        

      

      
        4

        
          

        

      

      
        
        

      

    

     

     

    (xii) The
      radio
      licenses described on Exhibit D-6 except those for which a transfer is
      prohibited or subject to payment of a fee or other consideration and for which
      no consent to transfer has been received or for which Purchaser has not agreed
      in writing to pay the fee or other consideration, as applicable;
      and

     

    (xiii) All
      (A) accounts, instruments and general intangibles (as such terms are
      defined in the Uniform Commercial Code of Texas) attributable to the other
      Additional Assets at the Closing Date (other than the Excluded Assets and the
      amounts to which Seller is entitled pursuant to Section 2.3
      and
Section 2.4);
      and
      (B) liens and security interests and collateral in favor of Sellers that
      exist as of the Closing Date, whether choate or inchoate, under any law, rule
      or
      regulation or under any of the Additional Contracts (i) arising from the
      ownership, operation or sale or other disposition of any of the other Additional
      Assets or (ii) arising in favor of any Seller as the operator of any of the
      Additional Assets, but only to the extent Purchaser is appointed successor
      operator.

     

    (b) “Administrative
      Services Agreement”
means
      that certain Administrative Services Agreement effective as of June 1, 1994,
      by
      and between DRI and Dominion Resources Black Warrior Trust, as amended from
      time
      to time.

     

    (c) “Adverse
      Environmental Condition”
shall
      mean, with respect to the Assets, any violation of Environmental Laws; any
      condition that is required to be remediated or cured under applicable
      Environmental Laws; the failure to remediate or cure any condition that is
      required to be remediated or cured under applicable Environmental Laws; or
      any
      actual or threatened action or proceeding before any Governmental Authority
      alleging potential liability arising out of or resulting from any actual or
      alleged violation of, or any remedial obligation under, any Environmental
      Laws.

     

    (d) “Affiliate”
means,
      with respect to any Person, a Person that directly or indirectly controls,
      is
      controlled by or is under common control with such Person, with control in
      such
      context meaning the ability to direct the management or policies of a Person
      through ownership of voting shares or other securities, pursuant to a written
      agreement, or otherwise.

     

    (e) “Annual
      Incentive Plan”
means
      the annual incentive bonus plan sponsored by Dominion Resources, Inc. for its
      eligible employees.

     

    (f) “Assets”
means
      the Company Assets and the Additional Assets.

     

    (g) “Business
      Day”
means
      any day other than a Saturday, a Sunday, or a day on which banks are closed
      for
      business in New York, New York or Richmond, Virginia, United States of
      America.

     

    (h) “COBRA”
has
      the
      meaning set forth in Section 10.9.

     

    (i) “Code”
means
      the United States Internal Revenue Code of 1986, as amended.

     

     

    
      
        
        

      

      
        5

        
          

        

      

      
        
        

      

    

     

     

    (j) “Company
      Assets”
means
      all of each Company’s and Wholly-Owned Subsidiary’s right, title, and interest
      in and to the following:

     

    (i) The
      Oil
      and Gas Leases that are described on Exhibit B-1 and all other Oil and Gas
      Leases owned by any Company or Wholly-Owned Subsidiary (collectively, the
“Company
      Leases”),
      and
      any and all oil, gas, water, CO2 or injection wells thereon or on the pooled,
      communitized or unitized acreage that includes all or any part of the Leases,
      including the interests in the wells shown on Exhibit B-2 attached hereto
      (the “Company
      Wells”);

     

    (ii) All
      pooled, communitized or unitized acreage which includes all or a part of any
      Company Lease (the “Company
      Units”),
      and
      all tenements, hereditaments and appurtenances belonging to the Company Leases
      and Company Units;

     

    (iii) The
      gas
      processing plants, gas gathering systems, pipelines and other mid-stream
      equipment described on Exhibit B-3 (the “Company
      Midstream Assets”
and,
      together with the Company Leases, Company Wells and Company Units, the
“Company
      Properties”);

     

    (iv) The
      Material Contracts listed on Schedule 4.8 and all other currently existing
      contracts, agreements and instruments with respect to the Company Properties,
      to
      the extent applicable to the Company Properties, including but not limited
      to,
      operating agreements, unitization, pooling and communitization agreements,
      declarations and orders, area of mutual interest agreements, joint venture
      agreements, farmin and farmout agreements, leases, easements, rights-of-way,
      exploration agreements, participation agreements, marketing agreements,
      balancing agreements, exchange agreements, transportation agreements, gathering
      agreements, agreements for the sale, storage and purchase of oil and gas and
      treating and processing agreements, but excluding any contracts, agreements
      and
      instruments included within the definition of Excluded Assets, and provided
      that
      the defined term “Company Contracts” shall not include the Company Leases,
      conveyances and assignments of Company Leases and other similar instruments
      constituting any Company’s or Wholly-Owned Subsidiary’s chain of title to the
      Company Leases (subject to such exclusion and proviso, the “Company
      Contracts”);

     

    (v) All
      surface fee interests, easements, permits, licenses, servitudes, rights-of-way,
      surface leases and other surface rights appurtenant to, and used or held for
      use
      in connection with, the Company Properties, but excluding any permits and other
      appurtenances included within the definition of Excluded Assets;

     

    (vi) All
      equipment, machinery, facilities, fixtures and other tangible personal property
      and improvements, including pipelines and well equipment (both surface and
      subsurface), located on the Company Properties or used or held for use in
      connection with the operation of the Company Properties or the 

     

     

    
      
        
        

      

      
        6

        
          

        

      

      
        
        

      

       

       

      exploration,
        production, transportation or processing of oil or gas from the Company
        Properties, but excluding (A) office furniture, fixtures and equipment
        except as described in Section 1.2(j)(vii),
        and
        (B) any such items included within the definition of Excluded Assets
        (subject to such exclusions, the “Company
        Equipment”);

    

     

    (vii) The
      office leases or buildings, if any, described on Exhibit B-4 and the
      furniture, fixtures and equipment located therein, but excluding any such items
      included within the definition of Excluded Assets;

     

    (viii) The
      materials and equipment inventory, if any, used or held for use in connection
      with the Company Properties, but excluding any such items included within the
      definition of Excluded Assets;

     

    (ix) All
      vehicles used in connection with the Company Properties, but excluding any
      such
      items included within the definition of Excluded Assets;

     

    (x) All
      oil
      and gas produced from or attributable to the Company Leases, Company Units,
      or
      Company Wells after the Closing Date, all oil, condensate and scrubber liquids
      inventories and ethane, propane, iso-butane, nor-butane and gasoline inventories
      of the Companies and Wholly-Owned Subsidiaries from the Company Properties
      in
      storage as of the end of the Closing Date and production, plant and
      transportation imbalances of the Companies and Wholly-Owned Subsidiaries as
      of
      the end of the Closing Date;

     

    (xi) The
      software, trade secrets and confidential information, including but not limited
      to geophysical and geological information, drilling operations, production
      data,
      customer information, operational data, research and development studies,
      reservoir modeling information and models, engineering information, and know-how
      (but excluding any trade secrets and confidential information of third parties)
      and other data, information and records of the Companies and Wholly-Owned
      Subsidiaries and their Affiliates, excluding however

     

    (A) any
      data,
      information, software and records to the extent disclosure or change in
      ownership in connection with a sale of shares is prohibited or subjected to
      payment of a fee or other consideration by any license agreement or other
      agreement with a Person other than Affiliates of Seller, or by applicable Law,
      and for which no consent to transfer has been received or for which Purchaser
      has not agreed in writing to pay the fee or other consideration, as
      applicable;

     

    (B) all
      legal
      records and legal files of Sellers including all work product of and
      attorney-client communications with any Seller’s legal counsel (other than
      Sellers’ working files for litigation of the Companies and Subsidiaries listed
      on Schedule 4.4 which is assumed by Purchaser pursuant to Section 12.1);

     

     

    
      
        
        

      

      
        7

        
          

        

      

      
        
        

      

    

     

     

    (C) data,
      information and records relating to any sale of all or any portion of the Shares
      or any Company Assets proposed or considered by Sellers and their Affiliates
      pursuant to that sales process commenced in the fall of 2006 and announced
      pursuant to a press release on November 1, 2006, including bids received
      from and records of negotiations with third Persons;

     

    (D) any
      data,
      information and records primarily relating to the other Excluded Assets;
      and

     

    (E) those
      original data, information, software and records retained by any Seller pursuant
      to Section 13.6.

     

    (Clauses (A)
      through (E) shall hereinafter be referred to as the “Company
      Excluded Records”
and
      subject to such exclusions, the data, information, software and records
      described in this Section 1.2(j)(xi)
      shall
      hereinafter be referred to as the “Company
      Records”);

     

    (xii) Radio
      licenses except those for which change in ownership in connection with a sale
      of
      equity ownership is prohibited or subject to payment of a fee or other
      consideration and for which no consent to transfer has been received or for
      which Purchaser has not agreed in writing to pay the fee or other consideration
      as applicable;

     

    (xiii) the
      Equity Interests in the Subsidiaries that are
      not
      Wholly-Owned Subsidiaries; and

     

    (xiv) All
      (A) accounts, instruments and general intangibles (as such terms are
      defined in the Uniform Commercial Code of Texas) attributable to the other
      Company Assets at the Closing Date (other than the Excluded Assets and the
      amounts to which Seller is entitled pursuant to Section 2.3
      and
Section 2.4);
      and
      (B) liens and security interests and collateral in favor of the Companies
      and Wholly-Owned Subsidiaries that exist as of the Closing Date, whether choate
      or inchoate, under any law, rule or regulation or under any of the Company
      Contracts (i) arising from the ownership, operation or sale or other
      disposition of any of the other Company Assets or (ii) arising in favor of
      any Company or Wholly-Owned Subsidiary as the operator of any of the Company
      Assets, but only to the extent Purchaser is appointed successor
      operator.

     

    (k) “Company
      Onshore Employees”
has
      the
      meaning set forth in Section 10.1(a).

     

    (l) “Company’s
      U.S. Benefit Plans”
has
      the
      meaning set forth in Section 10.3(a)(i).

     

    (m) “Comparability
      Period”
has
      the
      meaning set forth in Section 10.2(a).

     

     

    
      
        
        

      

      
        8

        
          

        

      

      
        
        

      

    

     

     

    (n) “Consolidated
      Group”
means
      an affiliated, consolidated, combined or unitary group with respect to any
      Taxes
      of which any of (i) a Company or Subsidiary treated as a corporation for tax
      purposes and (ii) DRI or an Affiliate of DRI (other than any such Company or
      Subsidiary), is or was a member prior to the Closing Date.

     

    (o) “Consolidated
      Onshore E&P Business”
means,
      together, the E&P Business and the business and operations conducted by
      DEPI, DOTEPI, Reserves, and all Persons that are wholly-owned by DEPI, DOTEPI
      and Reserves, directly or indirectly, that pertain to the Excluded Onshore
      Areas.

     

    (p) “Contracts”
means
      Company Contracts and Additional Contracts.

     

    (q) “DEPI
      I, LP”
means
      Dominion Exploration & Production I, L.P., a limited partnership organized
      under the Laws of Texas.

     

    (r) “DEPI
      Texas Beneficial Interests”
means
      all of the interests of DEPI I, LP in the Additional Properties located in
      Texas
      that are not in an Excluded Texas County, and in any other Assets that are
      associated therewith.

     

    (s) “Designated
      Affiliates”
has
      the
      meaning set forth in Section 10.1(a).

     

    (t) “Designated
      Employees”
has
      the
      meaning set forth in Section 10.1(b).

     

    (u) “DNG
      I,
      LP”
means
      Dominion Natural Gas I, LP, a limited partnership organized under the Laws
      of
      Texas.

     

    (v) “DOTEPI
      Texas Beneficial Interests”
means
      all of the interests of DNG I, LP in the Additional Properties located in Texas
      that are not in an Excluded Texas County, and in any other Assets that are
      associated therewith.

     

    (w) “DRI”
means
      Dominion Resources, Inc., a corporation organized under the Laws of
      Virginia.

     

    (x) “E&P
      Business”
means
      the business and operations conducted with the Assets by the Companies,
      Wholly-Owned Subsidiaries, DEPI, DOTEPI and Reserves.

     

    (y) “Effective
      Date”
means
      11:59 p.m. Central Time on June 30, 2007.

     

    (z) “Employee
      Plans”
means
      employee benefit and compensation plans, agreements, contracts, policies and
      programs, including, without limitation, (i) all retirement, savings and other
      pension plans; (ii) all health, severance, insurance, disability and other
      employee welfare plans; and (iii) all employment, incentive, perquisites,
      vacation and other similar plans, programs or practices whether or not subject
      to ERISA and whether covering one person or more than one person, that are
      maintained by Seller or any Affiliate, including an ERISA Affiliate, with
      respect to Company Onshore Employees or to which any Seller or any Affiliate,
      including an ERISA Affiliate, contributes on behalf of Company Onshore
      Employees.

     

     

    
      
        
        

      

      
        9

        
          

        

      

      
        
        

      

    

     

     

    (aa) “Environmental
      Liabilities”
shall
      mean any and all environmental response costs, costs to cure (including the
      costs of any necessary pollution control equipment), restoration costs, costs
      of
      remediation or removal, natural resource damages, settlements, penalties, fines,
      attorneys’ fees and other Damages, including any such matters incurred or
      imposed pursuant to any claim or cause of action by a Governmental Authority
      or
      other Person, attributable to an Adverse Environmental Condition occurring
      with
      respect to the Assets.

     

    (bb) “Equipment”
means
      Company Equipment and Additional Equipment.

     

    (cc) “ERISA”
means
      the Employee Retirement Income Security Act of 1974, as amended.

     

    (dd) “ERISA
      Affiliate”
means
      any other Person that is required to be treated as a single employer with
      Sellers or any Company or Subsidiary that is an Affiliate of Sellers under
      Section 414 of the Code or Section 4001(a)(14) of ERISA.

     

    (ee) “Excluded
      Employees”
means
      the Executives and Managing Directors listed on Schedule 1.2.

     

    (ff) [RESERVED]

     

    (gg) “Excluded
      New Mexico Counties”
means
      all counties in the state of New Mexico other than (i) Chavez, Eddy, Lea and
      Roosevelt counties, and (ii), with respect to overriding royalty interests
      only,
      San Juan and Rio Arriba Counties, and “Excluded
      New Mexico County”
means
      any of them.

     

    (hh) “Excluded
      Onshore Areas”
means
      Arkansas, Colorado, Illinois, Kansas, Louisiana, North Dakota, Nebraska,
      Oklahoma, South Dakota, Utah, Wyoming, Montana, the Excluded New Mexico Counties
      and the Excluded Texas Counties.

     

    (ii) “Excluded
      Records”
means
      the Company Excluded Records and the Additional Excluded Records.

     

    (jj) “Excluded
      Texas Counties”
means
      all counties in the state of Texas other than those counties identified on
      Schedule 1.2(jj), and “Excluded
      Texas County”
means
      any of them.

     

    (kk) “Executives”
means
      the individuals listed on Schedule 1.2, Part I.

     

    (ll) “Governmental
      Authority”
means
      any national government and/or government of any political subdivision, and
      departments, courts, arbitrator, arbitral tribunals, commissions, boards,
      bureaus, ministries, agencies or other instrumentalities of any of
      them.

     

    (mm) “Hart-Scott-Rodino
      Act”
means
      the
      Hart-Scott-Rodino Antitrust Improvements Act of 1976, as amended.

     

     

    
      
        
        

      

      
        10

        
          

        

      

      
        
        

      

    

     

     

    (nn) “Hazardous
      Substances”
shall
      mean any substance defined or regulated as a “pollutant,” “contaminant,” “solid
      waste,” “hazardous substance,” “toxic substance” or “hazardous waste” under any
      Environmental Laws.

     

    (oo) “Key
      Employees”
means
      the individuals listed on Schedule 1.2, Part III.

     

    (pp) “Laws”
means
      all laws, statutes, rules, regulations, ordinances, orders, decrees,
      requirements, authoritative interpretations, judgments and codes of Governmental
      Authorities.

     

    (qq) “Leases”
means
      Company Leases and Additional Leases.

     

    (rr) “Leadership
      Team”
has
      the
      meaning set forth in Section 10.1(f).

     

    (ss) “Managing
      Directors”
means
      the individuals listed on Schedule 1.2, Part II.

     

    (tt) “Material
      Contract”
means
      any Contract (i) which can reasonably be expected in the case of (A) below
      to generate gross revenue per year for the owner of the Assets in excess of
      Ten
      Million dollars ($10,000,000) or (ii) which in the case of (D), (E), (F),
      (G) or (H) below can reasonably be expected to require expenditures per year
      chargeable to the owner of the Assets in excess of Five Million dollars
      ($5,000,000) (other than, in the case of (G), expenditures associated with
      transfer or re-licensing fees) or (iii) which in the case of (B) and (C)
      below can reasonably be expected to require expenditures per year chargeable
      to
      the owner of the Assets in excess of Five Million dollars ($5,000,000) or
      (iv) which satisfies the description in (I) or (J) below, and is of one or
      more of the following types:

     

    (A) contracts
      for the purchase, sale or exchange of oil, gas or other
      hydrocarbons;

     

    (B) contracts
      for the gathering, treatment, processing, handling, storage or transportation
      of
      oil, gas or other hydrocarbons;

     

    (C) contracts
      for the use or sharing of drilling rigs;

     

    (D) purchase
      agreements, farmin and farmout agreements, exploration agreements, participation
      agreements and similar agreements providing for the earning of an equity
      interest;

     

    (E) partnership
      agreements, joint venture agreements and similar agreements;

     

    (F) operating
      agreements, unit agreements and unit operating agreements;

     

    (G) seismic
      licenses and contracts;

     

     

    
      
        
        

      

      
        11

        
          

        

      

      
        
        

      

    

     

     

    (H) leases
      not constituting Oil and Gas leases;

     

    (I) contracts
      for the construction and installation of Equipment with guaranteed production
      throughput requirements where amounts owed if the guaranteed throughput is
      not
      delivered exceed Five Million dollars ($5,000,000); and

     

    (J) all
      contracts between any Company (or Subsidiary) on the one hand and any Seller
      or
      any of its Affiliates (other than any Company or Subsidiary) on the other hand
      that will remain binding on any Company or Subsidiary, or will become binding
      on
      Purchaser, after the Closing (other than as expressly contemplated by this
      Agreement).

     

    (uu) “Midstream
      Assets”
means
      the Company Midstream Assets and the Additional Midstream Assets.

     

    (vv) “Multiemployer
      Plan”
means
      a
      multiemployer plan, as defined in Sections 3(37) and 4001(a)(3) of
      ERISA.

     

    (ww) “Offshore
      Package Areas”
means
      the Outer Continental Shelf and the state waters of Texas, Louisiana,
      Mississippi or Alabama in the Gulf of Mexico.

     

    (xx) “PBGC”
means
      the Pension Benefit Guaranty Corporation.

     

    (yy) “Person”
means
      any individual, corporation, partnership, limited liability company, trust,
      estate, Governmental Authority or any other entity.

     

    (zz) “Properties”
means
      Company Properties and Additional Properties.

     

    (aaa) “Property
      Costs”
means
      (without duplication) all operating expenses (including without limitation
      costs
      of insurance, rentals, shut-in payments, royalty payments, title examination
      and
      curative actions, and production and similar Taxes measured by units of
      production, and severance Taxes, attributable to production of oil and gas
      from
      the Assets, but excluding any Seller’s, Company’s or Subsidiary’s other Taxes)
      and capital expenditures (including without limitation bonuses, broker fees,
      and
      other lease acquisition costs, costs of drilling and completing wells and costs
      of acquiring equipment) incurred in the ownership and operation of the Assets
      in
      the ordinary course of business, general and administrative costs with respect
      to the E&P Business, and overhead costs charged to the Assets under the
      applicable operating agreement or if none, charged to the Assets on the same
      basis as charged on the date of this Agreement, but excluding without limitation
      liabilities, losses, costs, and expenses attributable to:

     

    (i) claims,
      investigations, administrative proceedings, arbitration or litigation directly
      or indirectly arising out of or resulting from actual or claimed personal
      injury, illness or death; property damage; environmental damage or
      contamination; other torts; private rights of action given under any Law; or
      violation of any Law,

     

     

    
      
        
        

      

      
        12

        
          

        

      

      
        
        

      

    

     

     

    (ii) obligations
      to plug wells, dismantle facilities, close pits and clear the site and/or
      restore the surface or seabed around such wells, facilities and
      pits,

     

    (iii) obligations
      to remediate actual or claimed contamination of groundwater, surface water,
      soil
      or Equipment,

     

    (iv) title
      claims (including claims that Leases have terminated),

     

    (v) claims
      of
      improper calculation or payment of royalties (including overriding royalties
      and
      other burdens on production) related to deduction of post-production costs
      or
      use of posted or index prices or prices paid by affiliates,

     

    (vi) gas
      balancing and other production balancing obligations,

     

    (vii) casualty
      and condemnation,

     

    (viii) any
      claims for indemnification, contribution or reimbursement from any third Person
      with respect to liabilities, losses, costs and expenses of the type described
      in
      preceding clauses (i) through (vii), whether such claims are made pursuant
      to
      contract or otherwise; and

     

    (ix) non-cash
      accounting entries such as depletion, depreciation and amortization incurred
      with respect to the Assets.

     

    Notwithstanding
      anything to the contrary, Property Costs does not include any costs incurred
      by
      any Seller in connection with any obligation of such Seller to pay, reimburse
      or
      indemnify the Purchaser hereunder, which costs shall be the sole obligation
      of
      such Seller.

     

    (bbb) “Purchaser
      U.S. Employee Plans”
has
      the
      meaning set forth in Section 10.4(a).

     

    (ccc) “Records”
means
      Company Records and Additional Records.

     

    (ddd) “Selected
      Employees”
has
      the
      meaning set forth in Section 10.1(c).

     

    (eee) “Seller
      Employment Indemnified Persons”
has
      the
      meaning set forth in Section 10.1(f).

     

    (fff) “Subsidiary”
means
      any of the entities described on Exhibit C, which are direct or indirect
      wholly or partially-owned subsidiaries of one or more of the
      Companies.

     

    (ggg) “Tax”
      means
      (i) all taxes, assessments, unclaimed property and escheat obligations,
      fees and other governmental charges imposed by any Governmental Authority,
      including any foreign, federal, state or local income tax, surtax, remittance
      tax, presumptive tax, net worth tax, special contribution, production tax,
      pipeline transportation tax, freehold mineral tax, value added tax, withholding
      tax, gross receipts

     

     

    
      
        
        

      

      
        13

        
          

        

      

      
        
        

      

       

       

      tax,
        windfall profits tax, profits tax, severance tax, personal property tax,
        ad
        valorem tax, real property tax (including assessments, fees or other charges
        imposed by a Governmental Authority which are based on the use or ownership
        of
        real property), sales tax, goods and services tax, service tax, transfer
        tax,
        use tax, excise tax, premium tax, stamp tax, motor vehicle tax, entertainment
        tax, insurance tax, capital stock tax, franchise tax, occupation tax, payroll
        tax, employment tax, unemployment tax, disability tax, alternative or add-on
        minimum tax and estimated tax, (ii) any interest, fine, additions to tax or
        penalty imposed by any Governmental Authority in connection with any item
        described in clause (i), and (iii) any liability in respect of any item
        described in clauses (i) or (ii) above, that arises by reason of a
        contract, assumption, transferee or successor liability, operation of law,
        Treasury Regulation Section 1.1502-6 (or any predecessor or successor thereof
        or
        any analogous provision under state, local or other law) or
        otherwise.

    

     

    (hhh) “Tax
      Expenses”
means
      any costs, expenses, losses or damages, including reasonable expenses of
      investigation and attorneys’ and accountants’ fees and expenses, incurred in
      connection with the determination, assessment or collection of
      Taxes.

     

    (iii) “Title
      IV Plan”
has
      the
      meaning set forth in Section 4.2(j)(iv).

     

    (jjj) “Transferred
      Derivatives”
means
      the physical derivatives contracts listed on Schedule 4.8.

     

    (kkk) “Trust
      Agreement”
means
      the Trust Agreement of Dominion Resources Black Warrior Trust among Dominion
      Black Warrior Basin, Inc., Dominion Resources, Inc., Mellon Bank (DE) National
      Association and Nationsbank of Texas, N.A., dated May 31, 1994, as amended
      from time to time.

     

    (lll) “U.S.
      Temporary Employees”
means
      those individuals providing services with respect to the Assets as either “co
      ops,” “interns” or contract workers through CoreStaff.

     

    (mmm) “Units”
means
      Company Units and Additional Units.

     

    (nnn) “WARN
      Act”
has
      the
      meaning set forth in Section 10.10(a).

     

    (ooo) “Wells”
means
      Company Wells and Additional Wells.

     

    (ppp) [RESERVED]

     

    (qqq) “Wholly-Owned
      Subsidiary”
means
      any Subsidiary in which all issued and outstanding equity interests are owned,
      directly or indirectly, by one or more Sellers and Companies.

     

    Section 1.3 
      Excluded
      Assets. 
      Notwithstanding anything to the contrary in Section 1.2
      or
      elsewhere in this Agreement, the “Additional Assets,” “Company Assets,” “Shares”
and “Interests” shall not include any rights with respect to the Excluded
      Assets, which, if owned by any Company or Wholly-Owned Subsidiary, Sellers
      shall
      be entitled to cause such Company or Wholly-Owned Subsidiary to transfer or
      distribute to Sellers, or their Affiliates, or 

     

     

    
      
        
        

      

      
        14

        
          

        

      

      
        
        

      

       

       

      one
        or
        more third parties, via one or more steps, prior to Closing; provided that
        (i)
        such transfer shall not involve any representation, warranty or indemnity
        provided by the transferor other than a special warranty of title with respect
        to the Excluded Utah Interests, the Excluded Midcontinent Pipeline Interests
        and
        any other real property interests and (ii) the transferee shall assume all
        obligations and liabilities (known and unknown) with respect to such Excluded
        Asset. “Excluded
        Assets”
shall
        mean the following:

    

     

    (i) the
      Excluded Records;

     

    (ii) copies
      of
      other Records retained by Sellers pursuant to Section 13.6;

     

    (iii) contracts,
      agreements and instruments, whose change in ownership in connection with a
      sale
      of equity ownership (if owned by the Companies or Subsidiaries) or transfer
      (if
      owned by DEPI, DOTEPI or Reserves) is prohibited or subjected to payment of
      a
      fee or other consideration by an agreement with a Person other than an Affiliate
      of Sellers, or by applicable Law, and for which no consent to transfer has
      been
      received or for which Purchaser has not agreed in writing to pay the fee or
      other consideration, as applicable;

     

    (iv) Permits
      and other appurtenances for which change in ownership in connection with a
      sale
      of equity ownership (if owned by the Companies or Subsidiaries) or transfer
      (if
      owned by DEPI, DOTEPI or Reserves) is prohibited or subjected to payment of
      a
      fee or other consideration by an agreement with a Person other than an Affiliate
      of Seller, or by applicable Law, and for which no consent to transfer has been
      received or for which Purchaser has not agreed in writing to pay the fee or
      other consideration, as applicable;

     

    (v) all
      claims against insurers and other third parties pending on or prior to the
      Effective Date other than the actions, suits and proceedings being assumed
      by
      Purchaser pursuant to Section 12.1
      and any
      claims against Persons other than Sellers and their Affiliates with respect
      to
      those actions, suits and proceedings;

     

    (vi) assets
      of
      or which relate to Sellers’ and their Affiliates’ Employee Plans or worker’s
      compensation insurance and programs;

     

    (vii) all
      trademarks and trade names containing “Dominion” or any variant
      thereof;

     

    (viii) all
      futures, options, swaps and other derivatives except the Transferred
      Derivatives, and all software used for trading, hedging and credit
      analysis;

     

    (ix) the
      Clearinghouse and Castlewood Road records storage facilities located in
      Richmond, Virginia;

     

     

    
      
        
        

      

      
        15

        
          

        

      

      
        
        

      

    

     

     

    (x) the
      portion of the approximately 60,000 sq. ft. office lease of space located at
      16800 Greenspoint Park Drive, Houston, Texas, that is not described on
      Exhibit D-4, Part II, the DEPI office lease for space located at 1250
      Poydras Street, New Orleans, Louisiana, the portion of the 123,000 sq. ft.
      office lease of space located at 14000 Quail Springs Parkway, Oklahoma City,
      Oklahoma that is not described on Exhibit D-4, Part II, and the approximately
      136,000 sq. ft. office lease of space located at Wedge International Tower,
      1415 Louisiana Street, Houston, Texas, and the furniture, fixtures and equipment
      associated with such excluded office space, less furniture, fixture and
      equipment assigned to any employee of Sellers or their Affiliates presently
      located in that space who becomes a Company Onshore Employee in the same
      building;

     

    (xi) any
      leased equipment and other leased personal property which is not purchased
      prior
      to Closing pursuant to Section 6.13
      (except
      to the extent the lease is transferable without payment of a fee or other
      consideration which Purchaser has not agreed in writing to pay);

     

    (xii) all
      office equipment, computers, cell phones, pagers and other hardware, personal
      property and equipment that: (A) relate primarily to any Seller’s business
      generally, or to the Appalachian Business, or to Seller’s business with respect
      to the Excluded Onshore Areas, or the Offshore Package Areas, or in Canada,
      or
      other business of any Seller and its Affiliates (except the E&P Business),
      or (B) are set forth on Schedule 1.3;

     

    (xiii) the
      contracts used for both the Assets and other assets of DEPI, DOTEPI, Reserves
      and their Affiliates described on Schedule 1.3;

     

    (xiv) any
      Tax
      refund (whether by payment, credit, offset or otherwise, and together with
      any
      interest thereon) in respect of any Taxes for which DEPI is liable for payment
      or required to indemnify Purchaser under Section 9.1;

     

    (xv) refunds
      received prior to the Cut-Off Date and relating to severance Tax abatements
      with
      respect to all taxable periods or portions thereof ending on or prior to the
      Effective Date;

     

    (xvi) all
      indemnities and other claims against Persons (other than the Sellers and/or
      their Affiliates) for Taxes for which DEPI is liable for payment or required
      to
      indemnify Purchaser under Section 9.1;

     

    (xvii) claims
      against insurers under policies held by Sellers or their Affiliates (other
      than
      the Companies and Subsidiaries);

     

    (xviii) amounts
      to which Sellers are entitled pursuant to Section 2.4(a),
      and
      Property Costs and revenues associated with all joint interest audits and other
      audits of Property Costs to the extent covering periods on or prior to the
      Effective Date, which amounts are paid or received prior to the Cut-Off
      Date;

     

     

    
      
        
        

      

      
        16

        
          

        

      

      
        
        

      

    

     

     

    (xix) the
      CO2
      membrane
      unit, associated equipment and lease and rights-of-way for locating and
      accessing such unit and associated equipment as further described on
      Schedule 1.3;

     

    (xx) all
      of
      the partnership interests in DNG I, LP, subject to the terms of Section
      6.14;

     

    (xxi) all
      of
      the interest of Dominion Midwest Energy, Inc. in and to those leases and other
      rights to oil and gas in place described on Schedule 1.3, Part II, and
      the contracts, equipment, data and records and other assets used or held for
      use
      in connection therewith (the “Excluded
      Utah Interests”);

     

    (xxii) all
      of
      the interest of Stonewater Pipeline Company, L.P. in and to the gathering
      systems, pipelines and other mid-stream equipment described on
      Schedule 1.3, Part III, and the contracts, equipment, data and records
      and other assets used or held for use in connection therewith (the “Excluded
      Midcontinent Pipeline Interests”);
      and

     

    (xxiii) any
      other
      assets, contracts or rights described on Schedule 1.3.

     

    Section 1.4 
      Transfer
      of Certain Assets Not Held by Sellers. 
      Sellers shall, at Closing, cause Dominion Resources Services, Inc. to assign
      to
      Purchaser certain personal property described on Schedule 1.4. EXCEPT
      AS
      EXPRESSLY SET FORTH IN ARTICLE IV OR THE CERTIFICATE REFERRED TO IN SECTION
      8.2(J), EACH ASSIGNMENT OF SUCH PERSONAL PROPERTY SHALL BE “AS IS, WHERE IS”
WITH ALL FAULTS, AND ALL REPRESENTATIONS AND WARRANTIES, EXPRESS OR IMPLIED,
      INCLUDING WARRANTIES OF CONDITION, QUALITY, AIRWORTHINESS, SUITABILITY, DESIGN,
      MARKETABILITY, TITLE, INFRINGEMENT, MERCHANTABILITY, FITNESS FOR A PARTICULAR
      PURPOSE, OR CONFORMITY TO MODELS OR SAMPLES OF MATERIALS ARE HEREBY DISCLAIMED.
      Such personal property shall be considered “Additional Assets” for purposes of
      this Agreement with the benefit of the representations, warranties, and other
      provisions of this Agreement related to the Assets. Without limiting any
      obligations of their other Affiliates under Section 6.3
      of this
      Agreement, Sellers shall also cause Dominion Resources Services, Inc. to comply
      with the various covenants contained in Sections 6.1 and 6.4, to the extent
      applicable to the property described on Schedule 1.4, prior to
      Closing.

     

     

    ARTICLE 2.

    PURCHASE
      PRICE

     

    Section 2.1 
      Purchase
      Price. 
      The purchase price for the Interests (the “Purchase
      Price”)
      shall
      be Four Billion Twenty-Five Million dollars ($4,025,000,000.00) (the
“Unadjusted
      Purchase Price”),
      adjusted as provided in Section 2.3.

     

     

    
      
        
        

      

      
        17

        
          

        

      

      
        
        

      

    

     

     

    Section 2.2 
      Allocation
      of Purchase Price. 

     

    (a) The
      Unadjusted Purchase Price shall be allocated to the Shares of each Company
      and
      to the DEPI Additional Assets, the DOTEPI Additional Assets and the Reserves
      Additional Assets as set forth on Schedule 2.2 (each an “Interest
      Unadjusted Purchase Price”).
      The
      adjustments to the Unadjusted Purchase Price under Section 2.3
      shall be
      applied to the Interest Unadjusted Purchase Price for the Shares of each
      Company, the DEPI Additional Assets, the DOTEPI Additional Assets and the
      Reserves Additional Assets based upon the owner of the specific Lease, Well
      or
      other asset to which the adjustment relates, if determinable. Any adjustments
      to
      the Unadjusted Purchase Price under Section 2.3
      that are
      not specific to any Company or Additional Asset group (for example, general
      and
      administrative expense of the E&P Business under Section 2.3(h)(ii))
      shall
      be applied pro rata to the Interest Unadjusted Purchase Price for the Shares
      of
      each Company, the DEPI Additional Assets, the DOTEPI Additional Assets, and
      the
      Reserves Additional Assets, as previously adjusted, in proportion to the amount
      of each. Each Interest Unadjusted Purchase Price, as so adjusted, shall be
      referred to herein as the “Interest
      Purchase Price.”

     

    (b) Each
      Seller shall be entitled to the portion of the Purchase Price equal to the
      Interest Purchase Price for the various Interests it is selling.

     

    (c) At
      least
      thirty (30) days prior to the Target Closing Date, Seller shall prepare and
      deliver to Purchaser, using and based upon the best information available to
      Sellers, a schedule setting forth the following items:

     

    (i) the
      portion of the Unadjusted Purchase Price as set forth in Schedule 2.2
      allocated to Interests other than the Additional Assets;

     

    (ii) the
      liabilities of the Companies and the Subsidiaries as of the Closing (as required
      for the allocations under clause (iii));

     

    (iii) an
      allocation of the sum of the Unadjusted Purchase Price under clause (i) and
      the aggregate amount of such liabilities under clause (ii) that are part of
      the adjusted grossed-up basis within the meaning of Treasury Regulation
§ 1.338-5 among the classes of assets of the Companies and any Subsidiary
      (other than any Company or Subsidiary that is not a member of a selling
      consolidated group within the meaning of Treasury Regulations §
1.338(h)(10)-1(b)(2)) as of the Closing, which allocations shall be made in
      accordance with Section 338(b)(5) and (h)(10) of the Code and the Treasury
      Regulations thereunder and shall be consistent with the allocations under
Section 2.2(a)
      and the
      Allocated Values established pursuant to Section 3.4;

     

    (iv) the
      portion of the Unadjusted Purchase Price as set forth in Schedule 2.2
      allocated to the Additional Assets;

     

    (v) the
      liabilities associated with the Additional Assets as of the Closing (as required
      for the allocations under clause (vi)); and

     

     

    
      
        
        

      

      
        18

        
          

        

      

      
        
        

      

    

     

     

    (vi) an
      allocation of the sum of the Unadjusted Purchase Price under clause (iv) and
      the
      aggregate amount of such liabilities under clause (v) that are includable in
      the
      Purchaser’s tax basis in the Additional Assets among the classes of the
      Additional Assets as of the Closing, which allocations shall be made in
      accordance with Section 1060 of the Code and the Treasury Regulations thereunder
      and shall be consistent with the allocations under Section 2.2(a)
      and the
      Allocated Values established pursuant to Section 3.4.

     

    Sellers
      shall at Purchaser’s request make reasonable documentation available to support
      the proposed allocation. As soon as reasonably practicable, but not later than
      fifteen (15) days following receipt of Sellers’ proposed allocation schedule,
      Purchaser shall deliver to DEPI a written report containing any changes that
      Purchaser proposes to be made in such schedule (and specifying the reasons
      therefor in reasonable detail). The Parties shall undertake to agree on a final
      schedule no later than six (6) Business Days prior to the Closing Date. In
      the
      event the Parties cannot reach agreement by that date, the Sellers’ allocation,
      as adjusted to reflect Purchaser’s suggested changes to which Sellers agree,
      shall be used pending adjustment under the following paragraph.

     

    Within
      thirty (30) days after the determination of the Purchase Price under
Section 8.4(b),
      but no
      later than thirty (30) days prior to the due date (after extension) of filing
      the Tax return for the period beginning on or after the Closing Date, the
      schedule described above in this Section 2.2(c)
      shall be
      amended by Sellers and delivered to Purchaser to reflect the Purchase Price
      following final adjustments. Purchaser shall cooperate with Sellers in the
      preparation of the amended schedule in a manner consistent with the provisions
      of Section 9.4.
      If
      neither the Preliminary Section 2.2(c) Schedule nor the Sellers’ amendments
      to it to reflect the Purchase Price following final adjustments is objected
      to
      by Purchaser (by written notice to DEPI specifying the reasons therefor in
      reasonable detail) within thirty (30) days after delivery of Sellers’
adjustments to the schedule, it shall be deemed agreed upon by the Parties
      and
      shall constitute the “Final Section 2.2(c) Schedule” (herein so called). In
      the event that the Parties cannot reach an agreement within twenty (20) days
      after Seller receives notice of any objection by Purchaser, then, any Party
      may
      refer the matters in dispute to PricewaterhouseCoopers or another mutually
      acceptable independent appraiser (the “Independent
      Appraiser”)
      to
      assist in determining the matters in dispute with respect to the allocation
      of
      the Purchase Price as finally adjusted among the separate classes of Company
      Assets or Additional Assets, as the case may be, for the purposes of the
      allocation described in this Section 2.2(c).
      Should
      PricewaterhouseCoopers fail or refuse to agree to serve as Independent Appraiser
      within twenty (20) days after written request from any Party to serve, and
      the
      Parties fail to agree in writing on a replacement Independent Appraiser within
      ten (10) days after the end of that twenty (20) day period, or should no
      replacement Independent Appraiser agree to serve within forty-five (45) days
      after the original written request pursuant to this sentence, the Independent
      Appraiser shall be appointed by the Houston office of the American Arbitration
      Association. The Independent Appraiser shall be instructed to deliver to
      Purchaser and Sellers a written determination of any revisions to the
      Section 2.2(c) Schedule within thirty (30) days after the date of referral
      thereof to the Independent Appraiser. Purchaser and Sellers agree to accept
      the
      Independent Appraiser’s determinations as to the matters in dispute and the
      appropriate adjustments to the schedule to reflect those determinations, which
      as so adjusted shall constitute the Final Section 2.2(c) Schedule. The
      Independent Appraiser may determine the issues in dispute following
      such

     

     

    
      
        
        

      

      
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    procedures,
      consistent with Schedule 2.2, the provisions of this Agreement and the
      Allocated Values, as it reasonably deems appropriate in the circumstances,
      and
      with reference to the amounts in issue. The Parties do not intend to impose
      any
      particular procedures upon the Independent Appraiser, it being the desire and
      direction of the Parties that any such disagreement shall be resolved as
      expeditiously and inexpensively as reasonably practicable. The Independent
      Appraiser shall act as an expert for the limited purpose of determining the
      specific disputed aspects of the allocation schedule submitted by any Party
      and
      may not award damages, interest, or penalties to any Party with respect to
      any
      matter. Each Seller and Purchaser shall bear its own legal fees and costs of
      presenting its case. DEPI shall bear one-half and Purchaser shall bear one-half
      of the costs and expenses of the Independent Appraiser.

     

    The
      allocations set forth in the Final Section 2.2(c)
      Schedule
      shall be used by Sellers, Purchaser, the Companies and the Subsidiaries as
      the
      basis for reporting asset values and other items, including the determination
      of
      the deemed sale price and the adjusted grossed-up basis of the assets of the
      applicable Companies and Subsidiaries in accordance with Treasury Regulation
      § 1.338-5 or similar applicable law, for purposes of all Tax Returns
      (including Internal Revenue Service Forms 8023 and 8883 (or any successor
      forms)). The allocations set forth in the Final Section 2.2(c)
      Schedule
      shall also be used by Sellers and Purchaser in preparing Internal Revenue
      Service Form 8594, Asset Acquisition Statement (which Form 8594 shall be
      completed, executed and delivered by such parties as soon as practicable after
      the Closing but in no event later than 15 days prior to the date such form
      is
      required to be filed). Sellers and Purchaser agree not to assert, and will
      cause
      their Affiliates not to assert, in connection with any audit or other proceeding
      with respect to Taxes, any asset values or other items inconsistent with the
      amounts set forth in Final Section 2.2(c)
      Schedule
      unless otherwise required by applicable Laws.

     

    Section 2.3 
      Adjustments
      to Purchase Price. 
      The Interest Unadjusted Purchase Price shall be adjusted with respect to the
      Shares of each Company, the DEPI Additional Assets, the DOTEPI Additional Assets
      and the Reserves Additional Assets as follows, but only with respect to matters
      (i) in the case of Section 2.3(a),
      for
      which notice is given on or before the Title Claim Date, (ii) in the case
      of Sections 2.3(b), (c), (d), (e), (f) or (g), identified on or before the
      180th day following Closing (the “Cut-Off
      Date”)
      and
      (iii) in the case of Section 2.3(h),
      received or paid on or before the Cut-Off Date:

     

    (a) Increased
      or decreased, as appropriate, in accordance with Section 3.5;

     

    (b) Decreased
      as a consequence of Assets excluded from this transaction as a consequence
      of
      the exercise of preferential rights to purchase, as described in Section 3.6;

     

    (c) Decreased
      by the amount of royalty, overriding royalty and other burdens payable out
      of
      production of oil or gas from the Leases and Units or the proceeds thereof
      to
      third Persons but held in suspense by any Seller, Company or Wholly-Owned
      Subsidiary at the Closing, and any interest accrued in escrow accounts for
      such
      suspended funds, to the extent such funds are not transferred to Purchaser’s
      control at the Closing;

     

     

    
      
        
        

      

      
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    (d) Increased
      by the amount of the Computer/Vehicle Buy-Out Costs in accordance with
Section 6.13,
      such
      increase not to exceed Three Million Nine Hundred Eighty Thousand dollars
      ($3,980,000);

     

    (e) Adjusted
      for production, plant and transportation gas imbalances and inventory on the
      Effective Date as follows:

     

    (i) Decreased
      by the sum of the amount of each production, plant and transportation gas
      imbalance owed by DEPI, DOTEPI, Reserves, the Companies and Wholly-Owned
      Subsidiaries (and their equity interest share of imbalances owed by Subsidiaries
      other than Wholly-Owned Subsidiaries) to third Persons at the Effective Date
      with respect to production from the Properties (or, in the case of Properties
      not operated by DEPI, DOTEPI, Reserves, a Company or a Wholly-Owned Subsidiary,
      as reported on the most recent imbalance statement as of a date closest to
      the
      Effective Date), in Mmbtu, multiplied by (A) the FOM Index Price for the
      point designated with respect to such source of the imbalance on
      Schedule 2.3(e) on the first day of the month after the month of the
      Effective Date less (B) the adjustments to such FOM Index Price shown on
      Schedule 2.3(e).

     

    (ii) Increased
      by the sum of the amount of each production, plant and transportation gas
      imbalance owed by third Persons to DEPI, DOTEPI, Reserves, the Companies and
      Wholly-Owned Subsidiaries (and their equity share of imbalances owed to
      Subsidiaries other than Wholly-Owned Subsidiaries) at the Effective Date with
      respect to production from the Properties (or, in the case of Properties not
      operated by DEPI, DOTEPI, Reserves, a Company or a Wholly-Owned Subsidiary,
      as
      reported on the most recent imbalance statement as of a date closest to the
      Effective Date), in Mmbtu, multiplied by (A) the FOM Index Price for the
      point designated with respect to such source of the imbalance on
      Schedule 2.3(e) on the first day of the month after the month of the
      Effective Date less (B) the adjustments to such FOM Index Price shown on
      Schedule 2.3(e).

     

    (iii) Decreased
      by the sum of the amount of each scrubber liquid overlift owed by DEPI, DOTEPI,
      Reserves, the Companies and Wholly-Owned Subsidiaries (and their equity interest
      share of overlifts owed by Subsidiaries other than Wholly-Owned Subsidiaries)
      at
      the Effective Date with respect to production from the Properties (or, in the
      case of Properties not operated by DEPI, DOTEPI, Reserves, a Company or a
      Wholly-Owned Subsidiary, as reported on the most recent statement received
      as of
      a date closest to the Effective Date), in Barrels, multiplied by (A) the
      index price for the point designated with respect to such source of the
      imbalance on Schedule 2.3(e) on the first day of the month after the month
      of the Effective Date less (B) the adjustments to such index price shown on
      Schedule 2.3(e).

     

    (iv) Decreased
      by the sum of the amount of each ethane, propane, iso-butane, nor-butane and
      gasoline overlift owed by DEPI, DOTEPI, Reserves, the Companies and Wholly-Owned
      Subsidiaries (and their equity interest share of overlifts owed by Subsidiaries
      other than Wholly-Owned Subsidiaries) at the 

     

     

    
      
        
        

      

      
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      Effective
        Date with respect to production from the Properties (or, in the case of
        Properties not operated by DEPI, DOTEPI, Reserves, a Company or a Wholly-Owned
        Subsidiary, as reported on the most recent statement received as of a date
        closest to the Effective Date), in gallons, multiplied by (A) the index
        price for the point designated with respect to such source of the imbalance
        on
        Schedule 2.3(e) on the first day of the month after the month of the
        Effective Date less (B) the adjustments to such index price shown on
        Schedule 2.3(e).

    

     

    (v) Increased
      by the sum of the amount of each oil, condensate and scrubber liquid inventory
      from the Properties in storage at the end of the Effective Date and produced
      for
      the account of DEPI, DOTEPI, Reserves, the Companies and Wholly-Owned
      Subsidiaries (and their equity interest share of such amounts produced for
      the
      account of Subsidiaries other than Wholly-Owned Subsidiaries) on or prior to
      the
      Effective Date, in Barrels, multiplied by (A) the index price for the point
      designated with respect to the location of the inventory on Schedule 2.3(e)
      on the first day of the month after the month of the Effective Date less
      (B) the adjustments to such index price shown on
      Schedule 2.3(e).

     

    (vi) Increased
      by the sum of the amount of each ethane, propane, iso-butane, nor-butane and
      gasoline inventory from the Properties in storage at the end of the Effective
      Date and produced for the account of DEPI, DOTEPI, Reserves, the Companies
      and
      Wholly-Owned Subsidiaries (and their equity interest share of such amounts
      produced for the account of Subsidiaries other than Wholly-Owned Subsidiaries)
      on or prior to the Effective Date, in gallons, multiplied by (A) the index
      price for the point designated with respect to the location of the inventory
      on
      Schedule 2.3(e) on the first day of the month after the month of the
      Effective Date less (B) the adjustments to such index price shown on
      Schedule 2.3(e).

     

    (vii) Decreased
      by the sum of the amount of each oil transportation and production imbalance
      owed by DEPI, DOTEPI, Reserves, the Companies and Wholly-Owned Subsidiaries
      to
      third Persons (and their equity interest share of overlifts owed by Subsidiaries
      other than Wholly-Owned Subsidiaries to third Persons) at the Effective Date
      with respect to production from the Properties (or, in the case of Properties
      not operated by DEPI, DOTEPI, Reserves, a Company or a Wholly-Owned Subsidiary,
      as reported on the most recent statement received as of a date closest to the
      Effective Date), in Barrels, multiplied by (A) the index price for the
      point designated with respect to such source of the imbalance on
      Schedule 2.3(e) on the first day of the month after the month of the
      Effective Date less (B) the adjustments to such index price shown on
      Schedule 2.3(e).

     

    (viii) Increased
      by the sum of the amount of each oil transportation imbalance owed by third
      Persons to DEPI, DOTEPI, Reserves, the Companies and Wholly-Owned Subsidiaries
      (and their equity interest share of such imbalances owed by third Persons to
      Subsidiaries other than Wholly-Owned Subsidiaries) at the Effective Date with
      respect to production from the Properties (or, in the case of Properties not
      operated by DEPI, DOTEPI, Reserves, a 

     

     

    
      
        
        

      

      
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      Company
        or a Wholly-Owned Subsidiary, as reported on the most recent statement received
        as of a date closest to the Effective Date), in Barrels, multiplied by
        (A) the index price for the point designated with respect to such source of
        the imbalance on Schedule 2.3(e) on the first day of the month after the
        month of the Effective Date less (B) the adjustments to such index price
        shown on Schedule 2.3(e).

    

     

    (f) Increased
      by the net amount of (i) all prepaid expenses (including prepaid Taxes,
      bonuses, rentals, cash calls to third Person operators) to the extent applying
      to the ownership and operation of the Assets or applying to the Companies or
      Wholly-Owned Subsidiaries (or their equity interest share of such amounts
      prepaid for the account of Subsidiaries other than Wholly-Owned Subsidiaries)
      after the Closing Date (provided that prepaid expenses with respect to any
      asset
      not transferred to Purchaser at Closing shall not increase the Purchase Price)
      less
      (ii) all third Person cash call payments received by DEPI, DOTEPI,
      Reserves, the Companies or Wholly-Owned Subsidiaries as operators to the extent
      applying to the operation of the Assets after the Closing Date;

     

    (g) Increased
      by the amount of cash and cash equivalents in lock boxes or otherwise in the
      possession of any Company or any of its direct or indirect Wholly-Owned
      Subsidiaries (and their equity interest share of cash and cash equivalents
      in
      the possession of Subsidiaries other than Wholly-Owned Subsidiaries) at the
      end
      of the Closing Date; and

     

    (h) Without
      prejudice to either Party’s rights under Article 12,
      adjusted for proceeds and other income attributable to the Assets, Property
      Costs and certain other costs attributable to the Assets, and interest as
      follows:

     

    (i) Decreased
      by an amount equal to the aggregate amount of the following proceeds received
      by
      any Seller, Company or Wholly-Owned Subsidiary, or any of their Affiliates,
      on
      or prior to the Closing Date, or by any Seller or any remaining Affiliate of
      Sellers after the Closing Date:

     

    (A) amounts
      earned from the sale, during the period from but excluding the Effective Date
      through and including the Closing Date (such period being referred to as the
      “Adjustment
      Period”),
      of
      oil, gas and other hydrocarbons produced from or attributable to the Properties
      (net of any (x) royalties, overriding royalties and other burdens payable
      out of production of oil, gas or other hydrocarbons or the proceeds thereof
      that
      are not included in Property Costs, (y) gathering, processing and
      transportation costs paid in connection with sales of oil, gas or other
      hydrocarbons that are not included as Property Costs under Section 2.3(h)(ii)
      and
      (z) production Taxes, other Taxes measured by units of production,
      severance Taxes and any other Property Costs, that in any such case are deducted
      by the purchaser of production, and excluding the effects of any futures,
      options, swaps or other derivatives other than the Transferred Derivatives),
      and

     

     

    
      
        
        

      

      
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    (B) other
      income earned with respect to the Assets during the Adjustment Period (provided
      that for purposes of this Section, no adjustment shall be made for funds
      received by any Seller, Company or Wholly-Owned Subsidiary for the account
      of
      third Persons and to which Seller does not become entitled prior to the Cut-Off
      Date, and excluding any income earned from futures, options, swaps or other
      derivatives other than the Transferred Derivatives) and (without duplication)
      proceeds of the sale of any Asset (other than sales of oil, gas and other
      hydrocarbons);

     

    (ii) Increased
      by an amount equal to the amount of all Property Costs, and other amounts
      expressly excluded from the definition of Property Costs, which are incurred
      in
      the ownership and operation of the Assets during the Adjustment Period but
      (A) paid by or on behalf of any Seller, Company or Wholly-Owned Subsidiary,
      or any of their Affiliates, through and including the Closing Date, or by any
      Seller or any remaining Affiliate of Sellers after the Closing Date but prior
      to
      the Cut-Off Date, or (B) without duplication, payable by any Company or
      Wholly-Owned Subsidiary to DEPI, DOTEPI, Reserves or any other Affiliate (except
      another Company or Subsidiary) with respect to the provision of goods, services,
      employment-related costs, and other ordinary course of business expenses with
      respect to the E&P Business and remaining unpaid at the end of the Closing
      Date, except in each case (x) any costs already deducted in the
      determination of proceeds in Section 2.3(h)(i)
      or
      otherwise taken into account as an increase in the Interest Unadjusted Purchase
      Price pursuant to any other provision of this Agreement, (y) Taxes (other
      than production Taxes and other Taxes measured by units of production and
      severance Taxes), which are addressed in Section 9.1(e),
      and
      (z) costs attributable to futures, options, swaps or other derivatives, or
      the elimination of the same pursuant to Section 6.12,
      other
      than costs attributable to the Transferred Derivatives, and provided that
      overhead costs charged with respect to development and production operations
      shall not exceed the amounts chargeable to the Properties under the applicable
      operating agreement or, if for any Property there is none, the amounts charged
      for that Property on the same basis as charged on the date of this Agreement;
      

     

    (iii) Increased
      (without duplication) by an amount equal to all amounts reimbursable to DEPI
      and
      its Affiliates under Section 6.16
      with
      respect to the Post-Closing transition of the E&P Business to Purchaser that
      have not already been reimbursed to DEPI pursuant to Section Section 6.16(c);
      and

     

    (iv) Increased
      by the amount that would be calculated on the Interest Unadjusted Purchase
      Price
      (as adjusted under clauses (a), (b), (c), (d), (e), (f), (h)(i), (h)(ii) and
      (h)(iii) above), at the Agreed Rate, for the period from but excluding the
      Target Closing Date through and including the Closing Date; as used herein,
      the
      term “Agreed
      Rate”
shall
      mean the lesser of (y) the one month London Inter-Bank Offered Rate, as
      published on Telerate Page 3750 on the last Business Day prior to the Effective
      Date, plus two percentage points (LIBOR +2%) and (z) the maximum rate
      allowed by applicable Laws.

     

     

    
      
        
        

      

      
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    For
      the
      avoidance of doubt, the Purchase Price shall be increased with respect to
      amounts owed by any Wholly-Owned Subsidiary or Company to any Seller or any
      of
      its Affiliates only to the extent the obligation is satisfied by such Purchase
      Price increase.

     

    The
      amount of each adjustment to the Interest Unadjusted Purchase Price described
      in
Section 2.3(f)
      and
Section 2.3(h)
      shall be
      determined in accordance with the United States generally accepted accounting
      principles consistently applied (the “Accounting
      Principles”)
      or, if
      the Accounting Principles are silent, then in accordance with the Council of
      Petroleum Accountants Society (COPAS) standards.

     

    Section 2.4 
      Ordinary
      Course Pre-Effective Date Costs Paid and Revenues Received
      Post-Closing.

     

    (a) With
      respect to any revenues earned or Property Costs incurred with respect to the
      Assets on or prior to the Effective Date but received or paid after the
      Effective Date:

     

    (i) Sellers
      shall be entitled to all amounts earned from the sale, during the period up
      to
      and including the Effective Date, of oil, gas and other hydrocarbons produced
      from or attributable to the Properties, which amounts are received on or before
      the Cut-Off Date (net of any (A) royalties, overriding royalties and other
      burdens payable out of production of oil, gas or other hydrocarbons or the
      proceeds thereof that are not included in Property Costs, (B) gathering,
      processing and transportation costs paid in connection with sales of oil, gas
      and other hydrocarbons that are not included as Property Costs under
Section 2.4(a)(ii)
      and
      (C) production Taxes, other Taxes measured by units of production,
      severance Taxes, and other Property Costs that in any such case are deducted
      by
      the purchaser of production), and to all other income earned with respect to
      the
      Assets through and including the Effective Date and received on or before the
      Cut-Off Date; and

     

    (ii) Sellers
      shall be responsible for (and entitled to any refunds and indemnities with
      respect to) all Property Costs incurred through and including the Effective
      Date
      that are paid after the Effective Date but on or before the Cut-Off
      Date.

     

    “Earned”
and
      “incurred,”
as
      used in this Section and Section 2.3,
      shall
      be interpreted in accordance with accounting recognition guidance under the
      Accounting Principles and shall be consistent with Sellers’ current accounting
      recognition practices, or, if the Accounting Principles are silent, in
      accordance with COPAS standards. For purposes of this Section 2.4(a),
      determination of whether Property Costs are attributable to the period before
      or
      after the Effective Date shall be based on when services are rendered, when
      the
      goods are delivered, or when the work is performed. 

     

    (b) Should
      Purchaser, the Companies, the Wholly-Owned Subsidiaries or their Affiliates
      receive after Closing any proceeds or other income to which Sellers are entitled
      under Section 2.4(a),
      Purchaser (on behalf of the Companies, the Wholly-Owned 

     

     

    
      
        
        

      

      
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      Subsidiaries
        or their Affiliates, as applicable) shall fully disclose, account for and
        promptly remit the same to DEPI on behalf of Sellers.
        If,
        after Closing, Sellers or their Affiliates (other than a Company or a
        Subsidiary) receive any proceeds or other income with respect to the Assets
        to
        which such party is not entitled under Section 2.4(a), DEPI shall fully
        disclose, account for and promptly remit same to Purchaser.

    

     

    (c) Should
      Purchaser, the Companies, the Wholly-Owned Subsidiaries or their Affiliates
      pay
      after Closing any Property Costs for which Sellers are responsible under
Section 2.4(a),
      DEPI
      shall reimburse Purchaser (on behalf of the Companies, the Wholly-Owned
      Subsidiaries or their Affiliates, as applicable) promptly after receipt of
      such
      Person’s invoice, accompanied by copies of the relevant vendor or other invoice
      and proof of payment.
      Within
      forty-five (45) days following Closing, Sellers shall provide notice to their
      vendors related to the E&P Business to send promptly any pre-Effective Date
      invoices. Should Sellers or any of their Affiliates (other than a Company or
      Subsidiary) pay after Closing any Property Costs for which Sellers are not
      responsible under Section 2.4(a), except to the extent such amounts are
      accounted for pursuant to Section 2.3(h), Purchaser shall reimburse DEPI (on
      behalf of Sellers) promptly after receipt of such Person’s invoices, accompanied
      by copies of the relevant vendor or other invoice and proof of
      payment.

     

    (d) Sellers
      shall have no further entitlement to amounts earned from the sale of oil, gas
      and other hydrocarbons produced from or attributable to the Properties and
      other
      income earned with respect to the Assets (except any applicable Excluded
      Assets), and no further responsibility for Property Costs incurred with respect
      to the Assets, to the extent such amounts have not been received or paid,
      respectively, on or before the Cut-Off Date.

     

    Section 2.5 
      Procedures.

     

    (a) For
      purposes of allocating production (and accounts receivable with respect
      thereto), under Section 2.3
      and
Section 2.4,
      (i) liquid hydrocarbons shall be deemed to be “from or attributable to” the
      Properties when they pass through the pipeline flange connecting into the
      storage facilities located on the lands subject to the applicable Lease or
      Unit
      or, if there are no such storage facilities, when they pass through the LACT
      meters or similar meters at the point of entry into the pipelines through which
      they are transported from those lands, and (ii) gaseous hydrocarbons shall
      be deemed to be “from or attributable to” the Properties when they pass through
      the delivery point sales meters or similar meters at the point of entry into
      the
      pipelines through which they are transported from the lands subject to the
      applicable Lease or Unit. Sellers shall utilize reasonable interpolative
      procedures to arrive at an allocation of production when exact meter readings
      or
      gauging or strapping data are not available.

     

    Surface
      use fees, insurance premiums and other Property Costs that are paid periodically
      shall be prorated based on the number of days in the applicable period falling
      on or before, or after, the Effective Date, or the Closing Date, as applicable.
      Production Taxes and similar Taxes measured by units of production, and
      severance Taxes, shall be prorated based on the amount of 

     

     

    
      
        
        

      

      
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      hydrocarbons
        actually produced, purchased or sold, as applicable, on or before, and after,
        the Effective Date,
        or the
        Closing Date, as applicable.

    

     

    (b) After
      Closing, Purchaser shall handle (and Sellers shall cooperate with the handling
      of) all joint interest audits and other audits of Property Costs with respect
      to
      the Assets, including those covering periods on or prior to the Effective Date,
      provided that Purchaser shall not agree to any adjustments to previously
      assessed costs for which Sellers are liable, or any compromise of any audit
      claims to which Sellers would be entitled, without the prior written consent
      of
      DEPI, such consent not to be unreasonably withheld or delayed. Purchaser shall
      provide DEPI with a copy of all applicable audit reports and written audit
      agreements received by Purchaser or any Company or Wholly-Owned Subsidiary
      and
      relating in whole or in part to periods on or prior to the Effective
      Date.

     

     

    ARTICLE 3.

    TITLE
      MATTERS

     

    Section 3.1 
      Company’s
      Title. 
      DEPI represents and warrants to Purchaser that the Sellers’, Companies’, and the
      Wholly-Owned Subsidiaries’ (as applicable) title to the Units and Wells shown on
      Exhibit B-2 and Exhibit D-2, as of the date hereof is, and as of the
      Closing Date shall be, Defensible Title as defined in Section 3.2. This
      representation and warranty, the provisions of this Article 3 and the special
      warranties in the Conveyances provide Purchaser’s exclusive remedy with respect
      to any Title Defects. For
      the
      purposes of the foregoing representation, as of the date hereof, DEPI shall
      be
      deemed to hold all DEPI Texas Beneficial Interests then held by DEPI I, LP
      relating to the Units and Wells shown on Exhibit B-2 and Exhibit D-2,
      and DOTEPI shall be deemed to hold all DOTEPI Texas Beneficial Interests then
      held by DNG I, LP relating to the Units and Wells shown on Exhibit B-2 and
      Exhibit D-2.

     

    Section 3.2 
      Definition
      of Defensible Title. 

     

    (a) As
      used
      in this Agreement, the term “Defensible
      Title”
means
      that title of each Seller, Company or Wholly-Owned Subsidiary, as applicable,
      which, subject to Permitted Encumbrances:

     

    (i) Entitles
      the Seller or Company or Wholly-Owned Subsidiary, as applicable, to receive
      throughout the duration of the productive life of any Unit or Well (after
      satisfaction of all royalties, overriding royalties, nonparticipating royalties,
      net profits interests and other similar burdens on or measured by production
      of
      oil and gas), not less than the “net revenue interest” share shown in Exhibits
      B-2 and D-2 of all oil, gas and other minerals produced, saved and marketed
      from
      such Unit or Well, except (A) decreases in connection with those operations
      in
      which the Seller or the Company or Wholly-Owned Subsidiary may elect after
      the
      date hereof to be a nonconsenting co-owner, (B) decreases resulting from
      reversion of interest to co-owners with respect to operations in which such
      co-owners elect, after the date hereof, not to consent, (C) decreases resulting
      from the establishment or amendment, after the date hereof, of pools or units,
      (D) decreases required to allow other working interest owners to make up past
      

     

     

    
      
        
        

      

      
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      underproduction
        or pipelines to make up past under deliveries and (E) as otherwise expressly
        stated in Exhibit B-2 or D-2;

    

     

    (ii) Obligates
      the Seller, Company or Wholly-Owned Subsidiary, as applicable, to bear a
      percentage of the costs and expenses for the maintenance and development of,
      and
      operations relating to, any Unit or Well not greater than the “working interest”
shown in Exhibits B-2 and D-2 without increase throughout the productive life
      of
      such Unit or Well, except as stated in Exhibits B-2 and D-2 and except increases
      resulting from contribution requirements with respect to defaulting co-owners
      under applicable operating agreements or applicable Law and increases that
      are
      accompanied by at least a proportionate increase in the Seller’s, Company’s or
      Wholly-Owned Subsidiary’s (as applicable) net revenue interest; and

     

    (iii) Is
      free
      and clear of liens, encumbrances, obligations or defects, other than Permitted
      Encumbrances.

     

    (b) As
      used
      in this Agreement, the term “Title
      Defect”
means
      any lien, charge, encumbrance, obligation or defect including without limitation
      a discrepancy in net revenue interest or working interest that causes a breach
      of DEPI’s representation and warranty in Section 3.1.
      As used
      in this Agreement, the term “Title
      Benefit”
shall
      mean any right, circumstance or condition that operates to increase the net
      revenue interest of a Seller or Company or Wholly-Owned Subsidiary in any Unit
      or Well above that shown on Exhibits B-2 and D-2, without causing a greater
      than
      proportionate increase in such Seller’s, Company’s or Wholly-Owned Subsidiary’s
      working interest above that shown in Exhibits B-2 and D-2.

     

    Section 3.3 
      Definition
      of Permitted Encumbrances. 
      As used herein, the term “Permitted
      Encumbrances”
means
      any or all of the following:

     

    (a) Lessors’
      royalties and any overriding royalties, reversionary interests and other burdens
      to the extent that they do not, individually or in the aggregate, reduce a
      Seller’s, Company’s or Wholly-Owned Subsidiary’s net revenue interests below
      that shown in Exhibits B-2 and D-2 or increase a Seller’s, Company’s or
      Wholly-Owned Subsidiary’s working interests above that shown in
      Exhibits B-2 and D-2 without a corresponding increase in the net revenue
      interest;

     

    (b) All
      leases, unit agreements, pooling agreements, operating agreements, production
      sales contracts, division orders and other contracts, agreements and instruments
      applicable to the Assets, including provisions for penalties, suspensions or
      forfeitures contained therein, to the extent that they do not, individually
      or
      in the aggregate, reduce a Seller’s, Company’s or Wholly-Owned Subsidiary’s net
      revenue interests below that shown in Exhibits B-2 and D-2 or increase a
      Seller’s, Company’s or Wholly-Owned Subsidiary’s working interests above that
      shown in Exhibits B-2 and D-2 without a corresponding increase in the net
      revenue interest;

     

     

    
      
        
        

      

      
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    (c) Rights
      of
      first refusal, preferential purchase rights and similar rights with respect
      to
      the Assets;

     

    (d) Third-party
      consent requirements and similar restrictions which are not applicable to the
      sale of the Interests contemplated by this Agreement or with respect to which
      waivers or consents are obtained from the appropriate Persons prior to the
      Closing Date or the appropriate time period for asserting the right has expired
      or which need not be satisfied prior to a transfer;

     

    (e) Liens
      for
      Taxes or assessments not yet delinquent or, if delinquent, being contested
      in
      good faith by appropriate actions;

     

    (f) Materialman’s,
      mechanic’s, repairman’s, employee’s, contractor’s, operator’s and other similar
      liens or charges arising in the ordinary course of business for amounts not
      yet
      delinquent (including any amounts being withheld as provided by Law), or if
      delinquent, being contested in good faith by appropriate actions;

     

    (g) All
      rights to consent, by required notices to, filings with, or other actions by
      Governmental Authorities in connection with the sale or conveyance of oil and
      gas leases or rights or interests therein if they are customarily obtained
      subsequent to the sale or conveyance;

     

    (h) Rights
      of
      reassignment arising upon final intention to abandon or release the Assets,
      or
      any of them;

     

    (i) Easements,
      rights-of-way, covenants, servitudes, permits, surface leases and other rights
      in respect of surface operations to the extent they, individually or in the
      aggregate, neither (i) reduce a Seller’s, Company’s or Wholly-Owned Subsidiary’s
      net revenue interest below that shown on Exhibit A-2 or increase a Seller’s,
      Company’s or Wholly-Owned Subsidiary’s working interest
      beyond
      that shown on Exhibit A-2 without a corresponding increase in net revenue
      interest nor (ii) detract in any material respect from the value of, or
      interfere in any material respect with the use, ownership or operation of,
      the
      Assets subject thereto or affected thereby (as currently used, owned or
      operated) and which would be acceptable by a reasonably prudent operator engaged
      in the business of owning and operating oil and gas properties;

     

    (j) Calls
      on
      production under: (i) existing Contracts that provide that the holder of such
      call on production must pay an index-based price for any production purchased
      by
      virtue of such call on production; and (ii) those Contracts identified on
      Schedule 3.3(j);

     

    (k) Any
      termination of any Seller’s, Company’s or Wholly-Owned Subsidiary’s title to any
      mineral servitude or any Property held by production as a consequence of the
      failure to conduct operations, cessation of production or insufficient
      production over any period except to the extent DEPI has knowledge thereof
      as of
      the date hereof;

     

     

    
      
        
        

      

      
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    (l) All
      rights reserved to or vested in any Governmental Authorities to control or
      regulate any of the Assets in any manner or to assess Tax with respect to the
      Assets, the ownership, use or operation thereof, or revenue, income or capital
      gains with respect thereto, and all obligations and duties under all applicable
      Laws of any such Governmental Authority or under any franchise, grant, license
      or permit issued by any Governmental Authority;

     

    (m) Any
      lien,
      charge or other encumbrance on or affecting the Assets which is expressly
      waived, assumed, bonded or paid by Purchaser at or prior to Closing or which
      is
      discharged by Sellers, any Company or any Wholly-Owned Subsidiary at or prior
      to
      Closing;

     

    (n) any
      lien
      or trust arising in connection with workers’ compensation, unemployment
      insurance, pension or employment laws or regulations;

     

    (o) The
      matters described in Schedule 4.4;

     

    (p) Any
      matters shown on Exhibits B-2 and D-2; and

     

    (q) Any
      other
      liens, charges, encumbrances, defects or irregularities, which do not,
      individually or in the aggregate, materially detract from the value of or
      materially interfere with the use or ownership of the Assets subject thereto
      or
      affected thereby (as currently used or owned) including, without limitation,
      (i)
      the absence of any lease amendment or consent by any royalty interest or mineral
      interest holder authorizing the pooling of any leasehold interest, royalty
      interest or mineral interest and (ii) the failure of Exhibits B-1, B-2, D-1
      and D-2 to reflect any lease or any unleased mineral interest where the owner
      thereof was treated as a non-participating co-tenant during the drilling of
      any
      well, which would be accepted by a reasonably prudent purchaser engaged in
      the
      business of owning and operating oil and gas properties.

     

    Section 3.4 
      Allocated
      Values. 
      Schedule 3.4 sets forth the agreed allocation of the Unadjusted Purchase
      Price among the Assets for purposes of DEPI’s title representation in this
Article 3,
      consistent with the allocations among the Shares for each Company, the DEPI
      Additional Assets, the DOTEPI Additional Assets and the Reserves Additional
      Assets under Section 2.2(a).
      The
“Allocated
      Value”
for
      any
      Well or Unit equals the portion of the Interest Unadjusted Purchase Price for
      the Company Shares or Additional Asset group to which such Well or Unit is
      related that is allocated to such Well or Unit on Schedule 3.4, increased
      or decreased by a share of each adjustment to the Interest Unadjusted Purchase
      Price under Sections 2.3(c), (d), (e), (f), (g) and (h). The share of each
      adjustment allocated to a particular Well or Unit shall be obtained by taking
      the portion of that adjustment allocated under Section 2.2(a)
      to the
      Shares or Additional Asset group to which the Well or Unit is related and
      further allocating that portion among the various Assets related to such Shares
      or Additional Asset group on a pro rata basis in proportion to the Interest
      Unadjusted Purchase Price allocated to each such Asset. Sellers have accepted
      such Allocated Values for purposes of this Agreement and the transactions
      contemplated hereby, but otherwise make no representation or warranty as to
      the
      accuracy of such values.

     

     

    
      
        
        

      

      
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    Section 3.5 
      Notice
      of Title Defects; Defect Adjustments. 

     

    (a) To
      assert
      a claim arising out of a breach of Section 3.1,
      Purchaser must deliver a claim notice or notices to DEPI on or before a date
      which is at least ten (10) Business Days prior to the Closing Date (the
“Title
      Claim Date”).
      Each
      such notice shall be in writing and shall include:

     

    (i) a
      description of the alleged Title Defect(s);

     

    (ii) the
      Units
      or Wells affected;

     

    (iii) the
      Allocated Values of the Units or Wells subject to the alleged Title
      Defect(s);

     

    (iv) supporting
      documents reasonably necessary for Sellers (as well as any title attorney or
      examiner hired by Sellers) to verify the existence of the alleged Title
      Defect(s); and

     

    (v) the
      amount by which Purchaser reasonably believes the Allocated Values of those
      Units or Wells are reduced by the alleged Title Defect(s) and the computations
      and information upon which Purchaser’s belief is based.

     

    Purchaser
      shall be deemed to have waived all breaches of Section 3.1
      of which
      Sellers have not been given notice on or before the Title Claim
      Date.

     

    (b) Should
      Purchaser discover any Title Benefit on or before the Title Claim Date,
      Purchaser shall as soon as practicable, but in any case by the Title Claim
      Date,
      deliver to DEPI a notice including:

     

    (i) a
      description of the Title Benefit;

     

    (ii) the
      Units
      or Wells affected;

     

    (iii) the
      Allocated Values of the Units or Wells subject to such Title Benefit;
      and

     

    (iv) the
      amount by which the Purchaser reasonably believes the Allocated Value of those
      Units or Wells is increased by the Title Benefit, and the computations and
      information upon which Purchaser’s belief is based.

     

    Sellers
      shall have the right, but not the obligation, to deliver to Purchaser a similar
      notice on or before the Title Claim Date with respect to each Title Benefit
      discovered by Sellers. Sellers shall be deemed to have waived all Title Benefits
      of which no Party has given notice on or before the Title Claim Date, except
      to
      the extent Purchaser has failed to give a notice which it was obligated to
      give
      under this Section 3.5(b).

     

    (c) Sellers
      shall have the right, but not the obligation, to attempt, at Sellers’ sole cost,
      to cure or remove on or before sixty (60) days after the Closing Date any
      Title

     

     

    
      
        
        

      

      
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      Defects
        of which Sellers have been advised by Purchaser. No reduction shall be made
        in
        the Unadjusted Purchase Price with respect to a Title Defect for purposes
        of
        Closing if DEPI has provided notice at least six (6) Business Days prior
        to the
        Closing Date of Sellers’ intent to attempt to cure the Title Defect. If the
        Title Defect is not cured as agreed by Sellers and Purchaser or if Sellers
        and
        Purchaser cannot agree, and it is determined by the Title Arbitrator that
        such
        Title Defect is not cured at the end of the sixty (60) day post-Closing period,
        the adjustment required under this Article 3
        shall be
        made pursuant to Section 8.4(b).
        Sellers’ election to attempt to cure a Title Defect shall not constitute a
        waiver of Sellers’ right to dispute the existence, nature or value of, or cost
        to cure, the Title Defect.

    

     

    (d) With
      respect to each Unit or Well affected by Title Defects reported under
Section 3.5(a),
      the
      Unit or Well shall, if an Additional Asset, be assigned at Closing or, if held
      by a Company or Wholly-Owned Subsidiary, remain in the Company or Wholly-Owned
      Subsidiary, subject in each case to all uncured Title Defects, and (subject
      to
Section 3.5(c)
      and the
      remainder of Section 3.5(d))
      the
      Unadjusted Purchase Price shall be reduced by an amount (the “Title
      Defect Amount”)
      equal
      to the reduction in the Allocated Value for such Unit or Well caused by such
      Title Defects, as determined pursuant to Section 3.5(g).
      Notwithstanding the foregoing provisions of this Section 3.5(d),
      no
      reduction shall be made in the Unadjusted Purchase Price with respect to any
      Title Defect that is (i) older than ten (10) years old and, except for
      unreleased production payments or similar interests or other unreleased
      encumbrances, a Title Defect Amount of less than Twenty-Five Million Dollars
      ($25,000,000), (ii) involves a counterparty no longer in existence or in
      bankruptcy or receivership or (iii) consists of an alleged defect in the
      authorization, execution, delivery, acknowledgement, or approval in a Seller’s,
      Company’s or Wholly-Owned Subsidiary’s chain of title for which DEPI at its
      election executes and delivers to Purchaser a separate written indemnity
      agreement, in form and substance reasonably satisfactory to Purchaser, under
      which DEPI agrees to fully, unconditionally and irrevocably indemnify and hold
      harmless Purchaser and its successors and assigns from any and all Damages
      arising out of or resulting from such Title Defect.

     

    (e) With
      respect to each Unit or Well affected by Title Benefits reported under
Section 3.5(b)
      (or
      which Purchaser should have reported under Section 3.5(b)),
      the
      Unadjusted Purchase Price shall be increased by an amount (the “Title
      Benefit Amount”)
      equal
      to the increase in the Allocated Value for such Unit or Well caused by such
      Title Benefits, as determined pursuant to Section 3.5(h),
      but in
      no event will the aggregate adjustments to the Unadjusted Purchase Price as
      a
      result of Title Benefits exceed the aggregate adjustments to the Unadjusted
      Purchase Price due to Title Defects.

     

    (f) This
      Article 3 shall, to the fullest extent permitted by applicable Law, be the
      exclusive right and remedy of Purchaser with respect to DEPI’s breach of its
      warranty and representation in Section 3.1.
      Except
      as provided in this Article 3,
      Section 4.13(b)
      and the
      Conveyances, Purchaser releases, remises and forever discharges Sellers and
      their Affiliates and all such parties’ stockholders, officers, directors,
      employees, agents, advisors and representatives from any and all suits, legal
      or
      administrative proceedings, claims, demands, damages, losses, costs,
      liabilities, interest or causes of action 

     

     

    
      
        
        

      

      
        32

        
          

        

      

      
        
        

      

       

       

      whatsoever,
        in law or in equity, known or unknown, which Purchaser might now or subsequently
        may have, based on, relating to or arising out of, any Title Defect or other
        deficiency in title to any Asset.

    

     

    (g) The
      Title
      Defect Amount resulting from a Title Defect shall be determined as
      follows:

     

    (i) if
      Purchaser and Sellers agree on the Title Defect Amount, that amount shall be
      the
      Title Defect Amount;

     

    (ii) if
      the
      Title Defect is a lien, encumbrance or other charge which is undisputed and
      liquidated in amount, then the Title Defect Amount shall be the amount necessary
      to be paid to remove the Title Defect from the appropriate Seller’s, Company’s
      or Wholly-Owned Subsidiary’s interest in the affected Unit or Well;

     

    (iii) if
      the
      Title Defect represents a discrepancy between (A) the net revenue interest
      for
      any Unit or Well and (B) the net revenue interest or percentage stated on
      Exhibit B-2 or D-2 (as appropriate), then the Title Defect Amount shall be
      the product of the Allocated Value of such Unit or Well multiplied by a
      fraction, the numerator of which is the net revenue interest or percentage
      ownership decrease and the denominator of which is the net revenue interest
      or
      percentage ownership stated on Exhibit B-2 or D-2, provided that if the
      Title Defect does not affect the Unit or Well throughout its entire productive
      life, the Title Defect Amount determined under this Section 3.5(g)(iii)
      shall be
      reduced to take into account the applicable time period only;

     

    (iv) if
      the
      Title Defect represents an obligation, encumbrance, burden or charge upon or
      other defect in title to the affected Unit or Well of a type not described
      in
      subsections (i), (ii) or (iii) above, the Title Defect Amount shall be
      determined by taking into account the Allocated Value of the Unit or Well so
      affected, the portion of the respective Seller’s, Company’s or Wholly-Owned
      Subsidiary’s interest in the Unit or Well affected by the Title Defect, the
      legal effect of the Title Defect, the potential economic effect of the Title
      Defect over the life of the affected Unit or Well, the values placed upon the
      Title Defect by Purchaser and Sellers and such other factors as are necessary
      to
      make a proper evaluation;

     

    (v) notwithstanding
      anything to the contrary in this Article 3,
      (A) an
      individual claim for a Title Defect for which a claim notice is given prior
      to
      the Title Claim Date shall only generate an adjustment to the Unadjusted
      Purchase Price under this Article 3
      if the
      Title Defect Amount with respect thereto exceeds One Million dollars
      ($1,000,000), (B) the
      aggregate Title Defect Amounts attributable to the effects of all Title Defects
      upon any given Unit or Well shall not exceed the Allocated Value of such Unit
      or
      Well and (C) there
      shall be no adjustment to the Unadjusted Purchase Price for Title Defects unless
      and until the aggregate Title Defect Amounts that are entitled to an adjustment
      under 

     

     

    
      
        
        

      

      
        33

        
          

        

      

      
        
        

      

       

       

      Section 3.5(g)(v)(A)
        and for
        which Claim Notices were timely delivered exceed Twenty-Five Million dollars
        ($25,000,000), and then only to the extent that such aggregate Title Defect
        Amounts exceed Twenty-Five Million dollars ($25,000,000);

    

     

    (vi) if
      a
      Title Defect is reasonably susceptible of being cured, the Title Defect Amount
      determined under subsections (iii) or (iv) above shall not be greater than
      the
      amount that can reasonably be shown to be the reasonable cost and expense of
      curing such Title Defect; and

     

    (vii) the
      Title
      Defect Amount with respect to a Title Defect shall be determined without
      duplication of any costs or losses included in another Title Defect Amount
      hereunder, or for which Purchaser otherwise receives credit in the calculation
      of the Purchase Price.

     

    (h) The
      Title
      Benefit Amount for any Title Benefit shall be the product of the Allocated
      Value
      of the affected Unit or Well multiplied by a fraction, the numerator of which
      is
      the net revenue interest increase and the denominator of which is the net
      revenue interest stated on Exhibit B-2 or D-2, provided that if the Title
      Benefit does not affect a Unit or Well throughout the entire life of the Unit
      or
      Well, the Title Benefit Amount determined under this Section 3.5(h)
      shall be
      reduced to take into account the applicable time period only. Notwithstanding
      anything to the contrary in this Article 3,
      an
      individual claim for a Title Benefit which is reported under Section 3.5(b)
      (or
      which Purchaser should have reported under Section 3.5(b))
      prior
      to the Title Claim Date shall only generate an adjustment to the Unadjusted
      Purchase Price under this Article 3
      if the
      Title Benefit Amount with respect thereto exceeds One Million dollars
      ($1,000,000).

     

    (i) Sellers
      and Purchaser shall attempt to agree on all Title Defect Amounts and Title
      Benefit Amounts by five (5) Business Days prior to the Closing Date. If Sellers
      and Purchaser are unable to agree by that date, then subject to Section 3.5(c),
      Sellers’ good faith estimate shall be used to determine the Closing Payment
      pursuant to Section 8.4(a),
      and the
      Title Defect Amounts and Title Benefit Amounts in dispute shall be exclusively
      and finally resolved by arbitration pursuant to this Section 3.5(i).
      During
      the 10-day period following the Closing Date, Title Defect Amounts and Title
      Benefit Amounts in dispute shall be submitted to a title attorney with at least
      10 years’ experience in oil and gas titles in the state in which the Units or
      Wells (or majority of Units and Wells) in question are located as selected
      by
      mutual agreement of Purchaser and DEPI on behalf of Sellers or absent such
      agreement during the 10-day period, by the Houston office of the American
      Arbitration Association (the “Title
      Arbitrator”).
      Likewise, if by the end of the sixty (60) day post-Closing cure period under
      Section 3.5(c),
      Sellers
      and Purchaser have been unable to agree upon whether any Title Defects have
      been
      cured, or Sellers have failed to cure any Title Defects which they provided
      notice that they would attempt to cure, and Sellers and Purchaser have been
      unable to agree on the Title Defect Amounts for such Title Defects, the cure
      and/or Title Defect Amounts in dispute shall be submitted to the Title
      Arbitrator. The Title Arbitrator shall not have worked as an employee or outside
      counsel for either Party or its Affiliates during the five (5) year period
      preceding the arbitration or have any financial interest in 

     

     

    
      
        
        

      

      
        34

        
          

        

      

      
        
        

      

       

       

      the
        dispute. The arbitration proceeding shall be held in Houston, Texas and shall
        be
        conducted in accordance with the Commercial Arbitration Rules of the American
        Arbitration Association, to the extent such rules do not conflict with the
        terms
        of this Section. The Title Arbitrator’s determination shall be made within 45
        days after submission of the matters in dispute and shall be final and binding
        upon the Parties, without right of appeal. In making his determination, the
        Title Arbitrator shall be bound by the rules set forth in Section 3.5(g)
        and
        3.5(h) and may consider such other matters as in the opinion of the Title
        Arbitrator are necessary or helpful to make a proper determination.
        Additionally, the Title Arbitrator may consult with and engage disinterested
        third Persons to advise the arbitrator, including title attorneys from other
        states and petroleum engineers. The Title Arbitrator shall act as an expert
        for
        the limited purpose of determining the specific disputed Title Defect cures
        and
        Title Defect Amounts and Title Benefit Amounts submitted by any Party and
        may
        not award damages, interest or penalties to any Party with respect to any
        matter. Each Seller and Purchaser shall bear its own legal fees and other
        costs
        of presenting its case. Purchaser shall bear one-half of the costs and expenses
        of the Title Arbitrator, and DEPI shall be responsible for the remaining
        one-half of the costs and expenses.

    

     

    Section 3.6 
      Consents
      to Assignment and Preferential Rights to Purchase. 

     

    (a) Promptly
      after the date hereof, Sellers shall prepare and send (i) notices to the
      holders of any required consents to assignment that are set forth on
      Schedule 4.11 requesting consents to the transactions contemplated by this
      Agreement and (ii) notices to the holders of any applicable preferential
      rights to purchase or similar rights that are set forth on Schedule 4.11 in
      compliance with the terms of such rights and requesting waivers of such rights.
      Any preferential purchase right must be exercised subject to all terms and
      conditions set forth in this Agreement, including the successful Closing of
      this
      Agreement pursuant to Article 8.
      The
      consideration payable under this Agreement for any particular Asset for purposes
      of preferential purchase right notices shall be the Allocated Value for such
      Asset. Sellers shall use commercially reasonable efforts to cause such consents
      to assignment and waivers of preferential rights to purchase or similar rights
      (or the exercise thereof) to be obtained and delivered prior to Closing,
      provided that Sellers shall not be required to make payments or undertake
      obligations to or for the benefit of the holders of such rights in order to
      obtain the required consents and waivers. Purchaser shall cooperate, and after
      Closing shall cause the Companies and Wholly-Owned Subsidiaries to cooperate,
      with Sellers in seeking to obtain such consents to assignment and waivers of
      preferential rights.

     

    (b) In
      no
      event shall there be transferred at Closing any Asset for which a consent
      requirement has not been satisfied and for which transfer is prohibited or
      a fee
      is payable (unless the same has been paid by Purchaser) without the consent.
      In
      cases in which the Asset subject to such a requirement is a Contract and
      Purchaser is assigned the Lease(s) to which the Contract relates, but the
      Contract is not transferred to Purchaser due to the unwaived consent
      requirement, Purchaser shall continue after Closing to use commercially
      reasonable efforts to obtain the consent so that such Contract can be
      transferred to Purchaser upon receipt of the consent, the Contract shall be
      held
      by Sellers for the benefit of Purchaser, Purchaser shall pay all amounts due
      thereunder, and 

     

     

    
      
        
        

      

      
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      Purchaser
        shall be responsible for the performance of any obligations under such Contract
        to the extent that Purchaser has been transferred the Assets necessary to
        perform under such Contract until such consent is obtained. In cases in which
        the Asset subject to such a requirement is a Lease and the third Person consent
        to the transfer of the Lease is not obtained by Closing, Purchaser may elect
        to
        treat the unsatisfied consent requirements as a Title Defect and receive
        the
        appropriate adjustment to the Unadjusted Purchase Price under Section 2.3
        by
        giving DEPI written notice thereof in accordance with Section 3.5(a),
        except
        that such notice may be given up to six (6) Business Days prior to the Closing
        Date. If an unsatisfied consent requirement with respect to which an adjustment
        to the Unadjusted Purchase Price is made under Section 3.5
        is
        subsequently satisfied prior to the date of the final adjustment to the
        Unadjusted Purchase Price under Section 8.4(b),
        Sellers
        shall be reimbursed in that final adjustment for the amount of any previous
        deduction from the Unadjusted Purchase Price, the Lease, if not previously
        transferred to Purchaser under the first sentence of this Section 3.6(b),
        shall
        be transferred, and the provisions of this Section 3.6
        shall no
        longer apply to such consent requirement.

    

     

    (c) If
      any
      preferential right to purchase any Assets is exercised prior to Closing, the
      Purchase Price shall be decreased by the Allocated Value for such Assets, the
      affected Assets shall not be transferred at Closing if owned by DEPI, DOTEPI
      or
      Reserves, and the affected Assets shall be deemed to be deleted from Exhibits
      B
      and/or D to this Agreement, as applicable, for all purposes.

     

    (d) Should
      a
      third Person fail to exercise or waive its preferential right to purchase as
      to
      any portion of the Assets prior to Closing and the time for exercise or waiver
      has not yet expired, then subject to the remaining provisions of this
Section 3.6,
      such
      Assets shall be included in the transaction at Closing, there shall be no
      adjustment to the Purchase Price at Closing with respect to such preferential
      right to purchase, and Sellers shall, at their sole expense, continue to use
      commercially reasonable efforts to obtain the waiver of the preferential
      purchase rights and shall continue to be responsible for the compliance
      therewith.

     

    (e) Should
      the holder of the preferential purchase right validly exercise the same (whether
      before or after Closing), then:

     

    (i) If
      the
      affected Assets are owned by DEPI, DOTEPI or Reserves, DEPI, DOTEPI or Reserves
      shall convey them to the holder on the terms and provisions set out in the
      applicable preferential right provision. If the affected Assets were previously
      transferred to Purchaser at Closing, Purchaser agrees to transfer the affected
      Assets back to the applicable Seller on the terms and provisions set out herein
      to permit such Seller to comply with this obligation (or, if the applicable
      Seller so requests, shall transfer the affected Assets directly to the holder
      on
      the terms and provisions set out in the applicable preferential purchase right
      provision);

     

    (ii) If
      the
      affected Assets are owned by a Company or Wholly-Owned Subsidiary, the Company
      or Subsidiary shall transfer them to the holder on the

     

     

    
      
        
        

      

      
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      terms
        and
        provisions set out in the applicable preferential purchase right provision.
        If
        Closing has already occurred, Purchaser shall cause the Company or Subsidiary
        to
        perform this obligation;

    

     

    (iii) Pursuant
      to Section 2.3(b),
      the
      applicable Seller(s) shall credit Purchaser with the Allocated Value of any
      Asset transferred pursuant to Section 3.6(e)(i)
      or
      (e)(ii) (or, if the transfer of the Asset occurs after the Cut-Off Date, Sellers
      shall promptly refund to Purchaser the lesser of the Allocated Value in respect
      of such Asset or the amount the applicable Seller receives from the transferee
      of such Asset);

     

    (iv) Such
      Seller(s) shall be entitled to the consideration paid by such holder (which
      shall, if received by a Company or Subsidiary after Closing, be paid to such
      Seller(s) by such Company or Subsidiary or by Purchaser as agent for and on
      behalf of such Company or Subsidiary);

     

    (v) If
      the
      affected Assets were owned by DEPI, DOTEPI or Reserves and were previously
      transferred to Purchaser at Closing, Purchase Price adjustments calculated
      in
      the same manner as the adjustments in Section 2.3(h)
      shall be
      calculated for the period from the Closing Date to the date of the reconveyance
      and the net amount of such adjustment, if positive, shall be paid by Purchaser
      to such Seller and, if negative, by such Seller to Purchaser;

     

    (vi) If
      the
      affected Assets were owned by DEPI, DOTEPI or Reserves and were previously
      transferred to Purchaser at Closing, DEPI, DOTEPI or Reserves, as applicable,
      shall assume all obligations assumed by Purchaser with respect to such Assets
      under Section 12.1,
      and
      shall indemnify, defend and hold harmless Purchaser from all Damages incurred
      by
      Purchaser caused by or arising out of or resulting from the ownership, use
      or
      operation of such Asset from the Closing Date to the date of the reconveyance,
      excluding, however, any such Damages resulting from any violation of any Law
      caused by the actions of, or implementation of policies or procedures of,
      Purchaser or any Company or Wholly-Owned Subsidiary after Closing, breach of
      any
      contract by Purchaser or any Company or Wholly-Owned Subsidiary after Closing,
      or gross negligence or willful misconduct of any Purchaser or any Company or
      Wholly-Owned Subsidiary after Closing;
      and

     

    (vii) In
      the
      event that the value of any Property operated by any Seller, Company or
      Wholly-Owned Subsidiary is materially impaired by the exercise of a preferential
      purchase right with respect to a Property also operated by such Seller, Company
      or Wholly-Owned Subsidiary on which infrastructure is used by the first Property
      without the benefit of an agreement for such use which would survive the
      transfer of title to the third party preferential purchase right holder,
      Purchaser may claim such material impairment as a Title Defect.

     

     

    
      
        
        

      

      
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    Section 3.7 
      Limitations
      on Applicability.
       The
      representation and warranty in Section 3.1
      shall
      terminate as of the Title Claim Date and shall have no further force and effect
      thereafter, provided there shall be no termination of Purchaser’s or Sellers’
rights under Section 3.5
      with
      respect to any bona fide Title Defect or Title Benefit claim properly reported
      on or before the Title Claim Date or under the Conveyances.

     

     

    ARTICLE 4.

    REPRESENTATIONS
      AND WARRANTIES OF SELLERS

     

    Subject
      to the provisions of this Article 4,
      and the
      other terms and conditions of this Agreement, DEPI represents and warrants
      to
      Purchaser the matters set out in Sections 4.1 through 4.19, and
      Sections 4.21 and 4.22.

     

    Section 4.1 
      Sellers.
      

     

    (a) Existence
      and Qualification.
      Each
      Seller is a corporation or limited liability company duly organized, validly
      existing and in good standing under the laws of the state where it is
      incorporated or organized (as set forth in the preamble).

     

    (b) Power.
      Each
      Seller has the corporate power to enter into and perform this Agreement (and
      all
      documents required to be executed and delivered by that Seller at Closing)
      and
      to consummate the transactions contemplated by this Agreement (and such
      documents).

     

    (c) Authorization
      and Enforceability.
      The
      execution, delivery and performance of this Agreement (and all documents
      required to be executed and delivered by each Seller at Closing), and the
      consummation of the transactions contemplated hereby and thereby, have been
      duly
      and validly authorized by all necessary corporate action on the part of such
      Seller. This Agreement has been duly executed and delivered by each Seller
      (and
      all documents required to be executed and delivered by each Seller at Closing
      shall be duly executed and delivered by such Seller) and this Agreement
      constitutes, and at the Closing such documents shall constitute, the valid
      and
      binding obligations of each Seller, enforceable in accordance with their terms
      except as such enforceability may be limited by applicable bankruptcy or other
      similar Laws affecting the rights and remedies of creditors generally as well
      as
      to general principles of equity (regardless of whether such enforceability
      is
      considered in a proceeding in equity or at law).

     

    (d) No
      Conflicts.
      The
      execution, delivery and performance of this Agreement by each Seller, and the
      consummation of the transactions contemplated by this Agreement shall not
      (i) violate any provision of the certificate of incorporation or bylaws (or
      equivalent governing instruments) of such Seller, (ii) result in default
      (with due notice or lapse of time or both) or the creation of any lien or
      encumbrance or give rise to any right of termination, cancellation or
      acceleration under any material note, bond, mortgage, indenture, or other
      financing instrument to which such Seller is a party or by which it is bound,
      (iii) violate any judgment, order, ruling, or decree applicable to the
      Assets or such Seller as a party in interest or (iv) violate any Laws
      applicable to such 

     

     

    
      
        
        

      

      
        38

        
          

        

      

      
        
        

      

       

       

      Seller,
        except any matters described in clauses (ii), (iii), or (iv) above which
        would not have a Material Adverse Effect.

    

     

    Section 4.2 
      The
      Companies.

     

    (a) Existence
      and Qualification.
      Each
      Company other than the Survivor LPs is a corporation, duly organized, validly
      existing and in good standing under the Laws of its respective jurisdiction
      of
      incorporation or formation as described in Exhibit A attached hereto, and
      each is duly qualified to do business as a foreign corporation in each
      jurisdiction where its Company Assets are located, except where the failure
      to
      so qualify would not, individually or in the aggregate, have a Material Adverse
      Effect.
      As of
      the Closing, each Survivor LP will be a partnership, duly organized, validly
      existing and in good standing under the Laws of its respective jurisdiction
      of
      incorporation or formation as described in Exhibit A attached hereto and
      will be duly qualified to do business as a foreign limited partnership in each
      jurisdiction where its Company Assets are located, except where the failure
      to
      so qualify would not, individually or in the aggregate, have a Material Adverse
      Effect.

     

    (b) Power.
      Each
      Company other than the Survivor LPs has the corporate power and authority to
      own, lease or otherwise hold its Assets and conduct its business in the manner
      consistent with recent practice.
      As of
      the Closing, each Survivor LP will have the partnership power and authority
      to
      own, lease or otherwise hold its Assets and conduct its business in the manner
      consistent with recent practice of the E&P Business.

     

    (c) No
      Conflicts.
      The
      consummation of transactions contemplated by this Agreement shall not
      (i) violate any provision of the certificate of incorporation or bylaws (or
      equivalent governing instruments) of any Company, (ii) result in default
      (with due notice or lapse of time or both) or the creation of any lien or
      encumbrance or give rise to any right of termination, cancellation or
      acceleration under any material note, bond, mortgage, indenture, or other
      financing instrument to which any Company is a party or by which it is bound,
      (iii) violate any judgment, order, ruling, or decree applicable to any
      Company as a party in interest, or (iv) violate any Laws applicable to any
      Company, or any of its Company Assets, except any matters described in clauses
      (ii), (iii), or (iv) above which would not have a Material Adverse
      Effect.

     

    (d) Certificate
      of Incorporation and Bylaws.
      Sellers
      have delivered to Purchaser true and complete copies of the certificate of
      incorporation and by-laws (or equivalent governing instruments), each as amended
      to date, of the Companies other than the Survivor LPs and have made available
      to
      Purchaser for inspection the stock certificates and transfer books, and the
      minute books, of the Companies other than the Survivor LPs.
      Prior to
      the Closing, Seller shall deliver to Purchaser true and complete copies of
      the
      certificate of incorporation and by-laws (or equivalent governing instruments),
      each as amended as of such date, of the Survivor LPs and make available to
      Purchaser for inspection the partnership books, of the Survivor
      LPs.

     

    (e) Title
      to Shares.
      Sellers
      have good and valid title to the Shares of the Companies other than the Survivor
      LPs, and as of the Closing, will have good and valid title to the Shares of
      the
      Survivor LPs, in each case, free and clear of any liens, claims, 

     

     

    
      
        
        

      

      
        39

        
          

        

      

       

       

      encumbrances,
        security interests, options, charges and restrictions of any kind other than
        restrictions on transfer that may be imposed by applicable federal or state
        securities laws or in the applicable Company’s governing instruments. Other than
        this Agreement, and, in the case of the Survivor LPs, their respective
        partnership agreements, the Shares are not subject to any voting agreement
        or
        other contract, agreement, arrangement, commitment or understanding, including
        any such agreement, arrangement, commitment or understanding restricting
        or
        otherwise relating to the voting, dividend rights or disposition of the
        Shares.

    

     

    (f) The
      Shares.
      The
      entire issued and outstanding capital stock of the Companies that are not
      Survivor LPs are their Shares, consisting of the numbers set forth on Exhibit
      A
      attached hereto, and the entire equity ownership interest in the Survivor LPs
      will at Closing be their Shares. In each case, all the Shares of the Companies
      that are not Survivor LPs are, and the Shares of the Survivor LPs at Closing
      will be, duly authorized and validly issued and outstanding, fully paid,
      non-assessable and not issued in violation of any preemptive rights. Except
      for
      the Shares, there are no outstanding shares of capital stock or other equity
      interests in any Company, or any contractual arrangements giving any Person
      a
      right to receive any benefits or rights similar to the rights enjoyed by or
      accruing to the holders of any Shares of any Company. Other than pursuant to
      this Agreement, there are no outstanding warrants, options, rights, convertible
      or exchangeable securities or other commitments pursuant to which any Seller
      or
      a Company is or may be required to issue equity interests in such
      Company.

     

    (g) Balance
      Sheets and Income Statements.
      The
      combined, unaudited balance sheets of the Consolidated Onshore E&P Business
      as of December 31, 2005, and December 31, 2006 (the “Balance
      Sheets”),
      and
      the income statements of the Consolidated Onshore E&P Business for the year
      ended December 31, 2005, and for the year ended December 31, 2006 (the
“Income
      Statements”)
      attached hereto as Schedule 4.2(g) have been prepared from the books and records
      of the Sellers, Companies and Subsidiaries, in conformity with the Accounting
      Principles and fairly present the financial position of the Consolidated Onshore
      E&P Business as of the dates thereof and the results of operations of the
      Consolidated Onshore E&P Business for the periods then ended, including the
      allocations of general and administrative expense, shared assets and other
      items
      that have been made as indicated in Schedule 4.2(g), except for the
      following:

     

    (i) normal
      period end adjustments, including but not limited to subsequent
      events;

     

    (ii) the
      absence of notes required by the Accounting Principles; and

     

    (iii) the
      exclusion of cash and short-term investments, Affiliate accounts receivable
      and
      payable, margin assets and liabilities, goodwill, debt and interest to be
      eliminated pursuant to Section 6.9,
      Affiliate debt and interest to be eliminated pursuant to Section 6.8,
      retirement and other employee benefits, financing fees, the effects of hedging
      and other derivatives to be eliminated pursuant to Section 6.12,
      income
      taxes, and stock compensation.

     

     

    
      
        
        

      

      
        40

        
          

        

      

      
        
        

      

    

     

     

    Parent’s
      net investment (equity) is included in the Balance Sheets, however no
      representation is made regarding these balances.

     

    (h) Subsidiaries.
      No
      Company or Wholly-Owned Subsidiary directly or indirectly owns any capital
      stock
      or other equity interest in any Person except in Subsidiaries as set forth
      in
      Exhibit C and excluding, for the avoidance of doubt, any tax partnerships
      entered into with respect to the Assets.

     

    (i) Labor
      Matters.
      

     

    (i) No
      Company or Wholly-Owned Subsidiary has any employees other than the Company
      Onshore Employees, Excluded Employees, Key Employees and U.S. Temporary
      Employees.

     

    (ii) Other
      than for Excluded Employees, Key Employees, U.S. Temporary Employees or
      consultants, there are no employment agreements with any individuals who are
      (x) employed by DEPI, DOTEPI or Reserves who are rendering services
      primarily with respect to the Assets or (y) employed by Dominion Resources
      Services, Inc. and who are rendering services primarily with respect to the
      Assets or (z) employed by a Company or Wholly-Owned Subsidiary.

     

    (iii) DEPI,
      DOTEPI, Reserves, the Companies and the Wholly-Owned Subsidiaries have no
      collective bargaining agreements relating to the Assets. To the knowledge of
      DEPI: (A) no labor organization or group of employees of the Companies or the
      Wholly-Owned Subsidiary has made a demand for recognition or certification
      as a
      union or other labor organization, and (B) there are no representation or
      certification proceedings or petitions seeking a representation proceeding
      presently pending or threatened in writing to be brought or filed with the
      National Labor Relations Board or any labor relations tribunal or authority.
      To
      DEPI’s knowledge, there are no organizing activities involving the Companies or
      the Wholly-Owned Subsidiaries relating to the Assets.

     

    (j) Employee
      Benefits.

     

    (i) Schedule 4.2(j)(i)
      lists all of the Employee Plans.

     

    (ii) All
      Employee Plans subject to ERISA and the Code comply in all material respects
      with ERISA, the Code and all applicable Laws, except as set forth on Schedule
      4.2(j)(i).

     

    (iii) All
      Employee Plans contributed to by the Sellers, Companies, Wholly-Owned
      Subsidiaries or any ERISA Affiliate intended to be qualified under Section
      401
      of the Code have filed for or received favorable determination letters with
      respect to such qualified status from the Internal Revenue Service. The
      determination letter for each such Employee Plan remains in effect, and, to
      DEPI’s knowledge, any amendment made, or event relating to such an Employee

     

     

    
      
        
        

      

      
        41

        
          

        

      

      
        
        

      

       

       

      Plan
        subsequent to the date of such determination letter, has not materially and
        adversely affected the qualified status of the Employee Plan.

    

     

    (iv) No
      Employee Plan that is subject to Title IV of ERISA (a “Title
      IV Plan”)
      or
      Section 412 of the Code has incurred an accumulated funding deficiency, whether
      or not waived, within the meaning of Section 412 of the Code or Section 302
      of
      ERISA, and to DEPI’s knowledge, no condition exists which would be expected to
      result in an accumulated funding deficiency as of the last day of the current
      plan year of any Title IV Plan or other Employee Plan subject to Section 412
      of
      the Code. The PBGC has not instituted proceedings to terminate any Title IV
      Plan, and no other event or condition has occurred which might constitute
      grounds under Section 4042 of ERISA for the termination of, or the appointment
      of a trustee to administer, any such Title IV Plan.

     

    (v) No
      Employee Plan covering Company Onshore Employees is subject to the Laws of
      any
      jurisdiction outside the United States.

     

    (vi) None
      of
      Sellers, the Companies, the Wholly-Owned Subsidiaries, any other Affiliate
      of
      Sellers or any ERISA Affiliate has incurred or reasonably expects to incur
      any
      liability under Title IV of ERISA, including, without limitation, any liability
      (including secondary liability) for withdrawal from a Multiemployer Plan, any
      liability under Section 412, 4975 or 4980B of the Code, or any liability under
      Section 502 of ERISA.

     

    Section 4.3 
      The
      Subsidiaries.
      

     

    (a) Existence
      and Qualification.
      The
      Wholly-Owned Subsidiary is a limited partnership duly organized and validly
      existing under the Laws of its respective jurisdiction of incorporation or
      formation as described in Exhibit C and is duly qualified to do business as
      a foreign corporation, limited liability company, or general or limited
      partnership, as applicable, in each jurisdiction where its Assets are located,
      except where the failure to so qualify would not, individually or in the
      aggregate, have a Material Adverse Effect.

     

    (b) Power.
      The
      Wholly-Owned Subsidiary has the partnership power and authority to own, lease
      or
      otherwise hold its Assets and conduct its business in the manner consistent
      with
      recent practice.

     

    (c) No
      Conflicts.
      The
      consummation of transactions contemplated by this Agreement shall not
      (i) violate any provision of the certificate of incorporation or the
      by-laws (or equivalent certificates and governing instruments) of the
      Wholly-Owned Subsidiary, (ii) result in default (with due notice or lapse
      of time or both) or the creation of any lien or encumbrance or give rise to
      any
      right of termination, cancellation or acceleration under any material note,
      bond, mortgage, indenture, or other financing instrument to which the
      Wholly-Owned Subsidiary is a party or by which it is bound, (iii) violate
      any judgment, order, ruling, or decree applicable to the Wholly-Owned Subsidiary
      as a party in interest, or (iv) violate any Laws applicable to the
      Wholly-

     

     

    
      
        
        

      

      
        42

        
          

        

      

      
        
        

      

       

       

      Owned
        Subsidiary, or any of its Assets, except any matters described in clauses
        (ii),
        (iii), or (iv) above which would not have a Material Adverse
        Effect.

    

     

    (d) Certificate
      of Incorporation and Bylaws.
      Sellers
      have delivered to Purchaser true and complete copies of the partnership
      agreements, each as amended to date, of each Subsidiary (other than those
      certificates of partnership agreements for Frederick HOF Limited Partnership
      and
      Wilderness Energy Services Limited Partnership subject to confidentiality
      restrictions for which Sellers were unable to obtain all required consents
      for
      disclosure) and has made available to Purchaser for inspection the partnership
      books of the Wholly-Owned Subsidiary.
      Sellers
      will continue after the date hereof using commercially reasonable efforts to
      obtain the necessary consents to disclose the governing instruments for the
      Frederick HOF Limited Partnership and Wilderness Energy Services Partnership,
      provided that Sellers shall not be required to make payments or undertake
      obligations to or for the benefit of the holders of such consent
      rights.

     

    (e) Title
      to Equity Interests of the Subsidiaries.
      The
      issued and outstanding shares, partnership interests or membership interests,
      as
      appropriate, in each Subsidiary are owned of record as described in
      Exhibit C. In the case of such issued and outstanding shares, partnership
      interests or membership interests owned of record by a Seller, Company or
      Subsidiary as shown on Exhibit C (the “Equity
      Interests”),
      such
      shares or interest are also owned beneficially and free and clear of any liens,
      claims, encumbrances, security interests, options, charges and restrictions
      of
      any kind other than restrictions on transfers that may be imposed by applicable
      federal or state securities laws, or in the applicable Subsidiary’s governing
      instruments. Other than this Agreement and, in the case of Subsidiaries that
      are
      limited liability companies or general or limited partnerships, their respective
      ownership agreements, the Equity Interests are not subject to any voting
      agreement or other contract, agreement, arrangement, commitment or
      understanding, including any such agreement, arrangement, commitment or
      understanding restricting or otherwise relating to the voting, dividend rights
      or disposition of the Equity Interests.

     

    (f) The
      Equity Interests.
      The
      entire issued and outstanding capital stock of each Subsidiary that is a
      corporation consists of the numbers set forth on Exhibit C attached hereto,
      and the entire equity ownership of each Subsidiary that is a limited liability
      company or general or limited partnership consists of the partnership interests
      or membership interests as set forth in Exhibit C attached hereto. In each
      case, all the Equity Interests are duly authorized and validly issued and
      outstanding, fully paid, non-assessable (except, in the case of Subsidiaries
      that are limited liability companies or general or limited partnerships, as
      expressly authorized by the terms of the applicable operating agreements or
      partnership agreements of the Subsidiaries and except for any obligation to
      return distributions under the Laws applicable to each Subsidiary and have
      not
      been issued in violation of any preemptive rights. Except for the shares,
      partnership interests or membership interests shown on Exhibit C, there are
      no outstanding shares, units or other equity interests in any Subsidiary, or
      any
      contractual arrangements giving any Person a right to receive any benefits
      or
      rights similar to the rights enjoyed by or accruing to the holders of any Equity
      Interests of any Subsidiary. Other than pursuant to 

     

     

    
      
        
        

      

      
        43

        
          

        

      

      
        
        

      

       

       

      this
        Agreement, there are no outstanding warrants, options, rights, convertible
        or
        exchangeable securities or other commitments pursuant to which any Company
        or
        any Subsidiary is or may become obligated to issue or sell any capital stock
        or
        other equity interests in such Subsidiary.

    

     

    Section 4.4 
      Litigation. 
      Except as disclosed on Schedule 4.4, there are no actions, suits or
      proceedings pending, or to DEPI’s knowledge threatened in writing, before any
      Governmental Authority or arbitrator with respect to the E&P Business or
      against any Company or Wholly-Owned Subsidiary. There are no actions, suits
      or
      proceedings pending, or to DEPI’s knowledge, threatened in writing, before any
      Governmental Authority or arbitrator against any Seller, Company or Wholly-Owned
      Subsidiary, or any Affiliate of any of them, which are reasonably likely to
      impair or delay materially Sellers’ ability to perform their obligations under
      this Agreement.

     

    Section 4.5 
      Taxes
      and Assessments.
       Except as disclosed on Schedule 4.5,

     

    (a) To
      the
      knowledge of DEPI, each Company and Subsidiary has filed all material Tax
      Returns (as defined in Section 9.2(a))
      required to be filed by it, and timely paid all material Taxes that were due
      and
      payable by it, except those for which adequate reserves have been
      provided;

     

    (b) To
      the
      knowledge of DEPI, no Company or Subsidiary has received written notice of
      any
      pending claim against it (which remains outstanding) from any applicable
      Governmental Authority for assessment of material Taxes, and to the knowledge
      of
      DEPI, no such claim has been threatened;

     

    (c) To
      the
      knowledge of DEPI, each Seller has filed all material Tax Returns (as defined
      in
Section 9.2(a))
      required to be filed by it and paid all material Taxes (except those for which
      adequate reserves have been provided) with respect to the Additional Assets;
      

     

    (d) To
      the
      knowledge of DEPI, no Seller has received written notice of any pending claim
      against it (which remains outstanding) from any applicable Governmental
      Authority for assessment of material Taxes with respect to the Additional
      Assets, and to the knowledge of DEPI, no such claim has been
      threatened;

     

    (e) Schedule
      4.5 sets forth all of the Assets that are deemed by agreement or applicable
      law
      to be held by a partnership for federal tax purposes, and, to the extent any
      of
      the Assets are deemed by agreement or applicable law to be held by a partnership
      for federal tax purposes, any such partnerships shall have in effect an election
      under Section 754 of the Code that will apply with respect to such portion
      of
      the Assets being sold and purchased under this Agreement and that are deemed
      owned by such partnerships;

     

    (f) Schedule 4.5(f)
      lists each Company and Subsidiary and indicates whether each such Company and
      Subsidiary (to DEPI’s knowledge in the case of Subsidiaries other than
      Wholly-Owned Subsidiaries) is treated as a C corporation, partnership, or entity
      disregarded as separate from its owner for United States federal income tax
      purposes;

     

     

    
      
        
        

      

      
        44

        
          

        

      

      
        
        

      

    

     

     

    (g) None
      of
      the Companies or Wholly-Owned Subsidiaries has, during the period such Companies
      or Wholly-Owned Subsidiaries have been part of the Consolidated Group, and
      to
      the knowledge of DEPI, none of the other Subsidiaries has,
      (i) participated, within the meaning of Treasury Regulation
      Section 1.6011-4(c), in any “listed transaction” or any other “reportable
      transaction” within the meaning of Treasury Regulation Section 1.6011-4,
      (ii) engaged in any transaction that gives rise to (x) a registration
      obligation under Section 6111 of the Code and the Treasury Regulations
      thereunder, or (y) a list maintenance obligation under Section 6112 of
      the Code and the Treasury Regulations thereunder, or (iii) taken any
      position on any Tax Return which could give rise to a substantial underpayment
      of Tax under Section 6662 of the Code or any similar provision of state,
      local or foreign Tax law;

     

    (h) To
      the
      knowledge of DEPI, (i) no audit, litigation or other proceeding with
      respect to material Taxes has been commenced or is presently pending with
      respect to any of the Companies or the Subsidiaries, or with respect to the
      Additional Assets; and (ii) each of the Companies and Subsidiaries has
      withheld and paid all material Taxes required to have been withheld and paid
      by
      them, including in connection with amounts paid or owing to any employee,
      independent contractor, creditor, member, stockholder, or other third party;
      and

     

    (i) To
      the
      knowledge of DEPI, none of the Companies or Subsidiaries has been a member
      of a
      consolidated, combined or unitary group, except for a Consolidated
      Group.

     

    Section 4.6 
      Environmental
      Laws. 
      Except as disclosed on Schedule 4.6, to DEPI’s knowledge, each Company’s
      and Wholly-Owned Subsidiary’s, and DEPI’s, DOTEPI’s and Reserves’, ownership and
      operation of its respective Assets is in compliance with all applicable
      Environmental Laws, except such failures to comply as, individually or in the
      aggregate, would not have a Material Adverse Effect. Except as disclosed on
      Schedule 4.6, and except for contamination that would not, individually or
      in the aggregate, have a Material Adverse Effect, to DEPI’s knowledge there has
      been no pollution or contamination of groundwater, surface water, soil,
      subsurface strata or seabed on the Properties resulting from hydrocarbon or
      related activities on such Properties which was required to be remediated under
      applicable Environmental Laws on or before the date of this Agreement for which
      any Company or Wholly-Owned Subsidiary or the owner of the Additional Assets
      would be liable but which has not been remediated. Except as disclosed on
      Schedule 4.4 or Schedule 4.6, to DEPI’s knowledge, none of the Sellers has
      received any unresolved written notice from any Person or Governmental Authority
      asserting or alleging that the Companies or the Properties are or may be in
      violation of Environmental Laws, are or may be the subject of any investigation
      pursuant to Environmental Laws or are or may be subject to Environmental
      Liabilities. Notwithstanding
      anything to the contrary in this Section or elsewhere in this Agreement, DEPI
      makes no, and disclaims any, representation or warranty, express or implied,
      with respect to the presence or absence of naturally occurring radioactive
      material (“NORM”),
      asbestos, mercury, drilling fluids and chemicals, and produced waters and
      hydrocarbons in or on the Properties or Equipment in quantities typical for
      oilfield operations in the areas in which the Properties and Equipment are
      located. For purposes of this Agreement, “Environmental
      Laws”
means,
      as the same have been amended to the date hereof, the Comprehensive
      Environmental Response, Compensation and 

     

     

    
      
        
        

      

      
        45

        
          

        

      

      
        
        

      

       

       

      Liability
        Act, 42 U.S.C. § 9601 et seq.;
        the
        Resource Conservation and Recovery Act, 42 U.S.C. § 6901 et seq.;
        the
        Federal Water Pollution Control Act, 33 U.S.C. § 1251 et seq.;
        the
        Clean Air Act, 42 U.S.C. § 7401 et seq.;
        the
        Hazardous Materials Transportation Act, 49 U.S.C. § 1471 et seq.;
        the
        Toxic Substances Control Act, 15 U.S.C. §§ 2601 through 2629; the Oil
        Pollution Act, 33 U.S.C. § 2701 et seq.;
        the
        Emergency Planning and Community Right to Know Act, 42 U.S.C. § 11001
et seq.;
        and
        the Safe Drinking Water Act, 42 U.S.C. §§ 300f through 300j, in each case
        as amended to the date hereof, and all similar Laws as of the date hereof
        of any
        Governmental Authority having jurisdiction over the property in question
        addressing pollution or protection of the environment or biological or cultural
        resources, remediation of contamination, restoration of environmental quality,
        Hazardous Substances and all regulations implementing the
        foregoing.

    

     

    Section 4.7 
      Compliance
      with Laws.
       Except with respect to Environmental Laws, which are addressed in
Section 4.6
      and
      except as disclosed on Schedule 4.7, to DEPI’s knowledge, the Companies and
      the Wholly-Owned Subsidiaries are in compliance with, and DEPI’s, DOTEPI’s and
      Reserves’ ownership, use and operation of the Additional Assets are in
      compliance with, all applicable Laws, except such failures to comply as would
      not, individually or in the aggregate, have a Material Adverse Effect. Except
      as
      set forth on Schedule 4.7, Sellers and the Companies and Wholly-Owned
      Subsidiaries have all material permits, licenses and other governmental
      authorizations (collectively, the “Permits”)
      necessary to own, lease or otherwise hold their respective properties and assets
      and to conduct the E&P Business as currently conducted except where the
      failure to have any Permit does not result in a Material Adverse
      Effect.

     

    Section 4.8 
      Contracts. 
      Schedule 4.8 lists all Material Contracts. To DEPI’s knowledge, none of the
      Sellers, the Companies or the Wholly-Owned Subsidiaries, nor to the knowledge
      of
      DEPI, any other Person, is (or will be with due notice, lapse of time or both)
      in default under any Material Contract except as disclosed on Schedule 4.8
      and except such defaults as would not, individually or in the aggregate, have
      a
      Material Adverse Effect. To DEPI’s knowledge, all Material Contracts are in full
      force and effect. Except as disclosed on Schedule 4.8, there are no
      Contracts with Affiliates of Sellers (other than the Companies and Subsidiaries)
      that will be binding on any Company or Wholly-Owned Subsidiary or the Assets
      after Closing. Except as disclosed on Schedule 4.8, there are no futures,
      options, swaps or other derivatives with respect to the sale of production
      that
      will be binding on any Company or Wholly-Owned Subsidiary or the Assets after
      Closing. Except as disclosed on Schedule 4.8, as of the date identified on
      such Schedule, there were no contracts for the purchase, sale or exchange of
      oil, gas or other hydrocarbons produced from or attributable to the Properties
      that will be binding on Purchaser, the Companies, the Wholly-Owned Subsidiary
      or
      the Assets after Closing that Purchaser (or the applicable Company or
      Wholly-Owned Subsidiary) will not be entitled to terminate at will (without
      penalty) on 90 days notice or less. No notice of default or breach has been
      received or delivered by any Seller, Company or Wholly-Owned Subsidiary under
      any Material Contract, the resolution of which is currently outstanding, and
      no
      currently effective notices have been received by any Seller, Company or
      Wholly-Owned Subsidiary of the exercise of any premature termination, price
      redetermination, market-out or curtailment of any Material
      Contract.

     

     

    
      
        
        

      

      
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    Section 4.9 
      Payments
      for Production. 
      Except as disclosed on Schedule 4.9 and subject to the covenant in
Section 6.11,
      none of
      the Sellers, the Companies or the Wholly-Owned Subsidiaries are obligated by
      virtue of a take or pay payment, advance payment or other similar payment (other
      than royalties, overriding royalties and similar arrangements established in
      the
      Leases or reflected on Exhibit B-1, Exhibit B-2, Exhibit D-1 or
      Exhibit D-2), to deliver oil or gas, or proceeds from the sale thereof,
      attributable to the Sellers’, Company’s or Wholly-Owned Subsidiary’s interest in
      the Properties at some future time without receiving payment therefor at or
      after the time of delivery.

     

    Section 4.10 
      Production
      Imbalances. 
      Except with respect to Properties and in the amounts set forth on
      Schedule 4.10, as of the dates set forth on such Schedule, there were no
      imbalances with respect to the Properties arising from overproduction or
      underproduction or overdeliveries or underdeliveries or other imbalance arising
      at the wellhead, pipeline, gathering system, transportation system, processing
      plant or other location, including, without limitation, any imbalances under
      gas
      balancing or similar agreements, or imbalances under processing agreements
      and
      imbalances under gathering or transportation agreements.

     

    Section 4.11 
      Consents
      and Preferential Purchase Rights. 
      As of the date hereof, there are no preferential rights to purchase or required
      third Person consents to assignment, which may be applicable or necessary for
      the valid execution, delivery and performance by Sellers of this Agreement
      (including to the sale of Shares and Additional Assets by Sellers as
      contemplated by this Agreement), except for consents and approvals of
      Governmental Authorities that are customarily obtained after Closing, those
      approvals described in Section 6.7,
      and as
      set forth on Schedule 4.11.

     

    Section 4.12 
      Liability
      for Brokers’ Fees. 
      Purchaser, the Companies and the Subsidiaries shall not directly or indirectly
      have any responsibility, liability or expense, as a result of undertakings
      or
      agreements of Sellers, the Companies or the Subsidiaries prior to Closing,
      for
      brokerage fees, finder’s fees, agent’s commissions or other similar forms of
      compensation to an intermediary in connection with the negotiation, execution
      or
      delivery of this Agreement or any agreement or transaction contemplated
      hereby.

     

    Section 4.13 
      Equipment
      and Personal Property.

     

    (a) Except
      as
      set forth on Schedule 4.13(a), all currently producing Wells and Equipment
      are
      in an operable state of repair adequate to maintain normal operations in
      accordance with past practices, ordinary wear and tear excepted. DEPI, DOTEPI,
      Reserves, each Company and the Wholly-Owned Subsidiary have all material
      easements, rights of way, licenses and authorizations, from Governmental
      Authorities necessary to access, construct, operate, maintain and repair the
      Wells and Equipment in the ordinary course of business as currently conducted
      by
      such Persons and in material compliance with all Laws, except such failures
      as
      would not individually or in the aggregate have a Material Adverse
      Effect.

     

    (b) With
      respect to Equipment, hydrocarbon production and inventory, DEPI’s, DOTEPI’s,
      Reserves’, and each Company’s and Wholly-Owned Subsidiary’s title as of the date
      hereof is, and as of the Closing Date, shall be transferred to Purchaser, free
      and clear of liens and encumbrances other than Permitted
      Encumbrances.
      To
      DEPI’s knowledge, the Sellers (and/or the Companies and Wholly-Owned Subsidiary)
      have such 

     

     

    
      
        
        

      

      
        47

        
          

        

      

      
        
        

      

       

       

      title
        to
        the Midstream Assets as would be deemed adequate by a reasonable and prudent
        owner of assets similar to the Midstream Assets.

    

     

    Section 4.14 
      Non-Consent
      Operations. 
      No Seller, Company or Wholly-Owned Subsidiary has elected not to participate
      in
      any operation or activity proposed with respect to the Assets which could result
      in any of such Person’s interest in any Assets becoming subject to a penalty or
      forfeiture as a result of such election not to participate in such operation
      or
      activity, except to the extent reflected in the Net Revenue Interest and Working
      Interest set forth in Exhibit B-2 or Exhibit D-2.

     

    Section 4.15 
      Wells. 
      To DEPI’s knowledge, all Wells have been drilled and completed within the limits
      permitted by all applicable Leases, contracts, and pooling or unit agreements.
      To DEPI’s knowledge, no Well is subject to penalties on allowables after the
      Effective Date because of any overproduction or any other violation of
      Laws.

     

    Section 4.16 
      Outstanding
      Capital Commitments. 
      As of the date of this Agreement, there are no outstanding AFEs or other
      commitments for capital expenditures (except as expressly set forth in the
      terms
      of a contract) which are binding on any Seller, Company or Wholly-Owned
      Subsidiary with respect to the Assets or E&P Business and which DEPI
      reasonably anticipates will individually require expenditures by the owner
      of
      the Assets after the Effective Date in excess of Two Million dollars
      ($2,000,000), other than those shown on Schedule 4.16.

     

    Section 4.17 
      Insurance. 
      Schedule 4.17 lists all the insurance policies maintained by Sellers, the
      Companies and the Wholly-Owned Subsidiary with respect to the
      Assets.

     

    Section 4.18 
      Absence
      of Certain Changes. 
      Since December 31, 2006, and except as set forth on Schedule 4.18, (a) there
      has
      not been any reduction in the rate of production of oil, gas or condensate
      from
      the Properties which would constitute a Material Adverse Effect, (b) there
      has
      not been any reduction or write-down in the reserves estimated for the
      Properties (which reduction or write-down is not reflected in the Reserve
      Report) that would constitute a Material Adverse Effect, (c) there has not
      been
      any damage, destruction or loss with respect to the Assets that would constitute
      a Material Adverse Effect that is not addressed by the terms of Section 12.4,
      or
      (d) the Assets have not become subject to any obligation or liability that
      would
      be required to be reflected as an extraordinary item separately listed on an
      income statement for the E&P Business prepared in accordance with the
      Accounting Principles.

     

    Section 4.19 
      Assets
      of the E&P Business. 
      Except as described in Section 1.3 and except for those vehicles, computers
      and
      software leased for use in the operation of the E&P Business that are not
      purchased by Seller or Affiliates of Seller pursuant to Section 6.13, (a) the
      Assets include all material equipment, materials, contracts, data, records,
      software and other property owned or leased by Sellers, the Companies, the
      Wholly-Owned Subsidiaries and their Affiliates necessary for the conduct of
      the
      E&P Business in a manner consistent with recent practices; (b) since
      December 31, 2006, the Assets have been operated only in the ordinary course
      of
      business consistent with past practices of DEPI, DOTEPI, Reserves, the Companies
      and the Wholly-Owned Subsidiaries; and (c) no property material to the conduct
      of the E&P

     

     

    
      
        
        

      

      
        48

        
          

        

      

      
        
        

      

       

       

      Business
        is being retained by any Seller or Affiliate of Sellers (other that the
        Companies and Subsidiaries).

    

     

    Section 4.20 
      Limitations.

     

    (a) Except
      as
      and to the extent expressly set forth in Article 3,
      this
Article 4
      or in
      the certificate of Sellers to be delivered pursuant to Section 8.2(j),
      or
      DEPI’s, DOTEPI’s or Reserves’ special warranty of title in the Conveyances,
      (i) Sellers make no representations or warranties, express or implied, and
      (ii) Sellers expressly disclaim all liability and responsibility for any
      representation, warranty, statement or information made or communicated (orally
      or in writing) to Purchaser or any of its Affiliates, employees, agents,
      consultants or representatives (including, without limitation, any opinion,
      information, projection or advice that may have been provided to Purchaser
      by
      any officer, director, employee, agent, consultant, representative or advisor
      of
      Sellers or any of their Affiliates).

     

    (b) EXCEPT
      AS
      EXPRESSLY REPRESENTED OTHERWISE IN ARTICLE 3,
      THIS
ARTICLE 4,
      IN THE
      CERTIFICATE OF SELLERS TO BE DELIVERED AT CLOSING PURSUANT TO SECTION 8.2(J),
      OR
      DEPI’S, DOTEPI’S OR RESERVES’ SPECIAL WARRANTY OF TITLE IN THE CONVEYANCES,
WITHOUT
      LIMITING THE GENERALITY OF THE FOREGOING, SELLERS (1) MAKE NO AND EXPRESSLY
      DISCLAIM ANY REPRESENTATION OR WARRANTY, EXPRESS OR IMPLIED, AS TO
      (I) TITLE TO ANY OF THE ASSETS, (II) THE CONTENTS, CHARACTER OR NATURE
      OF ANY DESCRIPTIVE MEMORANDUM, OR ANY REPORT OF ANY PETROLEUM ENGINEERING
      CONSULTANT, OR ANY GEOLOGICAL OR SEISMIC DATA OR INTERPRETATION, RELATING TO
      THE
      ASSETS, (III) THE QUANTITY, QUALITY OR RECOVERABILITY OF PETROLEUM
      SUBSTANCES IN OR FROM THE ASSETS, (IV) THE EXISTENCE OF ANY PROSPECT,
      RECOMPLETION, INFILL OR STEP-OUT DRILLING OPPORTUNITIES, (V) ANY ESTIMATES
      OF THE VALUE OF THE ASSETS OR FUTURE REVENUES GENERATED BY THE ASSETS,
      (VI) THE PRODUCTION OF PETROLEUM SUBSTANCES FROM THE ASSETS, OR WHETHER
      PRODUCTION HAS BEEN CONTINUOUS, OR IN PAYING QUANTITIES, OR ANY PRODUCTION
      OR
      DECLINE RATES, (VII) THE MAINTENANCE, REPAIR, CONDITION, QUALITY,
      SUITABILITY, DESIGN OR MARKETABILITY OF THE ASSETS, (VIII) INFRINGEMENT OF
      ANY INTELLECTUAL PROPERTY RIGHT, OR (IX) ANY OTHER MATERIALS OR INFORMATION
      THAT MAY HAVE BEEN MADE AVAILABLE OR COMMUNICATED TO PURCHASER OR ITS
      AFFILIATES, OR ITS OR THEIR EMPLOYEES, AGENTS, CONSULTANTS, REPRESENTATIVES
      OR
      ADVISORS IN CONNECTION WITH THE TRANSACTIONS CONTEMPLATED BY THIS AGREEMENT
      OR
      ANY DISCUSSION OR PRESENTATION RELATING THERETO, AND (2) FURTHER DISCLAIM ANY
      REPRESENTATION OR WARRANTY, EXPRESS OR IMPLIED, OF MERCHANTABILITY, FITNESS
      FOR
      A PARTICULAR PURPOSE OR CONFORMITY TO MODELS OR SAMPLES OF MATERIALS OF ANY
      EQUIPMENT, IT BEING EXPRESSLY UNDERSTOOD AND AGREED BY THE PARTIES HERETO THE
      ASSETS ARE BEING TRANSFERRED

     

     

    
      
        
        

      

      
        49

        
          

        

      

      
        
        

      

       

       

       “AS
        IS, WHERE IS,” WITH ALL FAULTS AND DEFECTS, AND THAT PURCHASER HAS MADE OR
        CAUSED TO BE MADE SUCH INSPECTIONS AS PURCHASER DEEMS
        APPROPRIATE.

    

     

    (c) Any
      representation “to the knowledge of DEPI” or “to DEPI’s knowledge” is limited to
      matters within the actual knowledge of the individuals identified on
      Schedule 4.20(c).
      Actual
      knowledge only includes information actually personally known by such
      individual.

     

    (d) Inclusion
      of a matter on a schedule attached hereto with respect to a representation
      or
      warranty that addresses matters having a Material Adverse Effect shall not
      be
      deemed an indication that such matter does, or may, have a Material Adverse
      Effect. Schedules may include matters not required by the terms of the Agreement
      to be listed on the Schedule, which additional matters are disclosed for
      purposes of information only, and inclusion of any such matter does not mean
      that all such matters are included. As used herein, “Material
      Adverse Effect”
means
      a
      material adverse effect on the ownership, operation or financial condition
      of
      the E&P Business, taken as a whole; provided, however, that Material Adverse
      Effect shall not include material adverse effects resulting from general changes
      in oil and gas prices; general changes in industry, economic or political
      conditions, or markets; changes in condition or developments generally
      applicable to the oil and gas industry in any area or areas where the Assets
      are
      located; acts of God, including hurricanes and storms; acts or failures to
      act
      of Governmental Authorities (where not caused by the willful or negligent acts
      of Sellers, the Companies or Subsidiaries); civil unrest or similar disorder;
      terrorist acts; changes in Laws; effects or changes that are cured or no longer
      exist by the earlier of the Closing and the termination of this Agreement
      pursuant to Article 11;
      and
      changes resulting from the announcement of the transactions contemplated hereby
      or the performance of the covenants set forth in Article 6
      hereof.

     

    (e) A
      matter
      scheduled as an exception for any representation shall be deemed to be an
      exception to all representations for which it is relevant,
      except
      that the Contracts listed on Schedule 4.11 do not modify the Material Contracts
      List in Schedule 4.8.

     

    Section 4.21 
      Production
      Allowables.
       Except as provided on Schedule 4.21, to DEPI’s knowledge, no Seller or any
      Company or Wholly-Owned Subsidiary has received written notice that there has
      been any change proposed in the production allowables for any Wells listed
      on
      Exhibit B-2 or D-2 except where a proposed change (if adopted or approved)
      would
      not have a Material Adverse Effect.

     

    Section 4.22 
      Accuracy
      of Data.
      The
      historical factual information, excluding title information, supplied by Sellers
      or its Affiliates to Ryder Scott & Co. in the preparation of its report
      dated as of December 31, 2006 (the “Reserve
      Report”)
      of the
      Assets is accurate and complete in all material respects. The historical
      production data titled:

     

    (a) “YE2006_Product”
      in EBU_YE2006_Aries_database in the data room folder 2.1.2.1.3.1, as updated
      by
“EBU Production Update thru 1_2007” in the data room folder 2.1.2.1.3.4.2;
      and

     

     

    
      
        
        

      

      
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    (b) “YE2006_Product”
      in WBU_YE2006_Aries_database in the data room folder 2.1.2.2.3.1, as updated
      by
“WBU Production Update thru 1_2007” in the data room folder
      2.1.2.2.3.4.2,

     

    (DVDs
      of
      which have been provided to Purchaser in connection with the signing of this
      Agreement and identified by Sellers and Purchaser), to the extent relating
      to
      the Assets, is accurate and complete in all material respects.

     

     

    ARTICLE 5.

    REPRESENTATIONS
      AND WARRANTIES OF PURCHASER

     

    Purchaser
      represents and warrants to Sellers the following:

     

    Section 5.1 
      Existence
      and Qualification. 
      Purchaser is a corporation organized, validly existing and in good standing
      under the laws of Delaware.

     

    Section 5.2 
      Power. 
      Purchaser has the corporate power to enter into and perform its obligations
      under this Agreement (and all documents required to be executed and delivered
      by
      Purchaser at Closing) and to consummate the transactions contemplated by this
      Agreement (and such documents).

     

    Section 5.3 
      Authorization
      and Enforceability. 
      The execution, delivery and performance of this Agreement (and all documents
      required to be executed and delivered by Purchaser at Closing), and the
      consummation of the transactions contemplated hereby and thereby, have been
      duly
      and validly authorized by all necessary corporate action on the part of
      Purchaser. This Agreement has been duly executed and delivered by Purchaser
      (and
      all documents required to be executed and delivered by Purchaser at Closing
      will
      be duly executed and delivered by Purchaser) and this Agreement constitutes,
      and
      at the Closing such documents will constitute, the valid and binding obligations
      of Purchaser, enforceable in accordance with their terms except as such
      enforceability may be limited by applicable bankruptcy or other similar laws
      affecting the rights and remedies of creditors generally as well as to general
      principles of equity (regardless of whether such enforceability is considered
      in
      a proceeding in equity or at law).

     

    Section 5.4 
      No
      Conflicts. 
      The execution, delivery and performance of this Agreement by Purchaser, and
      the
      consummation of the transactions contemplated by this Agreement, will not
      (i) violate any provision of the certificate of incorporation or bylaws (or
      other governing instruments) of Purchaser, (ii) result in a material
      default (with due notice or lapse of time or both) or the creation of any lien
      or encumbrance or give rise to any right of termination, cancellation or
      acceleration under any material note, bond, mortgage, indenture, or other
      financing instrument to which Purchaser is a party or by which it is bound,
      (iii) violate any judgment, order, ruling, or regulation applicable to
      Purchaser as a party in interest or (iv) violate any Law applicable to
      Purchaser, except any matters described in clauses (ii), (iii) or (iv) above
      which would not have a material adverse effect on Purchaser or its
      properties.

     

    Section 5.5 
      Consents,
      Approvals or Waivers. 
      The execution, delivery and performance of this Agreement by Purchaser will
      not
      be subject to any consent, approval or 

     

     

    
      
        
        

      

      
        51

        
          

        

      

      
        
        

      

       

       

      waiver
        from any Governmental Authority or other third Person except, as set forth
        on
        Schedule 5.5.

    

     

    Section 5.6 
      Litigation. 
      There are no actions, suits or proceedings pending, or to Purchaser’s knowledge,
      threatened in writing before any Governmental Authority or arbitrator against
      Purchaser or any Affiliate of Purchaser which are reasonably likely to impair
      or
      delay materially Purchaser’s ability to perform its obligations under this
      Agreement.

     

    Section 5.7 
      Financing. 
      Purchaser
      has sufficient cash, available lines of credit or other sources of immediately
      available funds (in United States dollars) to enable it to pay the Closing
      Payment to Sellers at the Closing.

     

    Section 5.8 
      Investment
      Intent. 
      Purchaser is acquiring the Interests for its own account and not with a view
      to
      their sale or distribution in violation of the Securities Act of 1933, as
      amended, the rules and regulations thereunder, any applicable state blue sky
      Laws, or any other applicable securities Laws.

     

    Section 5.9 
      Independent
      Investigation.
       Purchaser is (or its advisors are) experienced and knowledgeable in the
      oil and gas business and aware of the risks of that business. Purchaser
      acknowledges and affirms that (i) as of the date hereof, it has made all
      such independent investigation, verification, analysis and evaluation of the
      Companies, the Subsidiaries and the Assets as it deems necessary or appropriate
      to enter into this Agreement, and (ii) it has made all such reviews and
      inspections of the Assets and the business, books and records, results of
      operations, conditions (financial or otherwise) and prospects of the Companies
      and the Subsidiaries as it has deemed necessary or appropriate to execute and
      deliver this Agreement and (iii) prior to Closing, it will make further
      independent investigations, inspections and evaluations of the Assets as it
      deems necessary or appropriate to consummate the transactions contemplated
      hereby. Except for the representations and warranties expressly made by DEPI
      in
      Articles 3 and 4 of this Agreement, or in the certificate to be delivered
      to Purchaser pursuant to Section 8.2(j)
      of this
      Agreement or the Conveyances, Purchaser acknowledges that there are no
      representations or warranties, express or implied, as to the financial
      condition, Assets, liabilities, equity, operations, business or prospects of
      the
      Companies, the Subsidiaries or the Additional Assets and that in making its
      decision to enter into this Agreement and to consummate the transactions
      contemplated hereby, Purchaser has relied solely upon its own independent
      investigation, verification, analysis and evaluation.

     

    Section 5.10 
      Liability
      for Brokers’ Fees. 
      Sellers, and, prior to Closing, the Companies and the Subsidiaries, shall not
      directly or indirectly have any responsibility, liability or expense, as a
      result of undertakings or agreements of Purchaser, for brokerage fees, finder’s
      fees, agent’s commissions or other similar forms of compensation to an
      intermediary in connection with the negotiation, execution or delivery of this
      Agreement or any agreement or transaction contemplated hereby.

     

    Section 5.11 
      Qualification. 
      Purchaser is or as of the Closing will be qualified under applicable Laws to
      hold Leases, rights of way and other rights issued by the U.S. government,
      and
      by
      other Governmental Authorities, which are included in the Assets.

     

     

    
      
        
        

      

      
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    ARTICLE 6.

    COVENANTS
      OF THE PARTIES

     

    Section 6.1 
      Access. 
      Upon execution of this Agreement, Sellers will give Purchaser and its
      representatives access to the Assets (and to personnel and representatives
      of
      Sellers responsible for the Assets at such periodic meetings as Purchaser may
      reasonably request and arrange in advance through DEPI subject to the consent
      of
      DEPI, which consent shall not be withheld or delayed unreasonably) and access
      to
and the right to copy, at Purchaser’s expense, the Records in Sellers’
possession, for the purpose of conducting a confirmatory review of the E&P
      Business and for transition planning purposes, but only to the extent that
      Sellers may do so without (i) violating applicable Laws, including the HSR
      Act, or (ii) violating any obligations to any third Person and to the
      extent that Sellers have authority to grant such access without breaching any
      restriction binding on Sellers. Sellers shall use reasonable efforts to obtain
      permission for Purchaser to gain access to third-party operated Properties
      to
      inspect the condition of same. Such access by Purchaser shall be limited to
      Sellers’ normal business hours, and Purchaser’s investigation shall be conducted
      in a manner that minimizes interference with the operation of the E&P
      Business or the business of Sellers. Purchaser shall be entitled to conduct
      a
      Phase I or similar environmental assessment and may conduct visual
      inspections, record reviews, and interviews relating to the Properties,
      including their condition and their compliance with Environmental Laws
      (collectively, the “Phase
      I Investigation”),
      subject to the receipt of the necessary permission as described above.
      Purchaser’s right of access shall not entitle Purchaser to operate Equipment or
      conduct intrusive testing or sampling. All information obtained by Purchaser
      and
      its representatives under this Section 6.1
      shall be
      subject to the terms of that certain confidentiality agreement between Dominion
      Resources, Inc. and Purchaser dated December 13, 2006 (the “Confidentiality
      Agreement”)
      and
      any applicable privacy laws regarding personal information.

     

    Section 6.2 
      Notification
      of Breaches. 
      Until the Closing,

     

    (a) Purchaser
      shall notify Sellers promptly after Purchaser obtains actual knowledge that
      any
      representation or warranty of DEPI contained in this Agreement is untrue in
      any
      material respect or will be untrue in any material respect as of the Closing
      Date or that any covenant or agreement to be performed or observed by Sellers
      prior to or on the Closing Date has not been so performed or observed in any
      material respect; and

     

    (b) Sellers
      shall notify Purchaser promptly after any Seller obtains actual knowledge that
      any representation or warranty of Purchaser contained in this Agreement is
      untrue in any material respect or will be untrue in any material respect as
      of
      the Closing Date or that any covenant or agreement to be performed or observed
      by Purchaser prior to or on the Closing Date has not been so performed or
      observed in a material respect.

     

    If
      any of
      Purchaser’s or DEPI’s representations or warranties is untrue or shall become
      untrue in any material respect between the date of execution of this Agreement
      and the Closing Date, or if any of Purchaser’s or Sellers’ covenants or
      agreements to be performed or observed prior to or on the Closing Date shall
      not
      have been so performed or observed in any material respect, but if such breach
      of representation, warranty, covenant or agreement shall (if curable) be cured
      by the 

     

     

    
      
        
        

      

      
        53

        
          

        

      

      
        
        

      

    

     

     

    Closing
      (or, if the Closing does not occur, by the date set forth in Section 11.1),
      then
      such breach shall be considered not to have occurred for all purposes of this
      Agreement.

     

    Section 6.3 
      Press
      Releases. 
      Until the Closing, neither Sellers nor Purchaser, nor any Affiliate of any
      of
      them, shall make any press release regarding the existence of this Agreement,
      the contents hereof or the transactions contemplated hereby without the prior
      written consent of the Purchaser (in the case of announcements by Sellers or
      their Affiliates) or DEPI (in the case of announcements by Purchaser or its
      Affiliates); provided, however, the foregoing shall not restrict disclosures
      by
      Purchaser or Sellers or any of their Affiliates (i) to the extent that such
      disclosures are required by applicable securities or other Laws or the
      applicable rules of any stock exchange having jurisdiction over the disclosing
      Party or its Affiliates or (ii) to Governmental Authorities and third
      Persons holding preferential rights to purchase, rights of consent or other
      rights that may be applicable to the transactions contemplated by this
      Agreement, as reasonably necessary to provide notices, seek waivers. amendments
      or terminations of such rights, or seek such consents. Sellers and Purchaser
      shall each be liable for the compliance of their or its respective Affiliates
      with the terms of this Section.

     

    Section 6.4 
      Operation
      of Business. 
      Except as provided in the 2007 business and budget plan document attached hereto
      as Schedule 6.4 (the “2007
      Plan”),
      or as
      may be required in connection with Sections 6.8, 6.9, 6.11, 6.12, 6.13,
      6.14 and 6.16, until the Closing DEPI, DOTEPI and Reserves each shall, and
      the
      applicable Sellers shall cause the Companies and their Wholly-Owned Subsidiaries
      to each, operate its business with respect to the Assets in the ordinary course,
      and, without limiting the generality of the preceding,
      shall:

     

    (a) not
      transfer, sell, farmout, hypothecate, encumber or otherwise dispose of any
      of
      the Assets, except for (A) sales and dispositions of oil and gas in the
      ordinary course of business (but not including any volumetric production
      payments other than as provided in Section 6.11); (B) sales and
      dispositions of equipment and materials that are surplus, obsolete or replaced;
      (C) the sale or other disposition of the Excluded Utah Interests and the
      Excluded Midcontinent Pipeline Interests; and (D) other sales and
      dispositions of (in the ordinary course of business) Assets individually or
      in
      the aggregate not exceeding Ten Million dollars ($10,000,000); and

     

    (b) where
      it
      operates Leases or Units, produce oil, gas and/or other hydrocarbons from those
      Leases or Units consistent in the aggregate with the 2007 Plan, utilizing
      prudent oilfield practices as if Sellers were going to continue to own the
      E&P Business after the Closing Date and without regard to the existence of
      this Agreement, subject to the terms of the applicable Leases and Contracts,
      applicable Laws and requirements of Governmental Authorities and interruptions
      resulting from force majeure, mechanical breakdown and planned
      maintenance;

     

    (c) not
      terminate, materially amend, execute or extend any contracts reasonably expected
      to generate gross revenues per year for the owner of the Assets or to require
      expenditures per year chargeable to the owner of the Assets in excess of Ten
      Million dollars ($10,000,0000), or any Material Contracts reasonably expected
      to
      generate gross revenues per year for the owner of the Assets or to require
      expenditures per year chargeable to the owner of the Assets in excess of Five
      Million dollars

     

     

    
      
        
        

      

      
        54

        
          

        

      

      
        
        

      

       

       

       ($5,000,000),
        other than the execution or extension of a contract for the sale or exchange
        of
        oil, gas and/or other hydrocarbons terminable on ninety (90) days or shorter
        notice;

    

     

    (d) maintain
      insurance coverage on the Assets in the amounts and of the types currently
      in
      force;

     

    (e) use
      commercially reasonable efforts to maintain in full force and effect all Leases,
      that are capable of producing in paying quantities; and

     

    (f) maintain
      all material governmental permits, licenses, authorizations and approvals
      affecting the Assets.

     

    Requests
      for approval of any action restricted by this Section 6.4
      shall be
      delivered to either of the following individuals, each of whom shall have full
      authority to grant or deny such requests for approval on behalf of
      Purchaser:

     

    
      
        	
                Jonathan
                  Nathanson

              	 	
                Kenneth
                  J. Zinghini

              
	
                E-Mail:  jnathanson@loews.com

              	 	
                E-Mail:  kzinghini@loews.com

              
	
                Phone:  (212)
                  521-2135

              	 	
                Phone:  (212)
                  521-2953

              
	
                Fax:  (212)
                  521-2136

              	 	
                Fax:  (212)
                  521-2053

              

      

    

     

    Purchaser’s
      approval of any action restricted by this Section 6.4
      shall
      not be unreasonably withheld or delayed and shall be considered granted within
      ten (10) days (unless a shorter time is reasonably required by the circumstances
      and such shorter time is specified in Sellers’ notice) of Sellers’ notice to
      Purchaser requesting such consent unless Purchaser notifies Sellers to the
      contrary during that period. Notwithstanding the foregoing provisions of this
      Section 6.4,
      in the
      event of an emergency, Sellers may take such action as reasonably necessary
      and
      shall notify Purchaser of such action promptly thereafter.

     

    Section 6.5 
      Conduct
      of the Companies and Wholly-Owned Subsidiaries. 
      Except as provided in the Balance Sheets attached hereto as
      Schedule 4.2(g), or in the 2007 Plan, or on Schedule 6.5, or as may be
      required in connection with Sections 6.8, 6.9, 6.11, 6.12, 6.13 and 6.14,
      until the Closing, the applicable Sellers shall not permit any Company or
      Wholly-Owned Subsidiary to do any of the following without the prior written
      consent of Purchaser:

     

    (a) amend
      its
      charter, by-laws or equivalent governing instruments;

     

    (b) issue,
      redeem or otherwise acquire any shares of its capital stock or issue any option,
      warrant or right relating to its capital stock or any securities convertible
      into or exchangeable for any shares of capital stock, declare or pay any
      stock-split, or declare or pay any dividend or make any other payment or
      distribution to any Seller or other Affiliate except cash and Excluded Assets;
      provided,
      however,
      that
      capital stock may be issued in conjunction with the capitalization of Company
      or
      Wholly-Owned Subsidiary debt pursuant to Section 6.8,
      in
      which event such additional stock shall become part of the Shares delivered
      at
      Closing;

     

     

    
      
        
        

      

      
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    (c) incur
      or
      assume any indebtedness for borrowed money (a “Loan”)
      or
      guarantee any such indebtedness (excluding, for the avoidance of doubt,
      contractual or statutory joint and several liability obligations for joint
      operations, accounts payable incurred in the ordinary course of business and
      indebtedness to or guarantees for another Company or Subsidiary), which Loan
      or
      guaranty will remain in effect after Closing;

     

    (d) make
      an
      equity investment in any other Person (except investments in another Company
      or
      Subsidiary);

     

    (e) make
      any
      change in any method of accounting or accounting principles other than those
      required by the Accounting Principles;

     

    (f) acquire
      by merger or consolidation or purchase of equity interests any corporation,
      partnership, association or other business organization or division
      thereof;

     

    (g) with
      respect to any Taxes for which Purchaser may have liability under Article 9
      or any
      item that is likely to materially affect the Tax liability of Purchaser or
      any
      Affiliate in any Post-Closing Period, make, revoke or amend any material Tax
      election, enter into any settlement of any material issue with respect to any
      assessment or audit or other administrative or judicial proceeding, or execute
      or consent to any waivers extending the statutory period of limitations with
      respect to the collection or assessment of any material Taxes or file or amend
      any material Tax Return;

     

    (h) make
      any
      Loan (excluding, for the avoidance of doubt, (i) accounts receivable in the
      ordinary course of business, (ii) advances or cash call payments to the
      operator as required under applicable operating agreements, (iii) advances
      as operator on behalf of co-owners for costs under applicable operating
      agreements, (iv) Loans to another Company or Subsidiary or (v) other
      loans in the ordinary course of business, such as Loans to employees for the
      purchase of computers and natural gas appliances) to any Person;

     

    (i) terminate
      or voluntarily relinquish any permit, license or other authorization from any
      Governmental Authority necessary for the conduct of the E&P Business except
      in the ordinary course of business;

     

    (j) grant
      any
      bonus or increase in salary to any employee of any Company or Wholly-Owned
      Subsidiary, except (i) as required by existing employment contracts, plans
      or arrangements, (ii) normal annual adjustments and bonuses consistent with
      recent practice, and (iii) any extraordinary adjustments required for
      retention purposes consistent with industry practice at the time;

     

    (k) establish,
      materially amend or terminate any Employee Plan for employees of such Company
      or
      Wholly-Owned Subsidiary, except changes generally affecting plans covering
      both
      employees of such Company or Wholly-Owned Subsidiary and employees of its
      Affiliates, or consistent with then-current industry practice; or

     

    (l) agree
      to
      do any of the foregoing.

     

     

    
      
        
        

      

      
        56

        
          

        

      

      
        
        

      

    

     

     

    Requests
      for approval of any action restricted by this Section 6.5
      shall be
      delivered to either of the following individuals, each of whom shall have full
      authority to grant or deny such requests for approval on behalf of
      Purchaser:

     

    
      
        	
                Jonathan
                  Nathanson

              	 	
                Kenneth
                  J. Zinghini

              	 
	
                E-Mail:

              	
                jnathanson@loews.com

              	 	
                E-Mail:

              	
                kzinghini@loews.com

              	 
	
                Phone:

              	
                (212)
                  521-2135

              	 	
                Phone:

              	
                (212)
                  521-2953

              	 
	
                Fax:

              	
                (212)
                  521-2136

              	 	
                Fax:

              	
                (212)
                  521-2053

              	 

      

    

     

    Purchaser’s
      approval of any action restricted by this Section 6.5
      shall
      not be unreasonably withheld or delayed and shall be considered granted within
      10 days (unless a shorter time is reasonably required by the circumstances
      and
      such shorter time is specified in Sellers’ notice) of Sellers’ notice to
      Purchaser requesting such consent unless Purchaser notifies Sellers to the
      contrary during that period.

     

    Section 6.6 
      Indemnity
      Regarding Access. 
      Purchaser agrees to indemnify, defend and hold harmless Sellers, its Affiliates
      (including until Closing the Companies and Subsidiaries), the other owners
      of
      interests in the Properties, and all such Persons’ directors, officers,
      employees, agents and representatives from and against any and all claims,
      liabilities, losses, costs and expenses (including court costs and reasonable
      attorneys’ fees), including claims, liabilities, losses, costs and expenses
      attributable to personal injury, death, or property damage, arising out of
      or
      relating to access to the Assets prior to the Closing by Purchaser, its
      Affiliates, or its or their directors, officers, employees, agents or
      representatives, even
      if caused in whole or in part by the negligence (whether sole, joint or
      concurrent), strict liability or other legal fault of any indemnified
      Person.

     

    Section 6.7 
      Governmental
      Reviews. 
      Sellers and Purchaser shall each in a timely manner make (or cause its
      applicable Affiliate to make) (i) all required filings, including filings
      required under the Hart-Scott-Rodino Act, and prepare applications to and
      conduct negotiations with, each Governmental Authority as to which such filings,
      applications or negotiations are necessary or appropriate in the consummation
      of
      the transactions contemplated hereby and (ii) provide such information as
      the other may reasonably request in order to make such filings, prepare such
      applications and conduct such negotiations. Each Party shall cooperate with
      and
      use all reasonable efforts to assist the other with respect to such filings,
      applications and negotiations. Purchaser shall bear the cost of all filing
      or
      application fees payable to any Governmental Authority with respect to the
      transactions contemplated by this Agreement, regardless of whether Purchaser,
      any Seller, any Company, any Subsidiary, or any Affiliate of any of them is
      required to make the payment.

     

    Without
      limiting the generality of the preceding, prior to Closing, Purchaser shall
      take
      all such actions as are required to qualify to hold government Leases,
      rights-of-way and other rights included in the Assets and to meet any other
      requirements to receive and hold such Assets. Promptly after Closing, Purchaser
      and Sellers shall make all required filings with the U.S. Bureau of Land
      Management, U.S. Bureau of Indian Affairs, and other Governmental Authorities
      to
      properly assign and transfer government leases, operating rights and right
      of
      ways and any other related Additional Assets.
      Purchaser shall make all other required filings with any 

     

     

    
      
        
        

      

      
        57

        
          

        

      

      
        
        

      

       

       

      Governmental
        Authorities after Closing with respect to the transactions contemplated by
        this
        Agreement, including filing all required operator registration and change
        in
        operator, designation of operator and designation of applicant forms, and
        shall
        send all statutorily required notices with respect to Properties presently
        operated by DEPI, DOTEPI or Reserves. Purchaser shall also arrange for all
        bonds, letters of credit and guarantees required with respect to the ownership
        or operation of the Assets to be posted on or before Closing, to the extent
        and
        as described in Section 13.5.

    

     

    Section 6.8 
      Intercompany
      Indebtedness. 
      At or prior to Closing, Sellers and their Affiliates (other than the Companies
      and Subsidiaries) shall (i) either capitalize or cause each Company and
      Wholly-Owned Subsidiary to settle by cash payment any net indebtedness of such
      Company or Wholly-Owned Subsidiary to Sellers or to any other Affiliates (other
      than the Companies or Subsidiaries) and (ii) repay any net indebtedness of
      Sellers or any such Affiliate to each Company and Wholly-Owned Subsidiary,
      excluding, however, accounts payable (but only to the extent not taken into
      account in increasing the Purchase Price under Section 2.3) for the
      purchase of goods or services, or employment-related costs, or other ordinary
      course of business expenses owing to any Affiliate with respect to any period
      after the Effective Date which are subject to adjustment pursuant to
Section 2.3(h).

     

    Section 6.9 
      Third
      Person Indebtedness.
       At or prior to Closing, Sellers shall have satisfied or caused the
      Companies and Wholly-Owned Subsidiaries to satisfy all outstanding indebtedness
      owing by the Companies and Wholly-Owned Subsidiaries pursuant to third Person
      Loans (and shall by such time cause all liens and mortgages securing such
      indebtedness to be released pursuant to a release that is in form and substance
      reasonably acceptable to Purchaser), including Loans described on
      Schedule 6.9, excluding, for the avoidance of doubt, accounts payable in
      the ordinary course of business and Loans from another Company or
      Subsidiary.

     

    Section 6.10 
      Operatorship. 
      Within thirty (30) days after execution of this Agreement, DEPI, DOTEPI and
      Reserves shall each send notices (in form and substance reasonably acceptable
      to
      Purchaser) to all co-owners of the Additional Properties that it currently
      operates indicating that it is resigning as operator contingent upon and
      effective at Closing, and nominating and recommending Purchaser (or its
      designee) as successor operator following the Closing. DEPI,
      DOTEPI and Reserves make no representation or warranty as to Purchaser’s ability
      to succeed to operatorship of these Additional Properties, but Sellers shall
      at
      the request of Purchaser use commercially reasonable efforts to assist Purchaser
      (or its designee) to succeed the applicable Seller as operator of any
      Wells.

     

    Section 6.11 
      Volumetric
      Production Payments.
       On or prior to the Effective Date, the volumetric production payment
      contracts identified on Schedule 4.9 shall be purchased by Sellers or their
      Affiliates and replaced effective at the end of the Effective Date with new
      volumetric production payments on the terms set forth on Schedule 6.11,
      which volumetric production payments shall burden the Assets at
      Closing.

     

    Section 6.12 
      Hedges.
       At or prior to Closing, Sellers and their Affiliates shall eliminate or
      cause the Companies and Wholly-Owned Subsidiaries to eliminate all futures,
      options, swaps and other derivatives, except the Transferred Derivatives, with
      respect to the sale 

     

     

    
      
        
        

      

      
        58

        
          

        

      

      
        
        

      

       

       

      of
        production from the Assets that are currently binding on any Company or
        Wholly-Owned Subsidiary or the Assets.

    

     

    Section 6.13 
      Vehicles
      and Equipment. 
      At or prior to the Closing, Sellers or Affiliates of Sellers will exercise
      available options under applicable lease agreements to terminate such agreements
      and to purchase certain vehicles, computers, and software leased thereunder
      by
      or on behalf of the Companies or Wholly-Owned Subsidiaries or otherwise for
      use
      in the operation of the E&P Business, expending up to the amount specified
      in Section 2.3(d),
      which
      vehicles, computers and software shall then be included in the Assets at
      Closing. At Closing, Purchaser shall reimburse Sellers for such purchase costs
      and any other costs or expenses related thereto (the “Computer/Vehicle
      Buy-Out Costs”),
      as an
      adjustment to the Interest Unadjusted Purchase Price in accordance with
Section 2.3(d).

     

    Section 6.14 
      Certain
      Beneficial Interests. 

     

    (a) Except
      as
      provided in Section 6.14(c)
      below,
      until the Closing, DEPI shall not permit DEPI I, LP to assign, transfer,
      encumber or otherwise dispose of all or any part of the DEPI Texas Beneficial
      Interests in the possession of DEPI I, LP as of the date hereof, except to
      the
      extent that such assignment, transfer, encumbrance or other disposition is
      made
      in conjunction with an assignment, transfer, encumbrance or other disposition
      by
      DEPI of a corresponding interest in the Additional Asset associated with such
      DEPI Texas Beneficial Interests that is allowed by the terms and conditions
      of
      Sections 6.4 and 6.5.

     

    (b) Except
      as
      provided in Section 6.14(c)
      below,
      until the Closing, DOTEPI shall not permit DNG I, LP to assign, transfer,
      encumber or otherwise dispose of all or any part of the DOTEPI Texas Beneficial
      Interests in the possession of DNG I, LP as of the date hereof, except to the
      extent that such assignment, transfer, encumbrance or other disposition is
      made
      in conjunction with an assignment, transfer, encumbrance or other disposition
      by
      DOTEPI of a corresponding interest in the Additional Asset associated with
      such
      DOTEPI Texas Beneficial Interests that is allowed by the terms and conditions
      of
      Sections 6.4 and 6.5.

     

    (c) Prior
      to
      the Closing, DEPI
      shall cause DEPI I, LP to undergo a multi-survivor merger under which DEPI
      I, LP
      is survived by two or more limited partnerships, each with the same ownership
      as
      DEPI I, LP, and one of which holds the DEPI Texas Beneficial Interests
      (“DEPI
      Survivor LP”).
      The
      issued and outstanding partnership interests of DEPI Survivor LP shall then
      become Shares for all purposes of this Agreement and shall be transferred to
      two
      Delaware limited liability companies (the “Purchaser
      Subs”),
      each
      of which is wholly-owned by an Affiliate of Purchaser that is directly or
      indirectly wholly-owned by Purchaser (“Purchaser
      Holdco”),
      as
      part of the Interests at Closing. Prior to Closing, DOTEPI shall cause DNG
      I, LP
      to undergo a multi-survivor merger under which DNG I, LP is survived by two
      or
      more limited partnerships, each with the same ownership as DNG I, LP, and one
      of
      which holds the DOTEPI Texas Beneficial Interests (“DOTEPI
      Survivor LP”,
      and,
      together with DEPI Survivor LP, the “Survivor
      LPs”).
      The
      issued and outstanding partnership interests of DOTEPI Survivor LP shall then
      become Shares for all purposes of this Agreement and 

     

     

    
      
        
        

      

      
        59

        
          

        

      

      
        
        

      

       

       

      shall
        be
        transferred to the Purchaser Subs as part of the Interests at Closing. DEPI
        shall bear and shall indemnify and hold harmless Purchaser and the Companies
        and
        the Wholly-Owned Subsidiaries from and against all costs incurred in connection
        with the multi-survivor mergers described in this Section.

    

     

    (d) [RESERVED]

     

    (e) Within
      10
      days following the Closing Date, Purchaser will cause each of the Purchaser
      Subs
      to merge with and into Purchaser Holdco.

     

    (f) Notwithstanding
      Sections 6.14(c) and 6.14(d), the Sellers may in their sole discretion cause
      the
      Survivor LPs and Stonewater LP to sell their respective assets directly to
      Purchaser Holdco in lieu of consummating the transactions described in Sections
      6.14(c) and 6.14(d). 

     

    Section 6.15 
      Further
      Assurances. 
      After Closing, Sellers and Purchaser each agrees to take such further actions
      and to execute, acknowledge and deliver all such further documents as are
      reasonably requested by the other for carrying out the purposes of this
      Agreement or of any document delivered pursuant to this Agreement.

     

    Section 6.16 
      DEPI/Purchaser
      Transition Services Agreement.

     

    (a) Prior
      to
      Closing, Sellers and Purchaser agree to cooperate in good faith to design and
      implement a mutually agreeable transition plan with respect to the services
      listed on the schedules to the DEPI/Purchaser Transition Services Agreement.
      Purchaser shall bear all costs of work prior to Closing with respect to
      post-Closing transition of the E&P Business to Purchaser, including any
      costs of performance of DEPI Services (as defined in the DEPI/Purchaser
      Transition Services Agreement), on the basis set forth in Schedule 1.1 to the
      DEPI/Purchaser Transition Services Agreement where applicable and, if not
      otherwise described in Schedule 1.1 or this Section 6.16, shall reimburse DEPI
      in an amount equal to (i) 1.7 multiplied by the Hourly Labor Costs (as defined
      in the DEPI/Purchaser Transition Services Agreement) of the personnel of DEPI
      and its Affiliates providing the service multiplied by the number of hours
      in a
      relevant month such personnel spent providing such services plus (ii) all other
      out-of-pocket, third party or AFE costs incurred by DEPI or its Affiliates
      in
      providing the services described in this Section.

     

    (b) Without
      limiting the generality of Section 6.16(a),
      after
      the date hereof, Sellers and Purchaser shall work together to begin the
      activities described as “Master Contract Services” in part (C)(3) of Schedule
      1.1 to the DEPI/Purchaser Transition Services Agreement and the activities
      described as “Dual Contracts Services” in part (C)(4) of Schedule 1.1 to
      the DEPI/Purchaser Transition Services Agreement. DEPI and its Affiliates shall
      be entitled to reimbursement for any such work on the basis set forth in
      Schedule 1.1 to the DEPI/Purchaser Transition Services Agreement.

     

    (c) Subject
      to the priorities described in Section (B)(1)(3)(c) of Schedule 1.1 to the
      DEPI/Purchaser Transition Services Agreement, after the date hereof, Sellers,
      Purchaser and consultants designated by Purchaser shall work together to
      determine the 

     

     

    
      
        
        

      

      
        60

        
          

        

      

      
        
        

      

       

       

      information
        technology personnel, equipment and software that will need to be acquired
        by
        Purchaser to replace information technology functions provided to the E&P
        Business by Sellers and their Affiliates (other than the Companies and
        Subsidiaries), including financial management systems, human resource systems
        and IT infrastructure. Subject to the priorities described in Section
        (B)(1)(3)(c) of Schedule 1.1 to the DEPI/Purchaser Transition Services
        Agreement, Sellers shall, at the written instruction of Purchaser, use
        commercially reasonable efforts to acquire such information technology
        personnel, equipment and software for the E&P Business. Any personnel hired
        as employees of Sellers pursuant to this Section shall be included among
        the
        Company Onshore Employees to whom Purchaser or its Designated Affiliate must
        offer employment under Section 10.1, but shall not count toward any minimum
        or
        maximum numbers of employees under Section 10.1. Equipment acquired by Sellers
        pursuant to this Section shall be included among the Equipment transferred
        at
        Closing. Software acquired by Sellers pursuant to this Section shall be acquired
        with a right to transfer to Purchaser or its wholly-owned Affiliate and shall
        be
        included in the Assets transferred at Closing, notwithstanding Sections
        1.1(a)(xi)(D) and 1.3. Purchaser shall bear all costs incurred in connection
        with the undertakings described in this Section 6.16(c)
        and
        shall reimburse DEPI for an amount equal to (i) 1.7 multiplied by the Hourly
        Labor Costs (as defined in the DEPI/Purchaser Transition Services Agreement)
        of
        the personnel providing the service multiplied by the number of hours in
        a
        relevant month such personnel spent providing such services plus (ii) all
        costs
        of hiring and employing information technology personnel who are newly hired
        pursuant to this Section, which costs shall be deemed for purposes of this
        Section to equal the amount of any hiring bonus, moving expense and similar
        hiring costs plus 1.7 times their annual base salary, allocated pro rata
        to the
        period between the date of hiring and Closing or termination of this Agreement
        plus (iii) all costs of acquiring equipment and software pursuant to this
        Section plus (iv) all other out-of-pocket, third party or AFE costs incurred
        by
        DEPI or its Affiliates in providing the services described in this
        Section. 

    

     

    (d) Purchaser
      shall reimburse DEPI for amounts paid by Sellers or their Affiliates but for
      which Purchaser is responsible under the terms of this Section no later than
      seven (7) calendar days after the Purchaser’s receipt of an invoice from DEPI
      stating Purchaser’s liability therefor. The terms of Sections 1.3 and 8.1 of the
      DEPI/Purchaser Transition Services Agreement shall apply to the services
      performed under this Section and shall be incorporated herein by reference
      as if
      set out herein in full.

     

    Section 6.17 
      Dominion
      Resources Black Warrior Trust.
       On or prior to Closing, Purchaser shall take all actions necessary to
      terminate the DRI obligations under Article X of the Trust Agreement as of
      Closing, in accordance with the terms of Section 10.03 thereof and shall, as
      of
      Closing, assume the obligations of DRI under the Administrative Services
      Agreement and under Article X of the Trust Agreement. In addition, to the extent
      there are any continuing obligations of DRI under the Trust Agreement, Purchaser
      shall, as of Closing, indemnify and hold DRI harmless therefrom in accordance
      with the indemnity provisions of Article 12.

     

     

    
      
        
        

      

      
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    Section 6.18 
      Financial
      Statements.
      

     

    (a) Sellers
      shall use their commercially reasonable efforts to prepare, as soon as
      practicable after the date of this Agreement and at the sole cost and expense
      of
      Purchaser, the statements of revenues and direct operating expenses for the
      E&P Business for the most recent three (3) fiscal years ending prior to the
      Closing Date and all notes thereto that would be required of Purchaser or any
      of
      its Affiliates were they required to file a Form 8-K with the Securities and
      Exchange Commission (the “SEC”)
      pursuant to the Exchange Act related to the transactions contemplated by this
      Agreement (collectively, the “Statements
      of Revenues and Expenses”),
      in
      such form that such statements and the notes thereto can be audited. Sellers
      shall further use their commercially reasonable efforts to prepare, no later
      than five (5) days prior to the Target Closing Date, the first quarter 2007
      statements of revenues and direct operating expenses for the E&P Business
      that would be required for such a Form 8-K filing in such form that such
      statements and the notes thereto can be audited.

     

    (b) Promptly
      after the date of this Agreement, Sellers shall request Deloitte & Touche
      LLP, Seller’s external auditor (“Deloitte”),
      to
      (i) perform an audit of the Statements of Revenues and Expenses and to issue
      its
      opinion with respect to the Statements of Revenues and Expenses (the Statements
      of Revenues and Expenses and related audit opinions being hereinafter referred
      to as the “Audited
      Statements of Revenue and Expenses”)
      and
      (ii) provide its written consent for the use of its audit reports with respect
      to Statements of Revenues and Expenses in reports filed by Purchaser or any
      of
      its Affiliates under the Exchange Act or the Securities Act, as required by
      such
      Laws. Both DEPI, DRI or one of their Affiliates and Purchaser shall sign an
      engagement letter for Deloitte and provide such information as may be reasonably
      requested from time to time by Deloitte. Purchaser shall bear all fees charged
      by Deloitte pursuant to such engagement. Sellers and Purchaser shall reasonably
      cooperate in the completion of such audit and delivery of the Audited Statements
      of Revenue and Expenses to Purchaser or any of its Affiliates as soon as
      reasonably practicable, but no later than five (5) days prior to the Target
      Closing Date, including by providing and causing their respective officers
      or
      Affiliates to provide, such certifications, representation letters or similar
      items as Deloitte shall reasonably request in connection with its audit of
      the
      Statements of Revenue and Expenses. Sellers shall keep Purchaser reasonably
      informed regarding the progress of such audit.

     

    (c) Sellers
      and Purchaser will cooperate with each other and use commercially reasonable
      efforts to, within one hundred twenty (120) days following the Closing Date,
      (i)
      prepare financial statements compliant with rules 3-01 and 3-12 of Regulation
      S-X as would be required in connection with the preparation and filing by
      Purchaser of a Registration Statement on Form S-1 or otherwise in connection
      with a financing or public offering of securities with respect to the E&P
      Business (the “S-1
      Financial Statements”),
      and
      (ii) with respect to those of the S-1 Financial Statements which are for a
      full
      year period or as of the end of a year, have such statements audited by Deloitte
      (the “Audited
      S-1 Financial Statements”),
      including the issuance by Deloitte of its opinion with respect thereto and
      its
      written consent for the use of its audit reports with respect to the S-1
      Financial Statements in reports filed by Purchaser or any of its Affiliates
      under the 

     

     

    
      
        
        

      

      
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      Exchange
        Act or the Securities Act, as required by such Laws. Both DEPI, DRI or one
        of
        their Affiliates and Purchaser shall sign an engagement letter for Deloitte
        and
        provide such information as may be reasonably requested from time to time
        by
        Deloitte. Sellers, Purchaser and their Affiliates shall (A) provide each
        other
        and Deloitte with reasonable access to their respective records and personnel,
        including in the case of Dominion, records necessary to prepare and audit
        the
        allocations of general and administrative expenses and similar items from
        Dominion’s exploration and production business as a whole to the E&P
        Business, as may be reasonably required in connection with the preparation
        of
        the S-1 Financial Statements and the audit of the Audited S-1 Financial
        Statements, and (B) provide and cause their respective officers or Affiliates
        to
        provide, such certifications, representation letters or similar items as
        Deloitte shall reasonably request in connection with its audit of the Audited
        S-1 Financial Statements. Purchaser will pay all costs and expenses associated
        with the preparation and audit of the financial statements described in this
        Section 6.18(c).

    

     

    Purchaser
      shall promptly reimburse DEPI on behalf of Sellers and their Affiliates for
      all
      internal and external expenses incurred by Sellers and their Affiliates pursuant
      to this Section 6.18.

     

    Section 6.19 
      Carlsbad
      Royalties;
      CoEnergy Contract.
      

     

    (a) The
      Parties agree that all of DEPI’s, DOTEPI’s and Reserves’ right, title and
      interest in overriding royalties located in San Juan and Rio Arriba Counties,
      New Mexico (the “Carlsbad
      Royalties”)
      are to
      be transferred to Purchaser at Closing as part of the Additional Leases. Sellers
      were not able to complete the entries necessary to include the Carlsbad
      Royalties on Exhibit D-1 prior to the date hereof, so Sellers agree to
      deliver to Purchaser, within fifteen (15) Business Days after the date hereof,
      a
      supplement to Exhibit D-1 listing all Carlsbad Royalties not already on
      Exhibit D-1. Such supplement shall be deemed to be a part of
      Exhibit D-1 for all purposes of this Agreement and the Carlsbad Royalties
      shall be Additional Leases for all purposes of this Agreement.

     

    (b) Prior
      to
      the Closing, DEI shall transfer to Dominion Midwest Energy, Inc. all of its
      right, title and interest in the GISB gas sales contract between DEI and
      CoEnergy Trading Company dated September 1, 1999.

     

     

    ARTICLE 7.

    CONDITIONS
      TO CLOSING

     

    Section 7.1 
      Conditions
      of Sellers to Closing. 
      The obligations of Sellers to consummate the transactions contemplated by this
      Agreement are subject, at the option of Sellers, to the satisfaction on or
      prior
      to Closing of each of the following conditions:

     

    (a) Representations.
      The
      representations and warranties of Purchaser set forth in Article 5
      shall be
      true and correct in all material respects as of the date of this Agreement
      and
      as of the Closing Date as though made on and as of the Closing
      Date;

     

     

    
      
        
        

      

      
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    (b) Performance.
      Purchaser shall have performed and observed, in all material respects, all
      covenants and agreements to be performed or observed by it under this Agreement
      prior to or on the Closing Date;

     

    (c) No
      Action.
      On the
      Closing Date, no injunction, order or award restraining, enjoining or otherwise
      prohibiting the consummation of the transactions contemplated by this Agreement,
      or granting substantial damages in connection therewith, shall have been issued
      and remain in force, and no suit, action, or other proceeding (excluding any
      such matter initiated by Sellers or any of its Affiliates) shall be pending
      before any Governmental Authority or body of competent jurisdiction seeking
      to
      enjoin or restrain or otherwise prohibit the consummation of the transactions
      contemplated by this Agreement or recover substantial damages from Sellers
      or
      any Affiliate of Sellers resulting therefrom;
      and

     

    (d) Governmental
      Consents.
      All
      material consents and approvals of any Governmental Authority required for
      the
      transfer of the Interests from Sellers to Purchaser as contemplated under this
      Agreement, except consents and approvals of assignments by Governmental
      Authorities that are customarily obtained after closing, shall have been
      granted, or the necessary waiting period shall have expired, or early
      termination of the waiting period shall have been granted.

     

    Section 7.2 
      Conditions
      of Purchaser to Closing.
       The obligations of Purchaser to consummate the transactions contemplated
      by this Agreement are subject, at the option of Purchaser, to the satisfaction
      on or prior to Closing of each of the following conditions:

     

    (a) Representations.
      The
      representations and warranties of DEPI set forth in Article 4
      shall be
      true and correct as of the date of this Agreement and as of the Closing Date
      as
      though made on and as of the Closing Date (other than representations and
      warranties that refer to a specified date, which need only be true and correct
      on and as of such specified date), except for such breaches, if any, as would
      not individually or in the aggregate have a Material Adverse Effect (except
      to
      the extent such representation or warranty is qualified by its terms by
      materiality, Material Adverse Effect or other similar words, such qualification
      in its terms shall be inapplicable for purposes of this Section);

     

    (b) Performance.
      Sellers
      shall have performed and observed, in all material respects, all covenants
      and
      agreements to be performed or observed by them under this Agreement prior to
      or
      on the Closing Date except, in the case of breaches of Sections 6.4 and 6.5
      and 6.10, for such breaches, if any, as would not have a Material Adverse Effect
      (except to the extent such covenant or agreement is qualified by its terms
      by
      materiality or Material Adverse Effect, such qualification in its terms shall
      be
      inapplicable for purposes of this Section);

     

    (c) No
      Action.
      On the
      Closing Date, no injunction, order or award restraining, enjoining or otherwise
      prohibiting the consummation of the transactions contemplated by this Agreement,
      or granting substantial damages in connection therewith, shall have been issued
      and remain in force, and no suit, action, or other proceeding (excluding any
      such matter initiated by Purchaser or any of its Affiliates) 

     

     

    
      
        
        

      

      
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      shall
        be
        pending before any Governmental Authority or body of competent jurisdiction
        seeking to enjoin or restrain or otherwise prohibit the consummation of the
        transactions contemplated by this Agreement or recover substantial damages
        from
        Purchaser or any Affiliate of Purchaser resulting therefrom;
        and

    

     

    (d) Governmental
      Consents.
      All
      material consents and approvals of any Governmental Authority required for
      the
      transfer of the Interests from Sellers to Purchaser as contemplated under this
      Agreement, except consents and approvals of assignments by Governmental
      Authorities that are customarily obtained after closing, shall have been granted
      or the necessary waiting period shall have expired, or early termination of
      the
      waiting period shall have been granted.

     

     

    ARTICLE 8.

    CLOSING

     

    Section 8.1 
      Time
      and Place of Closing. 
      The consummation of the purchase and sale of the Interests contemplated by
      this
      Agreement (the “Closing”)
      shall,
      unless otherwise agreed to in writing by Purchaser and Sellers, take place
      at
      the offices of Baker Botts L.L.P. located at 910 Louisiana St., Houston, Texas,
      at 10:00 a.m., local time, on August 2, 2007 (the “Target
      Closing Date”),
      or if
      all conditions in Article 7
      to be
      satisfied prior to Closing have not yet been satisfied or waived, as soon
      thereafter as such conditions have been satisfied or waived, subject to the
      provisions of Article 11.
      The
      date on which the Closing occurs is referred to herein as the “Closing
      Date.”

     

    Section 8.2 
      Obligations
      of Sellers at Closing. 
      At the Closing, upon the terms and subject to the conditions of this Agreement,
      and subject to the simultaneous performance by Purchaser of its obligations
      pursuant to Section 8.3,
      Sellers
      shall deliver or cause to be delivered to Purchaser (or its Wholly-Owned
      Affiliates that (i) have been designated in writing by Purchaser to DEPI at
      least fifteen (15) days prior to Closing and (ii) satisfy the requirements
      of
      Section 5.11) among other things, the following:

     

    (a) Certificate(s)
      (or lost certificate affidavit(s)) representing the Shares, duly endorsed (or
      accompanied by duly endorsed stock powers) for transfer to Purchaser, together
      with instruments of assignment of the non-certificated Shares to Purchaser,
      duly
      executed by the applicable Sellers;

     

    (b) Resignations
      of the directors and officers of the Companies and the Wholly-Owned
      Subsidiaries, effective on or before the Closing;

     

    (c) Terminations
      of powers of attorney granted by the Companies or Wholly-Owned Subsidiaries
      as
      may be requested in a written notice to Sellers by Purchaser delivered at least
      ten (10) days prior to the Closing Date.

     

    (d) Conveyances
      of the Additional Assets (other than the DEPI Texas Beneficial Interests and
      DOTEPI Texas Beneficial Interests, which are transferred pursuant to Section
      8.2(a)) in the form attached hereto as Exhibit E (the “Conveyances”),
      

     

     

    
      
        
        

      

      
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      duly
        executed by DEPI, DOTEPI or Reserves, as applicable, in sufficient duplicate
        originals to allow recording in all appropriate jurisdictions and
        offices;

    

     

    (e) Assignments
      in form required by federal, state or tribal agencies for the assignment of
      any
      federal, state or tribal Additional Properties, duly executed by DEPI, DOTEPI
      or
      Reserves, as applicable, in sufficient duplicate originals to allow recording
      in
      all appropriate offices;

     

    (f) Executed
      certificates described in Treasury Regulation § 1.1445-2(b)(2) certifying that
      each Seller is not a foreign person within the meaning of the Code;

     

    (g) Letters-in-lieu
      of transfer orders with respect to the Additional Properties duly executed
      by
      DEPI, DOTEPI or Reserves, as applicable;

     

    (h) Titles
      to
      the vehicles acquired pursuant to Section 6.13;

     

    (i) Assignments
      of the personal property described on Schedule 1.4;

     

    (j) A
      certificate duly executed by an authorized corporate officer of DEPI, dated
      as
      of the Closing, certifying on behalf of each Seller that the conditions set
      forth in Sections 7.2(a) and 7.2(b) have been fulfilled;

     

    (k) A
      certificate duly executed by the secretary or any assistant secretary of each
      Seller, dated as of the Closing, (i) attaching and certifying on behalf of
      Seller complete and correct copies of (A) the certificate of incorporation
      and the bylaws of Seller, each as in effect as of the Closing, (B) the
      resolutions of the Board of Directors of Seller authorizing the execution,
      delivery, and performance by such Seller of this Agreement and the transactions
      contemplated hereby, and (C) any required approval by the stockholders of
      Seller of this Agreement and the transactions contemplated hereby and
      (ii) certifying on behalf of Seller the incumbency of each officer of such
      Seller executing this Agreement or any document delivered in connection with
      the
      Closing;

     

    (l) Where
      notices of approval are received by Sellers pursuant to a filing or application
      under Section 6.7,
      copies
      of those notices of approval;

     

    (m) Counterparts
      of a transition services agreement between DEPI and Purchaser in the form
      attached hereto as Exhibit F (the “DEPI/Purchaser
      Transition Services Agreement”),
      duly
      executed by DEPI;

     

    (n) Subleases
      of the office space located at 16800 Greenspoint Park Drive, Houston, Texas
      and
      14000 Quail Springs Parkway, Oklahoma City, Oklahoma described on
      Exhibit D-4, each in substantially the same form and for the same
      consideration as the base lease, and for the same term, except that assignment
      shall not be permitted without the prior written consent of DEPI, such consent
      not to be unreasonably withheld (each, a “Sublease”),
      duly
      executed by the applicable Seller;

     

    (o) The
      Forms
      required by Section 9.9
      executed
      by DRI; and

     

     

    
      
        
        

      

      
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    (p) All
      other
      documents and instruments reasonably required from Sellers to transfer the
      Interests to Purchaser.

     

    Section 8.3 
      Obligations
      of Purchaser at Closing. 
      At the Closing, upon the terms and subject to the conditions of this Agreement,
      and subject to the simultaneous performance by Sellers of its obligations
      pursuant to Section 8.2,
      Purchaser shall deliver or cause to be delivered to Sellers, among other things,
      the following:

     

    (a) A
      wire
      transfer of the Closing Payment in same-day funds;

     

    (b) Conveyances,
      duly executed by Purchaser, in sufficient duplicate originals to allow recording
      on all appropriate jurisdictions and offices;

     

    (c) Assignments
      in form required by federal, state or tribal agencies for the assignment of
      any
      federal, state or tribal Additional Properties, duly executed by Purchaser,
      in
      sufficient duplicate originals to allow recording in all appropriate
      offices;

     

    (d) A
      certificate by an authorized corporate officer of Purchaser, dated as of the
      Closing, certifying on behalf of Purchaser that the conditions set forth
      in Sections 7.1(a) and 7.1(b) have been fulfilled;

     

    (e) A
      certificate duly executed by the secretary or any assistant secretary of
      Purchaser, dated as of the Closing, (i) attaching and certifying on behalf
      of Purchaser complete and correct copies of (A) the certificate of
      incorporation and the bylaws of Purchaser, each as in effect as of the Closing,
      (B) the resolutions of the Board of Directors of Purchaser authorizing the
      execution, delivery, and performance by Purchaser of this Agreement and the
      transactions contemplated hereby, and (C) any required approval by the
      stockholders of Purchaser of this Agreement and the transactions contemplated
      hereby and (ii) certifying on behalf of Purchaser the incumbency of each
      officer of Purchaser executing this Agreement or any document delivered in
      connection with the Closing;

     

    (f) Where
      notices of approval are received by Purchaser pursuant to a filing or
      application under Section 6.7,
      copies
      of those notices of approval;

     

    (g) Evidence
      of replacement bonds, guarantees, and letters of credit, pursuant to
Section 13.5;
      and

     

    (h) Counterparts
      of the DEPI/Purchaser Transition Services Agreement,
      duly
      executed by Purchaser; and

     

    (i) Each
      Sublease, duly executed by Purchaser. 

     

    Section 8.4 
      Closing
      Payment and Post-Closing Purchase Price Adjustments.
      

     

    (a) Not
      later
      than five (5) Business Days prior to the Closing Date, Sellers shall prepare
      and
      deliver to Purchaser, using and based upon the best information 

     

     

    
      
        
        

      

      
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      available
        to Sellers, a preliminary settlement statement estimating the Interest Purchase
        Price for the Interests and showing the portions thereof to which each Seller
        is
        entitled after giving effect to all adjustments set forth in Section 2.3.
        Purchaser shall have the opportunity to review and discuss such statement
        with
        Sellers. The estimates delivered in accordance with this Section 8.4(a)
        shall
        constitute the collective dollar amount to be payable by Purchaser to Sellers
        at
        the Closing (the “Closing
        Payment”).

    

     

    (b) As
      soon
      as reasonably practicable after the Closing but not later than the later of
      (i) the one hundred and twentieth (120th) day following the Closing Date
      and (ii) the date on which the parties or the Title Arbitrator, as
      applicable, finally determines all Title Defect Amounts and Title Benefit
      Amounts under Section 3.5(i),
      Sellers
      shall prepare and deliver to Purchaser a draft statement setting forth the
      final
      calculation of the Interest Purchase Prices and showing the calculation of
      each
      adjustment under Section 2.3,
      based
      on the most recent actual figures for each adjustment. Sellers shall at
      Purchaser’s request make reasonable documentation available to Purchaser and its
      representatives to support the final figures (including supporting schedules,
      analyses, workpapers and underlying records and documentation as are reasonably
      necessary or helpful in Purchaser’s review of such statement). Sellers shall
      reasonably cooperate with Purchaser and its representatives in such examination.
      As soon as reasonably practicable but not later than the sixtieth (60th) day
      following receipt of Sellers’ statement hereunder, Purchaser shall deliver to
      DEPI a written report containing any changes that Purchaser proposes be made
      in
      such statement. Sellers may deliver a written report to Purchaser during this
      same period reflecting any changes that Sellers propose to be made in such
      statement as a result of additional information received after the statement
      was
      prepared. The Parties shall undertake to agree on the final statement of the
      Purchase Price no later than ninety (90) days after delivery of Seller’s
      statement. In the event that the Parties cannot reach agreement within such
      period of time, any Party may refer the items of adjustment which are in dispute
      to PricewaterhouseCoopers or another nationally-recognized independent
      accounting firm or consulting firm mutually acceptable to Purchaser and Sellers
      (the “Accounting
      Arbitrator”),
      for
      review and final determination by arbitration. Should PricewaterhouseCoopers
      fail or refuse to agree to serve as Accounting Arbitrator within twenty (20)
      days after written request from any Party to serve, and the Parties fail to
      agree in writing on a replacement Accounting Arbitrator within ten (10) days
      after the end of that twenty (20) day period, or should no replacement
      Accounting Arbitrator agree to serve within forty-five (45) days after the
      original written request pursuant to this sentence, the Accounting Arbitrator
      shall be appointed by the Houston office of the American Arbitration
      Association. The Accounting Arbitrator shall conduct the arbitration proceedings
      in Houston, Texas in accordance with the Commercial Arbitration Rules of the
      American Arbitration Association, to the extent such rules do not conflict
      with
      the terms of this Section. The Accounting Arbitrator’s determination shall be
      made within forty-five (45) days after submission of the matters in dispute
      and
      shall be final and binding on all Parties, without right of appeal. In
      determining the proper amount of any adjustment to the Purchase Price, the
      Accounting Arbitrator shall be bound by the terms of Section 2.3
      and may
      not increase the Purchase Price more than the increase proposed by Sellers
      nor
      decrease the Purchase Price more than the decrease proposed by Purchaser, as
      applicable. The Accounting Arbitrator shall act as an expert for the limited
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      specific
        disputed aspects of Purchase Price adjustments submitted by any Party and
        may
        not award damages, interest (except as expressly provided for in this Section)
        or penalties to any Party with respect to any matter. Each Seller and Purchaser
        shall bear its own legal fees and other costs of presenting its case. DEPI
        shall
        bear one-half and Purchaser shall bear one-half of the costs and expenses
        of the
        Accounting Arbitrator. Within ten (10) days after the earlier of
        (i) the expiration of Purchaser’s sixty (60) day review period without
        delivery of any written report by Purchaser or (ii) the date on which the
        Parties or the Accounting Arbitrator finally determine the Interest Purchase
        Prices, (x) Purchaser shall pay to DEPI on behalf of each Seller the amount
        by which the portion of any Interest Purchase Price(s) to which that Seller
        is
        entitled exceeds the portion of the Closing Payment received by that Seller
        or
        (y) DEPI on behalf of each Seller shall pay to Purchaser the amount by
        which the portion of the Closing Payment received by that Seller exceeds
        portion
        of the any Interest Purchase Price(s) to which that Seller is entitled, as
        applicable. Any post-Closing payment pursuant to this Section 8.4
        shall
        bear interest from the Closing Date to the date of payment at the Agreed
        Rate.

    

     

    (c) Purchaser
      shall assist Sellers in preparation of the final statement of the Interest
      Purchase Prices under Section 8.4(b)
      by
      furnishing invoices, receipts, reasonable access to personnel and such other
      assistance as may be requested by Seller to facilitate such process
      post-Closing.

     

    (d) All
      payments made or to be made under this Agreement to Sellers shall be made by
      electronic transfer of immediately available funds to Consolidated Natural
      Gas
      Company, acting as representative of Sellers, at the account set forth on
      Schedule 8.4(d), for the credit of the applicable Sellers, or to such other
      bank and account as may be specified by Sellers in writing. All payments made
      or
      to be made hereunder to Purchaser shall be by electronic transfer or immediately
      available funds to a bank and account specified by Purchaser in writing to
      Sellers, for the credit of Purchaser.

     

     

    ARTICLE 9.

    TAX
      MATTERS

     

    Section 9.1 
      Liability
      for Taxes. 

     

    (a) Taxes
      with Respect to Additional Assets.
      Sellers
      shall be responsible for filing any Tax Return (as defined in Section 9.2(a))
      with
      respect to Taxes attributable to the Additional Assets for a taxable period
      ending on or prior to the Closing Date, and, except with respect to Sellers’
income, franchise or other Tax Returns required to be filed by Sellers,
      Purchaser shall be responsible for filing any other Tax Return with respect
      to
      the Additional Assets. Subject to Section 9.1(e)
      and
Section 9.1(f),
      from
      and after Closing, DEPI shall be liable for, and shall indemnify and hold
      harmless the Purchaser Group (as defined in Section 12.2(b)) and the Companies
      and Wholly-Owned Subsidiaries from and against all Taxes and Tax Expenses with
      respect to the Additional Assets attributable to any taxable period ending
      on or
      prior to the Closing Date, including income Taxes arising as a result of any
      Seller’s gain on the sale of the Additional Assets as contemplated by this
      Agreement. From and after Closing, Purchaser shall be liable 

     

     

    
      
        
        

      

      
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      for,
        and
        shall indemnify and hold harmless each Seller and its Affiliates from and
        against, all such Taxes and Tax Expenses attributable to any taxable period
        beginning after the Closing Date and shall reimburse Sellers or their Affiliates
        for any such money paid by Sellers or their Affiliates with respect to such
        Taxes no later than seven (7) calendar days after the Purchaser’s receipt of
        notice and supporting work papers from DEPI of Purchaser’s liability therefor.
        If a taxable period includes the Closing Date, any Taxes with respect to
        the
        Additional Assets allocable to the Pre-Closing Period (as defined in
Section 9.1(b)
        and
        determined as described in Section 9.1(d))
        shall
        be the liability of DEPI and any other Taxes with respect to the Additional
        Assets shall be the liability of Purchaser.

    

     

    (b) Pre-Closing
      Taxes of Companies and Subsidiaries.
      Subject
      to Sections 9.1(e) and 9.1(f), from and after Closing, DEPI shall be liable
      for, and shall indemnify and hold harmless Purchaser and the Companies and
      Wholly-Owned Subsidiaries from and against, any Taxes and Tax Expenses imposed
      on or incurred by any Wholly-Owned Subsidiary or any Subsidiary which is not
      a
      Wholly-Owned Subsidiary to the extent of each Seller’s allocable share of such
      Subsidiary immediately prior to Closing and attributable to any taxable period
      ending on or prior to the Closing Date, and the portion, determined as described
      in Section 9.1(d),
      of any
      such Taxes for any taxable period beginning on or prior to the Closing Date
      and
      ending after the Closing Date which is allocable to the portion of such period
      occurring on or prior to the Closing Date (the “Pre-Closing
      Period”).

     

    (c) Post-Closing
      Taxes of Companies and Subsidiaries.
      From
      and after Closing, Purchaser shall be liable for, and shall indemnify and hold
      harmless each Seller and its Affiliates from and against, any Taxes and Tax
      Expenses imposed on or incurred by a Company or Wholly-Owned Subsidiary or
      any
      Subsidiary which is not a Wholly-Owned Subsidiary to the extent of each Seller’s
      allocable share of such Subsidiary immediately prior to Closing and attributable
      to any taxable period beginning after the Closing Date, and the portion,
      determined as described in Section 9.1(d),
      of any
      such Taxes for any taxable period beginning on or prior to the Closing Date
      and
      ending after the Closing Date which is allocable to the portion of such period
      occurring after the Closing Date (the “Post-Closing
      Period”). 

     

    (d) Straddle
      Period Taxes.
      Whenever it is necessary for purposes of this Agreement to determine the portion
      of any Taxes or earnings and profits of or with respect to any Company or
      Subsidiary for a taxable period beginning on or prior to and ending after the
      Closing Date which is allocable to the Pre-Closing Period or the Post-Closing
      Period, (i) in the case of a Company or Wholly-Owned Subsidiary, the
      determination shall be made as if such Company or Wholly-Owned Subsidiary was
      not a member of its respective Seller’s consolidated, affiliated, combined or
      unitary group for Tax purposes, and, (ii) any Taxes allocable to the Pre-Closing
      Period that are based on or related to income, gains or receipts will be
      computed (by an interim closing of the books) as if such taxable period ended
      as
      of the end of the Closing Date and any other Pre-Closing Period Taxes (except
      production Taxes and other Taxes measured by units of production, and severance
      Taxes) will be prorated based upon the number of days in the applicable period
      falling on or before, or after, the Closing Date. To the extent necessary,
      

     

     

    
      
        
        

      

      
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      a
        Seller
        shall estimate Taxes based on the Seller’s liability for Taxes with respect to
        the same or similar Tax Item (as defined in Section 9.2(a))
        in the
        immediately preceding year. Notwithstanding anything to the contrary herein,
        (i) any franchise Tax paid or payable with respect to each Company or
        Subsidiary shall be allocated to the taxable period during which the income,
        operations, assets or capital comprising the base of such Tax is measured,
        regardless of whether the right to do business for another taxable period
        is
        obtained by the payment of such franchise Tax and (ii) any ad valorem or
        property Taxes paid or payable with respect to the Assets shall be allocated
        to
        the taxable period applicable to the ownership of the Assets regardless of
        when
        such Taxes are assessed. Sellers shall, within 60 days after the
        determination of the Purchase Price under Section 8.4(b),
        prepare
        for Purchaser’s review a pro forma Tax Return for any taxable period beginning
        on or before, but ending after, the Closing Date, that shall include, pursuant
        to the method described in this Section 9.1(d),
        the
        income Tax liability associated with the Companies for the period beginning
        on
        the first day of such taxable period and ending on the Closing Date. Such
        pro
        forma Tax Return shall be used by Purchaser to prepare a Tax Return for such
        taxable period.

    

     

    (e) Period
      After Effective Date.
      Notwithstanding anything to the contrary in this Agreement, in the event Closing
      occurs after the Effective Date, from and after Closing, Purchaser shall be
      liable for, and shall indemnify and hold harmless each Seller and its Affiliates
      from and against, any Taxes for which Purchaser would have been liable had
      the
      Closing Date occurred on the Effective Date (excluding production Taxes and
      other Taxes measured by units of production, and severance Taxes) that are
      allocable to the period from but excluding the Effective Date to and including
      the Closing Date, and shall reimburse any such Seller or Affiliate for any
      such
      amount paid by it (or paid prior to Closing by any Company or Subsidiary) no
      later than 7 calendar days after the Purchaser’s receipt of notice and
      supporting work papers from DEPI of Purchaser’s liability therefor; provided,
      however, that, except as provided in Section 13.3,
      Purchaser shall be indemnified by Sellers against, and shall not be obligated
      under this Section 9.1(e)
      for, any
      Taxes attributable to (i) a Seller’s gain on the sale of Interests, (ii) a
      Company’s or Subsidiary’s transfer of Excluded Assets or transactions designed
      to achieve that purpose pursuant to Section 1.3
      or the
      multi-survivor mergers and transfer of Equity Interests in the Survivor LPs
      pursuant to Section 6.14
      hereof,
      (iii) the period prior to and through the Closing Date imposed or asserted
      pursuant to Treasury Regulations section 1.1502-6 or any analogous or similar
      state, local or foreign law or regulation, and (iv) the Section 338(h)(10)
      elections (as defined in Section 9.9)
      as
      contemplated by this Agreement. The amount of Taxes allocable to the time period
      described in the previous sentence will be determined in a manner similar to
      and
      consistent with the determination of Pre-Closing Period Taxes under Section 9.1(d).

     

    (f) Production
      Taxes.
      Notwithstanding anything to the contrary in this Agreement, production Taxes
      and
      other Taxes measured by units of production,
      and
      severance Taxes, shall not be subject to Section 9.1
      to the
      extent responsibility therefor and payment thereof is addressed by
      Sections 1.3(xv), 2.3, 2.4 and 8.4.

     

    (g) Indemnity
      Regarding Basis Step-Ups.
      Sellers
      agree to indemnify, defend and hold harmless Purchaser and its Affiliates
      (including following Closing, the 

     

     

    
      
        
        

      

      
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      Companies
        and Subsidiaries) from and against any and all Taxes, claims, liabilities,
        losses, costs, fees, and expenses (i) arising from any breach of the
        representation or warranty set forth in Section 4.5(e)
        or (ii)
        resulting from the failure of the Purchaser Holdco immediately following
        the
        merger of the Purchaser Subs into Purchaser Holdco to have a Tax basis in
        the
        assets held by the Survivor LPs and in the assets held by Stonewater LP for
        all
        applicable Tax purposes equal to the Tax basis that Purchaser Holdco would
        have
        obtained if Sellers had elected to effect the transaction pursuant to
Section 6.14(f)
        unless
        such lower Tax basis arises from any act or omission of Purchaser, Purchaser
        Holdco, or its Affiliates, including the failure of Purchaser to cause the
        Purchaser Subs to timely merge with and into Purchaser Holdco as contemplated
        by
Section 6.14(e).

    

     

    Section 9.2 
      Preparation
      and Filing of Company Tax Returns. 

     

    (a) With
      respect to each Tax return, declaration, report, claim for refund or information
      return or statement relating to Taxes, including any schedule or attachment
      thereto, and including any amendment thereof (a “Tax
      Return”)
      that
      is required to be filed for, by or with respect to a Company or Wholly-Owned
      Subsidiary with respect to a taxable period ending on or before the Closing
      Date, the Sellers shall cause such Tax Return to be prepared in accordance
      with
      applicable Laws, shall cause to be included in such Tax Return all items of
      income, gain, loss, deduction and credit or other items (collectively
“Tax
      Items”)
      required to be included therein and shall cause the Company or Wholly-Owned
      Subsidiary to timely file (assuming it has authority to do so) such Tax Return
      with the appropriate Governmental Authority and shall timely pay the amount
      of
      Taxes shown to be due on such Tax Return.

     

    (b) With
      respect to each Tax Return that is required to be filed by a Company or
      Wholly-Owned Subsidiary with respect to a taxable period beginning on or before
      and ending after the Closing Date, Purchaser shall cause such Tax Return to
      be
      prepared in accordance with applicable Laws, shall cause to be included in
      such
      Tax Return all Tax Items required to be included therein, and shall cause each
      Company or Wholly-Owned Subsidiary to file timely such Tax Return with the
      appropriate Governmental Authority and shall pay timely the amount of Taxes
      shown to be due on such Tax Return.

     

    (c) Except
      with respect to a federal income Tax Return, any Tax Return to be prepared
      pursuant to the provisions of this Article shall be prepared in a manner
      consistent with practices followed in prior years with respect to similar Tax
      Returns, except for changes required by changes in Law, unless, in the opinion
      of a partner of a nationally recognized law firm retained by a Party, complying
      with the terms of this paragraph would more likely than not result in
      noncompliance with applicable provisions of the Code or state, local or foreign
      Law.

     

    (d) If
      either
      (i) DEPI or Purchaser may be liable for any material portion of the Tax payable
      in connection with any Tax Return to be filed or caused to be filed by the
      other
      (or, in the case of Purchaser, by any Seller) (or any Tax Item reported on
      such
      Tax Return is likely to materially affect the Tax liability of such Party)
      or
      (ii) in any case with respect to any taxable period beginning on or before
      but ending after the Closing Date, 

     

     

    
      
        
        

      

      
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      the
        Party
        responsible under this Agreement for filing such return or causing such return
        to be filed (the “Tax
        Return Preparer”)
        shall
        prepare and deliver to the other Party (the “Tax
        Payor”)
        a copy
        of such return and any schedules, work papers and other documentation then
        available that are relevant to the preparation of the portion of such return
        for
        which the Tax Payor is or may be liable under this Agreement not later than
        forty-five (45) days before the date on which the Tax Return is due to be
        filed
        (taking into account any valid extensions) (the “Due
        Date”).
        The
        Tax Return Preparer shall not file such return or cause such return to be
        filed
        until the earlier of either the receipt of written notice from the Tax Payor
        indicating the Tax Payor’s consent thereto, or the Due Date. The Tax Payor shall
        have the option of providing to the Tax Return Preparer, at any time at least
        fifteen (15) days prior to the Due Date, written instructions as to how the
        Tax
        Payor wants any, or all, of the items for which it may be liable (or any
        item
        that is likely to affect the Tax liability of such party) reflected on such
        Tax
        Return. The Tax Return Preparer shall, in preparing such return, but subject
        to
Section 9.2(c),
        cause
        the items for which the Tax Payor is liable under this Agreement to be reflected
        in accordance with the Tax Payor’s instructions (unless, in the opinion of a
        partner of a nationally recognized law firm retained by the Tax Return Preparer,
        complying with the Tax Payor’s instructions would more likely than not result in
        noncompliance with applicable provisions of the Code or state, local or foreign
        Law) and, in the absence of having received such instructions, in accordance
        with Section 9.2(c).

    

     

    Section 9.3 
      Allocation
      Arrangements.
       Effective as of the Closing, any tax indemnity, sharing, allocation or
      similar agreement or arrangement (a “Tax
      Sharing Agreement”)
      that
      may be in effect prior to the Closing Date between or among, a Company or
      Wholly-Owned Subsidiary, on the one hand, and its Seller or any of its
      Affiliates (other than the Companies and Wholly-Owned Subsidiaries), on the
      other hand, shall be extinguished in full as the Tax Sharing Agreement relates
      to such Company or Wholly-Owned Subsidiary, and any liabilities or rights
      existing under any such agreement or arrangement by or with respect to a Company
      or Wholly-Owned Subsidiary shall cease to exist and shall no longer be
      enforceable.
      The
      Companies and the Wholly-Owned Subsidiaries shall not have any obligation under
      any Tax Sharing Agreement with respect to Taxes attributable to the period
      after
      the Effective Date.

     

    Section 9.4 
      Access
      to Information. 

     

    (a) From
      and
      after Closing, each Seller shall grant to Purchaser (or its designees) access
      at
      all reasonable times to all of the information, books and records relating
      to a
      Company or Subsidiary within the possession of the Seller (including without
      limitation work papers and correspondence with taxing authorities, but excluding
      work product of and attorney-client communications with any of Sellers’ legal
      counsel and personnel files), and shall afford Purchaser (or its designees)
      the
      right (at Purchaser’s expense) to take extracts therefrom and to make copies
      thereof, to the extent reasonably necessary to permit Purchaser (or its
      designees) to prepare Tax Returns, to conduct negotiations with Tax authorities,
      and to implement the provisions of, or to investigate or defend any claims
      between the Parties arising under, this Agreement.

     

    (b) From
      and
      after Closing, Purchaser shall grant to Sellers (or Sellers’ designees) access
      at all reasonable times to all of the information, books and records

     

     

    
      
        
        

      

      
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      relating
        to the Companies or Subsidiaries within the possession of Purchaser or the
        Companies or Wholly-Owned Subsidiaries (including without limitation work
        papers
        and correspondence with taxing authorities, but excluding work product of
        and
        attorney-client communications with any of Purchaser’s legal counsel and
        personnel files), and shall afford Sellers (or Sellers’ designees) the right (at
        Sellers’ expense) to take extracts therefrom and to make copies thereof, to the
        extent reasonably necessary to permit Sellers (or Sellers’ designees) to prepare
        Tax Returns, to conduct negotiations with Tax authorities, and to implement
        the
        provisions of, or to investigate or defend any claims between the Parties
        arising under, this Agreement.

    

     

    (c) Each
      of
      the Parties hereto will preserve and retain all schedules, work papers and
      other
      documents within the possession of the Seller relating to any Tax Returns of
      or
      with respect to Taxes of the Companies or Subsidiaries or to any claims, audits
      or other proceedings affecting the Companies or Subsidiaries until the
      expiration of the statute of limitations (including extensions) applicable
      to
      the taxable period to which such documents relate or until the final
      determination of any controversy with respect to such taxable period, and until
      the final determination of any payments that may be required with respect to
      such taxable period under this Agreement.

     

    (d) At
      either
      Purchaser’s or Sellers’ request, the other Party shall provide reasonable access
      to Purchaser’s or Sellers’, as the case may be, and their respective Affiliates’
(including the Companies’ and Wholly-Owned Subsidiaries’) personnel who have
      knowledge of the information described in this Section 9.4.

     

    Section 9.5 
      Contest
      Provisions. 

     

    (a) Each
      of
      Purchaser, on the one hand, and Sellers, on the other hand (the “Tax
      Indemnified Person”),
      shall
      notify the chief tax officer (or other appropriate person) of DEPI or Purchaser,
      as the case may be (the “Tax
      Indemnifying Person”),
      in
      writing within twenty (20) days of receipt by the Tax Indemnified Person of
      written notice of any pending or threatened audits, adjustments, claims,
      examinations, assessments or other proceedings (a “Tax
      Audit”)
      which
      are likely to affect the liability for Taxes of such other party. If the Tax
      Indemnified Person fails to give such timely notice to the other party, it
      shall
      not be entitled to indemnification for any Taxes arising in connection with
      such
      Tax Audit if such failure to give notice materially adversely affects the other
      party’s right to participate in the Tax Audit.

     

    (b) If
      such
      Tax Audit relates to any taxable period, or portion thereof, ending on or before
      the Closing Date or for any Taxes for which only DEPI would be liable to
      indemnify Purchaser under this Agreement, DEPI shall have the option, at its
      expense, to control the defense and settlement of such Tax Audit. If DEPI does
      not elect to control the defense and settlement of such Tax Audit, Purchaser
      may, at Purchaser’s expense, control the defense and settlement of such Tax
      Audit, provided that DEPI shall pay any Tax for which it is otherwise liable
      under this Article 9.
      If such
      Tax Audit relates solely to any taxable period, or portion thereof, beginning
      after the Closing Date or for any Taxes for which only Purchaser would be liable
      under this Agreement, Purchaser shall, at its expense, control the defense
      and
      settlement of such Tax Audit.

     

     

    
      
        
        

      

      
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    (c) If
      such
      Tax Audit relates to Taxes for which both DEPI and Purchaser could be liable
      under this Agreement, to the extent practicable, such Tax Items will be
      distinguished and each Party will have the option to control the defense and
      settlement of those Taxes for which it is so liable. If such Tax Audit relates
      to a taxable period, or portion thereof, beginning on or before and ending
      after
      the Closing Date and any Tax Item cannot be identified as being a liability
      of
      only one party or cannot be separated from a Tax Item for which the other party
      is liable, DEPI, at its expense, shall have the option to control the defense
      and settlement of the Tax Audit, provided that such party defends the items
      as
      reported on the relevant Tax Return and provided further that no such matter
      shall be settled without the written consent of both parties, not to be
      unreasonably withheld.
      If DEPI
      does not elect to control the defense and settlement of such Tax Audit,
      Purchaser may, at Purchaser’s expense, control the defense and settlement of
      such Tax Audit, provided that DEPI shall pay any Tax for which it is otherwise
      liable under this Article 9.

     

    (d) Any
      party
      whose liability for Taxes may be affected by a Tax Audit shall be entitled
      to
      participate at its expense in such defense and to employ counsel of its choice
      at its expense and shall have the right to consent to any settlement of such
      Tax
      Audit (not to be unreasonably withheld) to the extent that such settlement
      would
      have an adverse effect with respect to a period for which that party is liable
      for Taxes, under this Agreement or otherwise.

     

    Section 9.6 
      Post-Closing
      Actions Which Affect Seller’s Tax Liability.
       Except
      with respect to federal income Taxes, Purchaser shall not and shall not permit
      its Affiliates, including the Companies and Wholly-Owned Subsidiaries, to take
      any action on or after the Closing Date which could reasonably be expected
      to
      materially increase any Seller’s liability for Taxes (including any liability of
      DEPI to indemnify Purchaser for Taxes under this Agreement).
      Except
      to the extent required by applicable Laws, Purchaser shall not and shall not
      permit its Affiliates, including the Companies and Wholly-Owned Subsidiaries,
      to
      amend any Tax Return with
      respect to a taxable period for which DEPI may be liable to indemnify Purchaser
      for Taxes under Section 9.1.

     

    Section 9.7 
      Refunds. 

     

    (a) Purchaser
      agrees to pay to DEPI any refund received (whether by payment, credit, offset
      or
      otherwise, and together with any interest thereon) after the Closing by
      Purchaser or its Affiliates, net of any Taxes imposed thereon, including the
      Companies and Wholly-Owned Subsidiaries, in respect of any Taxes for which
      DEPI
      is liable or required to indemnify Purchaser under Section 9.1.
      Purchaser shall provide reasonable cooperation to DEPI and DEPI’s Affiliates at
      their expense in order to take all necessary steps to claim any such refund.
      Any
      such refund received by Purchaser or its Affiliates or the Companies or
      Wholly-Owned Subsidiaries shall be paid to DEPI, net of any Taxes imposed
      thereon, within thirty (30) days after such refund is received. Purchaser agrees
      to notify DEPI within ten (10) days following the discovery of a right to claim
      any such refund if such refund is material and upon receipt of any such refund.
      Purchaser agrees to claim any such refund as soon as possible after the
      discovery of a 

     

     

    
      
        
        

      

      
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      right
        to
        claim a refund and to furnish to DEPI all information, records and assistance
        necessary to verify the amount of the refund or overpayment.

    

     

    (b) Purchaser
      shall not make, and shall not cause any Company or Wholly-Owned Subsidiary
      to
      file any carryback claims with respect to any Tax Item of such Company or
      Wholly-Owned Subsidiary arising in any taxable period beginning after the
      Closing Date with respect to a period prior to the Closing Date.

     

    Section 9.8 
      Conflict. 
      In the event of a conflict between the provisions of this Article 9
      and any
      other provision of this Agreement, except Section 13.3
      hereof,
      this Article 9
      shall
      control.

     

    Section 9.9 
      Election
      Under Section 338(h)(10).
       Sellers
      and Purchaser agree that they shall make a joint election under Section
      338(h)(10) of the Code and under any comparable provisions of state or local
      law
      with respect to the purchase of the Interests (other than Interests in
any
      Company or Subsidiary that is not a member of a selling consolidated group
      within the meaning of Treasury Regulations § 1.338(h)(10)-1(b)(2))
      (the
“Section
      338(h)(10) Elections”.
      To
      facilitate such elections, at the Closing Purchaser shall deliver to DEPI on
      behalf of Sellers Internal Revenue Service Forms 8023 and any similar forms
      under applicable state, local or foreign income Tax law (the “Forms”)
      with
      respect to Purchaser’s purchase of the Interests, which Forms shall be duly
      executed by an authorized person for Sellers. Purchaser shall cause the Forms
      to
      be duly executed by an authorized person for Purchaser, shall provide a copy
      of
      the executed Forms to Seller, and shall duly and timely file the Forms as
      prescribed by Treasury Regulation 1.338(h)(10)-1 or the corresponding provisions
      of applicable state, local or foreign income Tax law. The Parties agree that
      the
      Purchase Price and the liabilities of the relevant Company and Subsidiaries
      (plus other relevant items) will be reported on Forms 8883 and otherwise for
      income Tax purposes, consistent with the Purchase Price Allocation as determined
      under Section 2.2. Except to the extent required by applicable Law, neither
      Sellers nor Purchaser shall take any action inconsistent with, or fail to take
      any action necessary for, the validity of the elections described in this
Section 9.9.

     

    Section 9.10 
      Section
      754 Election. 
      Each Seller shall obtain any consents required to facilitate the elections
      under
      Section 754 of the Code described in Section 4.5(e).

     

     

    ARTICLE 10.

    U.S.
      EMPLOYMENT MATTERS

     

    Section 10.1 
      Employees.
      

     

    (a) “Company
      Onshore Employees”
shall
      mean all those individuals other than Excluded Employees (i) who are either
      Designated Employees or Selected Employees and (ii) who accept an offer of
      employment or continued employment with whichever of Purchaser or its Affiliates
      is designated by Purchaser in its sole discretion to make the offer of
      employment or continued employment (“Designated
      Affiliates”)
      pursuant to Section 10.2.

     

     

    
      
        
        

      

      
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    (b) “Designated
      Employees”
are
      those individuals (i) who, as of the Closing Date are (x) employed by
      DEPI, DOTEPI, Reserves, the Companies or Wholly-Owned Subsidiaries and are
      rendering services primarily with respect to the Assets or (y) employed by
      Dominion Resources Services, Inc. and are rendering services primarily with
      respect to the Assets or (z) employed pursuant to the college recruiting
      program of the Companies or their Affiliates with respect to the Assets and
      (ii) who are not U.S. Temporary Employees. Seller shall provide Purchaser
      and its Designated Affiliates not later than ten (10) days after the execution
      of this Agreement a list of Designated Employees to whom Purchaser or its
      Designated Affiliates must offer employment or continued employment in
      accordance with Section 10.2(a). In no event shall the number of employees
      on
      the list exceed three hundred thirty (330) unless Purchaser approves a higher
      number in writing.

     

    (c) “Selected
      Employees”
are
      no
      fewer than 270 individuals (i) who, as of the Closing Date are
      (x) employed by DEPI, DOTEPI, Reserves, the Companies or Wholly-Owned
      Subsidiaries and are rendering services with respect to the Assets or
      (y) employed by Dominion Resources Services, Inc. and are rendering
      services with respect to the Assets, (ii) who are not U.S. Temporary
      Employees and (iii) who are selected by the Leadership Team acting as agents
      for
      Purchaser and its Affiliates from a list provided to Purchaser and its
      Affiliates not later than fourteen (14) days after the execution of this
      Agreement as individuals to whom Purchaser or its Designated Affiliates must
      offer employment or continued employment in accordance with Section 10.2(a).
      The
      Leadership Team shall have until the date that is no later than thirty (30)
      days
      after the date the list of Selected Employees is provided to Purchaser and
      its
      Affiliates to designate and notify Sellers or their delegate which of the
      Selected Employees will receive offers in accordance with Section
      10.2(a).

     

    (d) From
      the
      date hereof through a date eighteen (18) months from the Closing Date, none
      of
      Purchaser, its Designated Affiliates, its wholly-owned Affiliates designated
      to
      receive Conveyances pursuant to Section 8.2, or any of its other Affiliates
      which have assisted Purchaser with or otherwise participated in the transactions
      that are the subject of this Agreement will, directly or indirectly, solicit
      (provided that in no event will general advertising be deemed solicitation
      for
      purposes of this Section 10.1(d)), or offer employment to any employee of any
      of
      Sellers or their Affiliates other than the Designated Employees listed pursuant
      to Section 10.2(b) and the Selected Employees listed pursuant to Section 10.1(c)
      without the prior written consent of DEPI. From the date hereof through a date
      eighteen (18) months from the Closing Date, neither Sellers nor any of their
      Affiliates engaged in the exploration and production business will, directly
      or
      indirectly, solicit or offer employment to any Company Onshore Employee without
      the prior written consent of Purchaser. 

     

    (e) Individuals
      who are otherwise Company Onshore Employees but who on the Closing Date are
      not
      actively at work due to a leave of absence covered by the Family and Medical
      Leave Act of 1993, or due to any other authorized leave of absence, shall
      nevertheless be treated as Company Onshore Employees; provided,
      however,
      that an
      individual shall not be considered a Company Onshore Employee if such individual
      as of 

     

     

    
      
        
        

      

      
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      the
        Closing Date is receiving benefits under the Dominion Resources, Inc. Long-Term
        Disability Plan.

    

     

    (f) The
      Parties acknowledge that Purchaser intends to identify a leadership team,
      composed of employees of Sellers or their Affiliates (the “Leadership
      Team”),
      that
      will act as agents on behalf of Purchaser and its Affiliates with regard to
      the
      selection, staffing and hiring of Selected Employees. Purchaser shall indemnify,
      defend and hold harmless Sellers, their current and former Affiliates and the
      respective officers, directors, employees and agents of each of them (including
      the members of the Leadership Team) (“Seller
      Employment Indemnified Persons”)
      from
      and against all liability, loss, cost, expense, claim, award, damage, fine,
      fee,
      penalty, interest, deficiency, or judgment, including court costs and fees
      and
      expenses of attorneys, incurred or suffered by any Seller Employment Indemnified
      Person resulting from, arising out of, or related to or in connection with
      any
      of the Leadership Team’s, Purchaser’s, its Affiliates’, Sellers’, their
      Affiliates’ or any of their employees’ or agents’ acts or omissions related to
      the selection of the Selected Employees or Purchaser’s staffing and hiring
      process for Selected Employees, even
      if such liability is caused in whole or in part by the negligence (whether
      sole,
      joint or concurrent), strict liability or other legal fault of any Seller
      Employment Indemnified Person.

     

    Section 10.2 
      Continued
      Employment.
      

     

    (a) Purchaser
      and its Designated Affiliates shall cause the Purchaser or its Affiliate who
      is
      the employer of each Company Onshore Employee to employ or continue the
      employment of such Company Onshore Employee, in the case of a Designated
      Employee, effective as of the Closing Date, and in the case of a Selected
      Employee, effective as of the date on or after the Closing Date designated
      by
      DEPI (which shall be no later than the date on which the Selected Employee
      ceases to perform transition services in connection with sales by Sellers and
      their Affiliates of assets and companies pursuant to DRI’s sales process that
      commenced in the fall of 2006 and was announced pursuant to a press release
      dated November 1, 2006, including services pursuant to the DEPI/Purchaser
      Transition Service Agreement and services with respect to sales involving the
      Excluded Onshore Areas and the Offshore Package Areas), during the Comparability
      Period (i) at levels of total compensation (base pay and payroll practices)
      and benefits, including the amounts provided under Section 10.11, that are
      comparable, in the aggregate to the levels of total compensation (base pay
      and
      payroll practices) and benefits as noted under the Plans and Programs on
      Schedule 4.2(j)(i) in effect as of the Closing Date and (ii) at a work
      location no more than 50 miles from the individual’s work location as of the
      Closing Date. “Comparability
      Period”
shall
      mean (y) with respect to Company Onshore Employees who are Designated Employees,
      the twelve (12) month period beginning on the Closing Date and (z) with respect
      to each Company Onshore Employees who is a Selected Employee, the twelve (12)
      month period following the date such employee becomes an employee of Purchaser
      or its Affiliates. In determining comparability for the Comparability Period,
      in
      no event will the base pay and annual incentive bonus opportunity for each
      such
      employee be less than his or her base pay and annual incentive bonus opportunity
      with Seller as of the Closing Date. In determining comparability, any long
      term
      incentive opportunity, retention plans or
      

     

     

    
      
        
        

      

      
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      retention
        programs, Six Sigma and Spot Cash Programs listed on Part II of
        Schedule 4.2(j)(i), Equity-Based Programs listed on Part III of
        Schedule 4.2(j)(i) and amounts paid or payable from the Success Pool listed
        on Part V of Schedule 4.2(j)(i) shall be excluded. Purchaser and its
        Designated Affiliates will provide to each Company Onshore Employee during
        the
        Comparability Period coverage and benefits under plans substantially identical
        (or providing equal or greater value in the aggregate) to the Company’s U.S.
        Benefit Plans set out in Section 1 of Schedule 4.2(j)(i), except for Salaried
        Employees’ Pension Plan, Retiree Medical Plan and Retiree Life Insurance Plan
        which Purchaser has no obligation to provide.

    

     

    (b) Purchaser
      and its Designated Affiliates may offer to employ or continue the employment
      of
      any Excluded Employee effective as of the Closing Date; provided,
      however,
      that
      any offer to an Excluded Employee must include terms and conditions that are
      equal to or greater than those specified on Schedule 10.2(c)(ii) for
      Managing Directors or Schedule 10.2(d) for Executives, as appropriate for
      such Excluded Employee’s position. Any such Excluded Employee who accepts such
      offer and becomes an employee of Purchaser or its Designated Affiliates shall
      be
      a Company Onshore Employee, and Purchaser will provide terms and conditions
      no
      less favorable to such Excluded Employee than those specified on
      Schedule 10.2(c)(ii) for any such Managing Director and
      Schedule 10.2(d) for any such Executive.

     

    (c) If
      the
      employment of any Company Onshore Employee is involuntarily terminated by the
      Purchaser or its Designated Affiliates, other than for cause, under the
      severance plan on Schedule 10.2(c)(i) or resigns by reason of the
      relocation, without his or her consent, of his or her work location more than
      50
      miles from the individual’s work location as of the Closing Date during the
      Comparability Period, Purchaser and its Designated Affiliates shall provide,
      or
      cause to be provided, the terminated Company Onshore Employee with whichever
      of
      the following results in the greater value to such Company Onshore Employee:
      (i) salary continuation and health benefits until the end of the
      Comparability Period, (ii) severance benefits which are comparable, in the
      aggregate, to the severance benefits set out on Schedule 10.2(c)(i) and
      which, with respect to salary continuation, health benefits, outplacement
      services and annual incentive plan payment are no less than the benefits set
      out
      on Schedule 10.2(c)(i), or (iii) for Key Employees, the severance benefits
      provided by the special award letters as set out in Schedule
      10.2(c)(iii).

     

    (d) If
      a
      Designated Employee or Selected Employee receives cash severance or other
      severance related compensation or benefits from DEPI or its Affiliates but
      is
      subsequently employed by Purchaser or its Designated Affiliates within twelve
      (12) months of, in the case of a Designated Employee, the Closing Date, or
      in
      the case of a Selected Employee, the date such Selected Employee would have
      otherwise been released by Seller to become an employee of Purchaser or its
      Designated Affiliates, then Purchaser or its Designated Affiliates shall pay
      promptly to Sellers an amount equal to the aggregate of the cash severance
      and
      other severance related compensation and benefits provided by Sellers and their
      Affiliates to such employee in connection with the termination of such
      employee’s employment with Sellers and their Affiliates. If an Executive or
      Managing Director is employed by Purchaser or its Designated
      Affiliates

     

     

    
      
        
        

      

      
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      within
        twenty four (24) months of the Closing Date, then Purchaser or its Designated
        Affiliates shall pay promptly to Sellers an amount equal to the aggregate
        of the
        cash severance and other severance related compensation and benefits provided
        to
        such Executive or Managing Director by Sellers and their Affiliates, if any,
        in
        connection with the termination of such Executive’s or Managing Director’s
        employment with Sellers.

    

     

    Section 10.3 
      Plan
      Participation.
      

     

    (a)    (i) Effective
      as of the day after the Closing Date, the Companies, Subsidiaries, Companies
      and
      Wholly-Owned Subsidiaries shall cease to be participating employers in all
      Employee Plans sponsored by Sellers or any of their ERISA Affiliates
      (“Company’s
      U.S. Benefit Plans”),
      all
      Company Onshore Employees that are Designated Employees shall cease to accrue
      additional benefits by reason of employment with Sellers or their Affiliates
      for
      any periods after the Closing Date, and Sellers shall, if applicable, provide
      all such Designated Employees with appropriate notice of such cessation of
      participation and accruals in accordance with Section 204(h) of ERISA and Code
      Section 4980F (and the related regulations), at least forty-five (45) days
      in
      advance of the Closing Date.

     

    (ii) Effective
      as of the day after the Closing Date, Company Onshore Employees that are
      Designated Employees shall be entitled to such benefits, if any, from Company’s
      U.S. Benefit Plans provided to similarly situated employees employed by an
      entity ceasing to be an ERISA Affiliate of Sellers (including continued benefits
      under flexible spending arrangements if applicable continuation coverage is
      elected).

     

    (b)    (i) All
      Company Onshore Employees that are Selected Employees shall continue to
      participate in Company’s U.S. Benefit Plans until the earlier of the date such
      employee is employed by the Purchaser or its Designated Affiliates or such
      employee’s employment with DEPI, DOTEPI, Reserves, the Companies or the
      Wholly-Owned Subsidiaries otherwise ceases.

     

    (ii) Effective
      as of the date a Company Onshore Employee that is a Selected Employee is
      employed by the Purchaser or its Designated Affiliates, such Selected Employee
      shall cease to accrue additional benefits by reason of employment with Sellers
      or their Affiliates under the Company’s U.S. Benefit Plans, and Sellers shall,
      if applicable, provide all such Selected Employees with appropriate notice
      of
      such cessation of participation and accruals in accordance with Section 204(h)
      of ERISA and Code Section 4980F (and the related regulations), at least
      forty-five (45) days in advance of the date such Selected Employee will be
      released by Seller to become an employee of Purchaser or its Designated
      Affiliates.

     

    (iii) Effective
      as of the day after the date a Company Onshore Employee that is a Selected
      Employee is employed by the Purchaser or its Designated Affiliates, such
      Selected Employee shall be entitled to such benefits, if any, from Company’s
      U.S. Benefit Plans provided to similarly situated 

     

     

    
      
        
        

      

      
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      employees
        employed by an entity ceasing to be an ERISA Affiliate of Sellers (including
        continued benefits under flexible spending arrangements if applicable
        continuation coverage is elected).

    

     

    (c) Except
      as
      is set forth in this Section 10.3, Section 10.2, Section 10.4, Section 10.6
      and
      Section 10.9, after the Closing Date, neither Purchaser and its Affiliates
      nor
      the Companies or Wholly-Owned Subsidiaries shall have any liability or
      obligations (i) with respect to, based upon or arising under any Company U.S.
      Benefit Plan or any other employee benefit plan of Seller or their Affiliates
      or
      (ii) with respect to any current or former employee of DRI, DEPI, DOTEPI,
      Reserves, the Companies or the Subsidiaries except Company Onshore
      Employees.

     

    Section 10.4 
      Participation
      in Purchaser Plans.
      

     

    (a) As
      of the
      day after the Closing Date, all Company Onshore Employees that are Designated
      Employees shall, if applicable, be eligible to participate in and, if elected,
      shall commence participation in the employee benefit plans (within the meaning
      of Section 3(3) of ERISA), programs, policies, contracts, fringe benefits,
      or
      arrangements (whether written or unwritten) of Purchaser or its Affiliates
      covering similarly situated employees primarily engaged with respect to
      operations in the U.S. (collectively, “Purchaser
      U.S. Employee Plans”).
      Purchaser and its Affiliates shall, to the extent permissible under any
      Purchaser U.S. Employee Plan (provided that Purchaser and its Affiliates shall
      use reasonable efforts to remove any restrictions including restrictions in
      any
      insurance policy), waive all limitations as to pre-existing condition exclusions
      and waiting periods with respect to such Designated Employees and their spouses
      and dependents, if applicable, under the Purchaser U.S. Employee Plans other
      than, but only to the extent of, limitations or waiting periods that were in
      effect with respect to such employees under the Company’s U.S. Benefit Plans
      that have not been satisfied as of the Closing Date. Purchaser and its
      Affiliates shall, to the extent permissible under any Purchaser U.S. Employee
      Plan (provided that Purchaser and its Affiliates shall use reasonable efforts
      to
      remove any restrictions under any Purchaser U.S. Employee Plan or related
      insurance policy), provide each such Designated Employee with credit for any
      year-to-date co-payments and deductibles paid as of the Closing Date in
      satisfying any deductible or out-of-pocket requirements under the Purchaser
      U.S.
      Employee Plans. Purchaser and its Affiliates shall accept or cause to be
      accepted transfers from Sellers’ health care spending account plan and dependent
      care flexible spending account plan included in the Company’s U.S. Benefit Plans
      of each such Designated Employee’s unused account balance as of the day after
      the Closing Date and credit such employee with such amounts under the applicable
      Purchaser U.S. Employee Plans. In the event the plan years under the Purchaser
      U.S. Employee Plans and Company’s U.S. Benefit Plans do not end on the same
      date, such credits and transfers set forth in the preceding sentence shall
      be
      applied under the Purchaser U.S. Employee Plans for the plan year which includes
      the Closing Date; provided,
      however,
      that if
      there are less than six (6) months remaining in the plan year which includes
      the
      Closing Date, such credits and transfers shall be applied to the plan year
      which
      begins next following the Closing Date, to the extent permitted by applicable
      Law.

     

     

    
      
        
        

      

      
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    (b) As
      of the
      day after the date a Company Onshore Employee that is a Selected Employee is
      released by Seller to become an employee of Purchaser or its Designated
      Affiliates, such Selected Employee shall, if applicable, be eligible to
      participate in and, if elected, shall commence participation in the Purchaser
      U.S. Employee Plans. Purchaser and its Affiliates shall, to the extent
      permissible under any Purchaser U.S. Employee Plan (provided that Purchaser
      and
      its Affiliates shall use reasonable efforts to remove any restrictions including
      restrictions in any insurance policy), waive all limitations as to pre-existing
      condition exclusions and waiting periods with respect to each such Selected
      Employee and his or her spouse and dependents, if applicable, under the
      Purchaser U.S. Employee Plans other than, but only to the extent of, limitations
      or waiting periods that were in effect with respect to such employee under
      the
      Company’s U.S. Benefit Plans that have not been satisfied as of the date such
      employee is released by Seller to become an employee of Purchaser or its
      Designated Affiliates. Purchaser and its Affiliates shall, to the extent
      permissible under any Purchaser U.S. Employee Plan (provided that Purchaser
      and
      its Affiliates shall use reasonable efforts to remove any restrictions under
      any
      Purchaser U.S. Employee Plan or related insurance policy), provide each such
      Selected Employee with credit for any year-to-date co-payments and deductibles
      paid as of the date such employee is released by Seller to become an employee
      of
      Purchaser or its Designated Affiliates in satisfying any deductible or
      out-of-pocket requirements under the Purchaser U.S. Employee Plans. Purchaser
      and its Affiliates shall accept or cause to be accepted transfers from Sellers’
health care spending account plan and dependent care flexible spending account
      plan included in the Company’s U.S. Benefit Plans of each such Selected
      Employee’s unused account balance as of the day after the date such employee is
      released by Seller to become an employee of Purchaser or its Designated
      Affiliates and credit such employee with such amounts under the applicable
      Purchaser U.S. Employee Plans. In the event the plan years under the Purchaser
      U.S. Employee Plans and Company’s U.S. Benefit Plans do not end on the same
      date, such credits and transfers set forth in the preceding sentence shall
      be
      applied under the Purchaser U.S. Employee Plans for the plan year which includes
      the date such employee is released by Seller to become an employee of Purchaser
      or its Designated Affiliates; provided,
      however,
      that if
      there are less than six (6) months remaining in the plan year which includes
      the
      date such employee is released by Seller to become an employee of Purchaser
      or
      its Designated Affiliates, such credits and transfers shall be applied to the
      plan year which begins next following the date such employee is released by
      Seller to become an employee of Purchaser or its Designated Affiliates, to
      the
      extent permitted by applicable Law.

     

    Section 10.5 
      Service
      Credit. 
      Purchaser and its Affiliates shall cause to be provided to each Company Onshore
      Employee credit for prior service with Sellers or their Affiliates for purposes
      (including vesting, eligibility, benefit accrual and/or level of benefits)
      in
      all Purchaser U.S. Employee Plans, including fringe benefit plans, vacation
      and
      sick leave policies, severance plans or policies, and matching contributions
      under defined contribution plans, other than for benefit accruals under defined
      benefit pension plans subject to Title IV of ERISA or Section 412 of the Code
      and retiree medical plans maintained or provided by Purchaser or its
      wholly-owned subsidiaries or Affiliates, in which such Company Onshore Employees
      are eligible to participate on or after the date such employee is employed
      by
      the Purchaser or its Designated Affiliates. Under Purchaser’s vacation plan,
      each Company Onshore

     

     

    
      
        
        

      

      
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      Employee
        initially shall be entitled to vacation at least equal to the vacation such
        Company Onshore Employee was entitled to under Seller’s vacation
        plan.

    

     

    Section 10.6 
      Vacation
      and Leave.
       Purchaser and its Affiliates shall
      provide each Company Onshore Employee credit for all of the Company Onshore
      Employee’s earned but unused vacation and sick leave and other time-off as of
      the date such employee is employed by the Purchaser or its Designated Affiliates
      as determined under Sellers’ time-off policies.

     

    Section 10.7 
      Defined
      Contribution Plan.
       To the extent allowable by Law, Purchaser and its Affiliates shall take
      any and all necessary action to cause the trustee of a tax qualified defined
      contribution plan of Purchaser or one of its Affiliates, if requested to do
      so
      by a Company Onshore Employee, to accept a direct “rollover” of all or a portion
      of such employee’s distribution from Sellers’ tax qualified defined contribution
      plan (excluding securities (or other in-kind forms of distributions), but
      including plan loans).

     

    Section 10.8 
      Vesting.
      

     

    (a) As
      of the
      Closing Date, Sellers shall take all necessary action to cause the tax qualified
      defined contribution and defined benefit pension plans maintained by the Sellers
      or an Affiliate of Sellers to fully vest Company Onshore Employees that are
      Designated Employees in their account balances and/or accrued benefits under
      such plans.

     

    (b) As
      of the
      date such employee is employed by the Purchaser or its Designated Affiliates,
      Sellers shall take all necessary action to cause the tax qualified defined
      contribution and defined benefit pension plans maintained by the Sellers or
      an
      Affiliate of Sellers to fully vest Company Onshore Employees that are Selected
      Employees in their account balances and/or accrued benefits under such
      plans.

     

    Section 10.9 
      Welfare
      Benefit Plans; Workers’ Compensation; Other Benefits.
      

     

    (a) With
      respect to each Company Onshore Employee that is a Designated Employee
      (including any beneficiary or the dependent thereof), the Sellers shall retain
      all liabilities and obligations arising under any Seller welfare benefit plans
      and workers’ compensation benefits to the extent that such liability or
      obligation relates to claims incurred (whether or not reported or paid) on
      or
      prior to the Closing Date. For purposes of this Section 10.9(a), a claim shall
      be deemed to be incurred when (i) with respect to medical, dental, health
      related benefits, accident and disability (but not including workers’
compensation benefits and wage continuation/replacement type benefits), the
      medical, dental, health related, accident or disability services with respect
      to
      such claim are performed, (ii) with respect to life insurance, when the
      death occurs and (iii) with respect to workers’ compensation benefits, when
      the injury or condition giving rise to the claim occurs on or prior to the
      Closing Date. Subject to Section 10.1, with respect to each Company Onshore
      Employee that is a Designated Employee receiving workers’ compensation benefits,
      for purposes of this Section 10.9(a), the Seller or Affiliate (other than a
      Company or Subsidiary) employing such Designated Employee shall be 

     

    
      
        
        

      

      
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      responsible
        for claims incurred on or prior to the Closing Date, including payments made
        after the Closing Date for such claims. Subject to Section 10.1, with respect
        to
        each Company Onshore Employee that is a Designated Employee receiving wage
        continuation/replacement benefits for sickness/disability, for purposes of
        this
        Section 10.9(a), the Seller or Affiliate (other than a Company or Subsidiary)
        employing such Designated Employee shall be responsible for any payments
        due on
        or prior to the Closing Date and Purchaser and its Designated Affiliates
        shall
        be responsible for any payments due after the Closing Date. Effective as
        of the
        Closing Date, the Seller or Affiliate employing a Company Onshore Employee
        that
        is a Designated Employee shall be responsible for providing coverage under
        the
        Consolidated Omnibus Budget Reconciliation Act (“COBRA”)
        to any
        such Designated Employee, his or her spouse or dependent person as to whom
        a
“qualifying event” as defined in Section 4890B of the Code has occurred on or
        prior to the Closing Date. Purchaser and its Designated Affiliates shall
        be
        responsible for providing COBRA coverage to any Company Onshore Employee
        that is
        a Designated Employee, his or her spouse or dependent person as to whom a
        “qualifying event” occurs after the Closing Date.

    

     

    (b) With
      respect to each Company Onshore Employee that is a Selected Employee (including
      any beneficiary or the dependent thereof), the Sellers shall retain all
      liabilities and obligations arising under any Seller welfare benefit plans
      and
      workers’ compensation benefits to the extent that such liability or obligation
      relates to claims incurred (whether or not reported or paid) on or prior to
      the
      date such employee is employed by the Purchaser or its Designated Affiliates.
      For purposes of this Section 10.9(b), a claim shall be deemed to be incurred
      when (i) with respect to medical, dental, health related benefits, accident
      and disability (but not including workers’ compensation benefits and wage
      continuation/replacement type benefits), the medical, dental, health related,
      accident or disability services with respect to such claim are performed,
      (ii) with respect to life insurance, when the death occurs and
      (iii) with respect to workers’ compensation benefits, when the injury or
      condition giving rise to the claim occurs on or prior to the date such employee
      is employed by the Purchaser or its Designated Affiliates. Subject to Section
      10.1, with respect to each Company Onshore Employee that is a Selected Employee
      receiving workers’ compensation benefits, for purposes of this Section 10.9(b),
      the Seller or Affiliate (other than a Company or Subsidiary) employing such
      Selected Employee shall be responsible for claims incurred on or prior to the
      date such employee is employed by the Purchaser or its Designated Affiliates,
      including payments made after such date for such claims. Subject to Section
      10.1, with respect to each Company Onshore Employee that is a Selected Employee
      receiving wage continuation/replacement benefits for sickness/disability, for
      purposes of this Section 10.9(b), the Seller or Affiliate (other than a Company
      or Subsidiary) employing such Selected Employee shall be responsible for any
      payments due on or prior to the date such employee is employed by the Purchaser
      or its Designated Affiliates and Purchaser and its Designated Affiliates shall
      be responsible for any payments due after the date such employee is employed
      by
      the Purchaser or its Designated Affiliates. Effective as of the Closing Date,
      the Seller or Affiliate employing a Company Onshore Employee that is a Selected
      Employee shall be responsible for providing coverage under COBRA to any such
      Selected Employee, his or her spouse or dependent person as to whom a
“qualifying event” as defined in Section 4890B of the Code has occurred on or
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      employee
        is employed by the Purchaser or its Designated Affiliates. Purchaser and
        its
        Designated Affiliates shall be responsible for providing COBRA coverage to
        any
        Company Onshore Employee that is a Selected Employee, his or her spouse or
        dependent person as to whom a “qualifying event” occurs after the date such
        employee is employed by the Purchaser or its Designated Affiliates.

    

     

    (c) For
      Company Onshore Employees that are Designated Employees, effective as of the
      Closing Date, and for Company Onshore Employees that are Selected Employees,
      effective as of the date such employee is employed by the Purchaser or its
      Designated Affiliates, with respect to (i) relocation costs and
      reimbursements, (ii) appliance loans, (iii) education assistance, (iv)
      computer loans and (v) adoption assistance programs, Purchaser and its
      Designated Affiliates agree to assume responsibility for payments and benefits
      provided by or committed to by Sellers or their Affiliates to such Company
      Onshore Employees except that Purchaser and its Designated Affiliates undertake
      no obligation to continue any of these programs.

     

    Section 10.10 
      WARN
      Act.
      

     

    (a) If
      a
      plant closing or a mass layoff occurs or is deemed to occur with respect to
      DEPI, DOTEPI, Reserves, the Companies, the Subsidiaries and Dominion Resource
      Services, Inc. at any time on or after the Closing Date as
      a
      result of a termination of employment of Company Onshore Employees that are
      Designated Employees by Purchaser,
      Purchaser and its Designated Affiliates shall be solely responsible for
      providing all notices required under the Worker Adjustment and Retraining
      Notification Act, 29 U.S.C. §2109 et seq. or the regulations promulgated
      thereunder (the “WARN
      Act”)
      and
      for taking all remedial measures, including, without limitation, the payment
      of
      all amounts, penalties, liabilities, costs and expenses if such notices are
      not
      provided. 

     

    (b) If
      a
      plant closing or a mass layoff occurs or is deemed to occur with respect to
      DEPI, DOTEPI, Reserves, the Companies, the Subsidiaries and Dominion Resource
      Services, Inc. at any time on or after the date a Company Onshore Employee
      that
      is a Selected Employee is employed by the Purchaser or its Designated Affiliates
      as
      a
      result of a termination of employment of such Selected Employees by
      Purchaser,
      Purchaser and its Designated Affiliates shall be solely responsible for
      providing all notices required under the WARN Act and for taking all remedial
      measures, including, without limitation, the payment of all amounts, penalties,
      liabilities, costs and expenses if such notices are not provided.

     

    Section 10.11 
      Postretirement
      Benefits.
      

     

    (a) Except
      as
      set forth in Sections 10.2, 10.3, 10.4, 10.6 and 10.9, Sellers shall retain
      any
      and all liabilities, assets and obligations which relate to service of any
      Company Onshore Employee or former employee of Sellers or their Affiliates
      that
      arise under any Employee Plans, with respect to Company Onshore Employees that
      are Designated Employees, as of the Closing Date and with respect to Company
      Onshore Employees that are Selected Employees, as of the date such employee
      is
      employed by the 

     

     

    
      
        
        

      

      
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      Purchaser
        or its Designated Affiliates, including, without limitation, those providing
        postretirement benefits for any Company Onshore Employee or former employee
        (i) that are defined benefit pension plans, (ii) that are defined
        contribution plans as defined in Section 3(34) of ERISA, or (iii) which
        relate to other post-employment benefits for all current retirees of DEPI,
        DOTEPI, Reserves, the Companies, the Subsidiaries or Dominion Resource Services,
        Inc.

    

     

    (b) Purchaser
      does not currently sponsor a qualified defined benefit pension plan, retiree
      medical plan or retiree life insurance plan, nor does Purchaser intend to
      implement such plans following the Closing Date. Therefore, in lieu of such
      benefits, Purchaser will pay or provide, as appropriate, or will cause its
      Designated Affiliates to pay or provide, to each Company Onshore Employee
      employed by Purchaser or its Designated Affiliates as of the Closing Date
      additional benefits and/or a one time cash bonus (the “Special
      Benefits”).
      To
      the maximum extent permitted by applicable Law, such Special Benefits shall
      be
      in the form of one or more contributions for each Company Onshore Employee
      to a
      tax qualified defined contribution plan equal to, in the aggregate, 12.9% of
      the
      individual’s annual rate of base pay as of the (i) Closing Date for Designated
      Employees or (ii) for Selected Employees, the date such employees becomes
      employed by Purchaser or its Designated Affiliates. If all or a part of such
      Special Benefits cannot by reason of applicable Law be provided in a tax
      qualified defined contribution plan (the “Excess Amount”), the Excess Amount
      that cannot be so provided shall be paid in cash on a fully tax grossed up
      basis
      so that after all state and federal Taxes the Company Onshore Employee retains
      an amount equal to the Excess Amount. Purchaser may propose an alternative
      method for calculating the Special Benefits that provides equal or greater
      value
      in the aggregate for Company Onshore Employees, subject to DEPI’s approval that
      will not be unreasonably withheld.

     

    (c) With
      respect to Company Onshore Employees that are Designated Employees, the lesser
      of one-half of the Special Benefits or the maximum amount of the Special
      Benefits that can be contributed to the tax qualified plan for the 2007 plan
      year for such employee will be paid within 30 days after the end of the 2007
      plan year of the tax qualified plan and the remainder paid on the first
      anniversary of the Closing Date. If such Designated Employee is terminated
      by
      the Purchaser for cause or such Designated Employee terminates his/her
      employment prior to the first anniversary of the Closing Date, then he/she
      shall
      forfeit all rights to any of the Special Benefits that have not been paid as
      of
      the termination date.

     

    (d) With
      respect to Company Onshore Employees that are Selected Employees, the lesser
      of
      one-half of the Special Benefits or the maximum amount of the Special Benefits
      that can be contributed to the tax qualified plan for the 2007 plan year for
      such employee will be paid within 30 days after the end of the 2007 plan year
      of
      the tax qualified plan and the remainder paid on the first anniversary of the
      date such employee is employed by the Purchaser or its Designated Affiliates.
      If
      such Selected Employee is terminated by the Purchaser for cause or such Selected
      Employee terminates his/her employment prior to the first anniversary of the
      date such employee is employed by the Purchaser or its Designated Affiliates,
      then he/she shall forfeit all rights to of the Special Benefits that have not
      been paid as of the termination date.

     

     

    
      
        
        

      

      
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    Section 10.12 
      Annual
      Incentive Plan.
       Sellers shall pay, or shall cause the Companies or Wholly-Owned
      Subsidiaries, as applicable, to pay to each Company Onshore Employee as part
      of
      such individual’s final pay from Sellers and their Affiliates a prorated
      incentive amount in accordance with the Sellers’ Annual Incentive
      Plan.

     

    Section 10.13 
      Immigration
      Matters.
       Purchaser and its Designated Affiliates shall use reasonable efforts to
      employ Company Onshore Employees with H-1B immigration status under terms and
      conditions such that both (i) Purchaser and its Designated Affiliates
      qualify as a “successor employer” under applicable United States immigration
      laws and (ii) “green card portability” applies to such employees in respect
      of the transactions contemplated by this Agreement. Seller shall retain all
      immigration related liabilities and responsibilities (y) with respect to Company
      Onshore Employees that are Designated Employees arising from acts or omissions
      which occur on or prior to the Closing Date and (z) with respect to Company
      Onshore Employees that are Selected Employees arising from acts or omissions
      which occur on or prior to the date such employee is employed by the Purchaser
      or its Designated Affiliates.

     

    Section 10.14 
      No
      Plan or Amendment.
       Nothing
      in this Article 10 is intended to constitute, nor shall it operate or be
      construed as constituting, an employee benefit plan or an amendment to any
      employee benefit plan of the Purchaser or any Affiliate of the
      Purchaser.

     

     

    ARTICLE 11.

    TERMINATION
      AND AMENDMENT

     

    Section 11.1 
      Termination.
       This Agreement may be terminated at any time prior to Closing: (i) by
      the mutual prior written consent of Sellers and Purchaser; or (ii) by
      either Sellers or Purchaser, if Closing has not occurred on or before
      October 1, 2007 provided,
      however,
      that no
      Party shall be entitled to terminate this Agreement under this Section 11.1
      if the
      Closing has failed to occur because such Party negligently or willfully failed
      to perform or observe in any material respect its covenants and agreements
      hereunder.

     

    Section 11.2 
      Effect
      of Termination.
       If this Agreement is terminated pursuant to Section 11.1,
      this
      Agreement shall become void and of no further force or effect (except for the
      provisions of Sections 1.2, 1.3, 4.12, 5.10, 6.3, 6.6, 11.1, 11.2, 13.1,
      13.2, 13.4, 13.8, 13.9, 13.10, 13.11, 13.12, 13.13, 13.14, 13.15, 13.16, 13.17,
      13.18 and 13.19 and of the Confidentiality Agreement, all of which shall
      continue in full force and effect). Notwithstanding anything to the contrary
      in
      this Agreement, the termination of this Agreement under Section 11.1
      shall
      not relieve any Party from liability for any willful or negligent failure to
      perform or observe in any material respect any of its agreements or covenants
      contained herein that were to be performed or observed at or prior to Closing.
      In the event this Agreement terminates under Section 11.1
      and any
      Party has willfully or negligently failed to perform or observe in any material
      respect any of its agreements or covenants contained herein which are to be
      performed or observed at or prior to Closing, then the other Party, subject
      to
Section 13.19,
      shall
      be entitled to all remedies available at law or in equity and shall be entitled
      to recover court costs and attorneys’ fees in addition to any other relief to
      which
      the
      other Party may be entitled (and, for the avoidance of doubt, damages
      recoverable by the other Party for a termination under this Article 11 shall
      

     

     

    
      
        
        

      

      
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      include,
        without limiting similar damages of Purchaser or Sellers to the extent not
        described below, all applicable damages (it being agreed that the following
        damages do not constitute consequential, special, or punitive damages for
        the
        purpose of Section 13.19) constituting: (i) all out of pocket costs paid by
        it and its Affiliates in connection with the terminated transaction, including
        brokers, agents, advisors and attorneys fees; (ii) with respect to Sellers
        as
        the other Party, all costs of additional employee retention payments and/or
        costs of temporary or contract workers to replace workers departing after
        the
        termination of this transaction for a period of one year to the extent those
        costs of Seller exceed the baseline costs that would have been incurred by
        Seller in maintaining the employees of Seller as if the terminated transaction
        had never been agreed upon; (iii) with respect to Sellers as the other Party,
        the amount, if any, by which the Unadjusted Purchase Price exceeds the aggregate
        unadjusted sales price for the subsequent sale or sales comprising in aggregate
        the sale of the Interests to a third Person or third Persons to the extent
        such
        sale or sales are completed within a period of one year following the
        termination of the transaction; and (iv) interest at the Agreed Rate on the
        outstanding amount of the excess described in clause (iii) from the Target
        Closing Date until the last of any such subsequent sale or sales of the
        Interests are consummated not to exceed one year following the termination
        of
        the transaction).

    

     

     

    ARTICLE 12.

    INDEMNIFICATION;
      LIMITATIONS

     

    Section 12.1 
      Assumption.
       Without limiting Purchaser’s rights to indemnity under this Article 12,
      as of
      the Closing Date Purchaser shall assume and hereby agrees to fulfill, perform,
      pay and discharge (or cause to be fulfilled, performed, paid or discharged)
      all
      of the obligations and liabilities of Sellers and their Affiliates, known or
      unknown, with respect to the Interests, regardless of whether such obligations
      or liabilities arose prior to or after the Closing Date, including but not
      limited to, obligations to furnish makeup gas according to the terms of
      applicable gas sales, gathering or transportation Contracts, production
      balancing obligations, obligations to pay working interests, royalties,
      overriding royalties, net profits interests and other interests held in
      suspense, obligations to plug wells and dismantle structures, and to restore
      and/or remediate the Assets, ground water, surface water, soil or seabed in
      accordance with applicable agreements and Laws, including any obligations to
      assess, remediate, remove and dispose of NORM, asbestos, mercury, drilling
      fluids and chemicals, and produced waters and hydrocarbons, other environmental
      liabilities with respect to the E&P Business, obligations with respect to
      the actions, suits and proceedings identified as items 2 through 14 (inclusive),
      18, 19 and 20 on Schedule 4.4 (and any other actions, suits or proceedings
      arising out of the same facts or circumstances), regardless of the properties
      or
      assets to which such actions, suits or proceedings relate (unless such
      properties and assets are included in clauses (a) or (b) below), any claims
      regarding the general method, manner or practice of calculating or making
      royalty payments with respect to the Properties, and continuing obligations
      under any agreements pursuant to which the Sellers or their Affiliates
      (including without limitation the Companies and Subsidiaries) purchased Assets
      prior to the Closing (all of said obligations and liabilities, subject to the
      exclusions of the proviso below, herein being referred to as the “Assumed
      Seller Obligations”);
      provided, however, that Purchaser does not assume any obligations or liabilities
      to the extent that they are (collectively, the “Retained
      Seller Obligations”):

     

     

    
      
        
        

      

      
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    (a) attributable
      to or arise out of the Excluded Assets;

     

    (b) directly
      attributable to interests held or formerly held by DEPI, DOTEPI Reserves or
      any
      of the Companies or Subsidiaries located in the Offshore Package Areas, the
      Excluded Onshore Areas or the states in which the Appalachian Business is
      located;

     

    (c) required
      to be borne by Sellers under Section 2.3
      or
Section 2.4(c),
      including as provided in Section 8.4;

     

    (d) attributable
      to or arise out of any futures, options, swaps or other derivatives in place
      prior to Closing, except the Transferred Derivatives;

     

    (e) Tax
      obligations retained by Sellers pursuant to Article 9;

     

    (f) obligations
      retained by Sellers under Article 10;

     

    (g) obligations
      owed by any Seller, Company or Wholly-Owned Subsidiary or its Affiliates to
      a
      third Person claimant in the actions, suits and proceedings identified as items
      1 and 15 through 17 (inclusive) of Schedule 4.4, regardless of the Assets to
      which such actions, suits or proceedings relate;

     

    (h) amounts
      owed by any Seller, Company or Wholly-Owned Subsidiary to any Affiliate (other
      than a Company or Wholly-Owned Subsidiary) at the end of the Closing Date that
      are not incurred for the provision of goods or services, for employment related
      costs, or otherwise in the ordinary course of business, with respect to the
      ownership or operation of the Assets; or

     

    (i) any
      current liabilities (as determined in accordance with the Accounting Principles)
      composed of Property Costs that are outstanding at the Effective Date (provided
      that Seller’s retention of the same, and their classification as “Retained
      Seller Obligations,” shall terminate on the Cut-off Date).

     

    Section 12.2 
      Indemnification.

     

    (a) From
      and
      after Closing, Purchaser shall indemnify, defend and hold harmless Sellers
      and
      their current and former Affiliates (other than the Companies and Subsidiaries)
      and their respective officers, directors, employees and agents (“Seller
      Group”)
      from and against all Damages incurred or suffered by Seller Group:

     

    (i) caused
      by
      or arising out of or resulting from the Assumed Seller Obligations,

     

    (ii) caused
      by
      or arising out of or resulting from the ownership, use or operation of the
      Assets, whether before or after the Closing Date,

     

    (iii) caused
      by
      or arising out of or resulting from Purchaser’s breach of any of Purchaser’s
      covenants or agreements contained in Article 6,

     

     

    
      
        
        

      

      
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    (iv) caused
      by
      or arising out of or resulting from any breach of any representation or warranty
      made by Purchaser contained in Article 5
      of this
      Agreement or in the certificate delivered at Closing pursuant to Section 8.3(d),
      or

     

    (v) consisting
      of Environmental Liabilities (except to the extent DEPI is required to indemnify
      Purchaser pursuant to Section 12.2(b) or
      Section 12.2(g)).

     

    even
      if such Damages are caused in whole or in part by the negligence (whether sole,
      joint or concurrent), strict liability or other legal fault of any Indemnified
      Person,
      or a
      pre-existing condition, but excepting in each case Damages against which DEPI
      would be required to indemnify Purchaser under Section 12.2(b)
      at the
      time the claim notice is presented by Purchaser.

     

    (b) From
      and
      after Closing, DEPI shall indemnify, defend and hold harmless Purchaser, its
      current and former Affiliates and its and their respective officers, directors,
      employees and agents (“Purchaser
      Group”)
      against and from all Damages incurred or suffered by Purchaser
      Group:

     

    (i) caused
      by
      or arising out of or resulting from Sellers’ breach of any of Sellers’ covenants
      or agreements contained in Article 6,
      (provided, however, for purposes of interpretation of the preceding indemnity,
      Sellers’ covenants and agreements qualified by “Material Adverse Effect” but not
“material” or materiality generally shall be deemed to have been made without
      the “Material Adverse Effect” qualification),

     

    (ii) caused
      by
      or arising out of or resulting from any breach of any representation or warranty
      made by DEPI contained in Article 4
      of this
      Agreement (other than Section 4.5(e),
      which
      shall be exclusively subject to Section 9.1(g)),
      or in
      the certificates delivered at Closing pursuant to Section 8.2(j)
      (other
      than in respect of Section 4.5(e))
      (provided, however, for purposes of interpretation of the preceding indemnity,
      Sellers’ representations and warranties qualified by “Material Adverse Effect,”
but not “material” or materiality generally shall be deemed to have been made
      without the “Material Adverse Effect” qualification),

     

    (iii) caused
      by, arising out of or resulting from the Retained Seller Obligations,

     

    (iv) caused
      by, arising out of or resulting from claims for injury or death to any natural
      person attributable to or arising out of DEPI’s, DOTEPI’s, Reserves’ or any
      Company’s or Wholly-Owned Subsidiary’s ownership or operation of the Assets or
      any part thereof prior to the Effective Date,

     

    (v) caused
      by, arising out of or resulting from claims (whether brought by a Governmental
      Authority, an individual pursuant to a qui tam or false claims act proceeding,
      or otherwise) that DEPI, DOTEPI, Reserves or any Company or Wholly-Owned
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      the
        payment of, royalties (including minimum royalties, rentals, shut-in payments
        and overriding royalties) during such Person’s period of ownership or operation
        of the Assets or any part thereof prior to the Effective Date, to the extent
        attributable to such Person’s failure to pay, consistent with then current
        industry practices, royalties owing with respect to such Person’s share of
        production from specific Properties,

    

     

    (vi) consisting
      of Environmental Liabilities for which Seller is required to indemnify Purchaser
      pursuant to
      Section
      12.2(b)(ii) or Section 12.2(g) and any Environmental Liabilities caused by,
      arising out of or resulting from Sellers’ failure to perform any remediation
      operations that Sellers elect to perform pursuant to Section 12.2(g)(vi)
      in
      accordance with the requirements of such Section and applicable
      Law,

     

    (vii) related
      to off-site disposal of Hazardous Substances from the Assets prior to the
      Effective Date for which the owner of the Assets may be liable, or

     

    (viii) constituting
      fines, or civil, criminal or regulatory penalties that may be levied by a
      Governmental Authority for a violation of Environmental Laws with respect to
      the
      Assets which occurred prior to the Effective Date.

     

    even
      if such Damages are caused in whole or in part by the negligence (whether sole,
      joint or concurrent), strict liability or other legal fault of any Indemnified
      Person,
      or a pre-existing condition.

     

    (c) Notwithstanding
      anything to the contrary contained in this Agreement, from and after Closing,
      Sellers’ and Purchaser’s exclusive remedy against each other with respect to
      breaches of the representations, warranties, covenants and agreements of the
      Parties contained in Articles 4 (other than Section 4.5(e),
      which
      shall be exclusively subject to Section 9.1(g)),
      5 and
      6 (excluding Section 6.6,
      which
      shall be separately enforceable by Sellers pursuant to whatever rights and
      remedies are available to it outside of this Article 12)
      and the
      affirmations of such representations, warranties, covenants and agreements
      contained in the certificates delivered by each Party at Closing pursuant to
      Sections 8.2(j) or 8.3(d), as applicable, is set forth in this Section 12.2.
      Except
      for (i) the remedies contained in this Section 12.2
      and
Section 11.2,
      and
      (ii) any other remedies available to the Parties at law or in equity with
      respect to provisions of this Agreement other than Articles 4 (excluding
Section 4.5(e)),
      5 and
      6 (excluding Section 6.6),
      or the
      breach thereof, upon Closing Sellers and Purchaser each release, remise and
      forever discharge the other and their or its Affiliates and all such Persons’
stockholders, officers, directors, employees, agents, advisors and
      representatives from any and all suits, legal or administrative proceedings,
      claims, demands, damages, losses, costs, liabilities, interest, or causes of
      action whatsoever, in law or in equity, known or unknown, which such Parties
      might now or subsequently may have, based on, relating to or arising out of
      this
      Agreement or any Seller’s, Company’s or Subsidiary’s ownership, use or operation
      of the Assets, or the condition, quality, status or nature of the Assets,
      including rights to contribution under the Comprehensive Environmental Response,
      Compensation and Liability Act of 1980, as amended, breaches of statutory and
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      or
        other
        tort actions, rights to punitive damages, common law rights of contribution,
        any
        rights under insurance policies issued or underwritten by the other Party
        or
        Parties or any of its or their Affiliates and any rights under agreements
        between the Companies or the Subsidiaries and the Sellers or any other Affiliate
        of the Companies, even
        if caused in whole or in part by the negligence (whether sole, joint or
        concurrent), strict liability or other legal fault of any released
        Person,
        or
        a pre-existing condition, but
        excluding, however, any remaining balance owed by DEPI, DOTEPI, Reserves,
        any
        Company or any Subsidiary to any other Affiliate at the end of the Closing
        Date
        for provision of goods or services, or employment-related costs, or other
        ordinary course of business expenses, with respect to the ownership or operation
        of the Assets, the Companies or the Subsidiaries. Without limiting the
        generality of the preceding sentence, Purchaser agrees that from and after
        Closing its only remedy with respect to any Seller’s breach of its covenants and
        agreements in Article 6
        shall be
        the indemnity of DEPI in Section 12.2(b),
        as
        limited by the terms of this Article 12.

    

     

    (d) “Damages,”
for
      purposes of this Article 12,
      shall
      mean the amount of any actual liability, loss, cost, expense, claim, award
      or
      judgment incurred or suffered by any Indemnified Person arising out of or
      resulting from the indemnified matter, whether attributable to personal injury
      or death, property damage, contract claims, torts or otherwise, including
      reasonable fees and expenses of attorneys, consultants, accountants or other
      agents and experts reasonably incident to matters indemnified against, and
      the
      costs of investigation and/or monitoring of such matters, and the costs of
      enforcement of the indemnity; provided,
      however,
      that
“Damages” shall not include any adjustment for Taxes that may be assessed on
      payments under this Article 12
      or for
      Tax benefits received by the Indemnified Person as a consequence of any Damages.
      Notwithstanding the foregoing, Purchaser and Sellers shall not be entitled
      to
      indemnification under this Section 12.2
      for, and
      Damages shall not include, (i) loss of profits, whether actual or
      consequential, or other consequential damages suffered by the Party claiming
      indemnification, or any punitive damages (other than loss of profits,
      consequential damages or punitive damages suffered by third persons for which
      responsibility is allocated between the Parties), (ii) any increase in
      liability, loss, cost, expense, claim, award or judgment to the extent such
      increase is caused by the actions or omissions of any Indemnified Person after
      the Closing Date or (iii) except with respect to claims for any Retained
      Seller Obligations or breach of Sections 6.8, 6.9, 6.11, 6.12 and 6.13, any
      liability, loss, cost, expense, claim, award or judgment that does not
      individually exceed One Million dollars ($1,000,000).

     

    (e) Any
      claim
      for indemnity under this Section 12.2
      by any
      current or former Affiliate, director, officer, employee or agent must be
      brought and administered by the applicable Party to this Agreement. No
      Indemnified Person other than Sellers and Purchaser shall have any rights
      against either Sellers or Purchaser under the terms of this Section 12.2
      except
      as may be exercised on its behalf by Purchaser or Sellers, as applicable,
      pursuant to this Section 12.2(e).
      Each of
      Sellers and Purchaser may elect to exercise or not exercise indemnification
      rights under this Section on behalf of the other Indemnified Persons affiliated
      with it in its sole discretion and shall have no liability to any such other
      Indemnified Person for any action or inaction under this Section.

     

     

    
      
        
        

      

      
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    (f) Without
      prejudice to those Sections, this Section 12.2
      shall
      not apply in respect of title matters, which are exclusively covered by
Article 3
      (provided the aforesaid is not a limitation on Section 4.13),
      Tax
      matters other than Section 4.5(a)-(d)
      and (f)-(i), which are exclusively covered by Article 2
      and
Article 9,
      or
      claims for Property Costs, which are covered exclusively by Sections 2.3,
      2.4 and 8.4.

     

    (g)    (i) Purchaser
      may at its option notify DEPI in writing on or before ten (10) Business
      Days prior to the Closing Date of any matter disclosed by a Phase I
      Investigation conducted by Purchaser pursuant to Section 6.1
      which
      Purchaser in good faith believes may constitute an Adverse Environmental
      Condition (an “Environmental
      Concern”).
      If
      the existence of such Adverse Environmental Condition is suspected to exist
      in
      connection with the Phase I Investigation but can only be determined through
      further investigation or testing of soil, groundwater, or other materials or
      information (a “Potential
      Adverse Environmental Condition”),
      Purchaser shall conduct a Phase II environmental assessment with respect thereto
      within the timeframe provided below and notify DEPI in writing in accordance
      with the procedure described below of any item or information resulting from
      that Phase II environmental assessment that the Purchaser believes in good
      faith
      constitutes an Adverse Environmental Condition. Purchaser agrees that it is
      not
      permitted to conduct a Phase II environmental assessment prior to
      Closing.

     

    (ii) If
      Purchaser delivers timely notice of an Environmental Concern as described above
      or of an alleged Adverse Environmental Condition confirmed through a Phase
      II
      environmental assessment as described below and DEPI confirms to its reasonable
      satisfaction that such Environmental Concern or alleged Adverse Environmental
      Condition may constitute an Adverse Environmental Condition or it is determined
      by the Environmental Arbitrator (defined below) that such Environmental Concern
      or alleged Adverse Environmental Condition may constitute an Adverse
      Environmental Condition (an “Agreed
      Environmental Concern”),
      Seller shall provide indemnification pursuant to, and subject to the limitations
      applicable to, Section 12.2(b)(vi) to the extent, and only to the extent, of
      the
      Environmental Liabilities that arise from or relate thereto.

     

    (iii) Except
      for such disclosure to DEPI, Purchaser and DEPI shall maintain the results
      of
      any environmental assessment and all findings in connection therewith strictly
      confidential, subject to the terms of (including the authorized disclosures
      pursuant to) the Confidentiality Agreement, as if each Party were the
“Recipient” and the other “DRI” thereunder. Each notice by Purchaser under
Section 12.2(g)(i)
      or
Section 12.2(g)(iv)
      shall
      include a reasonably detailed description of the Environmental Concern,
      including the relevant excerpt from the Phase I Investigation or Phase II
      environmental assessment, as appropriate.

     

    (iv) With
      respect to any Potential Adverse Environmental Condition, Purchaser, within
      ninety (90) days after the Closing Date may conduct a Phase II environmental
      assessment with respect thereto. Purchaser must notify Seller on 

     

     

    
      
        
        

      

      
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      or
        before
        one hundred eighty (180) days after the Closing Date of the existence of
        any
        alleged Adverse Environmental Conditions, and any such notice shall include
        a
        copy of any relevant Phase II environmental assessment reports or other relevant
        documentation supporting Purchaser’s determination.

    

     

    (v) If
      Purchaser and Seller do not agree on the existence of an Environmental Concern
      or an Adverse Environmental Condition, the matter shall be submitted to a
      nationally recognized independent environmental consulting firm mutually
      acceptable to both the Purchaser and Seller (the “Environmental
      Arbitrator”)
      for
      review and final determination. The Environmental Arbitrator shall conduct
      the
      arbitration proceedings in Houston, Texas in accordance with the Commercial
      Arbitration Rules of the American Arbitration Association, to the extent such
      rules do not conflict with the terms of this Section. The Environmental
      Arbitrator’s determination shall be made within thirty (30) days after
      submission of the matters in dispute and shall be final and binding on all
      Parties, without right of appeal. In determining whether an Environmental
      Concern or Adverse Environmental Condition exists, the Environmental Arbitrator
      shall be bound by the terms of Section 12.2(g)
      and the
      defined terms contained in this Agreement. The Environmental Arbitrator shall
      act as an expert for the limited purpose of determining whether an Environmental
      Concern or Adverse Environmental Condition exists and may not award damages,
      interest or penalties to any Party with respect to any matter. Seller and
      Purchaser shall each bear its own legal fees and other costs of presenting
      its
      case. DEPI shall bear one half and Purchaser shall bear one half of the costs
      and expenses of the Environmental Arbitrator.

     

    (vi) Purchaser
      shall not conduct (or have conducted on its behalf) any material remediation
      operations with respect to any claimed Damages relating to a breach of DEPI’s
      representation or warranty pursuant to Section 4.6
      or any
      Claim relating to the subject matter of such representation or warranty or
      any
      claim related to this Section 12.2(g)
      without
      first giving Sellers notice of the remediation with reasonable detail at least
      thirty (30) days prior thereto (or such shorter period of time as shall be
      required by any Governmental Authority, required to comply with Environmental
      Laws or required to respond to any emergency situation). Sellers shall have
      the
      option (in their sole discretion) to conduct (or have conducted on their behalf)
      such remediation operations. If Sellers shall not have notified Purchaser of
      their agreement to conduct such remediation operations within such specified
      period, then Purchaser may conduct (or have conducted on its behalf) such
      operations. Purchaser and Sellers agree that any remediation activities
      undertaken with respect to the Assets, whether conducted by Purchaser or
      Sellers, for which DEPI may have responsibility shall be reasonable in extent
      and cost effective and shall be designed or implemented in such a manner as
      to
      achieve the least stringent permanent risk-based closure or remediation standard
      applicable to the property in question under Environmental Laws, subject to
      the
      approval of any Governmental Authority with jurisdiction over such remediation
      activities, and as necessary to permit the continued use of the affected
      property in the same manner and for the same purposes for which it

     

     

    
      
        
        

      

      
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      was
        being
        used at the Closing Date, provided that continuation of the pre-Closing use
        is
        acceptable to the relevant Governmental Authority. All remediation activities
        conducted by Sellers under this Agreement shall be conducted by qualified
        personnel or contractors in a professional and workmanlike manner and, to
        the
        extent reasonably possible, so as not to substantially interfere with
        Purchaser’s operation of the Assets.

    

     

    (h) The
      Parties shall treat, for Tax purposes, any amounts paid under this Article 12
      as an
      adjustment to the applicable Interest Purchase Price(s) in the same manner
      as
      provided in Section 2.2(a).

     

    Section 12.3 
      Indemnification
      Actions.
       All
      claims for indemnification under Section 12.2
      shall be
      asserted and resolved as follows:

     

    (a) For
      purposes of this Article 12,
      the
      term “Indemnifying
      Person”
when
      used in connection with particular Damages shall mean the Person having an
      obligation to indemnify another Person or Persons with respect to such Damages
      pursuant to this Article 12,
      and the
      term “Indemnified
      Person”
when
      used in connection with particular Damages shall mean a Person having the right
      to be indemnified with respect to such Damages pursuant to this Article 12
      (including, for the avoidance of doubt, those Persons identified in Section 12.2(e)).

     

    (b) To
      make a
      claim for indemnification under Section 12.2,
      an
      Indemnified Person shall notify the Indemnifying Person of its claim, including
      the specific details of and specific basis under this Agreement for its claim
      (the “Claim
      Notice”).
      In
      the event that the claim for indemnification is based upon a claim by a third
      Person against the Indemnified Person (a “Claim”),
      the
      Indemnified Person shall provide its Claim Notice within thirty (30) days after
      the Indemnified Person has actual knowledge of the Claim and shall enclose
      a
      copy of all papers (if any) served with respect to the Claim; provided
      that the
      failure of any Indemnified Person to give notice of a Claim as provided in
      this
Section 12.3
      shall
      not relieve the Indemnifying Person of its obligations under Section 12.2
      except
      to the extent such failure results in insufficient time being available to
      permit the Indemnifying Person to effectively defend against the Claim or
      otherwise prejudices the Indemnifying Person’s ability to defend against the
      Claim. In the event that the claim for indemnification is based upon an
      inaccuracy or breach of a representation, warranty, covenant or agreement,
      the
      Claim Notice shall specify the representation, warranty, covenant or agreement
      that was inaccurate or breached.

     

    (c) In
      the
      case of a claim for indemnification based upon a Claim, the Indemnifying Person
      shall have thirty (30) days from its receipt of the Claim Notice to notify
      the
      Indemnified Person whether it admits or denies its obligation to defend the
      Indemnified Person against such Claim under this Article 12.
      If the
      Indemnifying Person does not notify the Indemnified Person within such thirty
      (30) day period regarding whether the Indemnifying Person admits or denies
      its
      obligation to defend the Indemnified Person, it shall be conclusively deemed
      obligated to provide such indemnification hereunder. The Indemnified Person
      is
      authorized, prior to and during such thirty (30) day period, to file any motion,
      answer or other pleading that it shall deem 

     

     

    
      
        
        

      

      
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      necessary
        or appropriate to protect its interests or those of the Indemnifying Person
        and
        that is not prejudicial to the Indemnifying Person.

    

     

    (d) If
      the
      Indemnifying Person admits its obligation, it shall have the right and
      obligation to diligently defend, at its sole cost and expense, the Claim. The
      Indemnifying Person shall have full control of such defense and proceedings,
      including any compromise or settlement thereof. If requested by the Indemnifying
      Person, the Indemnified Person agrees to cooperate in contesting any Claim
      which
      the Indemnifying Person elects to contest (provided, however, that the
      Indemnified Person shall not be required to bring any counterclaim or
      cross-complaint against any Person). The Indemnified Person may participate
      in,
      but not control, any defense or settlement of any Claim controlled by the
      Indemnifying Person pursuant to this Section 12.3(d),
      provided that the Indemnified Person may file initial pleadings as described
      in
      the last sentence of paragraph (c) above if required by court or procedural
      rules to do so within the thirty (30) day period in paragraph (c) above. An
      Indemnifying Person shall not, without the written consent of the Indemnified
      Person, settle any Claim or consent to the entry of any judgment with respect
      thereto that (i) does not result in a final resolution of the Indemnified
      Person’s liability with respect to the Claim (including, in the case of a
      settlement, an unconditional written release of the Indemnified Person from
      all
      further liability in respect of such Claim) or (ii) may materially and
      adversely affect the Indemnified Person (other than as a result of money damages
      covered by the indemnity).

     

    (e) If
      the
      Indemnifying Person does not admit its obligation or admits its obligation
      but
      fails to diligently defend or settle the Claim, then the Indemnified Person
      shall have the right to defend against the Claim (at the sole cost and expense
      of the Indemnifying Person, if the Indemnified Person is entitled to
      indemnification hereunder), with counsel of the Indemnified Person’s choosing,
      subject to the right of the Indemnifying Person to admit its obligation to
      indemnify the Indemnified Person and assume the defense of the Claim at any
      time
      prior to settlement or final determination thereof. If the Indemnifying Person
      has not yet admitted its obligation to indemnify the Indemnified Person, the
      Indemnified Person shall send written notice to the Indemnifying Person of
      any
      proposed settlement and the Indemnifying Person shall have the option for ten
      (10) days following receipt of such notice to (i) admit in writing its
      obligation for indemnification with respect to such Claim and (ii) if its
      obligation is so admitted, assume the defense of the Claim, including the power
      to reject the proposed settlement. If the Indemnified Person settles any Claim
      over the objection of the Indemnifying Person after the Indemnifying Person
      has
      timely admitted its obligation for indemnification in writing and assumed the
      defense of the Claim, the Indemnified Person shall be deemed to have waived
      any
      right to indemnity with respect to the Claim.

     

    (f) In
      the
      case of a claim for indemnification not based upon a Claim, the Indemnifying
      Person shall have thirty (30) days from its receipt of the Claim Notice to
      (i) cure the Damages complained of, (ii) admit its obligation to
      provide indemnification with respect to such Damages or (iii) dispute the
      claim for such Damages. If the Indemnifying Person does not notify the
      Indemnified Person within such thirty (30) day period that it has cured the
      Damages or that it disputes the claim for such Damages, the

     

     

    
      
        
        

      

      
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      Indemnifying
        Person shall be conclusively deemed obligated to provide indemnification
        hereunder.

    

     

    Section 12.4 
      Casualty
      and Condemnation.
       If, after the date of this Agreement but prior to the Closing Date, any
      portion of the Assets is destroyed or damaged by fire or other casualty or
      is
      expropriated or taken in condemnation or under right of eminent domain,
      Purchaser shall nevertheless be required to close. In the event that the amount
      of the costs and expenses associated with repairing and/or restoring all Assets
      affected by any such casualty or the Allocated Values, determined in the same
      manner as a Title Defect in accordance with Section 3.5(g),
      for all
      Units and Wells taken in a condemnation or pursuant to right of eminent domain
      exceeds one percent (1%) of the Unadjusted Purchase Price, Sellers must elect
      by
      written notice to Purchaser prior to Closing either (i) to cause the Assets
      affected by any casualty to be repaired or restored, at Sellers’ sole cost, as
      promptly as reasonably practicable (which work may extend after the Closing
      Date), (ii) to indemnify Purchaser through a document to be delivered at
      Closing reasonably acceptable to Sellers and Purchaser against any costs or
      expenses that Purchaser reasonably incurs to repair or restore the Assets
      subject to any casualty or (iii) to treat the costs and expenses associated
      with repairing or restoring the Assets affected by such casualty or taking
      the
      Allocated Value for any Unit or Well taken as a breach of DEPI’s representation
      under Section 3.1,
      but
      without regard to the limitations in Section 3.5(g)
      (other
      than Section 3.5(g)(v)(B)).
      In
      each case with respect to clauses (i), (ii) or (iii) above, Sellers shall retain
      (or, if applicable, receive an assignment from the Company or Wholly-Owned
      Subsidiary owning the affected properties of) all rights to insurance and other
      claims against third Persons with respect to the casualty or taking except
      to
      the extent the Parties otherwise agree in writing.

     

    Section 12.5 
      Limitation
      on Actions.

     

    (a) The
      representations and warranties of the DEPI and Purchaser in Articles 4 and
      5 and the covenants and agreements of the Parties in Article 6,
      (excluding Sections 6.6 and 6.19) and the corresponding representations and
      warranties given in the certificates delivered at Closing pursuant to
      Sections 8.2(j) and 8.3(d), as applicable, shall survive the Closing until
      May 31, 2008 except that the
      representations and warranties of DEPI in Sections 4.2(e) [Title to
      Shares], 4.2(f) [The Shares], 4.3(e) [Title to Equity Interests of the
      Subsidiaries], 4.4(f) [The Equity Interests] and 4.5(e) [Taxes and Assessments]
      and the corresponding representations and warranties given in the certificate
      delivered at Closing pursuant to Section 8.2(j), in respect thereof, shall
      survive the Closing without time limit
      and the
      representations and warranties of DEPI in Section 4.18 shall terminate at
      Closing.

     

                          The
      remainder of this Agreement shall survive the Closing without time limit except
      as may otherwise be expressly provided herein. Representations, warranties,
      covenants
      and agreements shall be of no further force and effect after the date of their
      expiration, provided that there shall be no termination of any bona fide claim
      asserted pursuant to this Agreement with respect to such a representation,
      warranty, covenant or agreement prior to its expiration date.

     

    (b) The
      indemnities in Sections 12.2(a)(iii), 12.2(a)(iv), 12.2(b)(i) and
      12.2(b)(ii) shall terminate as of the termination date of each respective
      representation, 

     

     

    
      
        
        

      

      
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      warranty,
        covenant or agreement that is subject to indemnification, except in each
        case as
        to matters for which a specific written claim for indemnity has been delivered
        to the Indemnifying Person on or before such termination date. The indemnities
        in Sections 12.2(a)(i), 12.2(a)(ii), 12.2(a)(v),
        12.2(b)(iii) (to the extent related to Sections 12.1(a), 12.1(b), 12.1(d)
        12.1(e), 12.1(f) or 12.1(g)) and 12.4 shall continue without time limit.
        The
        indemnities in Sections 12.2(b)(iii) (to the extent related to Sections 12.1(c),
        12.1(h) and 12.1(i)), 12.2(b)(iv), 12.2(b)(v), 12.2(b)(vi), 12.2(b)(vii)
        and
        12.2(b)(viii) shall terminate one (1) year after Closing, except in each
        case at
        to matters for which a specific written claim for indemnity has been delivered
        to the Indemnifying Person on or before such termination
        date.

    

     

    (c) DEPI
      shall not have any liability for any indemnification under Section 12.2
      until
      and unless the aggregate amount of the liability for all Damages for which
      Claim
      Notices are delivered by Purchaser exceeds Forty Million  dollars
      ($40,000,000), and then only to the extent such Damages exceed Forty
      Million  dollars ($40,000,000). This Section shall not limit
      (i) indemnification for breach of those representations and warranties that
      survive without time limit under the first sentence of Section 12.5(a),
      (ii) indemnification for any breach of those covenants contained in
      Sections 6.8, 6.9, 6.11, 6.12, 6.13 and 6.14 and (iii) indemnification
      for the Retained Seller Obligations nor shall Damages for those matters count
      toward the Forty Million  dollars ($40,000,000). 

     

    (d) Notwithstanding
      anything to the contrary contained elsewhere in this Agreement, DEPI shall
      not
      be required to indemnify Purchaser under this Article 12
      for
      aggregate Damages in excess of Four Hundred Million dollars ($400,000,000);
      provided, however, that this Section 12.5(d)
      shall
      not limit DEPI’s liability with respect to breaches of (i) those
      representations and warranties that
      survive without time limit under the first sentence of Section 12.5(a),
      (ii) those covenants contained in Sections 6.8, 6.9, 6.12 and 6.13 and
      (iii) the Retained Seller Obligations.

     

    (e) The
      amount of any Damages for which an Indemnified Person is entitled to indemnity
      under this Article 12
      shall be
      reduced by the amount of insurance proceeds realized by the Indemnified Person
      or its Affiliates with respect to such Damages (net of any collection costs,
      and
      excluding the proceeds of any insurance policy issued or underwritten by the
      Indemnified Person or its Affiliates).

     

     

    ARTICLE 13.

    MISCELLANEOUS

     

    Section 13.1 
      Counterparts. 
      This Agreement may be executed in counterparts, each of which shall be deemed
      an
      original instrument, but all such counterparts together shall constitute but
      one
      agreement.
      Delivery
      of an executed counterpart signature page by facsimile is as effective as
      executing and delivering this Agreement in the presence of the other Parties
      to
      this Agreement.

     

     

    
      
        
        

      

      
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    Section 13.2 
      Notices. 
      All notices that are required or may be given pursuant to this Agreement shall
      be sufficient in all respects if given in writing, in English and delivered
      personally, by telecopy or by recognized courier service, as
      follows:

     

    If
      to
      Sellers:                       Consolidated
      Natural Gas Company

                                            120
      Tredegar
      Street

                                            Richmond,
      Virginia
      23219

                                            Attention:
      Christine
      M. Schwab

                                            Telephone:
      (804)
      819-2142

                                            Facsimile:
      (804)
      819-2214

     

    With
      a
      copy
      to:                                                             Dominion
      Resources, Inc.

                                            120
      Tredegar
      Street

                                            Richmond,
      Virginia
      23219

                                            Attention: Mark
      O.
      Webb

                                            Telephone: (804)
      819-2140

                                            Telecopy: (804)
      819-2202

     

    and
      with
      a copy
      to:                                                      Baker
      Botts L.L.P.

                                            910
      Louisiana
      Street

                                            Houston,
      Texas
      77002

                                            Attention:
       David
      F.
      Asmus

                                            Telephone: (713)
      229-1539

                                            Telecopy: (713)
      229-2839

     

    If
      to
      Purchaser:                                                             L
      O &
G Acquisition Corp. 

                                            667
      Madison Avenue,
      7th Floor 

                                            New
      York, NY 10021

                                            Attention:
       Corporate
      Secretary 

                                            Telephone: (212)
      521-2000

                                            Telecopy:
       (212)
      521-2997

     

    With
      a
      copy
      to:                                                            Vinson
      & Elkins LLP

                                            First
      City
      Tower

                                            1001
      Fannin
      Street

                                            Suite
      2500

                                            Houston,
      Texas
      77002-6760

                                            Attention:
       Douglas
      S. Bland

                                            Telephone: (713)
      758-2498

                                            Telecopy:
       (713)
      615-5649

     

    Either
      Party may change its address for notice by notice to the other in the manner
      set
      forth above. All notices shall be deemed to have been duly given at the time
      of
      receipt by the Party to which such notice is addressed.

     

    Section 13.3 
      Sales
      or Use Tax, Recording Fees and Similar Taxes and Fees.
       Notwithstanding anything to the contrary in Article 9,
      Purchaser shall bear any sales, use, excise, 

     

     

    
      
        
        

      

      
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      real
        property transfer, registration, documentary, stamp or transfer Taxes, recording
        fees and similar Taxes and fees incurred and imposed upon, or with respect
        to,
        the property transfers to Purchaser (or its Affiliates) contemplated hereby.
        Should any Seller, Company or Subsidiary or Affiliate of any of them pay
        prior
        to Closing, or should Seller or any continuing Affiliate of Seller pay after
        Closing, any amount for which Purchaser is liable under this Section 13.3,
        Purchaser shall, promptly following receipt of Sellers’ invoice, reimburse the
        amount paid. If such transfers or transactions are exempt from any such taxes
        or
        fees upon the filing of an appropriate certificate or other evidence of
        exemption, the Parties shall cooperate to timely furnish such certificate
        or
        evidence. Sellers shall provide reasonable assistance to Purchaser in
        establishing the applicability of any exemption from sales, use, real property
        transfer or any other transfer Taxes that is based wholly or partially on
        facts
        and information related to Sellers, including, but not limited to, providing
        Purchaser and taxing authorities access to books and records establishing
        the
        lack of prior similar sales activity and the ability of a particular Seller
        to
        separately establish income and expenses attributable to assets being
        transferred to Purchaser.

    

     

    Section 13.4 
      Expenses. 
      Except as provided in Section 6.7
      and in
Section 13.3,
      all
      expenses incurred by Sellers in connection with or related to the authorization,
      preparation or execution of this Agreement, and the Exhibits and Schedules
      hereto and thereto, and all other matters related to the Closing, including
      without limitation, all fees and expenses of counsel, accountants and financial
      advisers employed by Sellers, shall be borne solely and entirely by Sellers,
      and
      all such expenses incurred by Purchaser shall be borne solely and entirely
      by
      Purchaser.

     

    Section 13.5 
      Replacement
      of Bonds, Letters of Credit and Guarantees.
       The Parties understand that none of the bonds, letters of credit and
      guarantees, if any, posted by Sellers or any other Affiliate of the Companies
      or
      Subsidiaries (except the Companies and Subsidiaries) with any Governmental
      Authority or third Person and relating to the Companies, the Subsidiaries,
      or
      the Assets are to be transferred to Purchaser. On or before Closing, Purchaser
      shall obtain, or cause to be obtained in the name of Purchaser, replacements
      for
      such bonds, letters of credit and guarantees, and shall cause, effective as
      of
      the Closing, the cancellation or return to Sellers of the bonds, letters of
      credit and guarantees posted by Sellers and such Affiliates.
      Purchaser may also provide evidence that such replacements are not necessary
      as
      a result of existing bonds, letters of credit or guarantees that Purchaser
      has
      previously posted as long as such existing bonds, letters of credit or
      guarantees are adequate to secure the release of those posted by Sellers. Except
      for bonds, letters of credit and guarantees related primarily to the Excluded
      Assets, Schedule 13.5 identifies the bonds, letters of credit and
      guarantees posted by Sellers or any other Affiliate of the Companies or
      Subsidiaries (except the Companies and Subsidiaries) with respect to the E&P
      Business as of the date noted on such schedule.

     

    Section 13.6 
      Records.

     

    (a) Within
      ten (10) days after the Closing Date, Sellers shall deliver or cause to be
      delivered to Purchaser any Records that are in the possession of Sellers or
      its
      Affiliates (except the Subsidiaries that are not Wholly-Owned Subsidiaries),
      subject to Section 13.6(b).

     

     

    
      
        
        

      

      
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    (b) Sellers
      may retain the originals of those Records relating to Tax and accounting matters
      and provide Purchaser, at its request, with copies of such Records that pertain
      to (i) non-income Tax matters solely related to the Companies, the
      Subsidiaries or the Additional Assets; or (ii) if such Records are
      necessary for Purchaser to adequately prepare Tax Returns or to contest a Tax
      Audit pursuant to Article 9 with respect to any taxable period falling partly
      in
      the Pre-Closing Period and partly in the Post-Closing Period, with copies of
      such Records that are required by Purchaser for such Tax Records or Tax Audit.
      Sellers may retain copies of any other Records.

     

    (c) Purchaser,
      for a period of seven (7) years following the Closing, (and subject to
      Purchaser’s additional obligations under Section 9.4)
      shall:

     

    (i) retain
      the Records,

     

    (ii) provide
      Sellers, their Affiliates, and their respective officers, employees and
      representatives with access to the Records during normal business hours for
      review and copying at Sellers’ expense and

     

    (iii) provide
      Sellers, their Affiliates, and their respective officers, employees and
      representatives with access, during normal business hours, to materials received
      or produced after Closing relating to

     

    (A) Sellers’
      obligations under Article 9
      (including to prepare Tax Returns and to conduct negotiations with Tax
      Authorities), or

     

    (B) any
      claim
      for indemnification made under Section 12.2
      of this
      Agreement (excluding, however, attorney work product and attorney-client
      communications with respect to any such claim being brought by Purchaser under
      this Agreement)

     

    for
      review and copying at Sellers’ expense and to the Companies’, the Wholly-Owned
      Subsidiaries’ and their Affiliates’ personnel for the purpose of discussing any
      such matter or claim.

     

    (d) Sellers
      shall provide Purchaser, its Affiliates and their respective officers, employees
      and representatives with access, during normal business hours, to Excluded
      Records of the type described in Clauses (A) and (F) of Section 1.2(a)(xi)
      and Clause (D) of Section 1.2(j)(xi) for review and copying at Purchaser’s
      expense, to the extent necessary for Purchaser and/or its Affiliates to defend
      any action, suit or proceeding before any Governmental Authority or arbitration
      or any investigation by any Governmental Authority, provided that Purchaser,
      its
      Affiliates and their respective officers, employees and representatives shall
      have no access to any such Excluded Records that are also excluded by virtue
      of
      Sections 1.2(a)(xi)(B), (C), (D) or (E) or Sections 1.2(j)(xi)(A), (B) or
      (C).

     

    Section 13.7 
      Name
      Change.
       On the Closing Date, Purchaser shall make the filings required in each
      Company’s and Wholly-Owned Subsidiary’s jurisdiction of organization to
      eliminate the name “Dominion” and any variants thereof from the name of each
      Company and 

     

     

    
      
        
        

      

      
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      Wholly-Owned
        Subsidiary. As promptly as practicable, but in any case within one hundred
        twenty (120) days after the Closing Date, Purchaser shall (i) make all
        other filings (including assumed name filings) required to reflect the change
        of
        name in all applicable records of Governmental Authorities and
        (ii) eliminate the use of the name “Dominion” and variants thereof from the
        Assets and the E&P Business, and, except with respect to such grace period
        for eliminating existing usage, shall have no right to use any logos, trademarks
        or trade names belonging to any Seller or any of its Affiliates. Purchaser
        shall
        be solely responsible for any direct or indirect costs or expenses resulting
        from the change in use of name, and any resulting notification or approval
        requirements.

    

     

    Section 13.8 
      Governing
      Law
      and Venue.
       This Agreement and the legal relations between the Parties shall be
      governed by and construed in accordance with the laws of the State of Texas,
      without regard to principles of conflicts of laws that would direct the
      application of the laws of another jurisdiction.

     

    Section 13.9 
      Jurisdiction;
      Service of Process.
       Each Party consents to personal jurisdiction in any action brought in the
      United States federal courts located in the State of Texas (or, if jurisdiction
      is not available in the United States federal courts located in the State of
      Texas, to personal jurisdiction in any action brought in the state and federal
      courts located in the State of Delaware) with respect to any dispute, claim
      or
      controversy arising out of or in relation to or in connection with this
      Agreement, and each of the Parties hereto agrees that any action instituted
      by
      it against the other with respect to any such dispute, controversy or claim
      (except to the extent a dispute, controversy, or claim arising out of or in
      relation to or in connection with the allocation of the Purchase Price pursuant
      to Section 2.2,
      the
      determination of a Title Defect Amount or Title Benefit Amount pursuant to
      Section 3.5(i),
      the
      determination of Purchase Price adjustments pursuant to Section 8.4(b)
      or the
      determination of an Adverse Environmental Condition pursuant to Section 12.2(g)(vi)
      is
      referred to an expert pursuant to those Sections)
      will be
      instituted exclusively in the United States District Court for the Southern
      District of Texas, Houston Division (or, if jurisdiction is not available in
      the
      United States District Court for the Southern District of Texas, Houston
      Division, then exclusively in the state or federal courts located in the State
      of Delaware). The Parties hereby waive trial by jury in any action, proceeding
      or counterclaim brought by any Party against another in any matter whatsoever
      arising out of or in relation to or in connection with this
      Agreement.

     

    Section 13.10 
      Captions. 
      The captions in this Agreement are for convenience only and shall not be
      considered a part of or affect the construction or interpretation of any
      provision of this Agreement.

     

    Section 13.11 
      Waivers.
       Any failure by any Party to comply with any of its obligations, agreements
      or conditions herein contained may be waived by the Party to whom such
      compliance is owed by an instrument signed by the Party to whom compliance
      is
      owed and expressly identified as a waiver, but not in any other manner. No
      waiver of, or consent to a change in, any of the provisions of this Agreement
      shall be deemed or shall constitute a waiver of, or consent to a change in,
      other provisions hereof (whether or not similar), nor shall such waiver
      constitute a continuing waiver unless otherwise expressly provided.

     

     

    
      
        
        

      

      
        102

        
          

        

      

      
        
        

      

    

     

     

    Section 13.12 
      Assignment.
       No Party shall assign or otherwise transfer all or any part of this
      Agreement, nor shall any Party delegate any of its rights or duties hereunder,
      without the prior written consent of the other Party and any transfer or
      delegation made without such consent shall be void; provided, however, Purchaser
      shall be entitled in accordance with Section 8.2 to assign its rights (but
      not
      its obligations) to purchase specific portions of the Interests under this
      Agreement to one or more directly or indirectly wholly-owned Affiliates of
      Purchaser that satisfy the requirements of Section 5.11
      where
      applicable. Subject to the foregoing, this Agreement shall be binding upon
      and
      inure to the benefit of the Parties hereto and their respective successors
      and
      assigns.

     

    Section 13.13 
      Entire
      Agreement.
       The Confidentiality Agreement, this Agreement and the documents to be
      executed hereunder and the Exhibits and Schedules attached hereto constitute
      the
      entire agreement among the Parties pertaining to the subject matter hereof,
      and
      supersede all prior agreements, understandings, negotiations and discussions,
      whether oral or written, of the Parties pertaining to the subject matter
      hereof.

     

    Section 13.14 
      Amendment.
       This Agreement may be amended or modified only by an agreement in writing
      signed by Sellers and Purchaser and expressly identified as an amendment or
      modification.

     

    Section 13.15 
      No
      Third-Person Beneficiaries.
       Nothing in this Agreement shall entitle any Person other than Purchaser
      and Sellers to any claim, cause of action, remedy or right of any kind, except
      the rights expressly provided to the Persons described in Section 6.6
      and
Section 12.2(d).

     

    Section 13.16 
      Guarantees.
       Simultaneously with execution of this Agreement, Sellers have caused DRI
      to deliver to Purchaser a guarantee for the performance of Sellers’ obligations
      under this Agreement and any other agreements executed pursuant to this
      Agreement in substantially the form attached hereto as Exhibit “H” and
      Purchaser has caused Loews Corporation to deliver to Seller a guarantee for
      the
      performance of Purchaser’s obligations under this Agreement and any other
      agreements executed pursuant to this Agreement in substantially the form
      attached hereto as Exhibit “I.”

     

    Section 13.17 
      References.
      

     

    In
      this
      Agreement:

     

    (a) References
      to any gender includes a reference to all other genders;

     

    (b) References
      to the singular includes the plural, and vice versa;

     

    (c) Reference
      to any Article or Section means an Article or Section of this
      Agreement;

     

    (d) Reference
      to any Exhibit or Schedule means an Exhibit or Schedule to
      this Agreement, all of which are incorporated into and made a part of this
      Agreement;

     

     

    
      
        
        

      

      
        103

        
          

        

      

      
        
        

      

    

     

     

    (e) Unless
      expressly provided to the contrary, “hereunder”, “hereof”, “herein” and words of
      similar import are references to this Agreement as a whole and not any
      particular Section or other provision of this Agreement;

     

    (f) References
      to “$” or “dollars” means United States dollars; and

     

    (g) “Include”
      and “including” shall mean include or including without limiting the generality
      of the description preceding such term.

     

    Section 13.18 
      Construction.
       Purchaser is capable of making such investigation, inspection, review and
      evaluation of the Assets as a prudent purchaser would deem appropriate under
      the
      circumstances, including with respect to all matters relating to the Assets,
      their value, operation and suitability. Each of Sellers and Purchaser has had
      the opportunity to exercise business discretion in relation to the negotiation
      of the details of the transaction contemplated hereby. This Agreement is the
      result of arm’s-length negotiations from equal bargaining positions. It is
      expressly agreed that this Agreement shall not be construed against any Party,
      and no consideration shall be given or presumption made, on the basis of who
      drafted this Agreement or any particular provision thereof.

     

    Section 13.19 
      Limitation
      on Damages. 
      Notwithstanding anything to the contrary contained herein, except with respect
      to damages under Section 9.1(g)
      for loss
      of Tax benefits (or the incurrence of Taxes) attributable to failure to obtain
      a
      step-up in Tax basis, none of Purchaser, Sellers or any of their respective
      Affiliates shall be entitled to consequential, special or punitive damages
      in
      connection with this Agreement and the transactions contemplated hereby (other
      than consequential, special or punitive damages suffered by third Persons for
      which responsibility is allocated between the Parties) and each of Purchaser
      and
      Sellers, for itself and on behalf of its Affiliates, hereby expressly waives
      any
      right to consequential, special or punitive damages in connection with this
      Agreement and the transactions contemplated hereby (other than consequential,
      special or punitive damages suffered by third Persons for which responsibility
      is allocated between the Parties).

     

    
      
        
        

      

      
        104

        
          

        

      

      
        
        

      

    

     

    
       

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

       

       

      
        	 	
                SELLER:

              	
                DOMINION
                  EXPLORATION & PRODUCTION, INC.

              

      

      

      
        	 	 	
                Name:

              	/s/
	 	 	
                Title:

              	 

      

      

      

      
        	 	
                SELLER:

              	
                DOMINION
                  ENERGY, INC.

              

      

      

      
        	 	 	
                Name:

              	/s/
	 	 	
                Title:

              	 

      

      

      

      
        	 	
                SELLER:

              	
                DOMINION
                  OKLAHOMA TEXAS EXPLORATION & 

              
	 	 	
                PRODUCTION,
                  INC.

              

      

      

      
        	 	 	
                Name:

              	/s/
	 	 	
                Title:

              	 

      

      

      

      
        	 	
                SELLER:

              	
                DOMINION
                  RESERVES, INC.

              

      

      

      
        	 	 	
                Name:

              	/s/
	 	 	
                Title:

              	 

      

      

      

      
        	 	
                SELLER:

              	
                LDNG
                  TEXAS HOLDINGS, LLC

              

      

      

      
        	 	 	
                Name:

              	/s/
	 	 	
                Title:

              	 

      

      

      

      
        	 	
                SELLER:

              	
                DEPI
                  TEXAS HOLDINGS, LLC

              

      

      

      
        	 	 	
                Name:

              	/s/
	 	 	
                Title:

              	 

      

      

      

      
        	 	
                PURCHASER:

              	
                L
                  O
                  & G ACQUISITION CORP.

              

      

      

      
        	 	 	
                Name:

              	/s/
	 	 	
                Title:

              	 

      

      

       

    

    
      
        
        

      

      
        105

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