Document:

Exhibit

Exhibit 10.03
PORTIONS OF THIS AGREEMENT HAVE BEEN OMITTED BASED UPON A REQUEST FOR CONFIDENTIAL TREATMENT. THE USE OF THE FOLLOWING NOTATION IN THIS AGREEMENT INDICATES THAT THE CONFIDENTIAL PORTION HAS BEEN OMITTED PURSUANT TO SUCH REQUEST FOR CONFIDENTIAL TREATMENT AND THE OMITTED MATERIAL HAS BEEN FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION: [REDACTED]

TRANSITION SERVICES AGREEMENT
BY AND BETWEEN
HARTFORD FIRE INSURANCE COMPANY
and
HARTFORD LIFE, INC.
EFFECTIVE DATE:  May 31, 2018

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Table of Contents
Page
ARTICLE IDEFINITIONS; INTERPRETATION    1
Section 1.1Definitions    1
Section 1.2Other Definitions    2
Section 1.3Interpretation    3
ARTICLE IITRANSITION SERVICES    4
Section 2.1Services    4
Section 2.2Requests for Additional Services    5
Section 2.3Special Projects    5
Section 2.4Third-Party Consents    6
Section 2.5Service Modifications    6
Section 2.6Personnel; Subcontractors    7
Section 2.7Compliance with Policies    7
Section 2.8Non-Exclusivity    7
Section 2.9Title to Provider Property; Management and Control    7
Section 2.10Cooperation    8
ARTICLE IIISERVICE STANDARDS, PROJECT MANAGERS, REGULATORY MATTERS AND MIGRATION PLAN    8
Section 3.1Service and Special Project Standards    8
Section 3.2Regulatory Matters    9
Section 3.3Project Managers    9
Section 3.4Migration of Services    10
Section 3.5Dependencies    10
Section 3.6Prohibitive Event    11
Section 3.7Shared Contracts    12
ARTICLE IVSERVICE FEES AND FEE DISPUTE RESOLUTION    12
Section 4.1Service Fees    12
Section 4.2Reimbursement of Expenses    13
Section 4.3Invoices; Payment    13
Section 4.4Fee and Accounting Dispute Resolution    13

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Section 4.5Taxes    14
ARTICLE VTERM AND TERMINATION    14
Section 5.1Period of Service and Special Project    14
Section 5.2Termination of Individual Services and Special Projects    14
Section 5.3Termination of Agreement    15
Section 5.4Survival    16
ARTICLE VIINDEMNIFICATION AND LIMITATION OF LIABILITY    16
Section 6.1Indemnification by Provider    16
Section 6.2Indemnification by HLI    16
Section 6.3Notice of Claim; Defense    16
Section 6.4Limitation on Set-off    19
Section 6.5Disclaimer of Warranties    19
Section 6.6Limitation on Liability    19
Section 6.7Exclusive Remedies    19
Section 6.8Infringement or Violation of Law    20
ARTICLE VIIMISCELLANEOUS PROVISIONS    20
Section 7.1Further Assurances    20
Section 7.2License    20
Section 7.3Notices    20
Section 7.4Severability    21
Section 7.5Entire Agreement    21
Section 7.6Amendment    22
Section 7.7Governing Law    22
Section 7.8Jurisdiction; Venue    22
Section 7.9Dispute Escalation    22
Section 7.10Jury Waiver    23
Section 7.11No Third-Party Beneficiaries    23
Section 7.12Expenses    23
Section 7.13Waivers    23
Section 7.14Relationship Between the Parties    23
Section 7.15Treatment of Confidential Information    23
Section 7.16Assignment    24

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Section 7.17Force Majeure    24
Section 7.18Execution in Counterparts    24

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TRANSITION SERVICES AGREEMENT
This TRANSITION SERVICES AGREEMENT (this “Agreement”) dated May 31, 2018 (the “Effective Date”) is by and between Hartford Fire Insurance Company, on behalf of itself and its Affiliates providing any Service(s) and/or Special Project(s) (“Provider”) and Hartford Life, Inc., on behalf of itself and its Affiliates receiving any Service(s) and/or Special Project(s) (“HLI”).  Provider and HLI are each a “Party” and collectively, the “Parties.”
WHEREAS, Hartford Holdings, Inc., an Affiliate of Provider (“Seller”) and Hopmeadow Acquisition, Inc. (“Buyer”) entered into that certain Stock and Asset Purchase Agreement on December 3, 2017 (the “Purchase Agreement”), pursuant to which Buyer agreed to purchase and assume, or cause to be purchased and assumed, from Seller, all of the issued and outstanding equity interests of Hartford Life, Inc. and certain assets and liabilities comprising the Business (as defined in the Purchase Agreement), by means of certain reinsurance and administrative service arrangements and a transfer of the Shares, the Acquired Assets and the Assumed Liabilities (each as defined in the Purchase Agreement); and
WHEREAS, in order to provide for an orderly transition in the conduct of the Business by HLI after the consummation of the transactions contemplated by the Purchase Agreement, Provider will, for an interim period after the Effective Date and subject to the terms and conditions set forth herein, provide or cause to be provided certain services and/or special projects to and on behalf of HLI and its Affiliates (as defined in the Purchase Agreement).
NOW, THEREFORE, in consideration of the mutual covenants and agreements hereinafter set forth, it is hereby agreed as follows:

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Article I 
DEFINITIONS; INTERPRETATION

Section 1.1    Definitions.  Any capitalized term used but not defined herein shall have the meaning set forth in the Purchase Agreement.  The following terms shall have the respective meanings set forth below throughout this Agreement:
“Abandon” or “Abandonment” means the actual intentional refusal by Provider to provide or perform the material elements of the Services in breach of its obligations under this Agreement.
“Excluded Service” means any service identified on Schedule 2.2.
“Fully Loaded” means (a) for any Service or Special Project charged at an hourly rate, the fully loaded labor costs, including benefits, overhead, rent and similar costs with respect to the individual performing the Service or Special Project, to be allocated on an hourly basis, (b) for any unit-cost Service, the fully loaded unit cost and (c) for any Service or Special Project provided through a third-party provider, the fee charged by the third-party provider plus any actual out-of-pocket expenses incurred by Provider in administering such third-party Service or Special Project; provided, that with respect to clauses (a), (b), and (c) such costs shall include all applicable costs, even if they were historically allocated on separate line items but attributable to the same Service or Special Project; provided, further, that with respect to clauses (a) and (b), to the extent applicable, the cost charged to HLI shall not exceed the amount Provider charges its Affiliates for the same Service or substantially similar services. 
“Project Managers” means the two (2) individuals, one designated by Provider and the other designated by HLI, who are primarily responsible for administering this Agreement as described in Section 3.3.
“Service Modifications” means, collectively, Provider Service Modifications and Vendor Service Modifications.
“Special Project” means any service, project or task listed on Schedule 2.3 or that HLI requests Provider to provide or perform and that Provider has agreed in writing to provide or perform in accordance with Section 2.3, which service, project or task does not fall within the scope of the Services.
“Standard Fee” means (a) for any Service provided directly by Provider, Provider’s Fully Loaded, historical cost to the Business for such Service, and (b) for any Service provided by a third party, including as part of a Service managed or administered by Provider, the Fully Loaded costs associated with such Service without mark-up.
“Third-Party Costs” means for any Service or Special Project, all out-of-pocket fees, costs and expenses associated with such Service or Special Project paid or payable by Provider or its Affiliates to non-Affiliated third parties, including payments to Subcontractors and third-party vendors (including software, service and system license, subscription, usage and access fees), in each case determined without duplication of the Standard Fee.

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Section 1.2    Other Definitions.  In addition, the following capitalized terms are defined in the Sections or other provisions of this Agreement set forth below:
“Agreement”    Preamble
“Claim Notice”    Section 6.3(a)
“Confidential Information”    Section 7.15
“Effective Date”    Preamble
“Fees”    Section 4.1(b)
“Force Majeure”    Section 7.17
“HLI”    Preamble
“HLI Indemnified Parties”    Section 6.1 
“Inadvertently Omitted Service”    Section 2.2(a)
“Indemnified Party”    Section 6.3(a)
“Indemnifying Party”    Section 6.3(a)
“Invoice”    Section 4.3
“Migration Committee”    Section 3.4
“Migration Plan”    Section 3.4
“Parties” or “Party”    Preamble
“Prohibitive Event”    Section 3.6
“Provider”    Preamble
“Provider Indemnified Parties”    Section 6.2
“Provider Property”    Section 2.9(a)
“Provider Service Modifications”    Section 2.5(a)
“Purchase Agreement”    Recitals
“Requested Special Project”    Section 2.3
“Seller”    Recitals
“Service Fees”    Section 4.1(a)
“Service Period”    Section 5.1
“Services”    Section 2.1
“Special Project Fees”    Section 4.1(b)
“Subcontractor”    Section 2.6(a)
“Third-Party Claim”    Section 6.3(a)
“Third-Party Consent”    Section 2.4

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“Vendor Service Modifications”    Section 2.5(a)

Section 1.3    Interpretation.  Interpretation of this Agreement shall be governed by the following rules of construction:  (a) words in the singular shall be held to include the plural and vice versa, and words of one gender shall be held to include the other gender as the context requires; (b) references to Articles, Sections, paragraphs, Exhibits and Schedules are references to the Articles, Sections, paragraphs, Exhibits and Schedules to this Agreement unless otherwise specified; (c) references to “$” shall mean United States dollars; (d) the word “including” and words of similar import when used in this Agreement shall mean “including without limiting the generality of the foregoing,” unless otherwise specified; (e) the word “or” shall not be exclusive; (f) the table of contents, articles, titles and headings contained in this Agreement are for reference purposes only and shall not affect in any way the meaning or interpretation of this Agreement; (g) this Agreement shall be construed without regard to any presumption or rule requiring construction or interpretation against the party drafting or causing any instrument to be drafted; (h) the Schedules and Exhibits referred to herein shall be construed with and as an integral part of this Agreement to the same extent as if they were set forth verbatim herein; (i) unless the context otherwise requires, the words “hereof,” “herein” and “hereunder” and words of similar import when used in this Agreement shall refer to this Agreement as a whole and not to any particular provision of this Agreement; (j) all terms defined in this Agreement shall have the defined meanings when used in any certificate or other document made or delivered pursuant hereto unless otherwise defined therein; (k) any agreement or instrument defined or referred to herein or any agreement or instrument that is referred to herein means such agreement or instrument as from time to time amended, modified or supplemented, including by waiver or consent, and references to all attachments thereto and instruments incorporated therein; (l) any statute or regulation referred to herein means such statute or regulation as amended, modified, supplemented or replaced from time to time (and, in the case of any statute, includes any rules and regulations promulgated under such statute), and references to any section of any statute or regulation include any successor to such section; (m) all time periods within or following which any payment is to be made or act is to be done shall be calculated by excluding the date on which the period commences and including the date on which the period ends and by extending the period to the first succeeding Business Day if the last day of the period is not a Business Day; (n) references to any Person include such Person’s predecessors or successors, whether by merger, consolidation, amalgamation, reorganization or otherwise; (o) references to any Contract (including this Agreement) or organizational document are to the Contract or organizational document as amended, modified, supplemented or replaced from time to time, unless otherwise stated; and (p) any references to “fraud” with respect to any party shall mean intentional (and not constructive) fraud by such party.

ARTICLE II     
TRANSITION SERVICES

Section 2.1    Services.  Provider shall provide, or shall cause its Affiliates or their respective Subcontractors (as defined below) (in the case of Subcontractors, if permitted hereunder) to provide, to HLI and its Affiliates, as applicable, on the terms and conditions set forth herein, the services set forth on Schedule 2.1. The services listed on Schedule 2.1 together with any additional 

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services agreed upon by the Parties in accordance with Section 2.2 shall be collectively referred to herein as the “Services”.  Except for the Services and Special Projects expressly set forth in this Agreement, or otherwise agreed to by Provider in accordance with this Agreement, Provider shall be under no obligation to provide any services or special projects to HLI, any of HLI’s Affiliates or any third party.  Provider shall provide the knowledge transfer necessary to facilitate the separation of the Business, including Information Technology systems, from that of the other businesses of Provider and its Affiliates (other than the Acquired Companies) and the integration and migration of the Business into the business and operations of the Acquired Companies, to the extent such knowledge and skills have not been fully provided to HLI and its Affiliates by Provider and its Affiliates through other arrangements; provided that if Provider cannot reasonably accommodate such knowledge transfer in accordance with the foregoing, Provider and HLI will discuss the extent to which such knowledge transfer can be reasonably accommodated, and any such additional knowledge transfer shall be deemed to be a Requested Special Project and shall be subject to Section 2.3.  In the event that HLI or any of its Affiliates internally restructures, reorganizes or transfers such transferred portion of the Business to another Affiliate, Provider shall continue to perform, or cause to be performed, the Services to such Affiliate insofar as it conducts any portion of the Business.  Provider shall at all times reasonably assist and reasonably cooperate with HLI and any Affiliate of HLI that supports the Business to facilitate the arrangements contemplated hereby.  

Section 2.2    Requests for Additional Services.
(a)    Inadvertently Omitted Services.  If a service other than an Excluded Service was provided by Provider or its Affiliates to the Business during the ninety (90) days prior to the Effective Date but was inadvertently omitted from Schedule 2.1 by the Parties, as mutually determined by the Parties in good faith (an “Inadvertently Omitted Service”), and if HLI or any of its Affiliates desires that Provider perform such Inadvertently Omitted Service hereunder, HLI may submit a written request describing such service to Provider’s Project Manager, which written request must be received by Provider’s Project Manager within ninety (90) days after the Effective Date.  Upon receipt of such written request by Provider’s Project Manager, such Inadvertently Omitted Service and the associated service fees shall be documented in writing by the Parties as an amendment to Schedule 2.1 in accordance with Section 7.6, and such Inadvertently Omitted Service shall be included in the Services.  Buyer’s cost for any such Inadvertently Omitted Service shall be the Standard Fee (unless mutually agreed otherwise by the Parties).  If the Parties are unable to reach an agreement on whether a service is an Inadvertently Omitted Service, the dispute shall be resolved pursuant to Section 7.9.
(b)    Other Additional Services.  If after the Effective Date HLI or any of its Affiliates desires that any additional services, other than Excluded Services and Inadvertently Omitted Services, be provided hereunder, HLI may submit a written request describing such services to Provider’s Project Manager, and the Project Managers of each of HLI and Provider shall meet to discuss such request, and if Provider is reasonably capable of providing such additional services, and Provider or its Affiliates had made such additional services available prior to the Effective Date, Provider shall provide such additional services.  The Parties will negotiate the terms of providing additional services (including the associated fees payable by HLI) in good faith.  Any such additional 

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services and the associated service fees shall be documented in writing by the Parties as an amendment to Schedule 2.1 in accordance with Section 7.6, and such services shall be included in the Services.

Section 2.3    Special Projects.  Provider shall perform (or cause to be performed) the Special Projects identified on Schedule 2.3 in accordance with the terms hereof for and on behalf of HLI, and HLI shall pay the Special Project Fees identified thereon.  In addition, if HLI requests that Provider provide a Special Project that is not identified on Schedule 2.3 (a “Requested Special Project”), which request must include a description of the services required to be performed in conjunction with such Requested Special Project, Provider shall, within a reasonable period of time after the receipt of such request, which in no instance shall be more than thirty (30) Business Days after the date of receipt of such request, provide HLI with either (a) a written proposal for such Requested Special Project, giving reasonable consideration to other demands on Provider’s resources under this Agreement and otherwise, or (b) notice of its decision not to accept such Requested Special Project, in which case Provider shall have no obligation (except as set forth in the following proviso) to perform such Requested Special Project; provided, that if Provider is reasonably capable of performing any Requested Special Project, Provider shall perform such Requested Special Project, except to the extent that performing such Requested Special Project creates an unreasonable burden for Provider.  If the Parties agree in writing on such proposal, including the fees for any Requested Special Project, such Requested Special Project shall be deemed a Special Project, and Provider shall perform (or cause to be performed) such Special Project in accordance with the terms set forth in such proposal and the terms of this Agreement.  Provider shall not unreasonably withhold, condition or delay any proposal or agreement as to such proposal. If the Parties do not agree on such proposal (subject to the foregoing sentence), Provider shall have no further obligation under this Agreement with respect to such Requested Special Project.

Section 2.4    Third-Party Consents.  If any Service or Special Project cannot be performed or provided in accordance with this Agreement without obtaining a Third-Party Consent with respect to any third-party agreement, the Parties acknowledge and agree that such Third-Party Consent shall be treated in accordance with the applicable terms and conditions of Section 7.03(d)(i) and (iv) of the Purchase Agreement, which are incorporated into this Agreement by reference, provided, that if Provider is unable to obtain such Third-Party Consent, then Provider shall be obligated to use reasonable best efforts to provide the relevant Services or Special Projects through an alternative source until such appropriate consents or approvals are obtained. 

Section 2.5    Service Modifications.
(a)    With respect to the Services and Special Projects provided by Provider or its Affiliates, Provider may reasonably supplement, modify, substitute or otherwise alter any of the Services or Special Projects (collectively, “Provider Service Modifications”) from time to time in a manner consistent with supplements, modifications, substitutions or alterations made for similar services provided or otherwise made available by Provider or its Affiliates to itself or each other, provided such Provider Service Modifications would not have a material adverse effect on the corresponding Service or Special Project.  With respect to the Services and Special Projects provided by the vendors or service providers of Provider or its Affiliates, such vendors or service providers 

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may be permitted to supplement, modify, substitute or otherwise alter any of the Services or Special Projects (collectively, “Vendor Service Modifications”) from time to time in a manner consistent with supplements, modifications, substitutions or alterations made for similar services provided or otherwise made available to Provider or its Affiliates (if applicable); provided, however, if any such vendors or service providers may be restricted under any third party agreements from making any Vendor Service Modifications that could have more than an immaterial adverse effect on the corresponding Service or Special Project, Provider shall use reasonable best efforts to require the vendor to comply with such restrictions under such third party agreement.  Subject to the foregoing, if any Service Modification will or does result in an increase of the Fees (as defined below) or expenses payable by HLI for the applicable Service(s) or Special Project(s) or causes the level of service for the applicable Service(s) or Special Project(s) to fall below the levels set forth in Section 3.1, Provider shall provide HLI with notice of the same.  Upon receiving any such notice, HLI may terminate the affected Service(s) and/or Special Project(s) in accordance with Section 5.2.  If HLI has not provided notice of termination of the affected Service(s) and/or Special Project(s) within fifteen (15) days after the date of such Service Modification notice, Provider may thereafter deliver to HLI a second notice to the same effect as the notice described above.  If HLI has not provided notice of termination of the affected Service(s) and/or Special Project(s) within fifteen (15) days after the date of such second notice, HLI shall be deemed to have consented to the payment of such increased Fees and expenses and/or the decrease in the level of any such Service(s).
(b)    HLI may request that Provider increase the level at which the Services are performed, and Provider shall reasonably consider providing such service level, on mutually agreed terms and pricing; provided, that such a request shall be treated as an additional service pursuant to Section 2.2.

Section 2.6    Personnel; Subcontractors.
(a)    Provider may, directly or through one or more Affiliates, hire or engage one or more subcontractors or other third parties (each, a “Subcontractor”) to perform any or all of its obligations under this Agreement; provided, that if Provider engages a Subcontractor exclusively to perform Services under this Agreement, Provider must obtain HLI’s prior written consent to use such Subcontractor to perform the Services, which consent shall not be unreasonably withheld, conditioned or delayed.  Notwithstanding anything to the contrary, Provider shall always remain responsible for the performance of the Services and the Special Projects hereunder in accordance with the provisions of this Agreement.
(b)    Provider shall retain and employ a staff, or contractors as permitted hereunder, with the skill, diligence and expertise necessary to perform the Services in accordance with the provisions of this Agreement.

Section 2.7    Compliance with Policies.  In connection with the receipt of the Services and any Special Projects hereunder, HLI shall, and shall cause its Affiliates and each of its and their Representatives to, comply with all of the applicable security procedures, privacy policies and other policies of Provider, its Affiliates and any Subcontractor as are then in effect and transmitted to HLI in writing (including, without limitation, Provider’s Information Security Requirements attached as Exhibit A).  To the extent any such procedures or policies are amended, supplemented, modified 

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or replaced, or new policies are implemented, Provider shall furnish such changes to HLI in advance of implementation thereof. 

Section 2.8    Non-Exclusivity.  Nothing in this Agreement prevents HLI, during the term of this Agreement, from obtaining any of the Services or Special Projects from any other Person or from providing any such services to itself using its own facilities and employees.  

Section 2.9    Title to Provider Property; Management and Control.
(a)    Except with respect to the licensed intellectual property covered by Section 7.2 or items otherwise conveyed to HLI or any of its Affiliates pursuant to the Transaction Agreements, all intellectual property, procedures, methods, systems, strategies, tools, equipment, facilities and other resources used by Provider or any of its Affiliates or any Subcontractor in connection with the provision of Services and any Special Projects hereunder (collectively, the “Provider Property”) shall remain the property of Provider, its Affiliates or such Subcontractor (as applicable) and, except as otherwise provided herein, shall at all times be under the sole direction and control of Provider, its Affiliates or such Subcontractor.
(b)    Except as otherwise provided herein, management of, and control over, the provision of the Services and Special Projects (including the determination or designation at any time of Provider Property, employees and other resources of Provider, its Affiliates or any Subcontractor to be used in connection with the provision of the Services and Special Projects) shall reside solely with Provider; provided, that Provider will promptly provide HLI with notice of any restrictions or terms and conditions imposed by any third party used by Provider in connection with performing the Services and Special Projects, including with respect to HLI’s rights in any work product, services and deliverables provided as part of the Services and Special Projects; provided further that, Provider shall remain responsible for the performance of the Services and Special Projects in accordance with this Agreement.  Without limiting the generality of the foregoing, all labor matters relating to any employees of Provider, its Affiliates and any Subcontractor shall be within the exclusive control of such parties, and neither HLI nor any of its Affiliates shall take any action affecting, or have any rights with respect to, such matters.  Provider shall be solely responsible for the payment of all salary and benefits and all income tax, social security taxes, unemployment compensation, workers’ compensation tax, other employment taxes or withholdings and premiums and remittances with respect to employees of Provider and its Affiliates used to provide Services and Special Projects.

Section 2.10    Cooperation.  Each Party agrees to perform all obligations under this Agreement in good faith and to reasonably cooperate with the other Party in all matters relating to the performance and receipt of the Services and Special Projects, in order to facilitate the performance and receipt of the Services and the Special Projects and the activities contemplated hereby.  Each Party shall timely notify the other in advance of any material changes to such Party’s operating environment or personnel that could have a material adverse effect on any Services or Special Projects to reasonably minimize the effect of such changes, it being understood that no change shall (A) materially disrupt or interfere with the performance or receipt of the Services or Special Projects (B) free either Party from its obligations under this Agreement or (C) diminish the 

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applicable service, security or quality levels.  Each Party shall cooperate with investigations by Governmental Authorities.

ARTICLE III     
SERVICE STANDARDS, PROJECT MANAGERS, REGULATORY MATTERS AND MIGRATION PLAN

Section 3.1    Service and Special Project Standards.  Provider shall provide the Services and the Special Projects (i) if Provider obtains such Services or Special Projects under a third-party agreement in effect prior to the date hereof and makes such services available to HLI and its Affiliates through such third-party agreement, for so long as such third-party agreement remains in effect, in substantially the same manner and using at least the same standard of care and degree of efficiency and quality as is required under, or may be reasonably claimed with respect to, such third-party agreement, if applicable; provided, that, for purposes of this clause (i) if Provider or any of its Affiliates has a consent right with respect to termination or modification of a third-party arrangement under which a Service or Special Project is provided exclusively for HLI and its Affiliates, such consent shall not be given without the prior written consent of HLI or (ii) to the extent the foregoing clause (i) is not applicable, in substantially the same manner and using at least the same standard of care and degree of efficiency and quality that Provider, its Affiliates and its Subcontractors permitted hereunder used during the twelve (12)-month period prior to the Effective Date in performing such Services and Special Projects or substantially equivalent services for the Business; provided, that, for purposes of this clause (ii) if such Service, Special Project or substantially equivalent service was not provided by Provider prior to the Effective Date, then such Service or Special Project shall be provided in the manner agreed by the Parties in writing.  Provider shall use reasonable best efforts to select and supervise any Subcontractors providing Services hereunder.  Provider is not in the business of providing transition services to third parties, and under no circumstances shall Provider be held accountable to a higher standard of care than that set forth herein.  With respect to Services and Special Projects that are provided directly by Provider and its Affiliates, Provider will use reasonable best efforts to ensure that there are employees, or contractors as permitted hereunder, in place with adequate skill and knowledge to perform the Services and Special Projects in accordance with this Agreement.

Section 3.2    Regulatory Matters.  Each Party shall comply with all Laws then in effect pertaining to such Party’s business and operations and its performance of this Agreement.  Nothing in this Agreement obligates either Party to act in breach of the requirements of any Law, including written policy statements and by-laws of securities commissions, insurance and other regulatory authorities.  Provider shall cooperate with HLI and its Affiliates and any regulatory authorities that supervise HLI or any of its Affiliates in connection with meeting any regulatory requirements applicable to the Services.  Assisting HLI or any of its Affiliates in complying with any new Law enacted or proposed after the Effective Date shall be deemed a Special Project to the extent that such enactment or proposal had not been anticipated by Provider or HLI or any of its Affiliates prior to the Effective Date.  If either Party receives notice of, or otherwise becomes aware of, any inquiry, investigation, examination, audit, proceeding or other action by or on behalf of any Governmental Authority relating to the Services, HLI or Provider, or any of their respective Affiliates, as the case may be, shall promptly notify the other Party thereof, whereupon the Parties shall cooperate to 

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resolve such matter in a mutually satisfactory manner and shall act reasonably in light of the Parties’ respective interests in the matter at issue. 

Section 3.3    Project Managers.  
(a)    Provider and HLI shall each appoint a Project Manager, each of whom shall serve as the primary contact point for the Project Manager’s respective Party with respect to issues that may arise out of the performance of this Agreement.  Either of Provider or HLI may replace its respective Project Manager by giving prior written notice to the other Party’s Project Manager stating the name, title and contact information for such Party’s new Project Manager.  The Parties shall cause the Project Managers to meet, either in person or telephonically, at least once monthly, or more frequently if reasonably necessary, to discuss and document (for purposes of this Section 3.3, in a manner agreed upon by the Parties in writing, as may be necessary to facilitate an orderly transition) the status of the Services and any Special Projects, and to manage and document open issues related to this Agreement and performance hereunder, discuss any planned termination dates for particular Services and Special Projects, and review and document service levels achieved (and, if any, missed) in the previous month, as well as non-achievement of targets and corrective actions taken or planned, if applicable.  In addition, either Project Manager may call a meeting with the other Project Manager to address time critical issues related to the Services and/or Special Projects.  Project Managers shall update the documentation maintained pursuant to this Section 3.3 regularly between meetings required hereunder so as to ensure that all such meetings are effective.
(b)    Except as otherwise provided herein, the Project Managers shall have the authority to resolve any dispute hereunder, including by agreeing on how disputed amounts will be allocated between the Parties.

Section 3.4    Migration of Services.  The Parties acknowledge and agree that the Services to be provided hereunder are transitional in nature and are intended to provide HLI and its Affiliates with reasonable time to develop the internal resources and capacities (or to arrange for third-party providers) to provide such Services.  Prior to Closing, the Parties shall negotiate in good faith a plan for migration of the Services and Special Projects, as well as Information Technology systems related to the Business, and the principles governing the sharing and separation of information between the Parties (the “Migration Plan”).  Subject to Section 3.5 and Section 3.6, the Parties shall perform their respective obligations in the Migration Plan and shall use reasonable best efforts to achieve the milestones included in the Migration Plan in accordance with the relevant time frame set forth therein.  The Migration Plan shall include details related to the formation of a committee (the “Migration Committee”), the general purpose of which shall be to provide oversight for the Migration Plan.  The Migration Committee shall be composed of Samir Sravastava, Christopher Dagnault, Ellen Below, Robert Siracusa, Peter Sannizzaro (optional), Emily Pollack (optional), Jane Wolak, Jennifer Sala, Sarah Ransford and Bill Bloom (optional) and shall meet at least once per month during the Service Period.  Neither the Migration Committee nor any member of the Migration Committee shall have the right to make binding commitments on either Party.  HLI and its Affiliates shall bear their own costs and expenses incurred in performing its obligations under the Migration Plan and shall reimburse Provider for all of the costs and expenses that are incurred by Provider and its Affiliates after the Effective Date in performing their obligations under the Migration Plan; 

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provided, that each such reimbursable cost and expense in excess of $1,000 shall be pre-approved in writing by HLI.  The Migration Committee shall maintain appropriately detailed documentation and other records to the extent necessary to document implementation of the Migration Plan.

Section 3.5    Dependencies.  Notwithstanding the foregoing, both Parties acknowledge that some of the Services or Special Projects to be provided hereunder require instructions, data, information, cooperation, assistance and access from HLI or any of its Affiliates or are dependent in whole or in part on completion of prior acts by HLI or its Affiliates (including, without limitation, prior deliverables under the Migration Plan), which HLI or any of its Affiliates shall provide to Provider or otherwise complete as reasonably required for Provider to provide or procure such Services and Special Projects in the manner and with the timing contemplated.  If HLI or any of its Affiliates fails to provide such instructions, data, information, cooperation, assistance or access, fails to perform a prerequisite act or fails to take any other action that is reasonably necessary for Provider’s performance of the Services or Special Projects, Provider shall have no liability for failing to perform such Service or Special Project in full accordance with such instructions to the extent resulting from such failure.

Section 3.6    Prohibitive Event.
(a)    Without limiting the generality of Section 3.5, the following are prohibitive events for the purpose of this Section 3.6 (each a “Prohibitive Event”) in relation to each Service or Special Project:
		
	(i)
	failure by HLI to comply with its obligations under this Agreement;

		
	(ii)
	defects in the completeness, accuracy or quality of applicable information provided by or on behalf of HLI or any of its Affiliates;

		
	(iii)
	changes in Laws;

		
	(iv)
	the performance of any Service or Special Project as required by this Agreement causing Provider to violate any Laws;

		
	(v)
	any configurations of or modifications to any system of Provider that are requested by HLI or any of its Affiliates from time to time and agreed to by Provider;

		
	(vi)
	any modification by HLI or any of its Affiliates of any of its processes or systems to the extent such modification adversely impacts the provision of a Service;

		
	(vii)
	deficiency in the suitability, quality or performance of any software, equipment or system provided by or on behalf of HLI or any of its Affiliates to the extent such software, equipment or system was not used by HLI or its Affiliates prior to the date hereof;

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	(viii)
	the presence of viruses, Trojan horses, worms or other disabling features in HLI’s or any of its Affiliates’ systems;

		
	(ix)
	any defects in the completeness, accuracy or quality of network links provided by third party vendors provided by or on behalf of HLI or any of its Affiliates;

		
	(x)
	failure by HLI or any of its Affiliates to provide Provider with access to its applicable systems to the extent and for the duration that is reasonably necessary to enable Provider to provide the relevant Service; and

		
	(xi)
	any other prohibitive events mutually agreed in writing.

(b)    To the extent that the existence or occurrence of any such Prohibitive Event adversely affects the provision of any Service or Special Project, Provider is relieved of its obligation to provide the affected Service or Special Project to the extent so affected but only:  (i) for that part of the Service or Special Project affected by the Prohibitive Event; (ii) for the duration of that effect plus a reasonable period of time to recommence the affected Service(s) or Special Project(s); and (iii) to the extent that Provider uses reasonable best efforts to mitigate that effect, and gives HLI notice of the adverse effect reasonably promptly after becoming aware of the Prohibitive Event and its adverse effect.  To the extent that a Prohibitive Event results from facts and circumstances that are not materially caused or contributed to by HLI or its Affiliates, Provider will cooperate in obtaining for HLI and its Affiliates an acceptable alternative source for such services as promptly as practicable, and all aggregate costs and expenses in connection with obtaining such alternative source of services shall be borne fifty percent (50%) by Provider and fifty percent (50%) by HLI.  To the extent that a Prohibitive Event results from facts and circumstances materially caused or contributed to by HLI or its Affiliates, Provider will reasonably cooperate in obtaining for HLI and its Affiliates an acceptable alternative source for such services as promptly as practicable, but all costs in connection with obtaining such alternative source of services shall be borne entirely by HLI, provided, that Provider shall have no further obligations with respect to a Prohibitive Event that results from facts and circumstances that were intentionally caused or intentionally contributed to by HLI or its Affiliates.  Further, no Party shall be liable for any Loss whatsoever arising out of any interruption of a Service or Special Project or delay or failure to perform under this Agreement caused by Force Majeure.
(c)    The Parties shall propose and attempt to agree upon any steps to be taken under or in accordance with this Agreement in order to address each adverse effect of the type contemplated in Section 3.6(b).  Following the cessation of the effect of the Prohibitive Event, Provider shall as soon as practicable resume providing that part of the Service which was affected by the Prohibitive Event.

Section 3.7    Shared Contracts.  If and as requested by HLI, Provider shall, or shall cause its Affiliates to, assign to HLI or any of its Subsidiaries any Shared Contract (as defined in the Purchase Agreement) (a) that will expire or terminate, as applicable, prior to the end of the Service Period and (b) that Provider and its Affiliates do not intend on renewing.  Provider shall provide 

12

Buyer with prior written notice of any such termination or expiration no later than sixty (60) days before the anticipated termination or expiration date, as applicable, of each such Shared Contract. 

ARTICLE IV     
SERVICE FEES AND FEE DISPUTE RESOLUTION

Section 4.1    Service Fees.
(a)    In consideration of the provision of the Services, HLI shall pay to Provider the fees set forth in Schedule 2.1 for the Services (the “Service Fees”).  Subject to Section 5.2 (including, without limitation, Provider’s reasonable ability to avoid costs incurred in connection with such terminated Service), if HLI terminates any particular Service in accordance with this Agreement with an effective date of termination occurring prior to the end of any calendar month during the applicable Service Period, to the extent that the Service Fee for such Service is not based on usage, such Service Fee for such month shall be determined by multiplying the amount of such monthly Service Fee by a fraction, the numerator of which is the number of days that have then-elapsed during such month, and the denominator of which is the number of total days in such month.  The Service Fees do not include Taxes, which shall be paid for by HLI in accordance with Section 4.5 below.
(b)    In consideration of the provision of the Special Projects, HLI shall pay to provider the fees set forth on Schedule 2.3 for the Special Projects (“Special Project Fees” and together with the Service Fees, the “Fees”).

Section 4.2    Reimbursement of Expenses.  To the extent not already covered by the Fees, HLI shall reimburse Provider in accordance with Provider’s generally applicable policies for all out-of-pocket expenses actually incurred by Provider or any of its Affiliates or Subcontractors in connection with the provision of the Services and Special Projects to HLI and its Affiliates; provided, that each such reimbursable expense in excess of $1,000 shall be pre-approved in writing by HLI.  Subject to the proviso in the preceding sentence, such reimbursable expenses shall include, without limitation, the following:
(a)    the costs and expenses of any travel, including transportation, lodging and meals, of any employee or agent of Provider, its Affiliates or its Subcontractors who is required to travel to any location other than Provider’s facilities in connection with the performance of the Services and Special Projects.
(b)    all Third-Party Costs actually incurred by Provider or any of its Affiliates or Subcontractors for any Service or Special Project.  Except to the extent governed by Section 2.4, if Provider is required to procure or renew any license, subscription, access or usage rights from third-parties at any time prior to or during the Service Period (or period for the performance of a Special Project, as applicable) for purposes of providing Services and/or Special Projects, and such rights require a fixed or minimum period of time, HLI shall pay for the entire Third-Party Costs associated with or attributable to such rights for the period beginning on the Effective Date, even if the applicable Service Period (or period for the performance of a Special Project, as applicable) expires or is terminated prior to the end of such fixed or minimum period of time; provided, that 

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Provider shall use reasonable best efforts to mitigate (and as soon as reasonably practicable terminate the accrual of) such Third-Party Costs.

Section 4.3    Invoices; Payment.  Following the end of each calendar month during the term of this Agreement, Provider shall prepare and deliver to HLI an invoice in a format compatible with HLI’s current systems setting forth the Fees due under Section 4.1 and expense reimbursement amounts due under Section 4.2 for all Services (and Special Projects, if any) provided during such month (each an “Invoice”).  Upon request, Provider shall deliver to HLI such additional documentation related to the Fees and expenses as may reasonably requested by HLI to verify the amount of any Fees and expenses.  All amounts reflected in an Invoice shall be due and payable within thirty (30) calendar days following receipt by HLI of the Invoice.  Unless otherwise mutually agreed by the Parties, payments shall be made by check or electronic funds transmission.  If Provider so requests, HLI shall pay the portion of the applicable Fee related to the cost of a third-party service passed through to HLI and its Affiliates directly to such third party.

Section 4.4    Fee and Accounting Dispute Resolution.  If a good faith dispute arises as to the calculation of any Invoice, the Parties shall use their reasonable best efforts to reach an agreement with respect to such disputed amount.  If the respective individuals at HLI and Provider responsible for preparing and reviewing Invoices, as applicable, are unable to reach an agreement within five (5) Business Days after HLI has notified Provider that there is a dispute, then the Project Managers of HLI and Provider shall confer and use their reasonable best efforts to come to a resolution of the dispute.  If the Parties are unable to agree upon a resolution of the dispute within five (5) Business Days after the Project Managers have conferred, then the Parties may pursue any remedy permitted under this Agreement to resolve such dispute.

Section 4.5    Taxes.  Any sales Tax, transfer Tax, value-added Tax, goods and services Tax or similar Tax (including any such Taxes that are required to be withheld, but excluding all other Taxes including Taxes based upon or calculated by reference to income, receipts or capital, which such excluded Taxes shall be solely the liability of Provider) imposed on the Fees or expense reimbursements paid to Provider pursuant to this Article IV shall be paid by HLI to Provider; provided that upon HLI’s reasonable written request Provider shall provide HLI with written notice that, and information reasonably sufficient to verify that, such Taxes have been paid or are payable by Provider; provided further that HLI shall not reimburse Provider for any Taxes pursuant to this Section 4.5 if they have been recovered by Provider as a pre-approved expense.  In any case where Provider has not previously paid such Taxes, Provider shall timely make payment of such Taxes to the appropriate Governmental Authority upon receipt of the reimbursement from HLI.

ARTICLE V     
TERM AND TERMINATION

Section 5.1    Period of Service and Special Project.  Provider shall provide or cause to be provided each of the Services for a period of time beginning on the Effective Date (or such other date agreed by the Parties, as set forth in Schedule 2.1) and ending on the date on which such Service is scheduled to expire, as set forth in Schedule 2.1 and subject to any renewal periods identified in Schedule 2.1 or extension as set forth below (the “Service Period”), unless otherwise terminated as provided herein.  Provider shall provide or cause to be provided each of the Special Projects for the 

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period of time beginning on the Effective Date (or such other date agreed by the Parties, as set forth in Schedule 2.3), and ending on the earlier of (x) the date of completion of such Special Project and (y) the end date specified in the separate mutual agreement of the Parties.  No Service or Special Project shall be provided at any time after the end of the twelve (12) month period following the Effective Date; provided, that HLI may request two extensions, during which Provider shall continue to provide the then-current Services or Special Projects.  The first extension shall be for a period not to exceed eight (8) months and the fees for such Services and/or Special Projects provided during the first extension shall be increased by three percent (3%) over the applicable charge or charges for such Services and/or Special Projects charged during the initial Service Period.  Following such first extension, HLI may request one additional extension, not to exceed four (4) additional months, during which Provider shall continue to provide the then-current Services or Special Projects, but the fees for such Services and/or Special Projects during the second extension shall be six percent (6%) over the applicable charge or charges for such Services and/or Special Projects during the initial Service Period.

Section 5.2    Termination of Individual Services and Special Projects.  HLI, in its sole discretion, may terminate any specific Service or Special Project, with or without cause, upon providing Provider not less than forty-five (45) calendar days’ notice describing the Service or Special Project to be terminated and the effective date of termination.  Upon such early termination date, except to the extent Provider is reasonably able to avoid costs incurred by it in connection with providing such terminated Service or Special Project as a result of such early termination, charges for such terminated Service or Special Project shall continue to accrue, and HLI shall continue to pay Provider for them until the earlier of (i) the date that is six (6) months from the effective date of such early termination and (ii) the date on which such Service or Special Project would otherwise terminate in accordance with this Agreement, and HLI shall continue to be responsible for costs of any other Services and/or Special Projects that continue to be provided hereunder; provided, that Provider will use reasonable best efforts to mitigate (and as soon as reasonably practicable terminate the accrual of) costs with respect to any terminated Service or Special Project.  If the termination of the specified Service or Special Project would also require the termination or partial termination of, or otherwise affect the provision of, any other Services or Special Projects, then Provider shall advise HLI in writing of the same as soon as reasonably practicable after receiving HLI’s notice.  HLI shall, within fifteen (15) Business Days of receiving such notification from Provider, notify Provider of whether HLI is withdrawing its termination notice; otherwise, such termination shall be final and shall be deemed to include the originally specified Services and/or Special Projects as well as the other Services and/or Special Projects described by Provider.  Except as set forth above, no such termination of any Service or Special Project shall in any way affect Provider’s obligation to provide or make available any other Service or Special Project provided or required pursuant to this Agreement or HLI’s obligation to pay for the same, all in accordance with the terms of this Agreement.

Section 5.3    Termination of Agreement.
(a)    This Agreement (or any particular Service or Special Project) may be terminated with immediate effect as follows:

15

		
	(i)
	at any time upon the mutual written agreement of the Parties, which agreement must state the effective date of termination;

		
	(ii)
	on the date on which all Services and Special Projects have been completed or expired, if applicable, or have been earlier terminated by HLI pursuant to Section 5.2; or

		
	(iii)
	by Provider or by HLI when the non-terminating Party is in material breach of any of its obligations under this Agreement and has failed to remedy the breach within thirty (30) calendar days after receipt of notice from the terminating Party of the breach, such notice to reference this Section 5.3(a)(iii) and to describe in reasonable detail the breach.

(b)    Following any termination of this Agreement or any particular Service or Special Project, Provider shall use reasonable best efforts to transfer any records maintained by Provider hereunder to the extent pertaining to such terminated and transferred Services or Special Projects, as applicable, to HLI or to its designee; provided, that Provider may redact any portions of such records that do not pertain to the terminated or transferred Services or Special Projects.  HLI and its Affiliates shall cooperate with Provider to allow Provider to complete the transfer of such Services or Special Projects, as applicable, to HLI or its designee as early as is commercially reasonable to do so.  In addition, following any such termination, Provider shall cooperate with HLI in connection with any regulatory or Tax audits relating to any period during which Provider was providing Services or Special Projects hereunder.

Section 5.4    Survival.  The provisions of Article I, Article IV, Section 5.3(b), Section 5.4, Article VI and Article VII shall survive termination of this Agreement.

ARTICLE VI     
INDEMNIFICATION AND LIMITATION OF LIABILITY

Section 6.1    Indemnification by Provider.  Provider shall defend and hold harmless HLI, its Affiliates, and their respective Representatives and their respective successors and permitted assigns (collectively, the “HLI Indemnified Parties”) from and against all Losses from third-party claims asserted against, imposed upon or incurred by any HLI Indemnified Party arising out of or related to (a) Provider’s or its Affiliate’s gross negligence in the performance of any Services under this Agreement, willful misconduct or fraud, (b) any action taken by Provider or its Affiliates that breaches, or results in a breach, of Provider’s confidentiality obligations under this Agreement, (c) Provider’s or its Affiliate’s material failure to comply with applicable Law (except to the extent HLI or any of its Affiliates directed Provider or any of its Affiliates to take any action, or to forego taking any action, that resulted in such failure to comply), or (d) if the applicable Service or Special Project has been modified or altered by Provider (except to the extent HLI or any of its Affiliates directed Provider or any of its Affiliates to perform the modification or alteration), any claim of infringement of any intellectual property right of any third party arising from Provider’s or its Affiliate’s provision or HLI’s receipt of the applicable Service or Special Project or any portion thereof to the extent such infringement is caused by the modification or alteration.

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Section 6.2    Indemnification by HLI.  HLI shall defend and hold harmless Provider and its Affiliates and their respective Representatives and their respective successors and permitted assigns (collectively, the “Provider Indemnified Parties”) from and against all Losses from third-party claims asserted against, imposed upon or incurred by any Provider Indemnified Party arising out of or related to (a) HLI’s or any of its Affiliates’ gross negligence, willful misconduct or fraud, (b) any action taken by HLI or any of its Affiliates that breaches, or results in a breach, of HLI’s confidentiality obligations under this Agreement or (c) HLI’s or any of its Affiliates’ material failure to comply with applicable Law (except to the extent Provider directed HLI or any of its Affiliates to take any action, or to forego taking any action, that resulted in such failure to comply) or (d) if the applicable Service or Special Project has been modified or altered by Provider, to the extent HLI or any of its Affiliates directed Provider or any of its Affiliates to perform the modification or alteration, any claim of infringement of any intellectual property right of any third party arising from Provider’s provision or HLI’s or any of its Affiliates’ receipt of the applicable Service or Special Project or any portion thereof to the extent such infringement is caused by the modification or alteration.

Section 6.3    Notice of Claim; Defense.
(a)    A Party who may be entitled to be indemnified and held harmless under Section 6.1 or Section 6.2 (the “Indemnified Party”), shall promptly notify Provider or HLI, as applicable (the “Indemnifying Party”) in writing of any pending or threatened claim or demand by a third party that the Indemnified Party has determined has given or could reasonably give rise to such a right under this Agreement (including a pending or threatened claim or demand asserted by a third party against the Indemnified Party, such claim being a “Third-Party Claim”), describing in reasonable detail the facts and circumstances with respect to the subject matter of such claim or demand; provided, that the failure to provide such notice shall not release the Indemnifying Party from any of its obligations under this Article VI except to the extent the Indemnifying Party is actually prejudiced by such failure.  Following delivery of a notice of a Third-Party Claim, the Indemnified Party shall deliver to the Indemnifying Party, promptly (and in any event within ten (10) Business Days) after the Indemnified Party’s receipt thereof, copies of all notices and documents (including court papers) received by the Indemnified Party relating to such Third-Party Claim.
(b)    Following receipt of a notice of a Third-Party Claim from an Indemnified Party pursuant to Section 6.3(a), the Indemnifying Party may assume the defense and control of such Third-Party Claim by delivery of written notice to the Indemnified Party within sixty (60) days after receipt of the Indemnified Party’s claims notice pursuant to Section 6.3(a); provided, that the Indemnifying Party shall not be entitled to assume or maintain control of the defense of any Third-Party Claim and shall pay the reasonable fees, costs and expenses of counsel retained by the Indemnified Party to the extent (i) the Third-Party Claim relates to or arises in connection with any criminal proceeding, action, indictment, allegation or investigation against the Indemnified Party or (ii) the Third-Party Claim would reasonably be expected to result in an injunction or equitable relief against the Indemnified Party that would, in each case, have a material effect on the operation of the business of such Indemnified Party or any of its Affiliates.  The assumption of the defense by the Indemnifying Party of any Third-Party Claim shall not require the Indemnifying Party to 

17

agree to be liable for any Losses in respect of such Third-Party Claim and shall be without prejudice to any rights or defenses of the Indemnifying Party in respect of whether the Indemnified Party is entitled to indemnification under this Article VI for any particular Loss or Losses.
(c)    The Indemnified Party may take any actions reasonably necessary to defend such Third-Party Claim prior to the time that it receives a notice from the Indemnifying Party as contemplated by Section 6.3(b).  If the Indemnifying Party assumes the defense of any Third-Party Claim in accordance with Section 6.3(b), the Indemnifying Party shall allow the Indemnified Party a reasonable opportunity to participate in the defense of such Third-Party Claim with its own counsel and at its own expense; provided, however, that notwithstanding the foregoing, the Indemnifying Party shall bear the reasonable fees, costs and expenses of one (1) such separate counsel if (i) the Indemnifying Party and the Indemnified Party are both named parties to the Action and the Indemnified Party shall have reasonably determined in good faith that the representation of both parties by the same counsel would be inappropriate due to actual differing interests between them or that there may be defenses or counterclaims available to the Indemnified Party that are inconsistent with those available to the Indemnified Party or (ii) the Indemnifying Party shall have authorized the Indemnified Party to employ separate counsel at the Indemnifying Party’s expense.  If the Indemnifying Party assumes the defense of any Third-Party Claim, the Indemnifying Party shall not, for so long as it diligently conducts such defense, be liable to the Indemnified Party for legal or other expenses subsequently incurred by the Indemnified Party in connection with the defense thereof other than provided in this Section 6.3(c).  The Indemnifying Party shall be liable for the reasonable fees, costs and expenses of counsel employed by the Indemnified Party for any period during which Indemnifying Party has not assumed or is not diligently conducting the defense of a Third-Party Claim for which the Indemnified Party is entitled to indemnification hereunder.  Provider or HLI, as the case may be, shall, and shall cause each of its Affiliates and Representatives to, reasonably cooperate with the Indemnifying Party in the defense of any Third-Party Claim.  Without limiting the generality of the foregoing, from and after the delivery of a notice of a claim for indemnification with respect to a Third-Party Claim, at the reasonable request of the Indemnifying Party, each Indemnified Party shall grant the Indemnifying Party and its Representatives reasonable  access, during normal business hours, to the books, records, personnel and properties of the Indemnified Party to the extent reasonably related to such Third-Party Claim, at no cost to the Indemnifying Party (other than for reasonable out-of-pocket expenses of the Indemnified Parties).  The Indemnifying Party shall be authorized to consent to a settlement of, or the entry of any judgment arising from, any Third-Party Claim, without the consent of any Indemnified Party; provided, that (A) such settlement provides only for the payment of monetary damages (and does not impose any injunctive relief or otherwise impose any conditions or restrictions on the applicable Indemnified Party or any of its Affiliates or Representatives) and does not involve any finding or admission of any violation of Law or admission of any wrongdoing or any violation of the rights of any Person and does not include a statement or admission of fault, culpability or failure to act by or on the part of  any Indemnified Party or any of its Affiliates or Representatives, (B) the Indemnifying Party pays or causes to be paid all amounts arising out of such settlement or judgment concurrently with the effectiveness of such settlement or judgment, and (C) the Indemnifying Party obtains, as a condition of any settlement, entry of judgment or other resolution, a complete and unconditional release of each Indemnified Party from any and all Liabilities in respect of such Third-Party Claim.  If the Indemnifying Party elects not to defend the Indemnified Party against a Third-Party Claim 

18

to which it is entitled to indemnification hereunder, whether by not giving the Indemnified Party timely notice of its desire to so defend or otherwise, then the Indemnified Party shall have the right but not the obligation to assume its own defense, but without in any way waiving or otherwise affecting the Indemnified Party’s rights to indemnification pursuant to this Agreement, and the Indemnifying Party shall bear all fees, costs and expenses of one such counsel engaged by the Indemnified Party for Third-Party Claims for which such Indemnified Party was entitled to indemnification hereunder.
(d)    No Indemnifying Party shall have any liability under this Article VI for any Losses arising out of or in connection with any Third-Party Claim that is settled or compromised by an Indemnified Party without the prior consent of such Indemnifying Party (such consent not to be unreasonably withheld, conditioned or delayed).
(e)    If an Indemnified Party wishes to make a claim under this Article VI that does not involve a Third-Party Claim, the Indemnified Party shall give written notice to the Indemnifying Party setting forth (i) a reasonably detailed description of the claim, (ii) a good faith estimate of the amount of the claim (to the extent ascertainable) and (iii) the specific provision of this Agreement that the Indemnified Party alleges to be breached, and such notice shall be accompanied by copies of all available documentation that may be necessary or appropriate for the purposes of enabling the Indemnifying Party to be informed and to take any and all appropriate decisions and actions in respect of the matter and Loss that is the subject of the claim; provided, that the failure to provide such notice on a timely basis shall not release the Indemnifying Party from any of its obligations under this Article VI except to the extent the Indemnifying Party is actually prejudiced by such failure.

Section 6.4    Limitation on Set-off.  HLI shall have no right to set off any claim pursuant to this Article VI against any payment of Fees due pursuant to this Agreement.

Section 6.5    Disclaimer of Warranties.  Each Party acknowledges and agrees that neither Provider nor HLI, nor any of their respective Affiliates, makes any warranties with respect to the Services and Special Projects (except as expressly set forth herein), and Provider hereby expressly disclaims all warranties, expressed or implied, of any kind with respect to the Services and any Special Projects, including any warranty of non-infringement, merchantability or fitness for a particular purpose as to the Services and any Special Projects.

Section 6.6    Limitation on Liability.  NOTWITHSTANDING ANY PROVISION OF THIS AGREEMENT TO THE CONTRARY AND EXCEPT FOR ANY LOSSES TO BE INDEMNIFIED UNDER Section 6.1 OR Section 6.2 AND LOSSES RESULTING FROM BREACHES OF Section 7.15, PROVIDER WILL NOT BE LIABLE TO ANY HLI INDEMNIFIED PARTY, AND HLI WILL NOT BE LIABLE TO ANY PROVIDER INDEMNIFIED PARTY FOR ANY CLAIM ARISING OUT OF ANY PUNITIVE, EXEMPLARY OR OTHER SPECIAL DAMAGES, OR ANY INDIRECT, INCIDENTAL OR CONSEQUENTIAL DAMAGES (INCLUDING BUSINESS INTERRUPTION OR LOSS OF CUSTOMERS, GOODWILL, USE, INCOME, PROFITS OR ANTICIPATED PROFITS, BUSINESS OR BUSINESS OPPORTUNITY, SAVINGS, DATA OR BUSINESS REPUTATION), REGARDLESS OF WHETHER SUCH DAMAGES ARE BASED IN CONTRACT, BREACH 

19

OF WARRANTY, TORT, NEGLIGENCE OR ANY OTHER THEORY, AND REGARDLESS OF WHETHER THE PARTY AGAINST WHICH SUCH CLAIM IS MADE HAS BEEN ADVISED OF, KNEW OF, OR SHOULD HAVE KNOWN OF THE POSSIBILITY OF SUCH DAMAGES; PROVIDED THAT NO SUCH LIMITATION SHALL APPLY TO CLAIMS THAT ARE RELATED TO OR ARISE FROM GROSS NEGLIGENCE, WILLFUL MISCONDUCT OR FRAUD.  PROVIDER’S CUMULATIVE AGGREGATE LIABILITY TO BUYER FOR ANY CLAIMS RELATED TO OR ARISING OUT OF THIS AGREEMENT SHALL NOT EXCEED THE AMOUNT OF THE AGGREGATE FEES ACTUALLY PAID OR PAYABLE BY HLI TO PROVIDER UNDER THIS AGREEMENT; PROVIDED THAT NO SUCH LIMITATION SHALL APPLY TO CLAIMS THAT ARE RELATED TO OR ARISE FROM GROSS NEGLIGENCE, WILLFUL MISCONDUCT OR FRAUD.

Section 6.7    Exclusive Remedies.  Subject to the limitations set forth above in Section 6.6 and other than in the case of fraud or intentional misconduct by Provider, HLI’s exclusive remedy against Provider for any breach of, or other act or omission arising out of or relating to, this Agreement or the performance or non-performance of Provider hereunder shall be: (a) the right to receive refunds of the amounts of any payment in excess of amounts owed under this Agreement; (b) the right to indemnification as provided in Section 6.1; (c) in the case of Abandonment, the right to injunction, specific performance or other equitable non-monetary relief when available under applicable Law; (d) the right to terminate this Agreement pursuant to Section 5.3; and (e) the right to actual damages for breach of the service standard in Section 3.1 or breach of Section 7.15 (but, for the purposes of clarity, not for breach of any other section of this Agreement, including, absent breach of Section 3.1, breach of any service standard set forth on a schedule).

Section 6.8    Infringement or Violation of Law.  If HLI or any of its Affiliates directs Provider or any of its Affiliates to modify or alter any Service or Special Project and such modification or alteration would constitute either (i) an infringement of any intellectual property or (ii) a violation of Law, Provider shall promptly notify Provider of such infringement or violation, as applicable, but in no event later than five (5) Business Days following Provider’s knowledge of such infringement or violation, as applicable.

ARTICLE VII     
MISCELLANEOUS PROVISIONS

Section 7.1    Further Assurances.  The Parties shall execute and deliver, and shall procure that their Affiliates shall execute and deliver, such documents, certificates, agreements and other writings and take such other actions as may be necessary or desirable in order to consummate or implement expeditiously the transactions and services contemplated by this Agreement.

Section 7.2    License.  Except to the extent not permitted under applicable Law or contract, HLI hereby grants to Provider and its Affiliates and the Subcontractors, and Provider hereby accepts, a limited royalty-free, fully paid up, non-exclusive, irrevocable, worldwide, non-transferable, non-sublicensable, right and license during the Service Period and any period during which a Special Project is being performed to use and exploit all intellectual property and other proprietary rights owned or controlled by HLI or any of its Affiliates for the sole purpose of, and to the extent required for, performing Provider’s obligations under this Agreement.

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Section 7.3    Notices.  All notices, requests, consents, claims, demands and other communications under this Agreement shall be in writing and shall be given or made (and shall be deemed to have been duly given or made upon receipt) by delivery in person, by overnight courier service, by facsimile with receipt confirmed (followed by delivery of an original via overnight courier service) or by registered or certified mail (postage prepaid, return receipt requested) to the respective parties at the following addresses (or at such other address for a party as shall be specified in a notice given in accordance with this Section 7.3):
(a)    If to HLI, to:
Hartford Life, Inc.
c/o Hartford Life Insurance Company 
1 Griffin Road North 
Windsor, Connecticut 06095 
Attention:     Chief Financial Officer 
Facsimile:     (860) 624-0441
Email:    robert.siracusa@talcottresolution.com

with copies to (which shall not constitute notice):

Hartford Life Insurance Company
1 Griffin Road North
Windsor, Connecticut 06095
Attention:    General Counsel
Facsimile:    (860) 624-0441

and

Stroock & Stroock & Lavan LLP 
180 Maiden Lane 
New York, NY 10038 
Attention:     Bernhardt Nadell 
    Bradley Kulman
Jeffrey Lowenthal 
Facsimile:    (212) 806-6006

(b)    If to Provider, to:
Hartford Fire Insurance Company 
c/o Hartford Financial Services Group 
One Hartford Plaza 
Hartford, Connecticut 06155 
Attention:  General Counsel 

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Facsimile:  860-547-4721 
Email:  mergers@thehartford.com
with a copy to (which shall not constitute notice):
Sidley Austin LLP 
One South Dearborn 
Chicago, Illinois 60603 
Attention:    Perry J. Shwachman 
    Jonathan J. Kelly 
    Jeremy C. Watson 
Facsimile:    312-853-7036

Section 7.4    Severability.  If any term or other provision of this Agreement is invalid, illegal or incapable of being enforced under any Law or as a matter of public policy, all other conditions and provisions of this Agreement shall nevertheless remain in full force and effect so long as the economic or legal substance of the transactions contemplated by this Agreement is not affected in any manner materially adverse to any party.  Upon such determination that any term or other provision is invalid, illegal or incapable of being enforced, the parties to this Agreement shall negotiate in good faith to modify this Agreement so as to effect the original intent of the parties as closely as possible in a mutually acceptable manner in order that the transactions contemplated by this Agreement be consummated as originally contemplated to the greatest extent possible.  Nothing in this Section 7.4 shall affect either Party’s right to terminate this Agreement pursuant to Section 5.3.

Section 7.5    Entire Agreement.  This Agreement, the Schedules referred to herein, and the other Transaction Agreements constitute the entire agreement of the parties hereto with respect to the subject matter contained herein or therein and supersede all prior agreements and undertakings, both written and oral (other than the Confidentiality Agreement to the extent not in conflict with this Agreement), between or on behalf of Provider and/or its Affiliates, on the one hand, and HLI and/or its Affiliates, on the other hand, with respect to the subject matter of this Agreement.

Section 7.6    Amendment.  No provision of this Agreement (including the Migration Plan) may be amended, supplemented or modified except by a written instrument signed by the Parties.  The Parties acknowledge and agree that the Migration Plan may be modified as may be necessary to facilitate an orderly transition, provided, that any modifications to the Migration Plan shall be made only upon the mutual written agreement of the Parties.  

Section 7.7    Governing Law.  This Agreement, and the formation, termination or validity of any part of this Agreement, shall in all respects be governed by, and construed in accordance with, the Laws of the State of New York.

Section 7.8    Jurisdiction; Venue.
(a)    Each of the Parties irrevocably and unconditionally submits for itself and its property in any Action arising out of or relating to this Agreement, the transactions contemplated by this Agreement, the formation, breach, termination or validity of this Agreement or the recognition 

22

and enforcement of any judgment in respect of this Agreement, to the exclusive jurisdiction of the courts of the State of New York sitting in the County of New York, the federal courts for the Southern District of New York, and appellate courts having jurisdiction of appeals from any of the foregoing, and all claims in respect of any such Action shall be heard and determined in such New York courts or, to the extent permitted by Law, in such federal court.
(b)    Any such Action may and shall be brought in such courts and each of the Parties irrevocably and unconditionally waives any objection that it may now or hereafter have to the venue or jurisdiction of any such Action in any such court or that such Action was brought in an inconvenient court and shall not plead or claim the same.
(c)    Service of process in any Action may be effected by mailing a copy of such process by registered or certified mail (or any substantially similar form of mail), postage prepaid, to such party at its address as provided in Section 7.3.
(d)    Nothing in this Agreement or any other Transaction Agreement shall affect the right to effect service of process in any other manner permitted by the Laws of the State of New York.

Section 7.9    Dispute Escalation.  In the event a dispute arises between the Parties, face-to-face negotiations shall be conducted between the Parties’ respective Project Managers.  The Parties shall ensure that their respective Project Managers use reasonable best efforts and work together in good faith to resolve any disagreements or disputes between the Parties as expeditiously as possible.  If the Project Managers are unable to resolve the dispute within twenty (20) days after the dispute has been referred to them pursuant to this Section 7.9 (or such other time period as the Project Managers may agree upon) using good faith reasonable best efforts to resolve such disputes, any unresolved dispute arising out of the interpretation, performance or breach of this Agreement, including the formation or validity thereof, shall be resolved pursuant to Section 7.8.  Notwithstanding any of the foregoing, (i) disputes with respect to the calculation of any Invoice shall be resolved in accordance with Section 4.4 and (ii) either Party may seek immediate equitable relief in any competent court permitted under this Agreement for purposes of limiting or otherwise resolving a suspected breach of a duty of confidentiality hereunder.

Section 7.10    Jury Waiver.  EACH PARTY IRREVOCABLY AND UNCONDITIONALLY WAIVES ANY AND ALL RIGHT TO TRIAL BY JURY IN ANY ACTION (WHETHER BASED ON CONTRACT, TORT OR OTHERWISE) ARISING OUT OF OR RELATING TO THE TRANSACTIONS CONTEMPLATED BY THIS AGREEMENT, OR ITS PERFORMANCE UNDER OR THE ENFORCEMENT OF THIS AGREEMENT.

Section 7.11    No Third-Party Beneficiaries.  Except as provided in Article VI with respect to the Provider Indemnified Parties and HLI Indemnified Parties, this Agreement is for the sole benefit of the Parties and their permitted successors and assigns and nothing in this Agreement, express or implied, is intended to or shall confer upon any other Person or entity any legal or equitable right, benefit or remedy of any nature whatsoever under or by reason of this Agreement.

23

Section 7.12    Expenses.  Except as otherwise provided herein, each Party shall be responsible for all costs and expenses, including fees and disbursements of counsel, financial advisers and independent accountants, incurred by it in connection with this Agreement and the transactions and services contemplated hereby.

Section 7.13    Waivers.  Any term or provision of this Agreement may be waived, or the time for its performance may be extended, in writing at any time by the Party or Parties entitled to the benefit thereof.  Any such waiver shall be validly and sufficiently authorized for the purposes of this Agreement if, as to either Party, it is authorized in writing by an authorized Representative of such Party.  The failure of either Party hereto to enforce at any time any provision of this Agreement shall not be construed to be a waiver of such provision, nor in any way to affect the validity of this Agreement or any part hereof or the right of either Party thereafter to enforce each and every such provision.  No waiver of any breach of this Agreement shall be held to constitute a waiver of any preceding or subsequent breach.

Section 7.14    Relationship Between the Parties.  In connection with this Agreement, Provider, on the one hand, and HLI, on the other hand, are acting as independent contractors and, as such, shall not have any authority to bind or commit the other, except as otherwise expressly set forth herein.  Nothing in this Agreement shall be deemed or construed to create a joint venture or partnership relationship between the Parties for any purpose, and the Parties are not joint employers for any purpose by reason of this Agreement.

Section 7.15    Treatment of Confidential Information.  Each Party shall, and shall cause each of its Affiliates and each of its and their officers, directors and employees to, hold all information relating to the business of the other Party disclosed to it by reason of this Agreement (the “Confidential Information”) confidential, and shall not disclose or permit to be disclosed any such Confidential Information to any third party unless legally compelled to disclose such information; provided, however, a Party may disclose Confidential Information to such Party’s advisors, attorneys, contractors and auditors in connection with the performance or receipt of the Services and Special Projects provided such third parties are bound by confidentiality obligations at least as protective of the Confidential Information as set forth in this Section 7.15 and, provided, further, that to the extent that a Person receiving Confidential Information hereunder may become legally compelled to disclose any Confidential Information, such Person:  (a) may only disclose such information if it shall first have used reasonable best efforts to, and, if practicable, shall have afforded the other Party the opportunity to, obtain an appropriate protective order or other satisfactory assurance of confidential treatment for the information required to be so disclosed; and (b) if such protective order or other remedy is not obtained, or the other Party waives such Person’s compliance with the provisions of this Section 7.15, shall only furnish that portion of the Confidential Information which is legally required to be so disclosed.  As used herein, “Confidential Information” does not include any information that the receiving Party demonstrates:  (i) is or becomes generally available to the public other than as a result of a disclosure by the Party receiving the Confidential Information; (ii) was available to the receiving Party on a non-confidential basis prior to its disclosure by the disclosing Party; or (iii) becomes available to the receiving Party from a Person other than the disclosing Party or its Affiliates who is not, to the receiving Party’s knowledge, subject to any legally binding obligation to keep such information confidential.

24

Section 7.16    Assignment.  No party may assign this Agreement or any of the rights, interests or obligations hereunder (whether by operation of law or otherwise) without the prior written consent of the other Party (which consent shall not be unreasonably withheld, conditioned or delayed).  Notwithstanding the foregoing, (i) any Party may assign or delegate all or a portion of its rights and obligations hereunder without the consent of any other Party to an Affiliate and (ii) any Party may assign all or a portion of its rights and obligations hereunder without the consent of the other Party to a successor of all or a portion of the assigning Party’s assets or business, whether by merger, consolidation, acquisition, stock sale or similar transaction or series of related transactions.  Subject to the preceding sentences, this Agreement shall be binding upon, inure to the benefit of and be enforceable by the Parties and their respective successors and permitted assigns.  Any purported assignment or delegation not in compliance with the foregoing shall be null and void.

Section 7.17    Force Majeure.  Provider shall not be liable for any Loss whatsoever arising out of any interruption of Service or delay or failure to perform under this Agreement to the extent caused by Force Majeure (except to the extent that the Service being provided was a disaster recovery service).  For purposes of this Agreement, “Force Majeure” means any circumstance or event beyond the reasonable control of Provider relying upon such event or circumstance, including:  acts of God, acts of a public enemy, acts of terrorism, acts of a nation or any state, territory, province or other political division thereof, changes in Law, fires, floods, epidemics, riots, quarantine restrictions, freight embargoes or other similar causes.  In any such event, Provider’s obligations hereunder shall be postponed for such time as its performance is suspended or delayed on account thereof.  If Provider or any Subcontractor is so affected, Provider shall notify HLI in writing upon learning of the occurrence of such event of Force Majeure.  Upon the cessation of the Force Majeure event, Provider shall use reasonable best efforts to resume, or to cause the relevant Subcontractor, to resume, its performance with the least practicable delay.

Section 7.18    Execution in Counterparts.  This Agreement may be executed in two (2) or more counterparts, each of which when executed shall be deemed to be an original but all of which taken together shall constitute one and the same agreement.  Delivery of an executed counterpart of a signature page to this Agreement by facsimile or by electronic delivery in PDF format shall be as effective as delivery of a manually executed counterpart of any such Agreement.
[signatures are on the following page]

IN WITNESS WHEREOF, the Parties have executed and delivered this Agreement as of the Effective Date.
HARTFORD FIRE INSURANCE COMPANY
By:        /s/ Brion S. Johnson    

25

 
Name:    Brion S. Johnson    
 
Title:        Executive Vice President    
HARTFORD LIFE, INC.
By:        /s/ Brion S. Johnson    
 
Name:    Brion S. Johnson    
 
Title:        President    

1

Schedule 2.1
Services

[REDACTED] 
[SCHEDULE 2.1 DESCRIBES CERTAIN SERVICES, AND RELATED COSTS, THAT WILL BE PROVIDED BY THE SELLER (REFERRED TO IN THE AGREEMENT AS “PROVIDER”) TO THE SOLD COMPANIES POST CLOSE RELATING TO INVESTMENT MANAGEMENT, INFRASTRUCTURE AND SOFTWARE WITH RESPECT TO BILLING, COMPLIANCE, INFORMATION AND DATA SYSTEMS, VENDOR AND BROKER-DEALER MANAGEMENT, AND COMMUNICATION SYSTEMS.]

Schedule 2.1 - 1

1004530781v1

Schedule 2.2
Excluded Services
Except to the extent expressly set forth on Schedule 2.1, the following shall be Excluded Services:
		
	•
	Travel and entertainment

		
	•
	Temporary labor

		
	•
	Office supplies, energy/utilities

		
	•
	Payroll, benefits and related administration

		
	•
	Property management/real estate services, including corporate security

		
	•
	 M&A/corporate development

		
	•
	Public relations

		
	•
	Philanthropy and goodwill

		
	•
	External audit services

 

Schedule 2.2 - 1

1004530781v1

Schedule 2.3
SPECIAL PROJECTS
None.

Schedule 2.3 - 1

1004530781v1

Exhibit A
INFORMATION SECURITY REQUIREMENTS
[REDACTED]

Exhibit A - 1

1004530781v1Exhibit
10.1

 

Execution

 

MEMBERSHIP
INTEREST PURCHASE AGREEMENT

 

This
Membership Interest Purchase Agreement (this “Agreement”), dated as of May 4, 2018 (the “Execution
Date”), is made and entered into by and among Old Ironsides Fund II-A Portfolio Holding Company, LLC, a Delaware
limited liability company (“OIE Fund II-A”) and Old Ironsides Fund II-B Portfolio Holding Company, LLC,
a Delaware limited liability company (“OIE Fund II-B,” and each of OIE Fund II-A and OIE Fund
II-B, a “Seller,” and together, the “Sellers”), and Carbon Natural
Gas Company, a Delaware corporation (the “Purchaser”) and concerns the Class A Units of Carbon Appalachian
Company, LLC, a Delaware limited liability company (the “Company”) held by the Sellers. Capitalized
terms used but not defined herein shall have the respective meanings given to such terms in the LLC Agreement (as defined herein).

 

A. The
Company is engaged in the business of evaluating, acquiring, exploring, drilling, developing, producing and transporting oil,
gas and other hydrocarbons (the “Business”) within the AMI (as such term is defined in the Company’s
Amended and Restated Limited Liability Company Agreement dated August 15, 2017 (the “LLC Agreement”)
through the operations of direct and indirect subsidiaries (each, a “Subsidiary” and collectively, the
“Subsidiaries”);

 

B. The
Sellers collectively own Twenty-seven Thousand One Hundred Ninety Five Class A Units of the Company, (the “Subject
Class A Units”), which constitutes Seventy-three and one-half percent (73.50%) of the issued and outstanding Class
A Units of the Company (the respective ownership of the Subject Class A Units between the Sellers is set forth on Exhibit A
attached hereto; and

 

C. The
Purchaser desires to purchase from the Sellers and Sellers desire to sell to the Purchaser, all of the Subject Class A Units,
upon the terms and subject to the conditions hereinafter set forth.

 

NOW,
THEREFORE, in consideration of the premises and the mutual covenants and agreements hereinafter expressed, and subject to the
satisfaction or waiver of the conditions hereof, the parties hereto agree as follows:

 

ARTICLE
1

PURCHASE AND SALE

 

1.1 Purchase
and Sale of Subject Class A Units. Upon and subject to the terms and conditions of this Agreement and in reliance on the representations,
warranties and covenants contained herein, the Purchaser hereby agrees to purchase from the Sellers, and the Sellers hereby agree
to sell, assign, transfer, convey and deliver to the Purchaser all of the Subject Class A Units.

 

1.2 Purchase
Price. The price to be paid for the Subject Class A Units shall be Fifty-Six Million Eight Hundred Five Thousand Eight Hundred
Fifty-Four Dollars ($56,805,854.00) (the “Base Purchase Price,” and as adjusted in accordance with Section
1.3 hereof, the “Purchase Price”). The Purchase Price shall be paid in cash at Closing, allocated
and payable to each Seller in the respective percentages set forth on Exhibit A opposite such Seller’s name.

 

1.3 Purchase
Price Adjustments.

 

(a) Attached
hereto as Exhibit B is a spreadsheet setting forth the calculation and components of the Purchase Price as of December
31, 2017.

 

    

     

    

 

(b) The
Sellers and the Purchaser acknowledge and agree that the Base Purchase Price and the Purchase Price shall be calculated in accordance
with Exhibit B using the same methodology thereof. The Purchase Price shall be calculated by adjusting the following items
reflected in Exhibit B and recomputing the line item identified as “Equity Purchase Price” under the heading
“Old Ironsides”: (i)  the Priority Amount allocable to the outstanding Class A Units as of December 31, 2017
shall be adjusted to reflect the Priority Amount allocable to the outstanding Class A Units on the day immediately prior to the
Closing Date, (ii)  the Company’s Working Capital as of December 31, 2017 shall be adjusted to reflect the Company’s
Working Capital on the day immediately preceding the Closing Date, and (iii)  the outstanding principal amount owed by Carbon
Appalachia Enterprises, LLC to the Lenders under that certain Credit Agreement dated April 3, 2017, as amended (the “Credit
Agreement”), as of December 31, 2017, shall be adjusted to reflect the outstanding principal amount owed to the
Lenders under the Credit Agreement on the day immediately preceding the Closing Date.

 

(c) For
purposes of this Agreement, “Working Capital” means, with respect to the Company and its Subsidiaries,
as of the time of determination, the positive or negative amount obtained by subtracting (x) the sum of all current Liabilities
of the Company and its Subsidiaries (but excluding, for the avoidance of doubt, any income Tax Liabilities, any outstanding principal
amount under the Credit Agreement and any fees associated with the amendment of the Credit Agreement) from (y) the sum of all
current assets of the Company and its Subsidiaries (but excluding, for the avoidance of doubt, any income Tax assets), in each
case as of such time of determination. Working Capital shall be calculated in accordance with the methodology and the sample calculations
set forth on Exhibit C and otherwise in accordance with GAAP.

 

(d) Preliminary
Settlement Statement. Not later than two (2) Business Days prior to Closing, Purchaser shall prepare and submit to Sellers
for review a draft settlement statement (the “Preliminary Settlement Statement”) that shall set forth
Purchaser’s good faith estimate of the Purchase Price, reflecting each adjustment made in accordance with this Agreement
and the calculation of the adjustments used to determine such amount. The Preliminary Settlement Statement will be used to adjust
the Base Purchase Price at Closing.

 

(e) Final
Settlement Statement. On or before ninety (90) days after Closing, a final settlement statement (the “Final Settlement
Statement”) will be prepared by Purchaser and delivered to Sellers, setting forth Purchaser’s good faith calculation
of the Purchase Price and reflecting each adjustment made in accordance with this Agreement and the resulting final Purchase Price
(the “Final Price”). As soon as practicable, and in any event within thirty (30) days after receipt
of the Final Settlement Statement, Sellers shall return to Purchaser a written report containing any proposed changes to the Final
Settlement Statement and an explanation of any such changes and the reasons therefor (the “Dispute Notice”).
Any changes not so specified in the Dispute Notice shall be deemed waived, and Purchaser’s determinations with respect to
all such elements of the Final Settlement Statement that are not addressed specifically in the Dispute Notice shall prevail. If
Sellers fail to timely deliver a Dispute Notice to Purchaser containing changes Sellers propose to be made to the Final Settlement
Statement, the Final Settlement Statement as delivered by Purchaser will be deemed to be correct and will be final and binding
on the parties hereto and not subject to further audit or arbitration. If the Final Price set forth in the Final Settlement Statement
is mutually agreed upon in writing by Sellers and Purchaser, the Final Settlement Statement and the Final Price, shall be final
and binding on the parties hereto and not subject to further audit or arbitration. Any difference in the Purchase Price as paid
at Closing pursuant to the Preliminary Settlement Statement and the Final Price shall be paid by the owing party within five (5)
Business Days of final determination of such owed amounts in accordance herewith to the owed party.

 

    2

     

    

 

(f) Disputes.
Sellers and Purchaser shall work together in good faith to resolve any matters addressed in the Dispute Notice. If Sellers and
Purchaser are unable to resolve all of the matters addressed in the Dispute Notice within ten (10) Business Days after the delivery
of such Dispute Notice by Sellers to Purchaser, either party hereto may, upon notice to the other party hereto, submit all unresolved
matters addressed in the Dispute Notice to arbitration in accordance with this Section 1.3(f) by such Person as the parties
hereto may mutually select in writing (the “Accounting Arbitrator”), together with the Dispute Notice,
the Final Settlement Statement and any other documentation such party may desire to submit. If the parties hereto fail to agree
on an Accounting Arbitrator within ten (10) Business Days after a party’s election to submit such matters to arbitration
under this Section 1.3(f), then either party hereto may request the Denver, Colorado office of the American Arbitration
Association to select the Accounting Arbitrator. Within ten (10) Business Days after receiving the respective submissions of the
parties hereto, the Accounting Arbitrator shall render a decision choosing either Sellers’ position or Purchaser’s
position with respect to each matter addressed in any Dispute Notice, based on the materials described above. Any decision rendered
by the Accounting Arbitrator pursuant hereto shall be final, conclusive and binding on Sellers and Purchaser and enforceable against
any of the parties hereto in any court of competent jurisdiction. The costs of the Accounting Arbitrator shall be borne fifty
percent (50%) by Sellers and fifty percent (50%) by Purchaser.

 

(g) Cooperation.
Purchaser and shall cooperate and provide Sellers with access to the books, records and personnel of the Company and its Subsidiaries
and Purchaser and its Affiliates as reasonably requested by Sellers and related to the matters addressed in this Section 1.3.

 

ARTICLE
2

CLOSING

 

2.1 Closing.
The closing of the sale and purchase of the Subject Class A Units (the “Closing”) shall take place on
the third Business Day following the date on which there first occurs the satisfaction (or, to the extent permitted, the waiver)
of the conditions set forth in Sections 5.1 and 5.2 (other than any condition which by its nature is to be satisfied
at the Closing, but subject to satisfaction of all such conditions) or at such other place, time and date as may be agreed by
Seller and Purchaser (such date upon which the Closing occurs, the “Closing Date”) and the benefits
of the transaction, including, but not limited to the entitlement to the revenue, deductions, expenses and other financial and/or
Tax matters, shall be effective as of 12:01 a.m. on that date. The Closing shall take place at the offices of the Purchaser, at
1700 Broadway, Suite 1170, Denver, Colorado 80290, at such time as the parties may agree, or via email exchange of documents.
The date of the Closing is sometimes herein referred to as the “Closing,” provided, however, that all
references to the “Closing” as a point in time from which, or to which, a period of time is to be measured shall be
deemed references to the Closing Date, unless otherwise set forth herein. At Closing, (x) Sellers’ shall execute, acknowledge
and deliver to Purchaser the items described in Sections 5.1(c) and 5.1(g) and (y) Purchaser shall execute, acknowledge
and deliver to Sellers the items described in Sections 5.2(c) and 5.2(e).

 

    3

     

    

 

ARTICLE
3

REPRESENTATIONS AND WARRANTIES

 

3.1 Representations
and Warranties of the Seller. Each Seller severally, and not jointly, solely as to such Seller, represents and warrants to
Purchaser as of the date of this Agreement the following:

 

(a) Authority
of the Sellers. Such Seller has all requisite capacity, power, authority and legal right to execute, deliver and perform its
obligations pursuant to this Agreement. This Agreement, the underlying transactions contemplated hereby, and the execution, delivery
and performance of this Agreement by such Seller have been duly authorized by all necessary actions of such Seller. This Agreement
has been, and the other agreements, documents and instruments required to be delivered by such Seller in accordance with the provisions
hereof (the “Sellers’ Documents”) will be, duly executed and delivered on behalf of such Seller;
and this Agreement constitutes, and the Sellers’ Documents, when executed and delivered, will constitute, legal, valid and
binding obligations of such Seller, enforceable against such Seller in accordance with their respective terms, subject to the
effects of bankruptcy, insolvency, reorganization, moratorium and similar Laws, as well as to principles of equity (regardless
of whether such enforceability is considered in a proceeding in equity or at Law).

 

(b) Ownership.

 

(i) Such
Seller is the record and beneficial owner of the Subject Class A Units set forth opposite its respective name on Exhibit A,
free and clear of all Liens other than (A) restrictions on transfer that may be imposed by state or federal securities Laws and
(B) restrictions on transfer that are set forth in the LLC Agreement. Such Seller has full right, power and authority to transfer
and deliver to the Purchaser valid title to such respective Subject Class A Units, free and clear of all Liens other than (A)
restrictions on transfer that may be imposed by state or federal securities Laws and (B) restrictions on transfer that are set
forth in the LLC Agreement. The portion of the Subject Class A Units held by such Seller represents such Seller’s entire
ownership and rights to ownership in and to the Company.

 

(ii) Except
pursuant to this Agreement, there is no contractual obligation pursuant to which such Seller has, directly or indirectly, granted
any option, warrant or other right to any individual or corporation, association, partnership, limited liability company, joint
venture, joint stock or other company, business trust, trust, organization or other entity of any kind (“Person”)
to acquire any of the Subject Class A Units held by such Seller or any interest therein.

 

(iii) There
are no Liens on, or other contractual obligations relating to, the ownership, transfer or voting of such Seller’s portion
of the Subject Class A Units, or otherwise affecting the rights of such Seller in the Company (except as set forth in the organizational
documents of the Company (including the LLC Agreement)). Except for the transactions contemplated by this Agreement or the LLC
Agreement, there is no contractual obligation, which obligates the Company to purchase, redeem or otherwise acquire, or make any
payment (including any distribution) in respect of, such Seller’s portion of the Subject Class A Units.

 

(iv) At
the Closing, the Purchaser will acquire the record and beneficial ownership of such Seller’s portion of the Subject Class
A Units, free and clear of all Liens, except as are created by the Purchaser and (A) restrictions on transfer that may be imposed
by state or federal securities Laws and (B) restrictions on transfer that are set forth in the LLC Agreement.

 

(c) Existence;
Organization.

 

(i) The
Company is a limited liability company duly organized, validly existing and in good standing under the laws of the state of Delaware.
The Company has full power and authority to conduct its business and own and operate its properties as now conducted, owned and
operated.

 

    4

     

    

 

(ii) Such
Seller is a limited liability company duly organized, validly existing and in good standing under the laws of the state of Delaware.
Such Seller has full power and authority to conduct its respective business and own and operate its respective properties as now
conducted, owned and operated.

 

(d) Validity
of Contemplated Transaction.

 

(i) The
execution, delivery and performance of such Seller’s obligations under this Agreement by such Seller does not and will not
violate, conflict with or result in the breach of any term, condition or provision of, or require the consent of any Person under
(i) any existing regulation of any Governmental Body to which such Seller or, to such Seller’s Knowledge, the Company is
subject, (ii) any judgment, order, writ, injunction, decree or award of any court, arbitrator or governmental or regulatory official,
body or authority (each a “Governmental Body”
and collectively, “Governmental Bodies”) that is applicable to such Seller or, to such Seller’s
Knowledge, the Company, (iii) to such Seller’s Knowledge, the organizational documents of the Company or any securities
issued by the Company, (iv) the organizational documents of such Seller, or (v) any mortgage, indenture, agreement, contract,
commitment, lease, plan, authorization, or other instrument, document or understanding (excluding, for the avoidance of doubt,
the Credit Agreement and all documents contemplated thereunder), oral or written, to which such Seller or, to such Seller’s
Knowledge, the Company is a party, by which such Seller or, to such Seller’s Knowledge, the Company may have rights or by
which, to such Seller’s Knowledge, any of the Company’s assets or its Subsidiaries may be bound or affected, or, to
such Seller’s Knowledge, give any party with rights thereunder the right to terminate, modify, accelerate or otherwise change
the existing rights or obligations of the Company or any Subsidiary thereunder, in each case (i) through (v), other than (A) in
the case of consents, those that have already been obtained or that are to be obtained prior to Closing and (B) such as could
not reasonably be likely to have a Material Adverse Effect (as defined herein). As used in this Agreement, the term “Material
Adverse Effect” means any change in, or effect on, the Business, the Company’s assets, Subsidiaries, operations,
or condition (financial or otherwise) which, when considered either individually or in the aggregate together with all other adverse
changes or effects with respect to which such phrase is used in this Agreement, is materially adverse to the Business, the Company’s
assets, Subsidiaries, operations or condition (financial or otherwise), taken as a whole; provided, however, that
a Material Adverse Effect shall not include any material adverse effects resulting from: (i) entering into this Agreement
or the announcement or pendency of the transactions contemplated by this Agreement; (ii) changes in general market, economic,
financial or political conditions (including changes in commodity prices (including hydrocarbons), fuel supply or transportation
markets, interest or rates); (iii) conditions (or changes in such conditions) generally affecting the oil and gas and/or
gathering, processing or transportation industry; (iv) acts of God, including storms or meteorological events; (v) orders,
actions or failures to act of Governmental Bodies; (vi) civil unrest or similar disorder, the outbreak of hostilities, terrorist
acts or war; (vii) any actions taken or omitted to be taken (A) by or at the written request or with the prior written consent
of Purchaser or (B) as expressly permitted or prescribed hereunder; (viii) matters that are cured or no longer exist by the earlier
of Closing and the termination of this Agreement; (ix) any casualty losses; (x) a change in any applicable statute, law (including
common law), rule, regulation, ordinance, order, code, ruling, writ, injunction, decree or other official act of or by any Governmental
Body (collectively, “Laws”) or in the interpretation of generally accepted accounting principles in
the United States, consistently applied (“GAAP”) from and after the Execution Date; (xi) reclassification
or recalculation of reserves in the ordinary course of business; or (xii) natural declines in well performance. No authorization,
approval or consent of, and no registration or filing with, any Governmental Body is required in connection with the execution,
delivery or performance of this Agreement by such Seller.

 

    5

     

    

 

(e) No
Undisclosed Liabilities. Except as set forth on Schedule 3.1(e), to such Seller’s Knowledge, as of the Execution
Date, the Company does not have any Liabilities (as defined herein) except (i) as and to the extent of the amounts reflected or
reserved against on the balance sheet of the Company as at December 31, 2017 (the “Balance Sheet”),
(ii) Liabilities incurred by the Company in the ordinary course of the Business since the date of the Balance Sheet or (iii) Liabilities
that would not reasonably be expected to have a Material Adverse Effect. For purposes of this Agreement, the term “Liability”
or “Liabilities” shall include, without limitation, any direct or indirect indebtedness, guarantee,
claim, loss, damage, cost, expense, obligation or fixed or unfixed, known or unknown, asserted or unasserted, choate or inchoate,
liquidated or unliquidated, secured or unsecured, matured or unmatured, absolute or contingent, whether arising under contract,
tort or by statute.

 

(f) Absence
of Certain Developments. To such Seller’s Knowledge, since March 31, 2018 and prior to the date hereof, except for the
matters disclosed in Schedule 3.1(f) or approved, consented to or ratified by Purchaser, or actions taken in the ordinary
course of business:

 

(i) the
Company has not authorized the issuance of or issued any additional Units or other Interests of the Company (other than pursuant
to the terms of the LLC Agreement);

 

(ii) the
Company has not borrowed any money or otherwise incurred, guaranteed or otherwise become liable for any Indebtedness (other than
pursuant to the terms of the LLC Agreement);

 

(iii) the
Company has not mortgaged, pledged, assigned in trust or otherwise encumbered any property or assets of the Company or any of
its Subsidiaries, or assigned any monies owed or to be owed to the Company or any of its Subsidiaries, except for customary Liens
contained in or arising under operating or similar agreements executed by or binding on the Company or any of its Subsidiaries
or to secure Indebtedness;

 

(iv) the
Company has not made any distributions to the Members pursuant to Section 5.4 or Section 5.5 of the LLC Agreement;

 

(v) the
Company has not adjusted the compensation or benefits of any manager, officer or employee of the Company;

 

(vi) the
Company has not incurred any expenditure or series of related expenditures not otherwise a part of an approved Budget, except
any expenditure or series of related expenditures (x) as required under Section 2.7 of the LLC Agreement, (y) as permitted under
Section 2.8 of the LLC Agreement or (z) that constitute a Permitted Variance;

 

(vii) the
Company has not entered into any binding contractual obligation to do any of the things referred to elsewhere in this Section
3.1(f); and

 

(viii) to
the Seller’s Knowledge, the Company has not experienced a Material Adverse Effect.

 

    6

     

    

 

(g) Tax
Matters. To the Knowledge of the Sellers, for U.S. federal income Tax purposes, the Company is currently treated as a partnership.

 

(i) To
the Knowledge of the Sellers, all Tax Returns required to be filed by the Company or any of its Subsidiaries (each, a “Company
Tax Return” and collectively, the “Company Tax Returns”) have been filed with the appropriate
Governmental Body in all jurisdictions in which such Company Tax Returns are required to be filed, and all such Company Tax Returns
properly reflect the Liabilities of the Company for Taxes for the periods, property or events covered thereby.

 

(ii) To
the Knowledge of the Sellers, all Taxes owed by the Company or any of its Subsidiaries, including without limitation those which
are called for by the Company Tax Returns, or heretofore or hereafter claimed to be due by any Taxing authority from the Company,
have been properly accrued or paid and no such Taxes are currently delinquent.

 

Notwithstanding
any other provision in this Agreement, the representations and warranties in this Section 3.1(g) are the only representations
and warranties in this Agreement with respect to the Tax matters of the Company.

 

(h) Brokers’
Fees. None of such Seller or any of such Seller’s Affiliates will have any Liability for any brokerage fee, finders’
fee or other commission payable to any broker, finder, investment banker or other Person in connection with the transactions contemplated
hereunder based on arrangements made by or on behalf of such Seller or any of such Seller’s Affiliates for which Purchaser
or Purchaser’s Affiliates could become liable.

 

3.2 Representations
and Warranties of the Purchaser. The Purchaser represents and warrants to the Sellers the following:

 

(a) Corporate
Existence. The Purchaser is a corporation duly organized, validly existing and in good standing under the Laws of the state
of Delaware. The Purchaser has full power and authority to conduct its business and own and operate its respective properties
as now conducted, owned and operated.

 

(b) Corporate
Power and Authorization. The Purchaser has the requisite capacity, power, authority and legal right to execute, deliver and
perform its obligations pursuant to this Agreement. The Agreement, the underlying transactions contemplated hereby, and the execution,
delivery and performance of the obligations under this Agreement by the Purchaser has been duly authorized by all necessary action
on the part of the Purchaser. This Agreement has been, and the other agreements, documents and instruments required to be delivered
by the Purchaser in accordance with the provisions hereof (the “Purchaser Documents”) will be, duly
executed and delivered on behalf of the Purchaser by a duly authorized officer of the Purchaser and this Agreement constitutes,
and the Purchaser Documents, when executed and delivered, will constitute, the legal, valid and binding obligation of the Purchaser
enforceable against the Purchaser in accordance with their respective terms, subject to the effects of bankruptcy, insolvency,
reorganization, moratorium and similar Laws, as well as to principles of equity (regardless of whether such enforceability is
considered in a proceeding in equity or at Law).

 

    7

     

    

 

(c) Validity
of Contemplated Transactions, Etc. The execution, delivery and performance of this Agreement by the Purchaser does not and
will not violate, conflict with or result in the breach of any term, condition or provision of, or require the consent of any
other Person under (i) any existing regulation of any Governmental Body to which the Purchaser, or to Purchaser’s Knowledge,
the Company is subject, (ii) any judgment, order, writ, injunction, decree or award of any Governmental Body that is applicable
to Purchaser or, to such Purchaser’s Knowledge, the Company, (iii) to Purchaser’s Knowledge, the organizational documents
of the Company or any securities issued by the Company, or (iv) the organizational documents of the Purchaser or any securities
issued by the Purchaser, or (v) any mortgage, indenture, agreement, contract, commitment, lease, plan, authorization, or other
instrument, document or understanding (excluding, for the avoidance of doubt, (x) the Credit Agreement and all documents
contemplated thereunder and (y) that certain Credit Agreement among Purchaser, the Lenders from time to time party thereto
and LegacyTexas Bank dated October 3, 2016, as amended, and all documents contemplated thereunder (the “CRBO Credit
Agreement”)), oral or written, to which Purchaser or, to Purchaser’s Knowledge, the Company is a party, by
which Purchaser or the Company may have rights or by which any of the Company’s assets or its Subsidiaries may be bound
or affected, or give any party with rights thereunder the right to terminate, modify, accelerate or otherwise change the existing
rights or obligations of the Company or any Subsidiary thereunder, in each case (i) through (v), other than (A) in the case of
consents, those that have already been obtained or that are to be obtained prior to Closing and (B) such as could not reasonably
be likely to have a material adverse effect. No authorization or approval of, and no filing with, any Governmental Body is required
in connection with the execution, delivery or performance of this Agreement by the Purchaser, except as otherwise set forth herein.

 

(d) Independent
Investigation. The Purchaser is a current member of the Company and has conducted its own independent investigation, review
and analysis of the business, results of operations, prospects, and the assets of the Business and acknowledges that it has been
provided sufficient access to the personnel, properties, assets, premises, books and records, and other documents and data of
the Business for such purpose. The Purchaser acknowledges and agrees that in making its decision to enter into this Agreement
and to consummate the transactions contemplated hereby, the Purchaser has relied solely upon its own investigation and the express
representations and warranties of the Sellers as set forth in Section 3.1 of this Agreement (including the related portions
of the disclosure schedules), and based on such investigation, has formed an independent judgment concerning the Sellers, the
Subject Class A Units, the Company, the Subsidiaries, the assets of the Company and the Subsidiaries, the Business, and the transactions
contemplated hereby.

 

(e) Ownership.
To Purchaser’s Knowledge, except for the transactions contemplated by this Agreement, there is no contractual obligation,
or provision in the organizational documents of the Company which obligates the Company to purchase, redeem or otherwise acquire,
or make any payment (including any distribution (other than Tax distributions)) in respect of, any Seller’s portion of the
Subject Class A Units.

 

(f) Investment
Representation. Purchaser is acquiring the Subject Class A Units for its own account as an investment and not with
a view to sell, transfer or otherwise distribute all or any part thereof to any other Person in any transaction that would constitute
a “distribution” within the meaning of the Securities Act of 1933, and the rules and regulations promulgated thereunder
(the “Securities Act”). Purchaser acknowledges that it can bear the economic risk of its investment
in the Subject Class A Units, and has such knowledge and experience in financial and business matters that it is capable of evaluating
the merits and risks of an investment in all of the Subject Series A Units. Purchaser is an “accredited investor”
as such term is defined in Rule 501 of Regulation D under the Securities Act. Purchaser understands that neither the offer nor
sale of the Subject Class A Units has or will have been registered pursuant to the Securities Act or any applicable state securities
Laws, that all of the Subject Class A Units will be characterized as “restricted securities” under federal securities
Laws and that, under such Laws and applicable regulations, none of the Subject Class A Units can be sold or otherwise disposed
of without registration under the Securities Act or an exemption thereunder.

 

    8

     

    

 

(g) Brokers’
Fees. None of Purchaser or its Affiliates will have any Liability for any brokerage fee, finders’ fee or other
commission payable to any broker, finder, investment banker or other Person in connection with the transactions contemplated hereunder
based on arrangements made by or on behalf of Purchaser or any of its Affiliates for which any Seller or such Seller’s respective
Affiliates could become liable.

 

3.3 Survival
of Representations and Warranties; Limitations on Breaches of Representations and Warranties. All representations and warranties
made by the Parties in this Agreement or in any certificate, schedule, statement, document or instrument furnished hereunder or
in connection with negotiation, execution and performance of this Agreement shall survive the Closing for a period of nine (9)
months, except with respect to (i) occurrences of actual fraud and (ii) the representations and warranties contained in Sections
3.1(a), 3.1(b), 3.1(h), 3.2(a), 3.2(b), 3.2(d), 3.2(e), 3.2(f) and 3.2(g)
(collectively, the “Fundamental Representations”), which shall survive Closing indefinitely.

 

ARTICLE
4

AGREEMENT PENDING CLOSING

 

4.1 Agreements
of Sellers Pending the Closing. Each Seller covenants and agrees, severally and not jointly, on behalf of itself and, through
its application of commercially reasonable efforts, on behalf of the Company that, during
the period after the date this Agreement is signed and before the earlier of the termination of this Agreement and the
Closing:

 

(a) Conduct
of Business. The Company shall conduct the Business in the ordinary course consistent with past practice and, absent the consent
of the Purchaser, which consent shall not be unreasonably withheld, will make no material changes to present accounting practices
or methods, employee salaries, or officer compensation.

 

(b) Maintenance
of Physical Assets and Inventories. The Company shall continue to maintain and service its assets and Subsidiaries in substantially
the same manner as has been its consistent past practice.

 

(c) Maintenance
of Authorizations. The Company shall use commercially reasonable efforts to maintain in full force and effect all governmental
or quasi-governmental licenses, permits, certificates, authorizations, registrations, consents and permits used in or relating
to the Business, including, without limitation, all federal, state and other authorities, permits and licenses.

 

(d) Compliance
with Laws. The Company shall comply in all material respects with all regulations applicable to the Business or the Company’s
assets and Subsidiaries.

 

(e) Actions
of Sellers. Subject to the terms and conditions of this Agreement, such Seller shall use commercially reasonable efforts to
cooperate with Purchaser in order to effectuate the transactions contemplated by this Agreement.

 

(f) Updated
Schedules. The Sellers and the Company may promptly disclose to the Purchaser any information contained in the representations
and warranties and Schedules delivered pursuant hereto that, because of an event occurring after the date hereof, is incomplete
or is no longer correct as of all times after the date hereof until the Closing; provided, however, that none of
such disclosures shall be deemed to modify, amend or supplement the representations and warranties of the Sellers contained herein
or in any other agreement, document or instrument for any purpose, unless the Purchaser shall have consented in writing thereto.

 

    9

     

    

 

(g) Sale
of Assets. Absent the consent of the Purchaser, which consent shall not be unreasonably withheld, the Company shall not directly
or indirectly sell or encumber all or any part of its assets or those of any Subsidiary other than, in any such case, in the ordinary
course of the Business consistent with past practice.

 

(h) Exclusive
Dealing. Until the earlier to occur of the termination of this Agreement as provided in Section 9.1 below and the Closing:

 

(a)
 such Seller will not directly or indirectly, through any representative or otherwise,
solicit or entertain offers from, negotiate with or in any manner encourage, discuss, accept, or consider any proposal of any
other Person relating to the acquisition of the Subject Class A Units, in whole or in part, whether directly or indirectly, through
purchase, merger, consolidation, or otherwise; and

 

(b)
 such Seller will immediately notify the Purchaser regarding any contact between the
Seller and any other Person regarding any such offer or proposal or any related inquiry.

 

4.2 Agreements
of Purchaser Pending the Closing. The Purchaser covenants and agrees, on behalf of itself and, through its application of
commercially reasonable efforts, on behalf of the Company that, during the period after
the date this Agreement is signed and before the earlier of the termination of this Agreement and the Closing:

 

(a) Conduct
of Business. The Company shall conduct the Business in the ordinary course consistent with past practice and, absent the consent
of the Sellers, will make no material changes to present accounting practices or methods, employee salaries, or officer compensation.

 

(b) Maintenance
of Physical Assets and Inventories. The Company shall continue to maintain and service its assets and Subsidiaries in substantially
the same manner as has been its consistent past practice.

 

(c) Maintenance
of Authorizations. The Company shall use commercially reasonable efforts to maintain in full force and effect all governmental
or quasi-governmental licenses, permits, certificates, authorizations, registrations, consents and permits used in or relating
to the Business, including, without limitation, all federal, state and other authorities, permits and licenses.

 

(d) Compliance
with Laws. The Company shall comply in all material respects with all regulations applicable to the Business or the Company’s
assets and Subsidiaries.

 

(e) Actions
of Purchaser. Subject to the terms and conditions of this Agreement, Purchaser shall reasonably cooperate with Seller in order
to effectuate the transactions contemplated by this Agreement.

 

(f) Updated
Schedules. Purchaser may promptly disclose to the Sellers any information contained in the representations and warranties
and Schedules delivered pursuant hereto that, because of an event occurring after the date hereof, is incomplete or is no longer
correct as of all times after the date hereof until the Closing; provided, however, that none of such disclosures
shall be deemed to modify, amend or supplement the representations and warranties of Purchaser contained herein or in any other
agreement, document or instrument for any purpose, unless each Seller shall have consented in writing thereto.

 

    10

     

    

 

(g) Sale
of Assets. Absent the consent of the Sellers, which consent shall not be unreasonably withheld, the Company shall not directly
or indirectly sell or encumber all or any part of its assets or those of any Subsidiary other than, in any such case, in the ordinary
course of the Business consistent with past practice.

 

(h) Financing.
Purchaser shall take, or cause to be taken, all commercially reasonable actions authorized by its board of directors and to do,
or cause to be done, all things necessary, proper or advisable to arrange and consummate the Public Offering (or any permitted
replacement, amended, modified or any applicable Alternative Financing (as defined herein)), including (i) filing a draft registration
statement on Form S-1 with the Securities and Exchange Commission stating the consummation of the transactions contemplated hereunder
as the primary use of proceeds (the “SEC”), (ii) promptly responding to any comments received from the
SEC with respect to such draft registration statement and filing updated drafts of the registration statement, (iii) preparing
any required financial statements for the Public Offering, (iv) engaging investment banks or underwriters for the Public Offering,
and (v) complying in all material respects with the applicable requirements of the Securities Exchange Act of 1934 and the Securities
Act, as applicable. Purchaser shall keep Sellers informed with respect to any material activity concerning the status of the Public
Offering, including if for any reason Purchaser no longer believes in good faith that it will be able to obtain all or any portion
of the proceeds of the Public Offering. If the Public Offering becomes unavailable, the Purchaser shall, if authorized by its
board of directors, use commercially reasonable efforts authorized by its board of directors to arrange to obtain alternative
financing from alternative sources in an amount sufficient to consummate the transactions contemplated hereunder (“Alternative
Financing”). If the Public Offering or any Alternative Financing is consummated, Purchaser shall use the net proceeds
of such offering, such Alternative Financing or other funds available to it to pay the Purchase Price at the Closing.

 

(i) Lender
Consent. Purchaser shall use reasonable efforts to obtain, prior to the Closing, the consent of the necessary lenders under
the Credit Agreement and the CRBO Credit Agreement to permit (i) the acquisition by Purchaser of the Subject Class A Units and
(ii) any other action required to consummate the transactions contemplated by this Agreement (together, the “Credit
Agreement Consents”).

 

4.3 Survival
of Covenants; Limitations on Breach of Covenants. All covenants made by Sellers or Purchaser in this Agreement that are to
be performed at or prior to Closing shall terminate upon the Closing. All other covenants and agreements shall terminate in accordance
with their respective terms.

 

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ARTICLE
5

CONDITIONS PRECEDENT TO CLOSING

 

5.1 Conditions
Precedent to the Purchaser’s Obligations. The obligation of the Purchaser to consummate the transactions contemplated
by this Agreement is subject to the fulfillment or satisfaction, at the times indicated herein, of each of the following conditions
precedent:

 

(a) Representations
and Warranties True as of the Closing. The Fundamental Representations of Sellers shall be true and correct in all material
respects and the representations and warranties of Sellers in Section 3.1 that are not Fundamental Representations (the
“Sellers’ Non-Fundamental Representations”) shall be true and correct in all respects (in each
case, without regard to materiality or Material Adverse Effect qualifiers), on and as of the Closing Date, with the same effect
as though such representations and warranties had been made or given 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 (excluding
the reference to “as of the date of this Agreement” in the lead in to Section 3.1), except for all such breaches,
if any, of such Sellers’ Non-Fundamental Representations that individually or in the aggregate would not reasonably be expected
to have a Material Adverse Effect.

 

(b) Compliance
with this Agreement. The Sellers shall have performed and complied in all material respects with all agreements and conditions
required by this Agreement to be performed or complied with by them prior to or at the Closing.

 

(c) Closing
Certificate. The Purchaser shall have received a certificate from the Sellers dated the Closing Date, certifying that the
conditions specified in Sections 5.1(a) and 5.1(b) hereof have been fulfilled (the “Sellers’ Certificate”).

 

(d) No
Threatened or Pending Litigation. At the Closing, no suit, action or other proceeding, or injunction or final judgment relating
thereto shall be threatened in writing or be pending before any Governmental Body in which it is sought to restrain or prohibit
or to obtain damages in connection with the consummation of the transactions contemplated hereby.

 

(e) Successful
Closing of Public Offering. The Purchaser shall have successfully closed (i) a public offering of its common stock registered
on Form S-1 with net proceeds payable to and received by the Seller, after payment of all expenses, brokerage or investment banking
commissions, attorneys’ fees, auditors’ fees, accountant fees, road show expenses, consulting fees and the other costs
and expenses associated therewith, equal to or in excess of the Base Purchase Price (the “Public Offering”)
or (ii) an Alternative Financing.

 

(f) Approval
of Lenders and Administrative Agents. Purchaser shall have obtained the consent of the necessary lenders under the Credit
Agreement.

 

(g) Sellers’
Deliveries. The Sellers shall have delivered to the Purchaser at or prior to the Closing the following, all of which shall
be in a form reasonably satisfactory to the Purchaser and its counsel:

 

(i) the
executed Assignment in the form attached hereto as Exhibit D (the “Assignment”);

 

(ii) the
Sellers’ Release described in Section 5.1(h) below, executed by the Sellers; and

 

(iii) an
affidavit, duly executed and acknowledged by each Seller dated as of the Closing Date, in accordance with Treasury Regulation
§ 1.1445-2(b)(2) and Section 1446(f) of the Code, certifying that such Seller is not a “foreign person” for such
purposes.

 

(h) Seller
Release. Effective as of the Closing, each Seller shall execute the form of Release attached hereto as Exhibit E (the
“Sellers’ Release”).

 

(i) No
Material Adverse Effect. There shall not have occurred between the date of the execution of this Agreement and the Closing
a Material Adverse Effect.

 

    12

     

    

 

5.2 Conditions
Precedent to the Obligations of the Sellers. The obligation of each Seller to consummate the transactions contemplated by
this Agreement are subject to the fulfillment or satisfaction, prior to or at the Closing, of each of the following conditions
precedent:

 

(a) Representations
and Warranties True as of the Closing. The Fundamental Representations of Purchaser shall be true and correct in all material
respects and the representations and warranties of Purchaser in Section 3.2 that are not Fundamental Representations (the
“Purchaser’s Non-Fundamental Representations”) shall be true and correct in all respects (in each
case, without regard to materiality qualifiers), on and as of the Closing Date, with the same force and effect as though such
representations and warranties had been made or given 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 all such breaches,
if any, of such Purchaser’s Non-Fundamental Representations that individually or in the aggregate would not have a material
adverse effect.

 

(b) Compliance
with this Agreement. The Purchaser shall have performed and complied in all material respects with all agreements and conditions
required by this Agreement to be performed or complied with by it prior to or at the Closing.

 

(c) Closing
Certificate. The Sellers shall have received a certificate from the Purchaser dated the date of the Closing, certifying that
the conditions specified in Section 5.2(a) and 5.2(b) hereof have been fulfilled (the “Purchaser’s
Certificate”).

 

(d) No
Threatened or Pending Litigation. At the Closing, no suit, action or other proceeding, or injunction or final judgment relating
thereto shall be threatened in writing or be pending before any Governmental Body in which it is sought to restrain or prohibit
or to obtain substantial damages in connection with the consummation of the transactions contemplated hereby.

 

(e) Purchaser’s
Deliveries. The Purchaser shall have delivered to the Seller at or prior to Closing the following, all of which shall be in
a form reasonably satisfactory to the Sellers and their counsel:

 

(i) the
Purchase Price, to the accounts designated in the Preliminary Settlement Statement, by direct bank or wire transfer in immediately
available funds;

 

(ii) the
Assignment;

 

(iii) the
Purchaser’s Release described in Section 5.2(f) below, executed by the Purchaser;

 

(iv) the
CA Consents Evidence described in Section 5.2(g) below.

 

(f) Purchaser’s
Release. Effective as of the Closing, Purchaser shall execute the form of Release attached hereto as Exhibit F (the
“Purchaser’s Release”).

 

(g) Approval
of Lenders and Administrative Agents. Purchaser shall have delivered evidence, to the reasonable satisfaction of Sellers,
that the Credit Agreement Consents shall have been obtained (the “CA Consents Evidence”).

 

(h) No
Material Adverse Effect. There shall not have occurred between the date of the execution of this Agreement and the Closing
a Material Adverse Effect or material adverse effect (as applicable).

 

    13

     

    

 

ARTICLE
6

INDEMNIFICATION

 

6.1 General
Indemnification Obligation of the Seller. From and after the Closing, the Sellers shall reimburse, indemnify, defend, and
hold harmless the Purchaser, its officers, directors, affiliates (including, following the Closing, the Company), shareholders,
employees, and their successors and permitted assigns (each a “Purchaser Party”) against and in respect
of any and all demands, suits, claims, actions or causes of action, assessments, damages, losses, deficiencies, Liabilities, settlements,
penalties, forfeitures, costs and expenses (including, without limitation, reasonable legal fees and expenses and clean-up costs)
(hereinafter collectively referred to as “Indemnity Losses”) and individually an “Indemnity
Loss”) incurred, suffered, sustained or required to be paid, directly or indirectly, by, or sought to be imposed
on, a Purchaser Party resulting from, related to or arising out of any of the following:

 

(a) any
breach of any representation or warranty in Section 3.1 (other than Section 3.1(g)) or the Sellers’ Certificate;

 

(b) any
failure to perform any agreement or covenant to be performed on the part of the Sellers under this Agreement following the Closing;
and

 

(c) Sellers’
Allocated Portion (as defined herein) of any and all Taxes (1) resulting from, related to or arising out of a breach of any representation
or warranty set forth in Section 3.1(g), or (2) imposed on the Company or any Subsidiary of the Company (A) for all taxable
periods ending on or before the Closing Date and the portion through the end of the Closing Date for any Straddle Period (determined
in accordance with Section 9.17(c)) (the “Pre-Closing Date Tax Period”) and (B) as a transferee
or successor, by contract, or otherwise, resulting from events, transactions or relationships occurring or existing prior to the
Closing, other than such Taxes attributable to a transfer or other transaction between the Company and a Purchaser Party (clause
(1) and (2), collectively, “Seller Taxes”); provided, however, that Seller Taxes shall not include
a Tax to the extent such Tax was included as a current Liability in the determination of Working Capital. As used herein, the
“Sellers’ Allocated Portion” means 58.06%.

 

6.2 General
Indemnification Obligation of the Purchaser. From and after the Closing, the Purchaser shall reimburse, indemnify, defend,
and hold harmless the Sellers, and each Seller’s Affiliates and its and their respective officers, directors, affiliates,
partners, members, shareholders, employees, and their successors and permitted assigns (each, a “Seller Party”)
against and in respect of any Indemnity Losses incurred, suffered, sustained or required to be paid, directly or indirectly, by,
or sought to be imposed on, the Seller Party resulting from, related to or arising out of any of the following:

 

(a) any
breach of any representation or warranty in Section 3.2 or in the Purchaser’s Certificate;

 

(b) any
failure to perform any agreement or covenant to be performed on the part of Purchaser under this Agreement following the Closing;
and

 

(c) all
Taxes (other than Seller Taxes) imposed on the Company or any Subsidiary of the Company.

 

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6.3 Limitation
on Liability.

 

(a) Sellers
shall not have any Liability for any indemnification under Section 6.1(a) (i) for any individual Indemnity Loss unless
the indemnification amount with respect to such Indemnity Loss exceeds $100,000 (the “De Minimis Threshold”)
and (ii) until and unless the aggregate amount of all Indemnity Losses for which Claim Notices are delivered by Purchaser that
exceed the De Minimis Threshold exceeds two and one-half percent (2.5%) of the Base Purchase Price (the “Indemnity
Deductible”), after which point Sellers shall only be liable for such indemnification to the extent such Indemnity
Losses that exceed the De Minimis Threshold exceed the Indemnity Deductible; provided, that the limitations on Sellers’
Liability in this Section 6.3(a) shall not apply to Sellers’ Liability for breaches of the Fundamental Representations
and the corresponding representations and warranties in Sellers’ Certificate or Sellers’ Liability for breaches of
its representations and warranties in Section 3.1(g) and the corresponding representations and warranties in the Sellers’
Certificate.

 

(b) Notwithstanding
anything to the contrary contained in this Agreement, Sellers shall not be required to indemnify the Purchaser Parties for, or
otherwise have any Liability to the Purchaser Parties for, aggregate Indemnity Losses for any indemnification (i) under Section
6.1(a) (other than any obligation to indemnify the Purchaser Parties pursuant to Section 6.1(a) for any breach of any
Fundamental Representations and the corresponding representations and warranties in the Sellers’ Certificate or any breach
of representations and warranties in Section 3.1(g) and the corresponding representations and warranties in Sellers’
Certificate) in excess of fifteen percent (15%) of the Base Purchase Price or (ii) otherwise under the terms of this Agreement
in excess of one hundred percent (100%) of the Base Purchase Price. Sellers’ shall not have any Liability under Section
6.1(a) with respect to representations and warranties pertaining to the Company in excess of Sellers’ Allocated Portion
of the total Indemnity Losses resulting from such breach.

 

(c) Sellers
shall have no Liability for any breach by Sellers of this Agreement (or the Sellers’ Certificate) if (i) Purchaser had Knowledge
of any fact, circumstance or event prior to Purchaser’s execution and delivery of this Agreement that resulted in such breach
or (ii) (A) Purchaser did not have Knowledge any fact, circumstance or event prior to Purchaser’s execution and delivery
of this Agreement that resulted in such breach but Purchaser had Knowledge of such fact, circumstance or event prior to the Closing,
(B) where due to such breach Purchaser’s conditions to Closing set forth in Section 5.1 were not satisfied and (C)
Purchaser consummated the transactions contemplated by this Agreement.

 

(d) For
the avoidance of doubt, no Seller or Seller Party shall have any Liability hereunder for any action taken by Purchaser or its
Affiliates in its capacity as manager of the Company or otherwise on behalf of the Company or approved by Purchaser’s designee
to the Board regardless of whether (i) such action would give rise to a breach of a representation or warranty or covenant hereunder
or in any of the documents contemplated hereby or (ii) any Seller has Knowledge of such action taken.

 

(e) Sellers
shall have no liability pursuant to Section 6.1 in respect of and to the extent of any item or any Indemnity Losses that
have been reflected as a deduction in determining the Purchase Price hereunder or otherwise reflected as a liability or a reserve
in Working Capital as finally determined pursuant to Section 1.3 or that otherwise would result  in a double recovery.

 

(f) Sellers
and Purchaser, as applicable, shall use their commercially reasonable efforts to seek third party and insurance recoveries in
respect of Indemnity Losses. In the event any insurance proceeds or other recoveries from third parties are actually realized
(in each case calculated net of reasonable third party out-of-pocket costs and expenses of such recoveries but not including any
costs or expenses attributable to increases in insurance premiums) by Sellers or Purchaser or their respective Affiliates, as
applicable, subsequent to the receipt by such Indemnified Party of an indemnification or other payment hereunder in respect of
the claims to which such insurance proceeding or third party recovery relate, appropriate refunds shall be made promptly to the
Indemnifying Party regarding the amount of such payment.

 

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6.4 Notice
of Claim; Right to Contest Claims.

 

(a) In
the event either a Purchaser Party or Seller Party seeks indemnification (the “Indemnified Party”),
the Indemnified Party shall give reasonably prompt written notice (the “Claim Notice”) to all indemnifying
parties (the “Indemnifying Party”). The Claim Notice shall specify the facts constituting the basis
for such claim, the breach of representations, warranty, agreement or covenant claimed by the Indemnified Party, as applicable,
and the amount, to the extent known, of the claim asserted; provided, that the right of any party to be indemnified hereunder
shall not be adversely affected by a failure to give such notice unless, and then only to the extent that, an Indemnifying Party
is materially and adversely prejudiced thereby.

 

(b) Upon
receipt of a Claim Notice that does not involve a Third Person (as defined herein), the Indemnifying Party shall have thirty (30)
days from the receipt of such Claim Notice to notify the Indemnified Party in writing that the Indemnifying Party disputes such
claim. If the Indemnifying Party does not timely notify the Indemnified Party of any dispute, subject to the terms of this Agreement,
the Indemnifying Party shall pay the amount of any valid claim not more than fifteen (15) days after the expiration of the initial
thirty (30) day period.

 

(c) If
the Indemnifying Party does timely notify the Indemnified Party of such dispute, then the Indemnified Party shall have fifteen
(15) days to respond in writing to the objection of the Indemnifying Party. If after such fifteen-day period there remains a dispute,
then the Indemnified Party and the Indemnifying Party will attempt in good faith for a period not to exceed thirty (30) additional
days to agree upon the rights of the respective parties with respect to such claim. If the parties should so agree, a memorandum
setting forth such agreement will be prepared and signed by the Purchaser and the Seller, and subject to the terms of this Agreement,
the Indemnifying Party shall pay the amount of any valid claim not more than fifteen (15) days after the execution of such memorandum.
If the parties do not agree within such additional thirty-day period, then the Indemnified Party may pursue any and all other
remedies available to it hereunder.

 

6.5 Right
to Contest Claims of Third Persons.

 

(a) If
an Indemnified Party is entitled to indemnification hereunder because of a claim asserted by any claimant other than an Indemnified
Party (a “Third Person”), the Indemnified Party shall promptly deliver to the Indemnifying Party a Claim
Notice after such assertion is actually known to the Indemnified Party; provided, however, that the right of a Person
to be indemnified hereunder in respect of claims made by a Third Person shall not be adversely affected by a failure to promptly
give such Claim Notice unless, and then only to the extent that, an Indemnifying Party is materially and adversely prejudiced
thereby. The Indemnifying Party shall have the right, upon written notice to the Indemnified Party to investigate, contest or
settle the claim alleged by such Third Person (a “Third Person Claim”) so long as (i) the Indemnifying
Party gives written notice to the Indemnified Party within twenty (20) days after the Indemnified Party has given notice of the
Third Party Claim that the Indemnifying Party will indemnify the Indemnified Party from and against the entirety of any and all
Indemnity Losses the Indemnified Party may suffer resulting from, arising out of, relating to, in the nature of, or caused by
the Third Party Claim, (ii) the Third Party Claim involves only money damages and does not seek an injunction or other equitable
relief against the Indemnified Party, (iii) the Third Party Claim does not relate to or otherwise arise in connection with any
criminal or regulatory enforcement action, (iv) settlement of, an adverse judgment with respect to or the Indemnifying Party’s
conduct of the defense of the Third Party Claim is not, in the good faith judgment of the Indemnified Party, likely to include
any findings of fact or admissions of culpability as to the Indemnified Party and (v) the Indemnifying Party conducts the defense
of the Third Party Claim actively and diligently; provided, that the Indemnifying Party has the right to settle and compromise
such Third Person Claim only with the consent of the Indemnified Party (which consent may not be unreasonably withheld, conditioned
or delayed) unless there is no finding or admission of any violation of legal requirements or any violation of the rights of any
Person and no affect or any other claims that may be made against the Indemnified Party, and the sole relief provided is monetary
damages that are paid in full by the Indemnified Party; provided further, that any settlement shall include an unconditional
release of such claim against the Indemnified Party.

 

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(b) The
Indemnified Party may thereafter participate in (but not control) the defense of any such Third Person Claim with its own counsel
at its own expense, unless separate representation is necessary to avoid a conflict of interest, as determined by the Indemnifying
Party’s legal counsel in accordance with applicable Law, in which case such representation shall be at the expense of the
Indemnifying Party.

 

(c) Subject
to the Indemnified Party’s compliance with Section 6.5(a), unless and until the Indemnifying Party notifies the Indemnified
Party pursuant to Section 6.5(a) of its intent to investigate, contest or settle a Third Person Claim, the Indemnified
Party shall have the right, at its option, to assume and control the defense of the matter and to look to the Indemnifying Party
for the full amount of the reasonable costs of defense. The failure of the Indemnifying Party to respond in writing to a Notice
of Claim of the Indemnified Party with respect to such Third Person Claim within thirty (30) days after receipt thereof shall
be deemed an irrevocable election not to defend the same. If the Indemnifying Party does not notify the Indemnified Party of its
intent to investigate, contest or settle a Third Person Claim, (i) the Indemnified Party may defend against such claim using counsel
of its choice, in such manner as it may reasonably deem appropriate, including, but not limited to, settling such claim, after
giving notice of the same to the Indemnifying Party, on such terms as the Indemnified Party may reasonably deem appropriate, and
(ii) the Indemnifying Party may participate in (but not control) the defense of such action, with its own counsel at its own expense.
The Parties shall make available to each other all relevant information in their possession relating to any such Third Person
Claim and shall cooperate in the defense thereof.

 

6.6 Mitigation.
Each Indemnified Party will use all commercially reasonable efforts to mitigate all Indemnity Losses that may give rise to an
indemnification claim upon and after becoming aware of any event or circumstance which would reasonably be expected to give rise
to such Indemnity Losses.

 

6.7 Exclusive
Remedy. From and after the Closing, except for Section 1.3 the indemnification and remedies set forth in this Article
6 shall constitute the sole and exclusive remedies of the Purchaser Parties against Seller and of the Seller Parties against
Purchaser with respect to any breach of representation or warranty or non-performance, partial or total, of any covenant or agreement
contained in this Agreement; provided, however, that nothing in this Section 6.7 shall prevent any Party from seeking
injunctive or equitable relief in accordance with this Agreement; provided further, that in the event a Purchaser Party
or Seller Party should assert rights or obligations in connection with the transactions contemplated hereunder under any Law or
cause of action not based on the interpretation or application of this Agreement, the Parties agree that the provisions of this
Article 6 shall in all instances apply to such claim or cause of action.

 

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6.8 Non-Compensatory
Damages. NONE OF THE PURCHASER PARTIES NOR SELLER PARTIES SHALL BE ENTITLED TO RECOVER FROM SELLERS OR PURCHASER, AS APPLICABLE,
OR THEIR RESPECTIVE AFFILIATES, ANY SPECIAL, INDIRECT, CONSEQUENTIAL, PUNITIVE, EXEMPLARY, REMOTE OR SPECULATIVE DAMAGES OR LOST
PROFITS OR DIMINUTION IN VALUE ARISING UNDER OR IN CONNECTION WITH THIS AGREEMENT (EXCEPT AS OTHERWISE PROVIDED IN SECTION
8.9), THE SELLERS’ CERTIFICATE, THE PURCHASER’S CERTIFICATE OR THE OTHER DOCUMENTS CONTEMPLATED HEREUNDER OR THE
TRANSACTIONS CONTEMPLATED HEREBY OR THEREBY, EXCEPT TO THE EXTENT ANY SUCH PARTY SUFFERS SUCH DAMAGES TO A THIRD PARTY, WHICH
DAMAGES (INCLUDING COSTS OF DEFENSE AND REASONABLE ATTORNEYS’ FEES INCURRED IN CONNECTION WITH DEFENDING AGAINST SUCH DAMAGES)
SHALL NOT BE EXCLUDED BY THIS PROVISION AS TO RECOVERY HEREUNDER. SUBJECT TO THE PRECEDING SENTENCE, PURCHASER, ON BEHALF OF EACH
OF THE PURCHASER PARTIES, AND SELLERS, ON BEHALF OF EACH OF THE SELLER PARTIES, EACH WAIVE ANY RIGHT TO RECOVER ANY SPECIAL, INDIRECT,
CONSEQUENTIAL, PUNITIVE, EXEMPLARY, REMOTE OR SPECULATIVE DAMAGES OR LOST PROFITS OR DIMINUTION IN VALUE ARISING IN CONNECTION
WITH OR WITH RESPECT TO THIS AGREEMENT (EXCEPT AS OTHERWISE PROVIDED IN SECTION 8.9), THE SELLERS’ CERTIFICATE, THE
PURCHASER’S CERTIFICATE OR THE TRANSACTIONS CONTEMPLATED HEREBY OR THEREBY.

 

6.9 Waiver
of Other Representations.

 

(a) NOTWITHSTANDING
ANYTHING IN THIS AGREEMENT TO THE CONTRARY, IT IS THE EXPLICIT INTENT OF EACH PARTY HERETO, AND THE PARTIES HEREBY AGREE, THAT
NEITHER SELLER NOR ANY OF SUCH SELLER’S AFFILIATES OR SUCH SELLER’S AND SUCH SELLER’S RESPECTIVE REPRESENTATIVES
HAS MADE OR IS MAKING ANY REPRESENTATION OR WARRANTY WHATSOEVER, EXPRESS OR IMPLIED, WRITTEN OR ORAL, INCLUDING ANY IMPLIED REPRESENTATION
OR WARRANTY AS TO THE CONDITION, MERCHANTABILITY, USAGE, SUITABILITY OR FITNESS FOR ANY PARTICULAR PURPOSE WITH RESPECT TO THE
SUBJECT CLASS A UNITS, EXCEPT THOSE REPRESENTATIONS AND WARRANTIES EXPRESSLY MADE BY SELLERS IN SECTION 3.1 AND IN THE
SELLERS’ CERTIFICATE. IN PARTICULAR, AND WITHOUT IN ANY WAY LIMITING THE FOREGOING, (I) NEITHER SELLER NOR ANY OF SUCH SELLER’S
AFFILIATES OR SUCH SELLER’S OR SUCH SELLER’S RESPECTIVE REPRESENTATIVES MAKES ANY REPRESENTATION OR WARRANTY REGARDING
ANY ENVIRONMENTAL MATTERS AND (II) NEITHER SELLER NOR ANY OF SUCH SELLER’S AFFILIATES OR SUCH SELLER’S OR SUCH SELLER’S
REPRESENTATIVES MAKES ANY REPRESENTATION OR WARRANTY TO BUYER WITH RESPECT TO ANY FINANCIAL PROJECTIONS OR FORECASTS RELATING
TO THE SUBJECT CLASS A UNITS.

 

(b) EXCEPT
FOR THOSE REPRESENTATIONS AND WARRANTIES EXPRESSLY CONTAINED IN SECTION 3.1 AND IN THE SELLERS’ CERTIFICATE: THE
SUBJECT CLASS A UNITS ARE BEING TRANSFERRED THROUGH THE SALE OF THE SUBJECT CLASS A UNITS “AS IS, WHERE IS, WITH ALL FAULTS,”
AND EACH SELLER AND ITS AFFILIATES AND ITS AND THEIR RESPECTIVE REPRESENTATIVES EXPRESSLY DISCLAIM, AND PURCHASER AND ITS AFFILIATES
AND THEIR RESPECTIVE REPRESENTATIVES EXPRESSLY DISCLAIM RELIANCE UPON ANY AND ALL OTHER REPRESENTATIONS OR WARRANTIES OF ANY KIND
OR NATURE, EXPRESS OR IMPLIED, INCLUDING REPRESENTATIONS AND WARRANTIES AS TO THE CONDITION, VALUE OR QUALITY OF THE SUBJECT CLASS
A UNITS OR THE PROSPECTS, RISKS AND OTHER INCIDENTS OF THE SUBJECT CLASS A UNITS.

 

(c) PURCHASER
ACKNOWLEDGES THAT THE REPRESENTATIONS AND WARRANTIES SET FORTH IN SECTION 3.1 AND IN THE SELLERS’ CERTIFICATE ARE
THOSE ONLY OF SUCH SELLERS AND NOT OF ANY OTHER PERSON INCLUDING ANY AFFILIATE OR REPRESENTATIVE OF SELLERS OR ANY OF THEIR AFFILIATES.
PURCHASER FURTHER ACKNOWLEDGES, ON BEHALF OF ITSELF AND ITS AFFILIATES, THAT IT HAS NOT RELIED ON ANY REPRESENTATION NOT EXPRESSLY
SET FORTH IN THIS AGREEMENT.

 

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6.10 Waiver
of Right of Rescission. Sellers and Purchaser acknowledge that, following Closing, the payment of money, as limited by the
terms of this Agreement, shall be adequate compensation for breach of any representation, warranty, covenant or agreement contained
herein or for any other claim arising in connection with or with respect to this Agreement or the transactions contemplated by
this Agreement. As the payment of money shall be adequate compensation, following Closing, Purchaser and Sellers waive any right
to rescind this Agreement or any of the transactions contemplated hereby.

 

ARTICLE
7

POST-CLOSING MATTERS

 

7.1 Further
Assurances. From and after the Closing, each of the parties hereto will cooperate with the other and execute and deliver to
the other parties hereto such other instruments and documents and take such other actions as may be reasonably requested from
time to time by any other parties hereto as necessary to carry out, evidence and confirm the intended purposes of this Agreement.

 

7.2 D&O
Liability and Indemnification.

 

(a) For
a period of six (6) years after the Closing, Purchaser will not, and will not permit the Company or any of its Subsidiaries to,
amend, repeal or modify any provision in the Company’s or any of its Subsidiaries’ certificate or articles of incorporation,
bylaws or other equivalent governing documents relating to the exculpation, indemnification or advancement of expenses of any
current and former officers and directors (each, an “D&O Indemnified Person”) (unless required by
Law), it being the intent of the parties that the current and former officers and directors of the Company and its Subsidiaries
will continue to be entitled to such exculpation, indemnification and advancement of expenses to the full extent of the Law.

 

(b) In
addition to the other rights provided for in this Section 7.2 and not in limitation thereof, from and after the Closing,
Purchaser will, and will cause the Company and its Subsidiaries (each, a “D&O Indemnifying Party”)
to, to the fullest extent permitted by applicable Law, (i) indemnify and hold harmless (and release from any Liability to Purchaser
or the Company or any of its Subsidiaries), the D&O Indemnified Persons against all D&O Expenses (as defined herein),
losses, claims, damages, judgments or amounts paid in settlement (“D&O Costs”) in respect of any
threatened, pending or completed claim, action or proceeding, whether criminal, civil, administrative or investigative, based
on or arising out of or relating to the fact that such Person is or was a director or officer of the Company or any of its Subsidiaries
arising out of acts or omissions occurring on or prior to the Closing (including in respect of acts or omissions in connection
with this Agreement and the transactions contemplated thereby) (a “D&O Indemnifiable Claim”) and
(ii) advance to such D&O Indemnified Persons all D&O Expenses incurred in connection with any D&O Indemnifiable Claim
(including in circumstances where the D&O Indemnifying Party has assumed the defense of such claim) promptly after receipt
of reasonably detailed statements therefor; provided, however, that the Person to whom D&O Expenses are to be
advanced provides an undertaking to repay such advances if it is ultimately determined that such Person is not entitled to indemnification.
Any D&O Indemnifiable Claims will continue until such D&O Indemnifiable Claim is disposed of or all judgments, orders,
decrees or other rulings in connection with such D&O Indemnifiable Claim are fully satisfied. For the purposes of this Section
7.2(b), “D&O Expenses” will include attorneys’ fees and all other costs, charges and expenses
paid or incurred in connection with investigating, defending, being a witness in or participating in (including on appeal), or
preparing to defend, to be a witness in or participate in any D&O Indemnifiable Claim, but will exclude losses, judgments
and amounts paid in settlement (which items are included in the definition of D&O Costs).

 

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(c) On
or before the Closing, Purchaser and Sellers will cause the Company to, at the Company’s expense, obtain, maintain and fully
pay for irrevocable “tail” insurance policies naming the D&O Indemnified Persons as direct beneficiaries with
a claims period of at least six (6) years from the Closing Date from an insurance carrier and in an amount and scope mutually
agreed upon by Purchaser and Sellers. For the avoidance of doubt, the cost of such insurance policies shall adjust Working Capital
and the Purchase Price at Closing and be reflected in the Preliminary Settlement Statement. From and after Closing, Purchaser
will not, and will cause the Company not to, cancel or change such insurance policies in any respect.

 

ARTICLE
8

RESTRICTIVE COVENANTS

 

8.1 Consideration
Acknowledgement. The operational history of the Company has created over time substantial goodwill (proprietary information,
customer contacts, etc.) that is currently used in the Business and will be transferred to Purchaser as part of the membership
interest purchase transaction contemplated by this Agreement. Consequently, the Purchaser wants to assure that the Sellers will
abide by the restrictive covenants set forth in this Article 8. The Sellers also acknowledge that they will each directly
and indirectly receive substantial benefits from the consummation of the transaction contemplated by this Agreement and that such
consideration is the consideration for the transfer of the goodwill and the promises and covenants herein. The Sellers hereby
acknowledge that such benefits are good and adequate consideration for the promises and covenants granted by it hereunder.

 

8.2 Definitions.

 

(a) “Affiliate”
means with respect to a specified Person, any other Person directly or indirectly controlling, controlled by or under common control
with, the specified person or entity.

 

(b) “Business
Activities” shall mean all activities conducted by the Company or any of its Subsidiaries in evaluating, acquiring,
exploring, drilling, developing, and producing oil, gas and other hydrocarbons.

 

(c) “Competing
Business” means any (i) Competing Company engaged, whether in whole or in part, in the performance of Business Activities
and (ii) which first became known to Sellers in connection with Sellers’ receipt of Confidential Information from the Company
and Sellers’ ownership of the Subject Class A Units prior to the Closing.

 

(d) “Competing
Company” means any of the following Persons: (i) Diversified Gas and Oil PLC, (ii) Energy Corporation of America,
Inc., (iii) EnerVest, Ltd., (iv) EQT Corporation, (v) Jetta Operating Company, Inc., (vi) Kinzer Drilling Company, LLC, (vii)
Blue Ridge Mountain Resources, Inc., (viii) Vinland Energy, LLC, (ix) WS Atkins Limited, and (x) Core Minerals III, LLC.

 

(e) “Non-Disclosure
Period” means the period beginning on the Closing date and ending on the second anniversary thereof.

 

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(f) “Restricted
Period” means the period beginning on the Closing Date and ending on the first anniversary thereof.

 

(g) “Territory”
means the AMI.

 

8.3 Covenant
Not To Compete. In consideration of the substantial benefits to be received by the Sellers directly and indirectly from the
consummation of the transaction contemplated by this Agreement, to the fullest extent permitted by applicable Law, during the
Restricted Period, each Seller shall not, and shall direct its Affiliates not to, directly or indirectly own, manage, operate,
control, or otherwise be in any manner affiliated or connected with, or engage or participate in the ownership, management, operation,
financing, or control of any Competing Company engaged in any Competing Business within the Territory.

 

8.4 Agreement
Not to Solicit Employees. In addition to and not in limitation of Section 8.3, and in further consideration of the
substantial benefits received by them directly and indirectly from the consummation of the transactions contemplated by this Agreement,
each Seller agrees that during the Restricted Period it will not directly or indirectly, whether for its own account or for the
account of any Affiliate, solicit or recruit or attempt to solicit or recruit, hire or attempt to hire, contract with or attempt
to contract with any person that, to such Seller’s Knowledge, is an employee of the Company, the Purchaser or any of their
Affiliates; provided, however, that the foregoing provision shall not prevent any Seller or such Seller’s
Affiliates from engaging in general solicitations (including, without limitation, use of employment agencies, advertisements and
the internet) not specifically directed towards employees of the Company, the Purchaser or any of their Affiliates, or hiring
as a result thereof; provided further, that this Section 8.4 shall not restrict any portfolio companies of any Seller
or such Seller’s Affiliates who are not acting upon the direction of such Seller or its Affiliates.

 

8.5 Non-Disclosure.
In addition to and not in limitation of the covenants contained above, and in consideration of the substantial benefits to be
received by them directly and indirectly from the consummation of the transaction contemplated by this Agreement, each Seller
agrees that during the Non-Disclosure Period, it will not, directly or indirectly, without the prior written consent of the Purchaser,
disclose (except to its representatives) or use any Confidential Information (as defined herein); provided, however,
that, notwithstanding anything to the contrary in this Section 8.5, the information subject to the foregoing provisions
of this Section will not include any information (i) generally available to, or known by, the public (other than as a result of
disclosure in violation hereof), (ii) is or becomes available to any Seller or any of its Affiliates from a source other than
the Company or its Affiliates, provided, that, to the Knowledge such Seller, such source is not bound by any contractual,
legal or fiduciary obligation of confidentiality to the Company with respect to such information or (iii) is or was independently
developed or derived by any Seller or any of its Affiliates without reliance on the Confidential Information; and provided
further, that the provisions of this Section 8.5 will not prohibit (A) disclosure of Confidential Information (I) required
or requested by any applicable Law so long as, to the extent reasonably practicable and legally permissible, prior notice is given
of such disclosure and a reasonable opportunity is afforded to contest the same or (II) made in connection with the enforcement
of any right or remedy relating to this Agreement or (B) any retention of any Confidential Information as required by Law, professional
rules and standards or internal compliance policies or contained in an archived computer system backup in accordance with any
Seller’s or its Affiliate’s security and/or disaster recovery procedures. Each Seller agrees that it will be responsible
for any breach or violation of the provisions of this Section 8.5 by any of its representatives. For purposes of this Article
8, “Confidential Information” means any and all confidential and/or proprietary information relating
to the Company which:

 

(a) was
or is used in the business operations of the Company and was created by the Company, in each case prior to the Closing; or

 

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(b) was
or is used in the business operations of the Company, in each case prior to the Closing.

 

Confidential
Information includes, but is not limited to, the following types of confidential and/or proprietary information relating to the
Company (whether or not reduced to writing or designated as confidential):

 

(i) existing
and prospective business opportunities and transactions information;

 

(ii) customer
information;

 

(iii) vendor
and supplier information;

 

(iv) employee
information;

 

(v) financial
information;

 

(vi) marketing,
business development, pricing and quoting information;

 

(vii) facilities
information;

 

(viii) trade
secrets;

 

(ix) information
(material or otherwise) regarding the Purchaser that has not been disclosed to the public; and

 

(x) information
of a confidential or secret nature directly or indirectly relating to or concerning the affairs, financial position, assets, operations,
prospects, business activities or affairs of the Company, the Purchaser and any of their Affiliates.

 

Confidential
Information shall be considered a trade secret under all applicable Law. Purchaser, on its own behalf and on behalf of the Company
from and after the Closing, hereby acknowledges that Sellers’ and their Affiliates, members, directors, officers or employees
may retain mental impressions of the Confidential Information, and the use of such mental impressions shall not be deemed to be
a breach hereunder.

 

8.6 Non-Disparagement
Covenant. Each of the Sellers and Purchaser agree that, during the Restricted Period or at any time thereafter, it will not
in any communications with the press or other media or with any Person who, to the Knowledge of Sellers or Purchaser (as applicable),
is customer, employee or supplier of the Sellers, Purchaser or the Company (as applicable), criticize, ridicule or make any statement
which disparages or is derogatory of the Sellers, Purchaser, the Company or any of their respective Affiliates, members, directors,
officers or employees (as applicable).

 

8.7 Reasonableness
of Terms and Consideration. The Sellers and the Purchaser each stipulate and agree that the terms and covenants contained
in this Article 8 are fair and reasonable in duration, geographic scope and all other respects to protect the legitimate
interests of the Company, the Sellers, the Purchaser and their respective Affiliates, and that these restrictions are designed
for the reasonable protection of the value of the Subject Class A Units purchased, the goodwill transferred, and the business
operations of the Company, the Sellers, the Purchaser and their respective Affiliates. Each Seller and Purchaser expressly waives
any right to challenge the reasonableness or enforceability of the terms and covenants contained in this Article 8 and
further stipulates and agrees that it shall be estopped from raising any such challenge. Additionally, each Seller and Purchaser
hereby acknowledges and agrees that the restrictions in the covenants of this Article 8 have been supported by adequate
consideration as provided throughout this Agreement and the Purchaser’s payment described in Article 1 and the Sellers’
sale of the Subject Class A Units.

 

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8.8 Remedies
for Breach. Each party understands and agrees that the Company and/or the other party may suffer irreparable harm if such
party shall breach any of the obligations under this Article 8, and that the monetary damages may be impossible to estimate
or determine and may be inadequate to compensate the Company and/or such other party for that breach. Accordingly, each party
agrees that, in the event of a breach or a threatened breach of any of the provisions of this Article 8, the Company, the
Purchaser, the Sellers and/or their respective Affiliates, in addition to and not in limitation of any other rights, remedies
or damages available to them at Law or in equity, shall be entitled to seek immediate injunctive relief in the form of a temporary
restraining order without notice, preliminary injunction, and/or permanent injunction to prevent or restrain such breach by the
other party or by any and all Persons directly or indirectly acting for, on behalf of, or with such other party.

 

8.9 Damages.
To the extent that any damages are calculable resulting from the breach of Section 8.3 or Section 8.5, subject to
Section 6.8, the Company, the Purchaser and their Affiliates shall also be entitled to recover any lost profits or diminution
in value of the Company, the Purchaser and their Affiliates, from the Sellers, in each case, to the extent, and only to the extent,
that such lost profits or diminution in value of the Company constitute direct damages as a matter of Law.

 

8.10 Interpretation.
Each Seller and the Purchaser acknowledge and agree that the covenants contained in this Article 8 shall be construed as
a series of separate covenants. If any restriction in these covenants are declared by a court of competent jurisdiction to be
invalid, illegal or unenforceable by reason of the extent, duration, geographic scope or otherwise, then the parties shall negotiate
in good faith to modify the offending terms as necessary to render the restriction enforceable to the maximum extent possible.

 

8.11 Survival.
If, and only if, Closing occurs, the terms of the Article 8 shall survive the Closing of the transactions contemplated
hereby and be enforceable thereafter for the term of the Restricted Period or the Non-Disclosure Period, as applicable. Following
the expiration of the Restricted Period or the Non-Disclosure Period, as applicable, all covenants and agreements set forth under
this Article 8, shall automatically terminate without any action of the parties.

 

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ARTICLE
9

MISCELLANEOUS

 

9.1 Termination.

 

(a) Causes.
Anything herein or elsewhere to the contrary notwithstanding, this Agreement may be terminated by written notice of termination
at any time on or before the Closing only as follows:

 

(i) by
mutual written consent of any Seller and the Purchaser;

 

(ii) by
Purchaser, if there shall have been a breach by any Seller of such Seller’s representations, warranties or covenants contained
in this Agreement, and in each case such breach has not been cured within thirty (30) days after notice thereof has been delivered
to such Seller (or is not capable of being cured) and has not been waived in writing by Purchaser (in Purchaser’s sole discretion)
and such breach causes (or would cause if Closing were then scheduled to occur) a failure of any of the conditions set forth in
Section 5.1; provided, however, that Purchaser shall not be entitled to terminate this Agreement and the
transactions contemplated hereunder pursuant to this Section 9.1(a)(ii) if Purchaser is in material breach of this Agreement
at the time Purchaser desires to terminate;

 

(iii) by
any Seller, if there shall have been a breach by Purchaser of Purchaser’s representations, warranties or covenants contained
in this Agreement, and in each case such breach has not been cured within thirty (30) days after notice thereof has been delivered
to Purchaser (or is not capable of being cured) and has not been waived in writing by such Seller (in such Seller’s sole
discretion) and such breach causes (or would cause if Closing were then scheduled to occur) a failure of any of the conditions
set forth in Section 5.2; provided, however, that such Seller shall not be entitled to terminate this Agreement
and the transactions contemplated hereunder pursuant to this Section 9.1(a)(iii) if such Seller is in material breach of
this Agreement at such time;

 

(iv) by
the Purchaser upon written notice to Sellers given at any time on or after September 1, 2018 (the “Purchaser’s
Outside Date”); provided, however, that Purchaser shall not have the right to terminate this Agreement
pursuant to this Section 9.1(a)(iv) if Purchaser is in material breach of this Agreement at the time this Agreement would
otherwise be terminated by Purchaser;

 

(v) by
Sellers upon written notice to Purchaser given at any time on or after September 1, 2018 (the “Sellers’ Outside
Date”); provided, however, that Sellers shall not have the right to terminate this Agreement pursuant
to this Section 9.1(a)(v) if Sellers are in material breach of this Agreement at the time this Agreement would otherwise
be terminated by Sellers; or

 

(vi) by
any Seller or Purchaser if consummation of the transactions contemplated hereby is enjoined, restrained or otherwise prohibited
or otherwise made illegal by the terms of a final, non-appealable order.

 

(b) Effect
of Termination.

 

(i) In
the event of the termination of this Agreement pursuant to the provisions of this Section 9.1, this Agreement (except for
Section 6.8, this Section 9.1(b)(i), the last sentence of Section 9.2 (subject to this Section 9.1(b)(i)),
Sections 9.3, 9.5, 9.6, 9.7, 9.8, 9.9, 9.10, 9.11, 9.12, 9.13,
9.14, 9.15, 9.19, 9.20, 9.22, and 9.23 which shall survive such termination) shall become
void and have no effect, without any Liability on the part of any of the parties or their directors, officers, members or stockholders
in respect of this Agreement except in the case of fraud or willful and intentional breach or as otherwise set forth in this Section
9.1(b). In addition, (i) if Sellers terminate this Agreement pursuant to Section 9.1(a)(iii) or Section 9.1(a)(v),
Sellers shall be entitled to recover from Purchaser (in the case of a termination of this Agreement pursuant to Section 9.1(a)(iii))
or the Company (in the case of a termination of this Agreement pursuant to Section 9.1(a)(v)) all of Sellers’ transaction
costs and expenses, including attorney fees and court costs and (ii) if Purchaser terminates this Agreement pursuant to Section
9.1(a)(ii), Purchaser shall be entitled to recover from Sellers all of Purchaser’s transaction costs and expenses, including
attorney fees and court costs.

 

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9.2 Transfer
Taxes and Expenses. Each of the Sellers and Purchaser shall bear and pay 50% of all federal, state and local sales, use, documentary
and other similar Taxes, fees and charges, if any, due as a result of the sale of the Subject Class A Units contemplated hereby
(“Transfer Taxes”). Any Tax Returns that must be filed in connection with any such Transfer Taxes shall
be prepared and filed when due by the party that is primarily or customarily responsible under the applicable Law for filing such
Tax Returns. Such party will use its commercially reasonable efforts to provide such Tax Returns to the other party at least ten
(10) days prior to the due date (taking into account any valid extensions) for filing such Tax Returns, and such Tax Returns shall
not be filed without the prior written consent of the other party (which consent shall not be unreasonably withheld, conditioned
or delayed). Purchaser and Sellers shall cooperate in good faith, to the extent reasonably requested by the other party and permissible
under applicable Law, to minimize the amount of any such Transfer Taxes. Except as otherwise provided in this Agreement, each
party hereto shall pay its own expenses incidental to the preparation of this Agreement, the carrying out of the provisions of
this Agreement and the consummation of the transactions contemplated hereby.

 

9.3 Contents
of Agreement; Amendments. This Agreement, the other agreements and documents referenced herein, collectively set forth the
entire understanding of the parties hereto with respect to the transactions contemplated hereby. It shall not be amended or modified
except by written instrument duly executed by each of the parties hereto. Any and all previous agreements and understandings between
or among the parties regarding the subject matter hereof, whether written or oral, are superseded by this Agreement.

 

9.4 Assignment
and Binding Effect. This Agreement may not be assigned by any party hereto without the prior written consent of the other
parties, and any assignment in violation of the foregoing is void ab initio. Subject to the foregoing, all of the terms
and provisions of this Agreement shall be binding upon and inure to the benefit of and be enforceable by the successors and permitted
assigns of the Sellers and the Purchaser. Prior to execution by all parties, this Agreement shall not be binding upon or enforceable
by or against any party, by estoppel or otherwise.

 

9.5 Waiver.
Any condition, term or provision of this Agreement may be waived at any time by the party entitled to the benefit thereof by a
written instrument duly executed by such party. Any such written waiver shall not imply a waiver as to any other term, condition,
circumstance or occasion nor estop any party from enforcing any term, condition, right or remedy not expressly so waived. Failure
of a party to insist upon adherence to any term or condition of this Agreement on any occasion shall not be considered a waiver
or deprive that party of the right thereafter to insist upon adherence to that term or condition or any other term or condition
of this Agreement.

 

9.6 Notices.
Any notice or communication under this Agreement shall be in writing and delivered (by hand, email or nationally recognized overnight
courier in compliance with the provisions of this Section 9.6):

 

	 	If
        to the Purchaser:

         

         
	Carbon
Natural Gas Company

        Attention:
Patrick R. McDonald

        1700
Broadway, Suite 1170

        Denver,
Colorado 80290

        pmcdonald@carbonnaturalgas.com

	 	 	 
	 	With
        a copy to:

         

         
	Welborn
Sullivan Meck & Tooley, P.C.

        Attention:
Jeffrey J. Peterson

        1125
        17th Street, Suite 2200

	 	 	Denver,
Colorado 80202

        jpeterson@wsmtlaw.com

 

    25

     

    

	 	 	 
	 	If
        to the Sellers:

         

         
	Old
Ironsides Energy

        Attention:
Scott Carson

        10
St. James Avenue, 19th Floor

        Boston,
Massachussetts 02116

        scarson@oldironsidesenergy.com

	 	 	 
	 	With
        a copy to:

         

         
	Vinson
& Elkins LLP

        Attention:
Caroline Phillips

        666
Fifth Avenue, 26th Floor

        New
York, New York 10103

        cphillips@velaw.com

 

Notice
by electronic transmission shall be deemed given on the day sent, provided the sender receives confirmation of transmission
and the sender contemporaneously sends a copy of the notice to the recipient by first class mail, postage prepaid. Notice by hand
delivery against a written receipt or by nationally recognized overnight courier shall be deemed given on the day of delivery.
Any party may from time to time specify as its address for purposes of this Agreement any other address upon the giving of five
(5) days’ notice thereof to the other party in the manner required by this paragraph. This Section 9.6 shall not
prevent the giving of written notice in any other manner, but such notice shall be deemed effective only when and as of its actual
receipt at the proper address and by the proper addressee.

 

9.7 Governing
Law. This Agreement shall be governed by and construed in accordance with the Laws of the State of Delaware. Each party expressly
consents to the personal jurisdiction of the state and federal courts located in Wilmington, Delaware for any lawsuit filed there
against it by the other party arising from or relating to this Agreement.

 

9.8 Jurisdiction
and Venue. To the fullest extent permitted by applicable Law, each party hereto (i) agrees that any claim, action or proceeding
by such party seeking any relief whatsoever arising out of, or in connection with, this Agreement shall be brought only in a Delaware
state or federal court located in Wilmington, Delaware, and not in any other state or federal court in the United States of America
or any court in any other country; (ii) agrees to submit to the exclusive jurisdiction of such courts located in Wilmington, Delaware,
for purposes of all legal proceedings arising out of, or in connection with, this Agreement; (iii) waives and agrees not to assert
any objection that it may now or hereafter have to the laying of the venue of any such proceeding brought in such a court or any
claim that any such proceeding brought in such a court has been brought in an inconvenient forum; and (iv) agrees that a final
judgment in any such action or proceeding shall be conclusive and may be enforced in other jurisdictions by suit on the judgment
or in any other manner provided by applicable Law. Process in any action or proceeding referred to in the preceding sentence may
be served on a party anywhere in the world. EACH OF THE PARTIES IRREVOCABLY AND UNCONDITIONALLY WAIVES, TO THE FULLEST EXTENT
PERMITTED BY APPLICABLE LAW, ANY AND ALL RIGHTS TO TRIAL BY JURY IN CONNECTION WITH ANY LITIGATION OR PROCEEDING ARISING OUT OF
OR RELATING TO THIS AGREEMENT OR THE TRANSACTIONS CONTEMPLATED HEREBY.

 

9.9 No
Benefit to Others. Subject to Section 9.18 below, the representations, warranties, covenants and agreements contained
in this Agreement are for the sole benefit of the parties hereto and, in the case of Article 6 hereof, the other Persons
entitled to indemnity or defense, and their heirs, executors, administrators, legal representatives, successors and assigns, and
they shall not be construed as conferring any rights on any other Persons.

 

    26

     

    

 

9.10 Headings,
Number, Gender, “Person,” and “Knowledge”. All section headings contained in this Agreement are for
convenience of reference only, do not form a part of this Agreement, and shall not affect in any way the meaning or interpretation
of this Agreement. Words used herein, regardless of the number specifically used, shall be deemed and construed to include any
other number, singular or plural, as the context requires. When the context requires, any reference to the neuter gender herein
shall include the masculine and feminine genders, any reference to the masculine gender herein shall include the neuter and feminine
genders, and any reference to the feminine gender herein shall include the masculine and neuter genders. In this Agreement, the
term “Knowledge” means (i) with respect to any Seller, the actual knowledge (without duty of inquiry
or investigation) of Scott E. Carson, Daniel A. Rioux, and Christopher L. Stoeckle and (ii) with respect to Purchaser, the actual
knowledge (without duty of inquiry or investigation) of Patrick R. McDonald, Kevin D. Struzeki, Mark D. Pierce, Lloyd A. Hall,
and Michael J. Potter. Wherever the words “include,” “includes” or “including” are used in
this Agreement, they shall be deemed to be followed by the words “without limiting the foregoing in any respect.”
All references to “$” or “dollars” shall be deemed references to United States Dollars. Each accounting
term not defined herein will have the meaning given to it under GAAP as interpreted as of the Execution Date. If any period of
days referred to in this Agreement shall end on a day that is not a Business Day, then the expiration of such period shall be
automatically extended until the end of the first succeeding Business Day. References to a Person are also to its successors and
permitted assigns.

 

9.11 Exhibits
and Schedules. All exhibits and schedules referred to herein are intended to be and hereby are specifically made a part of
this Agreement.

 

9.12 Attorneys’
Fees. Any party to this Agreement who is the prevailing party in any legal, arbitration or equitable proceeding against any
other party brought under this Agreement shall be additionally entitled to recover court costs and reasonable and documented,
out-of-pocket attorneys’ fees from the non-prevailing party. For purposes of this Agreement, “prevailing party”
shall include, without limitation, a party obtaining substantially the relief sought, whether by compromise, settlement, arbitration
award or judgment.

 

9.13 Invalidity;
Severability. If a Governmental Body or arbitrator finds any provision unenforceable in a particular jurisdiction, then the
following will apply: (a) the Governmental Body or arbitrator considering the matter may amend the unenforceable provision to
the least extent necessary to make it enforceable; (b) if an unenforceable provision cannot be reformed under this Section
9.14, then that provision will be ineffective in that jurisdiction, but only to the least extent necessary to make the rest
of this Agreement enforceable there; and (c) reforming any provision must not affect the rest of this Agreement and must not prevent
the affected provision, as originally written, from being enforced elsewhere.

 

9.14 Mutual
Negotiation. This Agreement has been mutually negotiated by the parties. Therefore, any legal presumptions that contractual
ambiguities shall be construed against the drafter shall not apply.

 

9.15 Publicity.
The parties agree that, upon execution of this Agreement, (i) the Purchaser shall file a current report on Form 8-K in accordance
with the instructions of such Form 8-K announcing the entry into this Agreement and (ii) that this Agreement and the transactions
contemplated hereby will be disclosed in connection with the Public Offering. Prior to filing a current report on Form 8-K or
a press release pursuant to the foregoing, Purchaser shall furnish a draft of such current report and press release and, except
with respect to matters required to be disclosed by Purchaser pursuant to applicable Law or securities exchange regulations, shall
consider any reasonable comments that Sellers may have to such drafts. Except as provided in the previous sentence, all press
releases or other public communications relating to the transactions contemplated by this Agreement, and the method of the release
for publication thereof, shall be subject to the prior written consent of Purchaser and Sellers, which consent shall not be unreasonably
withheld, conditioned or delayed by any party.

 

    27

     

    

 

9.16 Counterparts.
This Agreement may be executed in any number of counterparts and any party hereto may execute any such counterpart, each of which
when executed and delivered shall be deemed to be an original, and all of which counterparts taken together shall constitute but
one and the same instrument. This Agreement shall become binding when one or more counterparts taken together shall have been
executed and delivered by the parties. It shall not be necessary in making proof of this Agreement or any counterpart hereof to
produce or account for any of the other counterparts.

 

9.17 Tax
Matters.

 

(a) Tax
Treatment. For U.S. federal income tax purpose (and for the purposes of any applicable state, local or foreign Tax that follows
the U.S. federal income tax treatment), Purchaser and Seller agree to treat the transactions contemplated by this Agreement in
accordance with Revenue Ruling 99-6, 1999-1 C.B. 432 (Situation 1): (i) by Sellers, as a sale of the Subject Class A Units by
Sellers to Purchaser, and (ii) by Purchaser, as (A) a purchase of an undivided 73.50% interest in the assets of the Company and
(B) the assumption by Purchaser of 73.50% of the liabilities of the Company, following a liquidating distribution by the Company
to the Sellers and the Purchaser in respect of their limited liability company interests in the Company. In connection therewith,
effective as of the close of business on the Closing Date, the Company shall close its books. The Company, the Sellers and the
Purchasers shall each take any and all necessary action to confirm that the status of the Company as a partnership for tax purposes
has terminated as of the Closing Date, and that, as of the date immediately following the Closing Date, the Company will be treated
as an entity disregarded for U.S. federal income tax purposes. Purchaser and Sellers will prepare and file all Tax Returns consistent
with the foregoing and will not take any inconsistent position on any Tax Returns, or during the course of any audit, litigation
or other proceeding with respect to Taxes, except as otherwise required by applicable law following a final determination by a
court of competent jurisdiction or other administrative settlement with or final administrative decision by the relevant Governmental
Body.

 

(b) Tax
Returns. The Purchaser shall cause the Company to prepare and file all Company Tax Returns for Pre-Closing Tax Periods (including,
for the avoidance of doubt, a final federal partnership tax return on Form 1065) and to prepare and deliver to the Sellers and
the Purchaser final Forms K-1 for the final U.S. federal tax year ended on the Closing Date. At least 30 days prior to the due
date for filing each such Company Tax Return, Purchaser will deliver a copy of such Company Tax Return, together with all supporting
documentation and workpapers, to Sellers for its review and comment. Purchaser will revise such Company Tax Return to reflect
any reasonable comments received from Sellers and will timely file such Company Tax Return with the appropriate Governmental Body
and will provide a copy to Sellers.

 

(c) Allocation
of Straddle Period Taxes. In the case of Taxes that are payable by the Company or any Subsidiary of the Company with respect
to any Straddle Period, the portion of any such Taxes that is attributable to the portion of such Straddle Period ending on the
Closing Date shall be:

 

(i) in
the case of Taxes that are either (A) based upon or related to income or receipts, or (B) imposed in connection with any sale
or other transfer or assignment of property (real or personal, tangible or intangible), deemed equal to the amount that would
be payable if the relevant Straddle Period ended with and included the Closing Date; provided that exemptions, allowances or deductions
that are calculated on an annual basis (including depreciation and amortization deductions) shall be allocated between the portion
of the Straddle Period ending on and including the Closing Date and the portion of the Straddle Period beginning after the Closing
Date in proportion to the number of days in each period; and

 

    28

     

    

 

(ii) in
the case of Taxes that are imposed on a periodic basis with respect to the assets or capital of the Company or any Subsidiary,
deemed to be the amount of such Taxes for the entire Straddle Period (or, in the case of such Taxes determined on an arrears basis,
the amount of such Taxes for the immediately preceding period), multiplied by a fraction the numerator of which is the number
of calendar days in the portion of the period ending on and including the Closing Date and the denominator of which is the number
of calendar days in the entire period.

 

(d) Cooperation
on Tax Matters; Tax Contests.

 

(i) The
Purchaser and the Sellers will cooperate fully, as and to the extent reasonably requested by the other party, in connection with
any Tax matters relating to the Company (including by the provision of reasonably relevant records or information). The party
requesting such cooperation will pay the reasonable out-of-pocket expenses of the other party.

 

(ii) Notwithstanding
Section 6.5(a), after the Closing, the Company shall in good faith control and defend, through counsel of its own choosing,
any audit, review, examination, assessment, claim for refund or administrative, judicial or other proceeding of the Company involving
(i) U.S. federal income Taxes or any other Tax imposed on a “flow-through” basis, in each case, with respect to a
Taxable period (or portion thereof) in which Sellers were a member of the Company or (ii) any other Tax for which Sellers may
be required to provide indemnification pursuant to this Agreement (each a “Tax Contest”); provided,
however, the Purchaser shall (i) give Sellers prompt notice of a Tax Contest, (ii) keep Sellers reasonably informed regarding
the progress and substantive aspects of such Tax Contest, (iii) permit the Sellers to participate in the defense of such Tax Contest,
with their own counsel at their own expense, and (iv) not settle, compromise or concede any portion of such Tax Contest without
the prior written consent of the Sellers, which consent shall not be unreasonably withheld, conditioned or delayed.

 

(e) Tax
Definitions.

 

(i) “Straddle
Period” means a Taxable period that begins on or before and ends after the Closing Date.

 

(ii) “Taxes”
shall mean any United States federal, state, local or foreign taxes, assessments, fees and other governmental charges or impositions
imposed by any Governmental Body, including, without limitation, all income, unemployment compensation, social security, payroll,
sales and use, excise, privilege, severance, production, property, ad valorem, franchise, license, school, fuel, mileage, registration
fees, and any other tax or similar governmental charge or imposition under laws of the United States or any state, including agreements
and compacts thereof or therewith, or municipal or political subdivision thereof or any foreign country or political subdivision
thereof), including any interest, deficiency, fines, penalty or addition thereto.

 

(iii) “Tax
Return” shall mean any United States federal, state, local and foreign tax return, declaration, report, claim for
refund, information return or other similar filing or statement required to be filed with a Governmental Body with respect to
Taxes (including any schedules or attachments thereto), and any amendment thereof.

 

    29

     

    

 

9.18 Subsequent
Merger. The Purchaser may at its election file articles and/or certificates of merger pursuant to applicable Law and pursuant
to resolutions of the boards of directors of the Purchaser and the members of the Company to merge the Company with and into the
Purchaser, and the separate organizational existence of the Company would cease and the Purchaser would continue as the surviving
entity. The representations, warranties and obligations of the Seller and the Purchaser set forth herein, including without limitation
the obligations of indemnification and Section 7.2, shall survive any such merger of the Purchaser and the Company.

 

9.19 Individual
Liability. Notwithstanding anything in this Agreement to the contrary, the Liabilities and obligations of each Seller shall
be separate, individual and not joint and several. With respect to any obligation of Sellers to pay money, such obligations shall
be borne pro rata by the Sellers in accordance with their relative ownership of the Subject Class A Units.

 

9.20 Affiliate
Liability. Each of the following is herein referred to as a “Party Affiliate”: with respect to a
party, (a) any direct or indirect holder of equity interests or securities in such party (whether limited or general partners,
members, stockholders or otherwise), and (b) any director, officer, manager, employee, representative or agent of (i) such
party or (ii) any direct or indirect holder of equity interests or securities in such party referred to in clause (a)
of this Section 9.20. No Party Affiliate of a party shall have any liability or obligation to the other party
of any nature whatsoever in connection with or under this Agreement or any of the documents contemplated hereby or the transactions
contemplated hereby or thereby, and each party hereby waives and releases all claims of any such liability and obligation.

 

9.21 Specific
Performance. Each party hereby acknowledges and agrees that the rights of each party to consummate the transactions contemplated
hereby are special, unique and of extraordinary character and that, if any party violates or fails or refuses to perform any covenant
or agreement made by it herein, the non-breaching party may be without an adequate remedy at Law. If any party violates or fails
or refuses to perform any covenant or agreement made by such party herein, the non-breaching party, subject to the terms hereof
and in addition to any remedy at Law for damages or other relief permitted under this Agreement, may (at any time prior to the
valid termination of this Agreement) institute and prosecute an action in any court of competent jurisdiction to enforce specific
performance of such covenant or agreement or seek any other equitable relief, without the necessity of proving actual damages
or posting of a bond.

 

9.22 Expenses.
Except as otherwise specifically provided, all fees, costs and expenses incurred by Purchaser or Sellers in negotiating this Agreement
and documents contemplated hereunder or in consummating the transactions contemplated hereby and thereby shall be paid by the
party incurring the same, including, legal and accounting fees, costs and expenses.

 

9.23 Disclosure
Schedules. No reference to or disclosure of any item or other matter in the disclosure schedules attached hereto (the “Disclosure
Schedules”) shall be construed as an admission or indication that such item or other matter is material or that
such item or other matter is required to be referred to or disclosed in the Disclosure Schedules. No disclosure in the Disclosure
Schedules relating to any possible breach or violation of any agreement or Law shall be construed as an admission or indication
that any such breach or violation exists or has actually occurred. The inclusion of any information in the Disclosure Schedules
shall not be deemed to be an admission or acknowledgment by any Seller that in and of itself, such information is material or
is required to be disclosed on the Disclosure Schedules.

 

[Remainder
of This Page is Left Intentionally Blank]

 

    30

     

    

 

IN
WITNESS WHEREOF, the parties hereto have duly executed this Agreement on the date first written above.

 

	 	SELLERS:
	 	 	 
	 	OLD IRONSIDES FUND II-A PORTFOLIO HOLDING COMPANY, LLC
	 	 	 
	 	By:	/s/ Scott E. Carson
	 		Scott E. Carson
	 		Managing Partner
	 	 	 
	 	OLD IRONSIDES FUND II-B PORTFOLIO HOLDING COMPANY, LLC
	 	 	 
	 	By:	/s/ Scott E. Carson
	 		Scott E. Carson
	 		Managing Partner

 

Signature
Page to Membership Interest Purchase Agreement

 

    

     

    

 

	 	PURCHASER:
	 	 	 
	 	CARBON NATURAL GAS COMPANY
	 	 	 
	 	By: 	/s/ Patrick R. McDonald 
	 	 	Patrick R. McDonald,
	 	 	Chief Executive Officer

  

Signature
Page to Membership Interest Purchase Agreement 

 

    

     

    

 

EXHIBIT
A

 

	Seller	 	Class A Units	 	 	Allocable Percentage	 
	OIE Fund II-A	 	 	22,613.69	 	 	 	83.15385	%
	OIE Fund II-B	 	 	4,581.31	 	 	 	16.84615	%

 

    	 	Exhibit
                                         A-1	 

     

    

 

EXHIBIT
B

 

PURCHASE
PRICE CALCULATION AS OF DECEMBER 31, 2017

 

[attached]

 

    	 	Exhibit
                                         B-1	 

     

    

 

	CARBON NATURAL GAS COMPANY
& CARBON APPALACHIAN COMPANY, LLC
	Combination Analysis and Old Ironsides Energy Funds Purchase Price Determination
	As of December 31, 2017

  

	 	 	PV10% - Strip	 	 	%	 	 	Debt	 	 	Net of Debt	 	 	Carbon Appalachia Company, LLC  

                                                                                Priority Amount Calculations

	Carbon (Separate Appalachia Assets)	 	$	60,696,000	 	 	 	29.6	%	 	$	-	 	 	$	60,696,000	 	 	 	 	 	 	 
	CAC	 	$	44,254,000	 	 	 	70.3	%	 	$	37,975,000	 	 	$	106,279,000	 	 	 12/31/17   	 	 	10	%
	Total      	 	$	204,950,000	 	 	 	  100. %  	 	 	 	 	 	 	 	 	 	 	 	 	$	38,807,233	 

 

	 	 	 	 	Purchase
    Valuation 
 (12/31/2017 Audit)	 	Contribution
    Date	 	 	Principal	 	Priority
    Amount
	Valuation
    (based on indicative third party offer)	 	 	 	$	175,000,000	 	 	 	 	 	 	 	 
	Carbon	 	 	 	$	51,826,299	 	 	 	$	37,000,000	 	$	38,807,233
	CAC	 	 	 	$	123,173,701	 	 	 	 	 	 	 	 
	CAC
    Debt	 	 	 	$	(37,975,000	)	3/31/17	 	$	12,000,000	 	$	12,893,402
	CAC
    Working Capital	 	 	 	$	2,585,933	 	7/15/17	 	$	14,000,000	 	$	14,631,654
	CAC
    - Net of Debt/Working Capital	 	 	 	$	87,784,634	 	9/25/17	 	$	11,000,000	 	$	11,282,178
	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	Priority
    of CAC Distributions	 	 	 	 	 	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	Class
    C Distribution	 	 	 	 	 	 	 	 	 	 	 	 	 
	OIE
    Fund II-A	0.00	%	 	$	-	 	 	 	 	 	 	 	 
	OIE
    Fund II-B	0.00	%	 	$	-	 	 	 	 	 	 	 	 
	Carbon	1.00	%	 	$	877,846	 	 	 	 	 	 	 	 
	Total	1.00	%	 	$	877,846	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	Remaining
    Funds to Allocate	 	 	 	$	86,906,788	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	Class
    A - Priority Amounts	 	 	 	 	 	 	 	 	 	 	 	 	 
	OIE
    Fund II-A	61.12	%	 	$	23,718,456	 	 	 	 	 	 	 	 
	OIE
    Fund II-B	12.38	%	 	$	4,804,860	 	 	 	 	 	 	 	 
	Carbon	26.50	%	 	$	10,283,917	 	 	 	 	 	 	 	 
	Total	100.00	%	 	$	38,807,233	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	Class
    B Distribution	 	 	 	 	 	 	 	 	 	 	 	 	 
	OIE
    Fund II-A	0.00	%	 	$	-	 	 	 	 	 	 	 	 
	OIE
    Fund II-B	0.00	%	 	$	-	 	 	 	 	 	 	 	 
	Carbon	20.00	%	 	$	9,619,911	 	 	 	 	 	 	 	 
	Total	20.00	%	 	$	9,619,911	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	Class
    A - Tier II	 	 	 	 	 	 	 	 	 	 	 	 	 
	OIE
    Fund II-A	61.12	%	 	$	23,518,238	 	 	 	 	 	 	 	 
	OIE
    Fund II-B	12.38	%	 	$	4,764,300	 	 	 	 	 	 	 	 
	Carbon	26.50	%	 	$	10,197,106	 	 	 	 	 	 	 	 
	Total	100.00	%	 	$	38,479,644	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	Total
    CAC Distributions	 	 	 	 	 	 	 	 	 	 	 	 	 
	OIE
    Fund II-A	 	 	 	$	47,236,694	 	 	 	 	 	 	 	 
	OIE
    Fund II-B	 	 	 	$	9,569,160	 	 	 	 	 	 	 	 
	Carbon	 	 	 	$	30,978,780	 	 	 	 	 	 	 	 
	Total	 	 	 	$	87,784,634	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	Old
    Ironsides	 	 	 	 	 	 	 	 	 	 	 	 	 
	Equity
    Purchase Price	 	 	 	$	56,805,854	 	 	 	 	 	 	 	 

   

    	 	Exhibit
                                         B-2	 

     

    

    

EXHIBIT
C

 

WORKING
CAPITAL CALCULATION

 

[attached]

  

    	 	Exhibit
                                         C-1	 

     

    

 

 

 

Carbon
Appalachian Company LLC

 

Consolidated
Balance Sheet

 

	 	 	Audited Balance Sheet	 
	 	 	December 31,	 	 	Working	 
	 	 	2017	 	 	Capital	 
	 	 	 	 	 	 	 
	ASSETS	 	 	 	 	 	 
	 	 	 	 	 	 	 
	Current assets:	 	 	 	 	 	 	 	 
	Cash and cash equivalents	 	$	4,511,695	 	 	$	4,511,695	 
	Accounts receivable:	 	 	 	 	 	 	 	 
	Revenue	 	 	10,681,576	 	 	 	10,681,576	 
	Trade receivables	 	 	1,569,484	 	 	 	1,569,484	 
	Prepaid expenses, deposits and other current assets	 	 	487,031	 	 	 	487,031	 
	Derivative asset	 	 	1,883,619	 	 	 	1,883,619	 
	Gas inventory	 	 	1,192,740	 	 	 	1,192,740	 
	Inventory	 	 	466,845	 	 	 	466,845	 
	Total current assets	 	 	20,792,990	 	 	 	20,792,990	 
	 	 	 	 	 	 	 	 	 
	Property, plant and equipment:	 	 	 	 	 	 	 	 
	Oil & gas properties	 	 	 	 	 	 	 	 
	Proved,net	 	 	82,622,337	 	 	 	 	 
	Unevaluted	 	 	1,779,600	 	 	 	 	 
	Other property and equipment, net	 	 	12,677,908	 	 	 	 	 
	 	 	 	97,079,845	 	 	 	 	 
	 	 	 	 	 	 	 	 	 
	Investments in affiliates	 	 	-	 	 	 	 	 
	Gas inventory - long term	 	 	-	 	 	 	 	 
	Other long-term assets	 	 	683,485	 	 	 	 	 
	 	 	 	 	 	 	 	 	 
	Total assets	 	$	118,556,320	 	 	 	 	 
	 	 	 	 	 	 	 	 	 
	LIABILITIES AND MEMBERS’ EQUITY	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	 	 	 
	Current liabilities:	 	 	 	 	 	 	 	 
	Accounts payable and accrued liabilities	 	$	12,069,985	 	 	$	12,069,985	 
	Due to related parties	 	 	1,852,529	 	 	 	1,852,529	 
	Firm transportation contract obligations	 	 	4,284,543	 	 	 	4,284,543	 
	Total current liabilities	 	 	18,207,057	 	 	 	18,207,057	 
	Non-current liabilities:	 	 	 	 	 	 	 	 
	Asset retirement obligations	 	 	4,789,411	 	 	 	 	 
	Firm transportation contract obligations	 	 	14,843,269	 	 	 	 	 
	Ad valorem taxes payable	 	 	1,812,502	 	 	 	 	 
	Notes payable	 	 	37,975,000	 	 	 	 	 
	Total non-current liabilities	 	 	59,420,182	 	 	 	 	 
	 	 	 	 	 	 	 	 	 
	Members’ equity:	 	 	 	 	 	 	 	 
	Members’ contributions	 	 	37,923,763	 	 	 	 	 
	Retained earnings	 	 	3,005,318	 	 	 	 	 
	Total members’ equity	 	 	40,929,081	 	 	 	 	 
	 	 	 	 	 	 	 	 	 
	Total liabilities and members’ equity	 	$	118,556,320	 	 	$	2,585,933	 

  

    	 	Exhibit
                                         C-2	 

     

    

 

EXHIBIT
D

 

FORM
OF ASSIGNMENT

 

[attached]

  

    	 	Exhibit
                                         D-1	 

     

    

 

ASSIGNMENT
AND ASSUMPTION OF CLASS A UNITS

 

This
Assignment and Assumption of Class A Units (this “Assignment”) is made and entered into as of ____________,
2018 (the “Execution Date”), by and among Old Ironsides Fund II-A Portfolio Holdings Company, LLC, a Delaware
limited liability company (“OIE Fund II-A”), Old Ironsides Fund II-B Portfolio Holdings Company, LLC, a Delaware
limited liability company (“OIE Fund II-B,” and together with OIE Fund II-A, “Assignors,”
and each, an “Assignor”), and Carbon Natural Gas Company, LLC, a Delaware corporation (“Assignee”).
Capitalized terms used but not otherwise defined herein shall have the meanings given to such terms in the Purchase Agreement
(as defined below).

 

RECITALS:

 

WHEREAS,
Assignors and Assignee entered into that certain Membership Interest Purchase Agreement dated as of May 4, 2018 (the “Purchase
Agreement”);

 

WHEREAS,
pursuant to the Purchase Agreement, OIE Fund II-A and OIE Fund II-B are obligated to sell, assign, transfer, convey and deliver
to Assignee, and Assignee is obligated to purchase from Assignors, 22,613.69 and 4,581.31 Class A Units, respectively, of Carbon
Appalachian Company, LLC, a Delaware limited liability company (the “Company”), (the “Subject Class
A Units”), which constitute 73.50% of the issued and outstanding Class A Units of the Company; and

 

WHEREAS,
in accordance with the terms of the Purchase Agreement, Assignee desires to accept the Subject Class A Units from Assignors, on
the terms and conditions set forth herein.

 

AGREEMENT:

 

NOW,
THEREFORE, in consideration of the mutual covenants and agreements contained herein and other good and valuable consideration
including the consideration as set forth in the Purchase Agreement, the receipt and sufficiency of which are hereby acknowledged,
Assignors and Assignee agree as follows:

 

Section
1. Assignment. In accordance with and subject to the terms of the Purchase Agreement, OIE Fund II-A and OIE Fund II-B
hereby sell, assign, transfer, convey and deliver 22,613.69 and 4,581.31 Subject Class A Units, respectively, to Assignee effective
as of Closing, together with all of Assignors’ rights associated with such Subject Class A Units. Assignors recognize and
agree that as a result of such assignment, they will no longer have any membership interest in the Company, and upon execution
of this Assignment, each Assignor shall cease to be a member of the Company.

 

Section
2. Acceptance. In accordance with and subject to the terms of the Purchase Agreement, Assignee hereby accepts the Subject
Class A Units effective as of Closing, and, in consideration therefor, agrees to assume all liabilities associated with the Subject
Class A Units, subject to the terms and conditions of the Purchase Agreement.

 

Section
3.Purchase Agreement. Nothing in this Assignment, express or implied, is intended to or shall be construed to modify,
expand or limit in any way the terms of the Purchase Agreement. To the extent that any provision of this Assignment conflicts
or is inconsistent with the terms of the Purchase Agreement, the Purchase Agreement shall govern. This Assignment is executed
and delivered pursuant to the Purchase Agreement.

 

Section
4. Governing Law. This Assignment shall be governed by and construed in accordance with the laws of the State of Delaware.
Each of Assignors and Assignee expressly consents to the personal jurisdiction of the state and federal courts located in Wilmington,
Delaware for any lawsuit filed there against it by the other party arising from or relating to this Assignment.

 

Section
5. Counterparts. This Assignment may be executed in one or more counterparts, each of which shall be deemed to be an
original, but all of which together shall constitute one and the same instrument.

 

[Remainder
of Page Intentionally Left Blank]

  

    	 	Exhibit
                                         D-2	 

     

    

 

IN
WITNESS WHEREOF, this Assignment has been executed as of the Execution Date.

 

	 	ASSIGNORS:
	 	 
	 	OLD IRONSIDES FUND II-A PORTFOLIO HOLDING COMPANY, LLC
	 	 
	 	By:	 
	 	Name: 	 Scott Carson
	 	Title:	 Managing Partner
	 	 
	 	OLD IRONSIDES FUND II-B PORTFOLIO HOLDING COMPANY, LLC
	 	 
	 	By:	 
	 	Name: 	Scott Carson
	 	Title:	 Managing Partner

 

Signature
Page to Assignment and Assumption of Class A Units

 

    	 	Exhibit
                                         D-3	 

     

    

 

	 	ASSIGNEE:
	 	 
	 	CARBON NATURAL GAS COMPANY
	 	 
	 	By:	 
	 	Name: 	 Patrick R. McDonald
	 	Title: 	Chief Executive Officer

    

    	 	Exhibit
                                         D-4	 

     

    

 

Execution

 

EXHIBIT
E

 

FORM
OF SELLERS’ RELEASE

 

[attached]

   

    	 	Exhibit
                                         E-1	 

     

    

 

RELEASE

  

THIS
RELEASE (the “Release”) dated ____________, 2018 (the “Effective Date”) is
made by Old Ironsides Fund II-A Portfolio Holding Company, LLC, a Delaware limited liability company (“OIE Fund II-A”),
and Old Ironsides Fund II-B Portfolio Holding Company, LLC, a Delaware limited liability company (together with OIE Fund II-A,
“Sellers” and each, a “Seller”). Capitalized terms used but not otherwise
defined herein shall have the meanings given to such terms in the Purchase Agreement (as defined below).

 

RECITALS

 

WHEREAS,
reference is made to that certain Membership Interest Purchase Agreement, dated May 4, 2018 (the “Purchase Agreement”)
by and among Sellers and Carbon Natural Gas Company, a Delaware corporation (“Purchaser”) pursuant to
which Purchaser purchased from Sellers certain Class A Units of Carbon Appalachian Company, LLC, a Delaware limited liability
company (the “Company”); and

 

WHEREAS,
this Release is delivered by Sellers pursuant to Section 5.1(g) of the Purchase Agreement.

 

WHEREAS,
in connection with such closing, each Seller desires to waive and release Purchaser, its Affiliates (including the Company and
its Subsidiaries) and its and their respective officers, directors, managers, partners, members, shareholders, employees and successors
and permitted assigns from certain claims, demands, causes of action, obligations, liabilities, costs and expenses in accordance
with the terms set forth herein.

 

RELEASE

 

NOW,
THEREFORE, in consideration of the promises, agreements and covenants contained herein and in the Purchase Agreement, and
for other valuable consideration, the receipt and sufficiency of which are hereby acknowledged, Sellers agree as follows:

 

		1.	Each
Seller, on behalf of itself and its Affiliates, hereby unconditionally waives and releases Purchaser, its Affiliates (including
the Company and its Subsidiaries) and its and their respective officers, directors, managers, partners, members, shareholders,
employees and successors and permitted assigns from any and all claims, demands, causes of action, obligations, liabilities (whether
absolute, accrued, contingent, fixed or otherwise, or whether due or to become due, whether known or unknown), costs or expenses
with respect to the transactions contemplated by the Purchase Agreement or any document contemplated thereunder or otherwise with
respect to the Company, its Subsidiaries and their respective businesses, whenever arising or occurring, and whether arising under
contract, statute, common law or otherwise; provided, however, that the foregoing release shall not include: (a)
any right of any Seller, its Affiliates or its and their respective officers, directors, managers, partners, members, shareholders,
employees and successors and permitted assigns to indemnification or advancement of expenses pursuant to the organizational documents
of the Company or its Subsidiaries; or (b) any right of any Seller Party pursuant to Section 6.2 of the Purchase Agreement.

 

		2.	This
Release shall be governed by and construed in accordance with the laws of the State of Delaware.

 

[Signature
Page Follows on the Next Page]

  

    	 	Exhibit
                                         E-2	 

     

    

 

IN
WITNESS WHEREOF, Sellers have caused this Release to be fully executed as of the Effective Date.

   

	 	SELLERS:
	 	 
	 	OLD IRONSIDES FUND II-A PORTFOLIO HOLDING COMPANY, LLC
	 	 
	 	By:	 
	 	Name: 	Scott Carson
	 	Title:	 Managing Partner
	 	 
	 	OLD IRONSIDES FUND II-B PORTFOLIO HOLDING COMPANY, LLC
	 	 
	 	By:	 
	 	Name: 	 Scott Carson
	 	Title: 	Managing Partner

  

    	 	Exhibit
                                         E-3	 

     

    

 

Execution

 

EXHIBIT
F

 

FORM
OF PURCHASER’S RELEASE

 

[attached]

    

    	 	Exhibit
                                         F-1	 

     

    

 

RELEASE

  

THIS
RELEASE (the “Release”) dated ____________, 2018 (the “Effective Date”) is
made by Carbon Natural Gas Company, a Delaware corporation (“Purchaser”). Capitalized terms used but
not otherwise defined herein shall have the meanings given to such terms in the Purchase Agreement (as defined below).

 

RECITALS

 

WHEREAS,
reference is made to that certain Membership Interest Purchase Agreement, dated May 4, 2018 (the “Purchase Agreement”),
by and among Purchaser, Old Ironsides Fund II-A Portfolio Holding Company, LLC, a Delaware limited liability company (“OIE
Fund II-A”) and Old Ironsides Fund II-B Portfolio Holding Company, LLC, a Delaware limited liability company (together
with OIE Fund II-A, “Sellers”) pursuant to which Purchaser purchased from Sellers certain Class A Units
of Carbon Appalachian Company, LLC, a Delaware limited liability company (the “Company”); and

 

WHEREAS,
this Release is delivered by Purchaser pursuant to Section 5.2(e) of the Purchase Agreement.

 

WHEREAS,
in connection with such closing, Purchaser, on behalf of itself and the Company, desires to waive and release Sellers, their respective
Affiliates and Sellers’ and such Affiliates’ respective officers, directors, managers, partners, members, shareholders,
employees and successors and permitted assigns from certain claims, demands, causes of action, obligations, liabilities, costs
and expenses in accordance with the terms set forth herein.

 

RELEASE

 

NOW,
THEREFORE, in consideration of the promises, agreements and covenants contained herein and in the Purchase Agreement, and
for other valuable consideration, the receipt and sufficiency of which are hereby acknowledged, Purchaser agrees as follows:

 

1.       Purchaser,
on behalf of itself and its Affiliates (including the Company), hereby unconditionally waives and releases Sellers, their respective
Affiliates and Sellers’ and such Affiliates’ respective officers, directors, managers, partners, members, shareholders,
employees and successors and permitted assigns from any and all claims, demands, causes of action, obligations, liabilities (whether
absolute, accrued, contingent, fixed or otherwise, or whether due or to become due, whether known or unknown), costs or expenses
with respect to the transactions contemplated by the Purchase Agreement or any document contemplated thereunder or otherwise with
respect to the Company, its Subsidiaries and their respective businesses, whenever arising or occurring, and whether arising under
contract, statute, common law or otherwise; provided, however, that the foregoing release shall not include any
right of any Purchaser Party pursuant to the indemnification provisions of Section 6.1 of the Purchase Agreement.

 

2.       This
Release shall be governed by and construed in accordance with the laws of the State of Delaware.

 

[Signature
Page Follows on the Next Page]

  

    	 	Exhibit
                                         F-2	 

     

    

 

Execution

 

IN
WITNESS WHEREOF, the Purchaser has caused this Release to be fully executed as of the Effective Date.

 

	 	PURCHASER:
	 	 
	 	CARBON NATURAL GAS COMPANY 
	 	 
	 	By:	 
	 	Name: 	 Patrick R. McDonald
	 	Title:	 Chief Executive Officer

   

    	 	Exhibit
                                         F-3	 

     

    

 

Schedule
3.1(e)

 

Undisclosed
Liabilities

 

		●	Shonk
                                         Land Company LLC v. Cabot Oil & Gas Corporation and Carbon West Virginia Company
                                         LLC

   

    Schedule 3.1(e)

     

    

 

SCHEDULE
3.1(f)

 

ABSENCE
OF CERTAIN DEVELOPMENTS

     

    Schedule 3.1(f)

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