Document:

EX-10.1

Purchase and Sale Agreement

By and Between

Teton Energy Corporation

and Teton Piceance LLC

as Seller

and

Puckett Land Company

as Buyer

Dated April 22, 2009

Garden Gulch Property

Garfield County, Colorado

TABLE OF CONTENTS

Page

1

EXHIBIT LIST

	 	 	 
	EXHIBIT A-1

EXHIBIT A-2

EXHIBIT B

EXHIBIT C

EXHIBIT D

EXHIBIT E

EXHIBIT F

EXHIBIT G

EXHIBIT H

EXHIBIT I

EXHIBIT J

EXHIBIT K

	 	Leases and Lands

Wells/WI/NRI

Allocated Values

Material Agreements

Preferential Rights and Consents

Capital Projects

Hydrocarbon Sales Contracts/Calls on Production

Imbalance Volumes

Assignment, Bill of Sale and Conveyance

FIRPTA Certificate

Environmental Conditions

Unearned Acreage

SCHEDULE OF DEFINED TERMS

	 	 	 
	Term	 	Section Where Defined
	Agreement

Allocated Value

Assets

Assumed Environmental Liabilities

Assumed Liabilities

Capital Projects

Closing Amount

Closing and Closing Date

Defensible Title

Deposit

Effective Time

Environmental Consultant

Environmental Defect

Environmental Defect Notice

Environmental Defect Value

Environmental Law

Remediation

Environmental Defect Adjustment

Escrow Agent

Excluded Assets

Exclusion Adjustment

Final Purchase Price

Imbalance Volumes

Individual Environmental Threshold

Individual Title Threshold

Information

Instruments

Interest Addition Adjustment

Leases

Losses

Material Agreements

Off-Site Environmental Liabilities

Party and Parties

Permitted Encumbrances

Preliminary Settlement Statement

Property Expenses

Purchase Price

Records

Required Consents

Retained Environmental Liabilities

Retained Liabilities

Settlement Date

Settlement Statement

	 	Opening Paragraph

2.3

1.2

5.3B.

14.1

6.6

2.4A

12.1

4.1A.

2.2

1.4

5.1

5.1

5.1

5.1

5.1

5.1

5.4B.

2.2

1.3

4.6B.1

13.1A

6.17A.&B.

5.1

4.1C.

8.3A.

8.2B.

4.3

1.2A

14.4

1.2G.

5.3A.

Opening Paragraph

4.1B.

2.4A.

2.4B.

2.1

1.2I.

4.6A

5.3A.

14.2

13.1A

13.1A.
	Term

	 	Section Where Defined
	 

	 	 
	Supporting Documentation

Taxes

Title Defect Adjustment

Title Defect

Title Defect Date

Title Defect Notice

Title Defect Value

Transaction

Wells

	 	4.2A

9.1

4.2B.

4.1C.

4.2A.

4.2A

4.1D.

Opening Paragraph

1.2B.

PURCHASE AND SALE AGREEMENT

This Purchase and Sale Agreement (this “Agreement”), dated April 22, 2009, is by and between
Teton Energy Corporation, a Delaware corporation and its wholly owned subsidiary, Teton Piceance
LLC, a Colorado limited liability company, 600 17th Street, Suite 1600 North, Denver,
Colorado 80202 (together “Seller” or “Teton”) and Puckett Land Company, a Colorado corporation,
5460 S. Quebec St., Ste. 250, Greenwood Village, Colorado 80111 (“Buyer” or “PLC”). The
transaction contemplated by this Agreement may be referred to as the “Transaction.” Seller and
Buyer may be referred to individually as a “Party” or collectively as the “Parties.”

RECITALS

A. Seller owns and desires to sell its interests in certain oil and gas properties located in
Garfield County, Colorado (the “Assets,” all as more particularly described in Section 1.2 below).

B. Buyer has conducted and will conduct an independent investigation of the nature and extent
of the Assets (as defined below) and desires to purchase all of Seller’s interest in the Assets
pursuant to the terms of this Agreement.

C. To accomplish the foregoing, the Parties wish to enter into this Agreement.

AGREEMENT

In consideration of the mutual promises contained herein, $100 and other good and valuable
consideration, the receipt and sufficiency of which are hereby acknowledged, Buyer and Seller agree
as follows:

ARTICLE 1

PURCHASE AND SALE

	1.1	 	Purchase and Sale.

Seller agrees to sell and Buyer agrees to purchase all of Seller’s right, title and interest
in the Assets, all pursuant to the terms of this Agreement.

1.2 The Assets.

As used herein, the term “Assets” refers to all of the Seller’s right, title and interest in
and to the following:

A. The oil, gas and/or mineral leases specifically described in Exhibit A-1 (the “Leases”),
the lands described in Exhibit A-1 (the “Lands”),and the oil, gas and other hydrocarbons
(“Hydrocarbons”) attributable to the Leases and Lands, including without limitation, all oil, gas
and/or other mineral leases, leasehold estates and interests, all mineral, royalty, overriding
royalty, production payment, reversionary, net profit, contractual leasehold and other similar
rights, estates and interests in the Leases or Lands, together with all the property and rights
incident thereto, including all rights in any pooled, unitized or communitized acreage by virtue of
the Lands or Leases being a part thereof and all Hydrocarbons produced from the pool or unit
allocated to any such Leases;

B. The oil and gas wells specifically described in Exhibit A-2 (the “Wells”), together with
all other oil and gas wells and all water, injection and disposal wells on the Leases or on lands
pooled, communitized or unitized therewith, and all personal property, equipment, fixtures,
improvements, permits, water discharge permits, roads, rights-of-way and easements located on the
Lands or used in connection with the production, gathering, treatment, processing, storing,
transportation, sale or disposal of Hydrocarbons or water produced from the Leases and Lands;

C. The unitization, pooling and communitization agreements, declarations and orders, and the
units created thereby and all other such agreements relating to the Assets described in
Sections 1.2 A. and B. and to the production of Hydrocarbons, if any, attributable to said Assets;

D. All existing and effective sales, purchase, exchange, gathering, and service agreements and
other contracts, agreements and instruments which relate, and only insofar as they relate, to the
Assets described in Subsections 1.2 A. through C., and including those which are described in
Exhibit C (the “Material Agreements”); and

E. All files, records and data relating to the Assets described in Sections 1.2A. through D.
maintained by Seller, including without limitation, the following, if and to the extent that such
files exist: all books, records, reports, manuals, files, title documents, including
correspondence, records of production and maintenance, revenue, sales, expenses, warranties, lease
files, land files, well files, division order files, abstracts, title opinions, assignments,
reports, property records, contract files, operations files, and files, maps, core data,
hydrocarbon analysis, well logs, mud logs, field studies together with other files, contracts and
other records and data including all geologic and geophysical data and maps (the “Records”). To
the extent that any of the Records contain interpretations of Seller, Buyer agrees to rely on such
interpretations at its own risk.

1.3 Excluded Assets.

As used herein, the term “Excluded Assets” refers to all of Seller’s right, title and interest
in and to the following, all of which are excluded from the terms of this Agreement and shall
remain the sole property of Seller:

A. All of Seller’s corporate minute books, financial records and other business records that
relate to Seller’s business generally (including the ownership and operation of the Assets);

B. All trade credits, all accounts, receivables and all other proceeds, income or revenues
attributable to the Assets with respect to any period of time prior to the Effective Time;

C. All claims and causes of action of Seller arising under or with respect to any contracts
that are attributable to periods of time prior to the Effective Time (including claims for
adjustments or refunds);

D. All rights and interests of Seller (a) under any policy or agreement of insurance or
indemnity, (b) under any bond, or (c) to any insurance or condemnation proceeds or awards arising,
in each case, from acts, omissions or events, or damage to or destruction of property attributable
to periods of time prior to the Effective Time;

E. All Hydrocarbons produced and sold from the Assets with respect to all periods prior to the
Effective Time;

F. All claims of Seller for refunds of or loss carry forwards with respect to (a) production
or any other taxes attributable to any period prior to the Effective Time, (b) income or franchise
taxes, or (c) any taxes attributable to the Excluded Assets;

G. All personal computers and associated peripherals and all radio and telephone equipment;

H. All of Seller’s proprietary computer software, patents, trade secrets, copyrights, names,
trademarks, logos and all other intellectual property; and

I. All audit rights arising under any of the applicable contracts or otherwise with respect to
any period prior to the Effective Time or to any of the Excluded Assets.

1.4 Effective Time.

The purchase and sale of the Assets shall be effective as of January 1, 2009 at 7:00 a.m.
Mountain Time (the “Effective Time”).

1.5 1031 Exchange.

Seller reserves the right, at or prior to Closing, to assign its rights under this Agreement
with respect to all or a portion of the Purchase Price, and that portion of the Assets associated
therewith (“1031 Assets”), to a Qualified Intermediary (“QI”) (as that term is defined in Section
1.1031(k)-1(g)(4)(v) of the Treasury Regulations) to accomplish this Transaction, in whole or in
part, in a manner that will comply with the requirements of a like-kind exchange (“Like-Kind
Exchange”) pursuant to Section 1031 of the Internal Revenue Code of 1986, as amended (“Code”). If
Seller so elects, Seller may assign its rights under this Agreement to the 1031 Assets to the QI.
Buyer hereby (i) consents to Seller’s assignment of its rights in this Agreement with respect to
the 1031 Assets, and (ii) if such an assignment is made, agrees to pay all or a portion of the
Purchase Price into the qualified trust account at Closing as directed in writing by Seller.
Seller and Buyer acknowledge and agree that a whole or partial assignment of this Agreement to a QI
shall not release either Party from any of its respective liabilities and obligations to each other
or expand any such respective liabilities or obligations under this Agreement. Neither Party
represents to the other that any particular tax treatment will be given to either Party as a result
of a Like-Kind Exchange. Buyer shall not be obligated to pay any additional costs or incur any
additional obligations under this Agreement resulting from Seller’s Like-Kind Exchange, and Seller
shall hold harmless and indemnify Buyer from and against all claims, losses and liabilities
(including reasonable attorneys’ fees, court costs and related expenses), if any, resulting from
such a Like-Kind Exchange.

ARTICLE 2

PURCHASE PRICE

2.1 Purchase Price.

The purchase price for the Assets shall be $10,330,000.00 (the “Purchase Price”). At Closing,
Buyer shall pay Seller the Purchase Price, as adjusted pursuant to Section 2.4.

2.2 Deposit.

Contemporaneously with the execution of this Agreement, Buyer has deposited by wire transfer
in same day funds the sum of $ 673,000 (the “Deposit”) in an escrow account maintained and
controlled by Davis, Graham and Stubbs, 1550 Seventeenth Street, Denver, Colorado 80202 (the
“Escrow Agent”), which account shall be under the joint control of Buyer and Seller: provided,
however, that in the event Seller or either of them should voluntarily file for protection under
the Bankruptcy laws of the United States, have a petition in bankruptcy initiated against it or
either of them or should either of them make an assignment of some or all of their respective
assets for the benefit of creditors, then Buyer shall have sole and exclusive authority over such
escrow account and of the disposition of the funds contained therein. The Deposit shall be
distributed to Seller and credited to the Purchase Price at Closing, or if this Agreement is
terminated, shall be distributed pursuant to Article 11.

2.3 Allocation of the Purchase Price.

Buyer, with Seller’s approval, has allocated the Purchase Price among the Assets as set forth
on Exhibit B. Buyer and Seller agree to use the values so allocated as the values for the
individual Assets when filing all tax returns. The value so allocated to a particular Asset may be
referred to as the “Allocated Value” for that Asset.

2.4 Adjustments to Purchase Price.

All adjustments to the Purchase Price shall be made (i) according to the factors described in
this Section, (ii) in accordance with generally accepted accounting principles as consistently
applied in the oil and gas industry, and (iii) without duplication.

A. Settlement Statements.

The Purchase Price shall be adjusted at Closing pursuant to a “Preliminary Settlement
Statement” which shall be prepared by Seller and submitted to Buyer on or before five (5) business
days prior to Closing, subject to Buyer’s review and comment. The form and content of the
Preliminary Settlement Statement will be agreed to by both Buyer and Seller. The Preliminary
Settlement Statement shall set forth the Closing Amount and all adjustments to the Purchase Price
and associated calculations. The term “Closing Amount” means the Purchase Price, adjusted as
provided in this Section using reasonable estimates as agreed to by the Parties if actual numbers
are not available. After Closing, the Purchase Price shall be adjusted pursuant to the Settlement
Statement delivered pursuant to Section 13.1.

B. Property Expenses.

For the purposes of this Agreement, the term “Property Expenses” shall mean all capital costs,
expenses, joint interest billings, lease operating expenses, lease rental and maintenance costs,
royalties, overriding royalties, leasehold payments, Taxes (as defined and apportioned as of the
Effective Time pursuant to Article 9), drilling costs, workover costs, gathering costs, geological,
geophysical and any other exploration or development expenditures chargeable under applicable
operating agreements or other agreements consistent with the standards established by the Council
of Petroleum Accountant Societies of North America that are attributable to the maintenance and
operation of the Assets during the period in question.

C. Upward Adjustments.

The Purchase Price shall be adjusted upward by the following:

1. An amount equal to all proceeds (net of royalty and Taxes not otherwise accounted for
hereunder) received and retained by the Buyer from the sale of all Hydrocarbons produced from or
credited to the Assets prior to the Effective Time;

2. An amount equal to all direct and actual costs attributable to the Assets, including,
without limitation, the Property Expenses, incurred and paid by Seller that are attributable to the
period after the Effective Time;

3. To the extent not covered in the preceding paragraph, an amount equal to all prepaid
expenses attributable to the Assets after the Effective Time that were paid by or on behalf of
Seller, including without limitation, prepaid drilling and/or completion costs, applicable
insurance costs through Closing, and prepaid utility charges;

4. An amount equal to the value (net of applicable Taxes) of Seller’s share of all oil in
storage tanks above the pipeline interconnect at the Effective Time to be calculated as follows:
The value shall be the product of (i) the volume in each storage tank (attributable to Seller’s
interest) as of the Effective Time as shown by the actual gauging reports, multiplied by (ii) the
price actually received for January 2009 production under the applicable marketing contract if the
Hydrocarbons in question had been sold; provided, however, that the adjustment contemplated by this
subsection (4) shall be made only to the extent that Seller does not receive and retain the
proceeds, or portion thereof, attributable to the pre-Effective Time merchantable oil in the
storage tanks;

5. An amount equal to the Interest Addition Adjustment; and

6. Any other amount agreed to by Buyer and Seller.

D. Downward Adjustments.

The Purchase Price shall be adjusted downward by the following:

1. Proceeds received and retained by Seller (net of applicable Taxes and royalties) that are
attributable to production from the Assets after the Effective Time;

2. The amount of all direct and actual expenses attributable to the Assets, including, without
limitation, the Property Expenses, that remain unpaid by Seller, or that have been paid by Buyer,
that are attributable to the period prior to the Effective Time;

3. An amount equal to the sum of all Environmental Defect Adjustments;

4. An amount equal to the Title Defect Adjustments; and

5. Any other amount agreed to by Buyer and Seller.

E. Tax Adjustments.

To adjust the Purchase Price for the apportionment of Taxes, the Parties agree to adjust the
Purchase Price, downward or upward, as appropriate, pursuant to the provisions of Article 9.

ARTICLE 3

BUYER’S INSPECTION

3.1 Access to the Records.

Immediately upon execution of this Agreement and subject to Section 8.3, Seller will make the
Records available to Buyer for inspection, copying, and review at Seller’s offices during normal
business hours to permit Buyer to perform its due diligence review. Subject to the consent and
cooperation of third parties, Seller will assist Buyer in Buyer’s efforts to obtain, at Buyer’s
expense, such additional information from such parties as Buyer may reasonably desire.

3.2 Disclaimer.

Except for the representations contained in this Agreement, Seller makes no representation of
any kind as to the Records or any information contained therein. Buyer agrees that any conclusions
drawn from the Records shall be the result of its own independent review and judgment.

3.3 Physical Access to the Leases, Lands and Wells.

During reasonable business hours, Seller agrees to grant Buyer physical access to the Leases,
Lands and Wells to allow Buyer to conduct, at Buyer’s sole risk and expense, on-site inspections
and environmental assessments of the Leases, Lands and Wells. In connection with any such on-site
inspections and assessments, Buyer agrees not to interfere with the normal operation of the Leases,
Lands and Wells and agrees to comply with all operational and safety requirements of the operators
of the Wells. In the event that Buyer’s ability to effectively inspect the Leases, Lands and Wells
is rendered reasonably impracticable by the presence of snow cover, the due date for Environmental
Defect Notices in Section 5.1 of this Agreement will be automatically extended for a period equal
to the period during which the Buyer’s inspection is so delayed, but in no event later than May 31,
2009. If, during its inspection and/or environmental assessment called for herein, Buyer
discovers any condition or event which would require the Operator of any Asset to report such
condition or event to any public body, including but not limited to the United States Environment
Protection Agency (the “EPA”), the Colorado Department of Public Health and Environment (the
“CDPHE) or the Colorado Oil and Gas Conservation Commission (the “COGCC”), Buyer will advise Seller
of the condition or event within 48 hours. In such event, Seller shall have 48 hours to advise the
Operator and demand that such event be reported. If Seller fails to so notify Operator within this
period of time, Seller shall be deemed to have agreed to indemnify and hold harmless Buyer from any
liability or penalty Buyer may thereafter incur for failure to so report such condition or event.
Subject to the immediately preceding sentence, such information shall be held confidential but may
be disclosed to Buyer or Buyer’s affiliates, attorneys, officers, employees and consultants used in
Buyer’s evaluation of the Assets. Furthermore, Buyer’s obligations of confidentiality shall not
apply to information (i) required to be disclosed by legal process, order, regulation, or rule, or
(ii) available to the public, or (iii) acquired from third parties not known by Buyer to have
confidentiality obligations to Seller, provided that Buyer agrees to inquire of such third parties
if such third party has an obligation of confidence to Seller. In connection with granting such
access, Buyer represents that it is insured and waives, releases and agrees to indemnify Seller,
and its respective directors, officers, shareholders, employees, agents and representatives,
against all claims for injury to, or death of, persons or for damage to property arising as a
result of any act or omission committed by Buyer or its employees, agents, contractors or
representatives in conducting Buyer’s on-site inspections and environmental assessments of the
Leases and Wells. This waiver, release and indemnity by Buyer shall survive termination of this
Agreement.

3.4 Buyer’s Agents.

To the extent that Buyer uses agents to conduct its due diligence activities, either in
Seller’s offices or on the Lands, Buyer agrees to (i) make such agents aware of the terms and
conditions set forth in this Article 3 and the confidentiality provisions of Article 8, and (ii)
ensure that such agents agree to be bound by the terms of this Article 3 and the confidentiality
provisions of Article 8.

ARTICLE 4

TITLE MATTERS

4.1 Definitions.

A. Defensible Title.

The term “Defensible Title” means such title to the Assets, that, subject to and except for
Permitted Encumbrances: (i) entitles Seller to receive not less than the net revenue interest
(“NRI”) set forth on Exhibit A-2; (ii) obligates Seller to bear costs and expenses relating to the
maintenance, development, operation and the production of Hydrocarbons in an amount not greater
than the working interest set forth in Exhibit A-2 (“WI”); and (iii) is free and clear of
encumbrances, liens and defects.

B. Permitted Encumbrances.

The term “Permitted Encumbrances” shall mean:

1. Lessors’ royalties, overriding royalties, net profits interests, production payments,
reversionary interests and similar burdens (payable or in suspense) if the net cumulative effect of
such burdens does not operate to reduce the NRI;

2. Liens for Taxes or assessments not yet due and delinquent or, if delinquent, that are being
contested in good faith in the normal course of business and for which Seller shall retain
responsibility;

3. All rights to consent by, required notices to, filings with, or other actions by federal,
state or local governmental bodies, in connection with the conveyance of the applicable Asset if
the same are customarily obtained after such conveyance;

4. Rights of reassignment upon the surrender or expiration of any Lease;

5. The terms and conditions of the Material Agreements and all documents of record to the
extent such do not decrease the NRI for the affected Asset or increase the WI for such Asset
without a corresponding proportionate increase in the NRI for such Asset;

6. Easements, rights-of-way, servitudes, permits, surface leases and other rights with respect
to surface operations, on, over or in respect of any of the Assets or any restriction on access
thereto that do not materially interfere with the operation of the affected Asset as has been
conducted in the past or materially affect the value thereof;

7. Liens to be released in connection with the Closing pursuant to Section 12.3; and

8. Materialmen’s, mechanics’, operators’ or other similar liens arising in the ordinary course
of business incidental to operation of the Assets (i) if such liens and charges have not been filed
pursuant to law and the time for filing such liens and charges has expired, (ii) if filed, such
liens and charges have not yet become due and payable or payment is being withheld as provided by
law and for which Seller shall retain responsibility, or (iii) if their validity is being contested
in good faith by appropriate action and for which Seller shall retain responsibility.

C. Title Defect.

The term “Title Defect” means any lien, encumbrance, claim, defect in or objection to real
property title, excluding Permitted Encumbrances, that alone or in combination with other defects
renders the Seller’s title to the Asset (i) less than Defensible Title, and (ii) reduces the
Allocated Value of the affected Asset by more than $12,500, net to Seller’s interest, (with such
amount being the “Individual Title Threshold”). Notwithstanding the foregoing, the following shall
not be considered Title Defects:

1. Defects based on a lack of information in Seller’s files;

2. Defects arising out of lack of survey;

3. Defects based on failure to record Leases issued by the BLM or any state, or any
assignments of record title or operating rights in such Leases, in the real property or other
county records of the county in which such Asset is located; provided that such Leases or
assignments are properly filed with the applicable federal or state office;

D. Title Defect Value.

“Title Defect Value” means the amount by which the Allocated Value of an Asset has been
reduced by a Title Defect. In determining the Title Defect Value, the Parties intend to include
only that portion of the Asset affected by the defect. The Title Defect Value may not exceed the
Allocated Value of the Asset and shall be determined by the Parties in good faith taking into
account all relevant factors, including without limitation, the following:

1. If the Title Defect is a lien or encumbrance on the Asset created by Seller, Seller shall
have the lien or encumbrance unconditionally released, and consequently, there shall be no Title
Defect Value associated with such lien or encumbrance.

2. If the Title Defect is an actual reduction in NRI or any other matter that does not fall
within the matters described in subsection 1., then the Buyer and Seller will negotiate in good
faith to reach mutual agreement as to the diminution effect of this Title Defect and thus the Title
Defect Value.

4.2 Purchase Price Adjustments for Title Defects.

A. Notices of Title Defects.

Buyer shall give Seller a written “Title Defect Notice” as soon as possible but no later than
the fifth business day prior to Closing (the “Title Defect Date”). Each Title Defect Notice must
be in writing and must satisfy the following conditions precedent: (i) name the affected Asset;
(ii) describe each Title Defect in reasonable detail; (iii) describe the basis for each Title
Defect; (iv) attach Supporting Documentation; (v) state the Allocated Value of the affected Asset;
(vi) state Buyer’s good faith estimate of the Title Defect Value. For the purposes of this
Section, “Supporting Documentation” for a particular Title Defect means if the basis is derived
from any document, a copy of such document (or pertinent part thereof) or if the basis is derived
from any gap in Seller’s chain of title, the documents preceding and following the gap shall be
attached, or in any case, other reasonable written documentation.

B. Defect Adjustments.

1. If an Asset is affected by a Title Defect, the Purchase Price will be reduced under
Section 2.4 and as set forth below, unless, at Seller’s election: (i) Seller cures the Title Defect
prior to Closing, (ii) Buyer agrees to waive the relevant Title Defect, or (iii) Seller elects on
or before the third business day prior to closing to cure such title defect no later than 90 days
after closing (iv) Seller, with Buyer’s consent, which Buyer may withhold in its sole discretion,
elects on or before Closing to indemnify Buyer against any loss attributable to the relevant Title
Defect or (v) Buyer and Seller to agree to exclude the portion of the Asset affected by the Title
Defect from the transaction and reduce the Purchase Price pursuant to Section 2.4.D.4; if, in the
absence of such agreement by Buyer and Seller, Seller elects nonetheless to exclude the portion of
the Asset affected by the Title Defect, then, in such event, Buyer may terminate this Agreement
pursuant to Section 11.1.E The Purchase Price shall be adjusted only for Title Defects that exceed
the Individual Title Threshold (with the amount of such adjustment being the “Title Defect
Adjustment”).

2. If Seller elects to cure the relevant Title Defect post Closing, Seller shall assign the
affected Asset to Buyer at Closing, the Purchase Price will not be adjusted downward pursuant to
Section 2.4.D.4 at Closing for such Title Defect and the Title Defect Value will be paid into and
held in an escrow account established for this purpose with the Escrow Agent, which escrow account
shall be under the joint control of both the Buyer and the Seller; provided, however, that in the
event Seller or either of them should voluntarily file for protection under the Bankruptcy laws of
the United States, have a petition in bankruptcy initiated against it or either of them or should
either of them make an assignment of some or all of their respective assets for the benefit of
creditors, then Buyer shall have sole and exclusive authority over such escrow account and of the
disposition of the funds contained therein. If within 90 days of Closing, Seller cures the
relevant Title Defect to the reasonable satisfaction of Buyer, Buyer agrees to instruct the Escrow
Agent to release the Title Defect Value including all interest earned thereon to Seller. If within
90 days of Closing Seller fails to cure the relevant Title Defect to the reasonable satisfaction of
Buyer, Seller agrees to instruct the Escrow Agent to release the Title Defect Value including all
interest earned thereon to Buyer.

4.3 Interest Additions.

Promptly on discovery, but on or before two days prior to Closing, Buyer shall in good faith
notify Seller, or Seller shall in good faith notify Buyer, of any interest discovered by that Party
that would be an Asset hereunder, but which Seller failed to list as an Asset (with such interest
being an “Interest Addition”). Interest Additions shall include, without limitation, the failure
to describe the interest in detail and any interest that entitles Seller to receive more than the
NRI or obligates Seller to bear costs and expenses in an amount less than the WI without a
proportionate change in NRI. Each such notice of an Interest Addition shall be in writing and
shall describe the Interest Addition, the estimated Allocated Value for the Interest Addition, or
the amount by which the Allocated Value of the Asset has been increased by the Interest Addition
(“Value of Interest Addition”), together with the associated computations and supporting
documentation. The Parties shall determine the Value of the Interest Addition in good faith in the
same manner as provided in Section 4.1D.2 taking into account all relevant factors. The Purchase
Price shall be increased for only those Interest Additions that exceed the Individual Title
Threshold (with the amount of such adjustment being the “Interest Addition Adjustment”).

4.4 Dispute Resolution.

The Parties agree to resolve disputes concerning title matters pursuant to the Arbitration
procedure set forth in Section 14.6.

4.5 Casualty Loss.

After the Effective Time and prior to Closing, if a portion of the Assets is destroyed by fire
or other casualty, or is taken or threatened to be taken in condemnation or under the right of
eminent domain (with such event being a “Casualty Loss”), Buyer shall purchase the Asset at Closing
for the Allocated Value of the Asset reduced by the estimated cost to repair or replace such Asset
(with equipment of similar utility)(the reduction being the “Net Casualty Loss”). At its option,
with Buyer’s consent, which Buyer may withhold in its sole discretion, Seller may elect to cure
such Casualty Loss prior to Closing. If Seller elects to cure such Casualty Loss, Seller may
replace or cause to be replaced any personal property that is the subject of a Casualty Loss with
equipment of similar grade and utility at Seller’s sole cost and expense and Seller shall indemnify
and hold harmless Buyer against any and all losses as a result of such Casualty Loss and Seller’s
election to cure such Casualty Loss. If Seller cures the Casualty Loss, Buyer shall purchase the
affected Asset at Closing for the Allocated Value thereof without any Purchase Price Adjustment for
such Casualty Loss.

4.6 Preferential Rights and Consents.

To Seller’s knowledge, the preferential purchase rights and/or required consents affecting the
Assets are set forth on Exhibit D. To the extent that there are preferential purchase rights or
required consents affecting the Assets, the provisions of this Section 4.6 shall apply. Seller
shall obtain all required consents and to give notices required in connection with preferential
purchase rights prior to Closing. If Buyer discovers other affected Assets during the course of
Buyer’s due diligence activities, Buyer shall notify Seller immediately and Seller shall obtain
such consents or obtain waivers and to give the notices required in connection with the
preferential rights prior to Closing.

A. Required Consents.

Except for consents and approvals which are customarily obtained post-Closing, and those
consents the absence of which would not invalidate the conveyance of the Assets (with all other
consents being “Required Consents”), Seller shall obtain all Required Consents prior to Closing.
Buyer shall reasonably cooperate with Seller in obtaining any Required Consent including providing
assurances of reasonable financial conditions, but Buyer shall not be required to expend funds or
make any other type of financial commitments a condition of obtaining such consent.

B. Preferential Purchase Rights.

1. If any preferential right to purchase any portion of the Assets is exercised prior to the
Closing Date, Buyer may elect, at its sole option, to terminate this Agreement pursuant to the
terms of Section 11.1.C.

ARTICLE 5

ENVIRONMENTAL MATTERS

The provisions of this Article apply only to the environmental matters associated with the
Assets.

5.1 Definitions.

For the purposes of the Agreement, the following terms shall have the following meanings:

“Environmental Consultant” means a third party consultant reasonably acceptable to Buyer and
Seller.

“Environmental Defect” means (a) a condition in, on or under an Asset (including, without
limitation, air, land, soil, surface and subsurface strata, surface water and ground water)
attributable to the period of time prior to the Effective Time that (i) causes an Asset to be in
violation of an Environmental Law, or (ii) requires Remediation under an Environmental Law and (b)
the cost to remediate the Environmental Defect exceeds $12,500 per incident or condition, net to
Seller’s interest (“Individual Environmental Threshold”). It is understood and agreed that matters
of an essentially similar nature such as, but not limited to, oil spills, chemical barrels or
equipment containing NORM or hazardous materials found at a single site shall be deemed a single
incident or condition.

“Environmental Defect Notice” means each written notice given by Buyer to Seller alleging an
Environmental Defect. Each Environmental Defect Notice must be in writing and must satisfy the
following conditions precedent: (i) name the affected Asset, (ii) describe the condition that
causes the Environmental Defect, (iii) provide reasonable factual substantiation for the
Environmental Defect, and (iv) state the estimated Remediation Cost as calculated by the
Environmental Consultant. All Environmental Defect Notices must be received by Seller on or before
five (5) days prior to Closing

“Environmental Defect Value” means the costs to remediate that particular Environmental
Defect.

“Environmental Law” means any law, statute, rule, regulation, code, ordinance or order issued
by any federal, state, or local governmental entity in effect on or before the Closing date
regulating or imposing liability or standards of conduct concerning protection of the environment
or human health and safety or the release or disposal of waste or hazardous materials explicitly
including the Colorado Oil and Gas Conservation Commission rules which became effective on April
1, 2009.

“Remediation” means actions taken to correct an Environmental Defect or otherwise required to
remediate in compliance with applicable Environmental Law, as recommended in writing by the
Environmental Consultant.

5.2 Environmental Representations.

Seller owns a working interest in all of the Assets but operates none of the Assets. Seller’s
Knowledge with respect to the Assets is that of a non-operator and is qualified accordingly. For
the period of Seller’s ownership of the Assets, and to the Knowledge of Seller, Seller represents
to Buyer that, except as described on Exhibit J, the Assets have been operated in compliance with
all Environmental Laws and Seller has not received notice of a violation of an Environmental Law
with respect to the Assets that remains uncured.

5.3 Environmental Liabilities and Obligations.

A. Retained Environmental Liabilities.

1. Upon Closing, subject to Section 5.4, Seller agrees to retain and pay, perform, fulfill and
discharge all claims, cost, expenses, liabilities and obligations accruing or relating to and
release Buyer and Buyer’s successors and assigns from all Losses attributable to and relating to
all Environmental Defects (a) described on Exhibit J and (b) for which Seller receives a timely
Environmental Defect Notice. Except for the Environmental Defects described on Exhibit J, timely
receipt of an Environmental Defect Notice and verification of the Remediation Costs by the
Environmental Consultant are conditions precedent to Seller’s obligation to retain liability for
Retained Environmental Liabilities. If Seller receives an Environmental Defect Notice for a
particular Environmental Defect and such Environmental Defect Notice is not contested under the
provisions of Section 5.5, and subject to the provisions of Section 5.4, Seller agrees to retain
all claims, costs, expenses, liabilities and obligations accruing or relating to the Environmental
Defect that was the subject of the Environmental Defect Notice.

2. If, within a period of six (6) months after Closing, Buyer becomes aware of an
Environmental Defect which existed prior to the Effective Time and delivers to Seller an
Environmental Defect Notice, and which Buyer could not have been aware of with the exercise of
reasonable diligence prior to closing, Seller agrees to retain and pay, perform, fulfill and
discharge all claims, costs, expenses, liabilities and obligations accruing or relating to and
release Buyer and Buyer’s successors and assigns from all Losses attributable to and relating to
such Environmental Defect. Timely receipt of an Environmental Defect Notice and verification of
the Remediation Costs by the Environmental Consultant are conditions precedent to Seller’s
obligation to retain liability for Retained Environmental Liabilities. If Seller receives an
Environmental Defect Notice for a particular Environmental Defect and such Environmental Defect
Notice is not contested under the provisions of Section 5.5, and subject to the provisions of
Section 5.4, Seller shall be deemed to have retained all claims, costs, expenses, liabilities and
obligations accruing or relating to the Environmental Defect that was the subject of the
Environmental Defect Notice.

3. The Retained Environmental Liabilities include Environmental Defects described in Sections
5.3.A.1 and 5.3.A.2 above.

B. Assumed Environmental Liabilities.

Except for Retained Environmental Liabilities and subject to the provisions of Section 5.4,
upon Closing, Buyer agrees to assume and pay, perform, fulfill and discharge and release Seller
from all Losses relating to environmental conditions in, on or under the Assets attributable to the
period of time before and after the Effective Time, including without limitation any and all
liability for (i) ground water contamination, (ii) Naturally Occurring Radioactive Materials, (iii)
man-made material fibers, (iv) the obligation to plug and abandon all of the wells located on the
Lands and reclamation of existing well sites on the Lands (collectively, the “Assumed Environmental
Liabilities”). If Buyer fails to timely deliver an Environmental Defect Notice with respect to an
Asset, or if the aggregate of all Environmental Defects is equal to or less than the Environmental
Deductible (as defined in Section 5.4), Buyer shall be deemed to (i) accept the environmental
condition(s) in, on and under that Asset or the Assets, (ii) have waived its right to claim an
Environmental Defect with respect to that particular condition in, on or under the Assets, and
(iii) include the particular environmental condition(s) as part of the Assumed Environmental
Liabilities. Notwithstanding the foregoing, Buyer may elect unilaterally to exclude any Asset
which has an Environmental Defect from the Transaction in accordance with Section 5.4 B. and the
environmental conditions with respect to such Asset shall not be part of the Assumed Environmental
Liabilities.

5.4 Remedies.

A. Environmental Defects less than the Environmental Deductible.If the aggregate
Environmental Defect Values of all Environmental Defect Notices timely delivered to Seller is less
than or equals $12,500 net to Seller’s interest (with such amount being the “Environmental
Deductible”), the amount of the Environmental Defect Adjustment for the purposes of Section 2.4.D.3
shall be zero.

B. Environmental Defects greater than the Environmental Deductible.

If the aggregate Environmental Defect Values of all Environmental Defect Notices timely
delivered to Seller exceeds the Environmental Deductible then Seller shall elect one of the
following options: (i) retain its obligation to indemnify and defend Buyer from any Losses relating
to such Environmental Defects to the extent that such Losses exceed the Environmental Deductible or
(ii) reduce the Purchase Price pursuant to Section 2.4.D.3 by an amount equal to the amount by
which the aggregate Environmental Defect Values of all Environmental Defect Notices exceeds the
Environmental Deductible (“Environmental Defect Adjustment”), in which event buyer shall release
and indemnify Seller from any further Retained Environmental Liability relating to the
Environmental Defects so remedied.

5.5 Contested Environmental Defects.

If Seller contests the existence of an Environmental Defect or the Environmental Defect Value,
Seller shall notify Buyer in writing on or before three (3) days after receipt of the Environmental
Defect Notice (“Rejection Notice”). The Rejection Notice shall state reasonable factual
substantiation of the rejection of the Environmental Defect or the Environmental Defect Value.
Within one (1) day of receipt of the Rejection Notice, representatives of Buyer and Seller
knowledgeable in environmental matters shall meet and in good faith agree on the validity of such
Environmental Defect and the Environmental Defect Value. If Seller fails to timely deliver a
Rejection Notice, Seller shall be deemed to have accepted the validity of the Environmental Defect
and Buyer’s estimate of the Environmental Defect Value, and shall be deemed to have waived its own
option to contest the Environmental Defect pursuant to this Section.

5.6 Exclusive Remedies.

The rights and remedies granted each Party in this Article, together with the indemnifications
set forth in Article 14 and the rights of each Party to not close pursuant to Articles 10 and 11
are the exclusive rights and remedies against the other Party related to any Environmental Defect
or other environmental matters.

ARTICLE 6

SELLER’S REPRESENTATIONS

The Parties’ agreement with respect to Title Matters and Environmental Matters is set forth in
Articles 4 and 5 respectively, and the provisions of those Articles set forth Seller’s
representations with respect to Title Matters and Environmental Matters. Except for Title Matters
and Environmental Matters, Seller makes the following representations as of the execution of this
Agreement and as of Closing:

6.1 Company Representations.

A. Corporate Representations.

Teton Piceance LLC is a limited liability company, duly organized, validly existing and in
good standing under the laws of the State of Colorado and Teton Energy Corporation is a corporation
duly organized, validly existing and in good standing under the laws of the State of Delaware.

B. Seller.

Seller has all requisite power and authority to own the Assets, to carry on its business as
presently conducted, to execute, deliver, and perform this Agreement and each other document
executed or to be executed by Seller in connection with the transactions contemplated herein. The
execution, delivery, and performance by Seller of this Agreement and each other document executed
or to be executed by Seller in connection with the Transaction and the consummation by it of the
Transaction have been duly authorized by all necessary company and/or corporate action of Seller.

C. No Violation.

The execution and delivery of this Agreement and the consummation of the transactions
contemplated hereby does not and will not (i) create a lien or encumbrance on the Assets that will
remain in existence after Closing, (ii) violate, or be in conflict with, any provision of Sellers’
governing documents, or any provision of any statute, rule or regulation applicable to Seller or
the Assets or any material lease, contract, agreement, instrument or obligation to which Seller is
a party or by which Seller or the Assets are bound, or (iii) violate, or be in conflict with, any
judgment, decree or order applicable to Seller.

6.2 Authorization and Enforceability.

The execution, delivery and performance of this Agreement and the transactions contemplated
hereby have been duly and validly authorized pursuant to the governing documents of each of the
Sellers. This Agreement and each other document executed by Seller in connection with this
Transaction constitutes Seller’s legal, valid and binding obligation, enforceable in accordance
with their respective terms, subject, however, to the effects of bankruptcy, insolvency,
reorganization, moratorium and other laws for the protection of creditors and equitable principles
which may limit the availability of certain equitable remedies (such as specific performance) in
certain instances.

6.3 Liability for Brokers’ Fees.

Seller has not incurred any liability, contingent or otherwise, for brokers’ or finders’ fees
relating to this Transaction for which Buyer shall have any responsibility whatsoever.

6.4 No Bankruptcy.

There are no bankruptcy proceedings pending, being contemplated by or, to the Knowledge of
Seller, threatened against Seller by any third party.

6.5 Litigation.

Seller has not received a written claim or written demand notice that has not been resolved
that would adversely affect any of the Assets. There are no actions, suits, ongoing governmental
investigations, written governmental inquiries or other proceedings pending or, to the Knowledge of
Seller, threatened against Seller or any of the Assets, in any court or by or before any federal,
state, municipal or other governmental agency or any arbitrator that relate to any of the Assets,
or that would affect the Seller’s ability to execute and deliver this Agreement or to consummate
this Transaction or might hinder or impede the operation of the Assets in any material respect.

6.6 Capital Projects.

Exhibit E is a list and description of all wells or other specified capital projects to the
extent such capital projects will extend beyond the Effective Time, and associated costs or
estimates thereof to the extent such costs or estimates exceed $12,500 per well or project net to
Seller’s interest (the “Capital Projects”). All costs and expenses incurred by the Parties with
respect to the Capital Projects will be apportioned between the Parties as of the Effective Time,
with Buyer assuming all post-Effective Time costs and expenses and Seller retaining all
pre-Effective Time costs and expenses.

6.7 Judgments.

There are no unsatisfied judgments or injunctions issued by a court of competent jurisdiction
or other governmental agency outstanding against Seller that would be reasonably expected to
interfere with the operation of any of the Assets, or affect the value of any of the Assets, or
impair Seller’s ability to enter into this Agreement or consummate this Transaction or might hinder
or impede the operation of the Assets in any respect.

6.8 Compliance with Law.

Except as listed on Exhibit J, Seller has not received a notice of a violation of any statute,
law, ordinance, regulation, permit, rule or order of any federal, state, tribal or local government
or any other governmental department or agency, or any judgment, decree or order of any court,
applicable to the Assets or operations on the Assets, which remains uncured.

6.9 Material Agreements.

Except for the Leases described in Exhibit A-1, Exhibit C is a list of all agreements that are
material to the ownership and operation of the Assets (with such agreements listed on Exhibit C
being the “Material Agreements”). Seller is in compliance with the terms of all of the Material
Agreements and all of the Material Agreements are in full force and effect. Seller has not
received notice of the termination of any of the Material Agreements and, to Seller’s Knowledge, no
such notice has been given by any party to any of the Material Agreements.

6.10 Plugging Obligations.

Except for wells listed on Exhibit B with the appropriate designation (such as Temporarily
Abandoned etc.), there are no dry holes, or shut in or otherwise inactive wells, located on the
Assets on lands pooled or unitized therewith that Seller has the obligation to plug and abandon.
Seller has not been notified of the lessor’s or lessor’s assigns’ intent to initiate oil shale
operations on the lands covered by the Leases that would in any way reduce the lessees’ rights to
develop and produce Hydrocarbons from the Leases. Seller has no Knowledge that any such oil shale
operations are currently being contemplated.

6.11 Personal Property and Equipment.

To Seller’s Knowledge, as of the Closing Date, all personal property constituting a part of
the Assets is in a state of repair so as to be adequate for normal operations. Notwithstanding the
foregoing, subsequent to the Closing Date, Seller expressly disclaims and negates any warranty as
to the condition of any personal property, equipment, fixtures and items of movable property
comprising any part of the Assets, including: (i) any implied or express warranty of
merchantability, (ii) any implied or express warranty of fitness for a particular purpose,
(iii) any implied or express warranty of conformity to models or samples of materials, (iv) any
rights of assignee under applicable statutes to claim diminution of consideration, and (v) any
claim by Buyer for damages because of defects, whether known or unknown, it being expressly
understood by Buyer that said personal property, fixtures, equipment and items are being conveyed
to Buyer “as is, where is,” with all faults and in their present condition and state of repair.

6.12 Hydrocarbon Sales Contracts.

Except for the Hydrocarbon Sales Contracts listed in Exhibit F, no Hydrocarbons are subject to
a sales contract (other than division orders or spot sales agreements terminable on no more than 30
days notice) and no person has any call upon, option to purchase or similar rights with respect to
the production from the Assets. Proceeds from the sale of oil, condensate, and gas from the Assets
are being received in all respects by Seller in a timely manner and are not being held in suspense
for any reason.

6.13 Imbalance Volumes.

A. Gas Pipeline Imbalances.

Except for the gas imbalances reflected on Exhibit G (“Imbalance Volumes”), there do not exist
any gas imbalances (i) which are with gatherers, processors, or transporters, and (ii) which are
associated with the Assets for which Buyer will have a duty after the Effective Time to deliver an
equivalent quantity of gas or pay a sum of money.

B. Wellhead Gas Imbalances.

Except for the Imbalance Volumes, there do not exist any gas imbalances relating either to
production from or at the wellhead between co-tenants or working interest owners in a well, unit,
or field which are associated with the Assets where Seller has received any quantity of gas prior
to the Effective Time for which Buyer will have a duty after the Effective Time to deliver an
equivalent quantity of gas or pay a sum of money.

6.14 Property Expenses.

In the ordinary course of business, Seller has paid all Property Expenses attributable to the
period of time prior to the Effective Time as such Property Expenses become due, and such Property
Expenses are being paid in a timely manner before the same become delinquent, except such Property
Expenses as are disputed in good faith by Seller in a timely manner and for which Seller shall
retain responsibility.

6.15 Records.

Seller makes no representations regarding the accuracy of any of the Records; provided,
however, Seller does represent that (i) all of the Records are files, or copies thereof, that
Seller has used in the ordinary course of operating and owning the Assets, (ii) Seller has not
intentionally withheld any material information from the Records or (iii) Seller has not
intentionally misrepresented any material information in the Records. Except as set forth in this
Section 6.15, no representation or warranty of any kind is made by Seller as to the Information and
Buyer expressly agrees that any conclusions drawn therefrom shall be the result of its own
independent review and judgment. The representations contained in this paragraph shall apply only
to matters of fact, and shall not apply to any information, data, printouts, extrapolations,
projections, documentation, maps, graphs, charts, or tables which reflect, depict, present,
portray, or represent, or which are based upon or derived from, in whole or in part, interpretation
of the Information including, but not limited to, matters of geological, geophysical, engineering,
or scientific interpretation.

6.16 Leases.

As of the Closing Date, all of the Leases are valid and in full force and effect and, to
Seller’s Knowledge, all acreage has been earned pursuant to the Leases and is held by production
except as shown on Exhibit K. Seller has not received a written notice of termination of any of
the Leases.

6.17 Licenses and Permits.

Seller has all governmental licenses, authorizations, consents, and approval required for the
ownership of the Assets, and has complied with all applicable rules, regulations, and ordinances of
any governmental authority have jurisdiction over the Assets and as to which non-compliance would
have a adverse effect on any of the Assets.

6.18 Management of Assets.

Since the Effective Time Seller has managed the Assets in the ordinary course of business and
in conformity with good oilfield practices and will continue to do so from the date of this
Agreement until the Closing Date.

6.19 Production Curtailments.

Since the Effective Time, there have been no curtailments, either market-based or mechanical,
in the production of natural gas from the Assets and Seller has no Knowledge that any such
curtailments are planned.

6.20 Liabilities and Obligations.

As of the Closing Date, to Seller’s Knowledge, there are no injury, death, casualty, tortious
action or inaction occurring on or attributable to the Assets or employee-related claims

of Seller attributable to the period of time subsequent to the Effective Time.

ARTICLE 7

BUYER’S REPRESENTATIONS

Buyer makes the following representations to Seller as of the execution of this Agreement and
as of Closing:

7.1 Corporate Representations.

A. Buyer is a corporation, duly organized, validly existing and in good standing under the
laws of the State of Colorado and is duly qualified to carry on its business in Colorado.

B. Buyer has all requisite power and authority to own the Assets after Closing, to carry on
its business as presently conducted, to execute, deliver, and perform this Agreement and each other
document executed in connection with the Transaction. The execution, delivery, and performance by
Buyer of this Agreement and each other document executed by Buyer in connection with the
Transaction, and the consummation by it of the Transaction, have been duly authorized by all
necessary corporate action of Buyer.

C. The execution and delivery of this Agreement does not (i) violate or conflict with any
provision of Buyer’s governing documents, or any provision of any statute, rule or regulation
applicable to Buyer or any material lease, contract, agreement, instrument or obligation to which
Buyer is a party or by which Buyer is bound, or (ii) violate or conflict with any judgment, decree
or order applicable to Buyer.

7.2 Authorization and Enforceability.

The execution, delivery and performance of this Agreement and this Transaction have been duly
and validly authorized by all requisite action on behalf of Buyer. This Agreement and each other
document executed by Buyer in connection with this Transaction constitute Buyer’s legal, valid and
binding obligation, enforceable in accordance with their respective terms, subject, however, to the
effects of bankruptcy, insolvency, reorganization, moratorium and similar laws for the protection
of creditors and equitable principles which may limit the availability of certain equitable
remedies (such as specific performance) in certain instances.

7.3 Liability for Brokers’ Fees.

Buyer has not incurred any liability, contingent or otherwise, for brokers’ or finders’ fees
relating to this Transaction for which Seller shall have any responsibility whatsoever.

7.4 Litigation.

There is no action, suit, proceeding, claim or investigation by any person, entity,
administrative agency or governmental body pending or, to Buyer’s Knowledge, threatened against it
before any governmental authority that impedes or is likely to impede Buyer’s ability to consummate
this Transaction and to assume the liabilities to be assumed by Buyer under this Agreement,
including without limitation, the Assumed Liabilities.

7.5 Securities Laws.

Buyer is familiar with the Assets and it is a knowledgeable, experienced and sophisticated
investor in the oil and gas business. Buyer understands and accepts the risks inherent in
ownership of the Assets. Buyer acknowledges that the Assets are or may be deemed to be
“securities” under the Securities Act of 1933, as amended, and certain applicable state securities
or Blue Sky laws and that resales thereof may therefore be subject to the registration requirements
of such acts. The Assets are being acquired solely for Buyer’s own account for the purpose of
investment and not with a view to resale, distribution or granting a participation therein in
violation of any securities laws.

7.6 Financing.

This Agreement and the sale contemplated hereby are contingent upon Buyer financing under
terms reasonably acceptable to Buyer for the remainder of the Purchase Price, subject, however, to
the following:

7.7 Financing Notice Date.

In the event Buyer notifies Seller in writing on or before 5:00 p.m. on May 8, 2009, that it
is not able to obtain such financing, this Agreement and any rights or obligations of the Parties
hereunder shall be terminated, and the Deposit provided for in Section 2.2, above, shall be
returned to Buyer, within 48 hours of such notice.

A. Seller’s Remedy.

If no such notice is received by Seller by the above time and date, but Buyer is unable to
close as scheduled because of lack of such financing, the Deposit shall be paid to Seller within 48
hours of the time and place set for Closing, notwithstanding any provision contained in Section
10.2 and 11.1 to the contrary, and shall be deemed for all purposes to fall under the terms of
Section 11.2. A., below.

7.8 Buyer’s Evaluation.

A. Records.

Buyer is experienced and knowledgeable in the oil and gas business and is aware of its risks.
Buyer acknowledges that Seller is making available to Buyer all of the Records and the opportunity
to examine, to the extent Buyer deems necessary in its sole discretion, all real property, personal
property and equipment associated with the Assets.

B. Independent Evaluation.

In entering into this Agreement, Buyer acknowledges and affirms that it has relied and will
rely solely on the terms of this Agreement and upon its independent analysis, evaluation and
investigation of, and judgment with respect to, the business, economic, legal, tax or other
consequences of this Transaction including its own estimate and appraisal of the extent and value
of the petroleum, natural gas and other reserves of the Assets, the value of the Assets and future
operation, maintenance and development costs associated with the Assets.

ARTICLE 8

COVENANTS AND AGREEMENTS

8.1 Covenants and Agreements of Seller.

Seller covenants and agrees with Buyer as follows:

A. Operations Prior to Closing.

From the date of execution hereof to the Closing, Seller will maintain the Assets in a manner
consistent with past practices. Seller agrees to maintain the insurance now in effect with respect
to the Assets through the date of Closing. From the date of execution of this Agreement to the
Closing Date, Seller shall pay or cause to be paid its proportionate shares of all Property
Expenses incurred in connection with the ownership or operations of the Assets. Seller will timely
notify Buyer of proposed activities and major capital expenditures that could reasonably be
expected to cost in excess of $12,500 per activity net to Seller’s interests conducted on the
Assets and will keep Buyer timely informed of all material developments affecting any of the
Assets.

B. Restriction on Operations.

Except in the case of an emergency, Seller will promptly inform Buyer of all requests for
commitments to expend funds in excess of $12,500 with respect to the Assets. Without the prior
written consent of Buyer, Seller shall not:

1. Enter into any new agreements or commitments with respect to the Assets;

2. Commit to or incur any expenditures in excess of $12,500 (net to Seller’s interest) with
respect to any part of the Assets;

3. Make any nonconsent elections with respect to operations affecting the Assets;

4. Abandon any Well or release (or permit to terminate), or modify or reduce its rights under
all or any portion of any of the Leases;

5. Modify or terminate any agreement, including the Material Agreements, or waive or
relinquish any right thereunder;

6. Agree to any renegotiated price, take or other terms under existing gas purchase
agreements;

7. Agree to any credit or prepayment arrangement that would reduce the share of gas
deliverable with respect to the Assets following the Effective Time;

8. Enter into any agreement or instrument for the sale, treatment, or transportation of
production from the Assets;

9. Create any material gas imbalance affecting the Assets;

10. Encumber, sell or otherwise dispose of any of the Assets, other than personal property
that is replaced by equivalent property or consumed in the normal operation of the Assets; and

11. Propose (i) the drilling of any additional wells, (ii) the deepening, plugging back or
reworking of any Well, (iii) the conducting of any other operations which require consent under the
applicable operating agreement, or (iv) the conducting of any other operations other than the
normal operation of the existing wells on the Assets.

C. Notification of Claims.

Seller shall promptly notify Buyer of any suit, action or other proceeding before any court or
governmental agency and any cause of action arising or threatened prior to the Closing that relates
to the Assets or that might result in impairment or loss of Seller’s title to any portion of the
Assets or the value thereof or that might hinder or impede the operation of the Leases.

D. Existing Relationships.

Prior to the Closing, Seller shall not introduce any new method of management, operation or
accounting with respect to the Assets and shall use all reasonable efforts to preserve its
relationships with customers, suppliers, distributors, contractors, operators, non-operators,
royalty owners, and others having business dealings with it in connection with the Assets.

E. Consents.

For the purposes of obtaining the written consents required in this Section 8.1, Buyer
designates the person set forth in Section 15.2. Such consents may be obtained in writing by
courier or given by email, telecopy or facsimile transmission.

F. Entity Status.

Seller shall maintain its corporate status from the date hereof until Closing and through the
Settlement Date to assure that as of the Closing Date and the Final Settlement, Seller will not be
under any material legal or contractual restriction that would prohibit or delay the timely
consummation of this Transaction.

8.2 Covenants and Agreements of Buyer.

Buyer covenants and agrees with Seller that Buyer shall maintain its corporate status from the
date hereof until the Closing Date and the Settlement Date, and use all reasonable efforts to
assure that as of the Closing Date and the Settlement Date it will not be under any material legal
or contractual restriction that would prohibit or delay the timely consummation of this
Transaction.

8.3 Covenants and Agreements of the Parties.

The Parties covenant and agree as follows:

A. Confidentiality.

All data and information, whether written or oral, obtained from Seller in connection with
this Transaction, including the Records, whether obtained by Buyer before or after the execution of
this Agreement, and data and information generated by Buyer in connection with this Transaction
(collectively, the “Information”), is deemed by the Parties to be confidential and proprietary to
Seller. Until the Closing, except as required by law or applicable stock exchange rule, Buyer and
its officers, agents and representatives will hold in strict confidence the terms of this
Agreement, and all Information, except any Information which: (i) at the time of disclosure to
Buyer by Seller is in the public domain; (ii) after disclosure to Buyer by Seller becomes part of
the public domain by publication or otherwise, except by breach of this commitment by Buyer; (iii)
was rightfully in Buyer’s possession at the time of disclosure to Buyer by Seller; (iv) Buyer
rightfully receives from third parties free of any obligation of confidence; or (v) is developed
independently by Buyer without the Information.

B. Return of Information.

If this Transaction does not close on or before Closing, or such later date as agreed to by
the Parties, Buyer shall (i) return to Seller all copies of the Information in possession of Buyer
obtained pursuant to any provision of this Agreement, which Information is at the time of
termination required to be held in confidence pursuant to Section 8.3A.; (ii) destroy any and all
notes, reports, studies or analyses based on or incorporating the Information.

C. Injunctive Relief.

Buyer agrees that Seller will not have an adequate remedy at law if Buyer violates any of the
terms of Sections 8.3A. and/or B. In such event, Seller will have the right, in addition to any
other it may have, to obtain injunctive relief to restrain any breach or threatened breach of the
terms of Sections 8.3A. and/or B., or to obtain specific enforcement of such terms

D. Cure Period for Breach.

If any Party believes any other Party has breached the terms of this Agreement, the Party who
believes the breach has occurred shall give written notice to the breaching Party of the nature of
the breach and give the breaching Party 48 hours to cure. Notwithstanding the foregoing, this
Subsection shall not apply to breach of the Parties’ obligations at Closing and shall not operate
to delay Closing.

E. Notice of Breach.

If either Seller or Buyer develops or possesses information that leads it to believe that the
other Party may have breached a representation or warranty under this Agreement, that Party shall
promptly inform the other Party of such potential breach so that it may attempt to remedy or cure
such breach prior to Closing. The provisions of this Agreement and the various documents and
agreements to be executed and delivered pursuant hereto relating to representations, warranties,
indemnities and agreements of Seller or Buyer shall not be altered or modified by the Closing or by
Buyer’s or Seller’s knowledge of any event or Buyer’s or Seller’s review of any documents or other
matters except as expressly provided herein to the contrary, except as otherwise agreed to by the
parties hereto.

ARTICLE 9

TAX MATTERS

9.1 Apportionment of Tax Liability.

“Taxes” shall mean all ad valorem, property, production, excise, net proceeds, severance and
all other taxes and similar obligations assessed against the Assets or based upon or measured by
the ownership of the Assets or the production of Hydrocarbons or the receipt of proceeds therefrom,
other than income taxes. All Taxes based on production of hydrocarbons shall be deemed
attributable to the period during which such production occurred and not attributable to the year
in which such Taxes are assessed. The apportionment of Taxes between the Parties shall take place
as an adjustment to the Purchase Price pursuant to Section 2.4 in the Preliminary Settlement
Statement, using estimates of such Taxes if actual numbers are not available. Notwithstanding the
foregoing, the Parties agree that ad valorem taxes assessed against the Assets for the 2007 tax
year, payable in 2008 but which have not yet been billed by the operator, and the 2008 tax year,
payable in 2009 shall be paid by Seller as an adjustment to the Purchase Price in the amount to be
estimated in the Preliminary Settlement Statement (if the actual amount is not known at the time
the Preliminary Settlement Statement is prepared) or in the actual amount (if the actual amount is
known prior to the Settlement Date). Seller shall have no further liability for ad valorem taxes
assessed against the Assets beyond that specified in the preceding sentence. Subject to the
provisions of Section 14.3, Taxes are considered part of the Property Expenses.

9.2 Calculation of Tax Liability.

Consistent with Section 9.1, and based on the best current information available as of
Closing, the proration of Taxes shall be made between the Parties as an adjustment to the Purchase
Price pursuant to Section 2.4 and thereafter pursuant to the provision of Section 14.3.

9.3 Tax Reports and Returns.

Seller agrees to file all tax returns for the period of time prior to January 1, 2009, and
Buyer agrees to file all tax returns for the period of time from and after January 1, 2009. The
Party not filing the return agrees to provide the Party filing the return with appropriate
information which is necessary to file any required tax reports and returns related to the Assets.

9.4 Sales Taxes.

Buyer shall be liable for and shall indemnify Seller for, any sales and use taxes, conveyance,
transfer and recording fees and real estate transfer stamps or taxes that may be imposed on any
transfer of the Assets pursuant to this Agreement. If required by applicable law, Seller shall, in
accordance with applicable law, calculate and remit any sales or similar taxes that are required to
be paid as a result of the transfer of the Assets to Buyer and Buyer shall promptly reimburse
Seller therefor. If Seller receives notice that any sales and/or use taxes are due, Seller shall
promptly forward such notice to Buyer for handling.

ARTICLE 10

CONDITIONS PRECEDENT TO CLOSING

10.1 Seller’s Conditions Precedent.

The obligations of Seller at the Closing are subject, at the option of Seller, to the
satisfaction or waiver at or prior to the Closing of the following conditions precedent:

A. All representations and warranties of Buyer contained in this Agreement are true in all
material respects (considering this Transaction as a whole) at and as of the Closing in accordance
with their terms as if such representations and warranties were remade at and as of the Closing.
Buyer has performed and satisfied all covenants and agreements required by this Agreement to be
performed and satisfied by Buyer at or prior to the Closing in all material respects;

B. No order has been entered by any court or governmental agency having jurisdiction over the
Parties or the subject matter of this Agreement that restrains or prohibits this Transaction and
that remains in effect at the time of Closing; and

C. The aggregate net reduction to the Purchase Price due to Title Defects, Interest Additions,
Environmental Defects, and reductions based on breaches of representations and warranties, but
excluding reductions for Exclusion Adjustments, does not exceed in the aggregate five per cent (5%)
of the Purchase Price.

10.2 Buyer’s Conditions Precedent.

The obligations of Buyer at the Closing are subject, at the option of Buyer, to the
satisfaction or waiver at or prior to the Closing of the following conditions precedent:

A. All representations and warranties of Seller contained in this Agreement are true in all
material respects at and as of the Closing in accordance with their terms as if such
representations were remade at and as of the Closing. Seller has performed and satisfied all
covenants and agreements required by this Agreement to be performed and satisfied by Seller at or
prior to the Closing in all material respects;

B. No order has been entered by any court or governmental agency having jurisdiction over the
Parties or the subject matter of this Agreement that restrains or prohibits this Transaction and
that remains in effect at the time of Closing; and

C. The aggregate net reduction to the Purchase Price due to Title Defects, Interest Additions,
Environmental Defects, reductions based on breaches of representations and warranties, and
reductions for Exclusion Adjustments, does not exceed in the aggregate 10% of the Purchase Price.

D. Seller has delivered to Buyer all Required Consents.

E. Seller has delivered to Buyer waivers of all preferential purchase rights, including rights
of first purchase, or written confirmation that all such rights have expired.

F. Completion by Buyer to its reasonable satisfaction of a due diligence review of the Assets,
including, without limitation, all files and records pertaining to title, environmental,
accounting, tax, reserves, operational, engineering and contract matters with respect to the
Assets; provided, however, that Buyer’s right to conduct such due diligence review, and to
terminate this agreement as a result, except as to title and environmental matters, shall terminate
at 5:00 p.m. on the seventh business day following execution of this Agreement.

ARTICLE 11

RIGHT OF TERMINATION AND ABANDONMENT

11.1 Termination.

This Agreement may be terminated in accordance with the following provisions:

A. By Seller if Seller’s conditions set forth in Section 10.1 are not satisfied through no
fault of Seller, or are not waived by Seller, as of the Closing Date;

B. By Buyer if Buyer’s conditions set forth in Section 10.2 are not satisfied through no fault
of Buyer, or are not waived by Buyer, as of the Closing Date;

C. By Buyer in the event the terms of Section 4.6. B.1 have been satisfied;

D. By either Party if the Purchase Price reduction described in either Sections 10.1C. or
10.2C. has occurred and not been waived by both Seller and Buyer; and

E. By Buyer in the event the terms of Section 4.2.B.1. (v) have been satisfied.

11.2 Liabilities Upon Termination.

A. Buyer’s Breach.

If Closing does not occur because Buyer wrongfully fails to tender performance at Closing or
otherwise breaches this Agreement prior to Closing, and Seller is ready to close, Seller shall be
entitled to receive the Deposit as liquidated damages. Buyer’s failure to close shall not be
considered wrongful if Buyer has terminated this Agreement as of right under Section 11.1. The
remedy set forth herein shall be Seller’s sole and exclusive remedy for Buyer’s wrongful failure to
close hereunder and Seller expressly waives any and all other remedies, legal and equitable, that
it otherwise may have had for Buyer’s wrongful failure to Close.

B. Seller’s Breach.

If Closing does not occur because Seller wrongfully fails to tender performance at Closing or
otherwise breaches this Agreement prior to Closing, and Buyer is ready and otherwise able to close,
Seller shall, at Buyer’s sole election either (i) return the Deposit to Buyer five (5) days after
the determination that the Closing will not occur, or (ii) Buyer shall have the right to pursue
specific performance of this Agreement.

C. Termination Pursuant to Sections 11.1.

If Buyer or Seller terminates this Agreement pursuant to Sections 4.2.B.1, 4.6.B.1 or 11.1 in
the absence of a breach by the other Party, neither Buyer nor Seller shall have any liability to
the other Party for termination of this Agreement, and Buyer shall be entitled to receive the
Deposit immediately after the determination that the Closing will not occur.

ARTICLE 12

CLOSING

12.1 Date of Closing.

The “Closing” of this Transaction shall be held on May 22, 2009. The date the Closing
actually occurs is called the “Closing Date.”

12.2 Place of Closing.

The Closing shall be held at the offices of Seller in Denver, Colorado, at 9:00 a.m. or at
such other time and place as Buyer and Seller may agree in writing.

12.3 Closing Obligations.

At Closing, the following events shall occur, each being a condition precedent to the others
and each being deemed to have occurred simultaneously with the others:

A. Seller shall execute, acknowledge and deliver to Buyer an Assignment, Bill of Sale and
Conveyance in the form attached as Exhibit H, conveying the Assets to Buyer as of the Effective
Time, with (i) a special warranty of the real property title by, through and under Seller but not
otherwise, and (ii) with all personal property and fixtures conveyed “AS IS, WHERE IS,” with no
warranties whatsoever, express, implied or statutory.

B. Seller and Buyer shall execute and deliver the Preliminary Settlement Statement.

C. Buyer shall deliver the Closing Amount to the account at the bank designated by Seller in
writing, by wire transfer in immediately available funds, or by such other method as agreed to by
the Parties.

D. Seller shall execute and deliver to Buyer an affidavit of non-foreign status and no
requirement for withholding under Section 1445 of the Code in the form attached as Exhibit I.

E. Seller shall prepare, execute and deliver to Buyer appropriate letters-in-lieu of transfer
orders.

F. Seller shall provide a release of the Mortgage in favor of JPMorgan Chase Bank, N.A., such
release to be in form and substance reasonably acceptable to Buyer.

G. Seller shall provide a release of the mortgage in favor of The Bank of New York Mellon
Trust Company, N.A., such release to be in form and substance reasonably acceptable to Buyer.

H. Seller shall make the Records available for pick up by Buyer at Closing to the extent
possible, but in any event, within five business days after Closing.

I. Seller shall deliver to Buyer all Required Consents.

J. Seller and Buyer shall take such other actions and deliver such other documents as are
contemplated by this Agreement.

ARTICLE 13

POST-CLOSING OBLIGATIONS

13.1 Post-Closing Adjustments.

A. Settlement Statement.

As soon as practicable after the Closing, but in no event later than 90 days after Closing,
Seller, with assistance from Buyer’s staff, will prepare and deliver to Buyer, in accordance with
customary industry accounting practices, the Settlement Statement (the “Settlement Statement”)
setting forth each adjustment or payment that was not finally determined as of the Closing and
showing the calculation of such adjustment and the resulting final purchase price (the “Final
Purchase Price”). As soon as practicable after receipt of the Settlement Statement, but in no
event later than on or before 30 days after receipt of Seller’s proposed Settlement Statement,
Buyer shall deliver to Seller in writing any changes that Buyer proposes to make to the Settlement
Statement. Buyer’s failure to deliver to Seller written proposed changes to the Settlement
Statement by that date shall be deemed an acceptance by Buyer of the Settlement Statement as
submitted by Seller. The Parties shall agree with respect to the changes proposed by Buyer, if
any, no later than 45 days after receipt of Seller’s proposed Settlement Statement. The date upon
which such agreement is reached or upon which the Final Purchase Price is established shall be
herein called the “Settlement Date.” If the Final Purchase Price is more than the Closing Amount,
Buyer shall pay Seller the amount of such difference. If the Final Purchase Price is less than the
Closing Amount, Seller shall pay to Buyer the amount of such difference. Any payment by Buyer or
Seller, as the case may be, shall be made by wire transfer of immediately available funds within 5
days of the Settlement Date.

B. Dispute Resolution.

If the Parties are unable to resolve a dispute as to the Final Purchase Price by 45 days after
Buyer’s receipt of Seller’s proposed Settlement Statement, the Parties shall submit the dispute to
binding arbitration to be conducted pursuant to Section 14.6.

13.2 Records.

Seller shall make the Records available for pick up by Buyer at Closing. Seller may retain
copies of the Records and Seller shall have the right to review and copy the Records during
standard business hours upon reasonable notice for so long as Buyer retains the Records.

13.3 Further Assurances.

From time to time after Closing, Seller and Buyer shall each execute, acknowledge and deliver
to the other such further instruments and take such other action as may be reasonably requested in
order to accomplish more effectively the purposes of this Transaction.

ARTICLE 14

ASSUMPTION AND RETENTION OF OBLIGATIONS AND INDEMNIFICATION

14.1 Buyer’s Assumption of Liabilities and Obligations.

Upon Closing, and except for Retained Liabilities and subject to Section 14.3 and 14.4, Buyer
shall assume and pay, perform, fulfill and discharge all claims, costs, expenses, liabilities and
obligations accruing or relating to the owning, developing, exploring or maintaining of the Assets
or the producing, transporting and marketing of Hydrocarbons from the Assets for the period after
the Effective Time, including, without limitation, (i) the Material Contracts, (ii) the Assumed
Environmental Liabilities (iii) the obligation to plug and abandon all wells and reclaim all well
sites located on the Lands regardless of when the obligations arose, (iv) the make-up and balancing
obligations for gas from the Wells, and (v) any breach of any representation, warranty, covenant or
agreement of Buyer contained in this Agreement (collectively, the “Assumed Liabilities”); provided,
however, that Seller shall between the execution of this Agreement and Closing conduct all actions
with respect to the Assets in the ordinary course of business and in conformance with good oilfield
practices.

14.2 Seller’s Retention of Liabilities and Obligations.

Upon Closing and subject to Sections 14.3 and 14.4, Seller retains, and agrees to perform,
fulfill and discharge all claims, costs, expenses, liabilities and obligations accruing or relating
to the owning, developing, exploring or maintaining, as well as (i) the Retained Environmental
Liabilities; (ii)  any injury, death, casualty, tortious action or inaction occurring on or
attributable to the Assets and attributable to the period of time prior to the Effective Time,
(iii) employee-related claims of Seller attributable to the period of time prior to the Effective
Time, (iv) any breach of any representation, warranty, covenant or agreement of Seller contained in
this Agreement, and (v) the Property Expenses incurred or attributable to the period of time prior
to the Effective Time (collectively, the “Retained Liabilities”).

14.3 Proceeds and Invoices for Property Expenses Received After the Settlement Date.

After the Settlement Date, those proceeds attributable to the Assets received by a Party or
invoices received for or Property Expenses paid by one Party for or on behalf of the other Party
with respect to the Assets which were not already included in the Final Settlement, shall be
settled as follows:

A. Proceeds.

Proceeds received by Buyer with respect to sales of Hydrocarbons produced prior to the
Effective Time shall be remitted or forwarded to Seller. Proceeds received by Seller with respect
to sales of Hydrocarbons produced after the Effective Time shall be forwarded to Buyer.

B. Property Expenses.

Invoices for Property Expenses received by Buyer that relate to operations on the Assets prior
to the Effective Time shall be forwarded to Seller by Buyer, or if already paid by Buyer, invoiced
by Buyer to Seller. Invoices for Property Expenses received by Seller that relate to operations on
the Assets after the Effective Time shall be forwarded to Buyer by Seller, or if already paid by
Seller, invoiced by Seller to Buyer.

14.4 Indemnification.

“Losses” shall mean any actual losses, costs, expenses (including court costs, reasonable fees
and expenses of attorneys, technical experts and expert witnesses and the cost of investigation),
liabilities, damages, demands, suits, claims, and sanctions of every kind and character (including
civil fines) arising from, related to or reasonably incident to matters indemnified against;
excluding however any special, consequential, punitive or exemplary damages, diminution of value of
an Asset, loss of profits incurred by a Party hereto or Loss incurred as a result of the
indemnified Party indemnifying a third party.

After the Closing, the Parties shall indemnify each other as follows:

A. Seller’s Indemnification of Buyer.

Seller assumes all risk, liability, obligation and Losses in connection with, and shall
defend, indemnify, and save and hold harmless Buyer, its officers, directors, employees and agents,
from and against any and all Losses and causes of action, liabilities and expenses relating to, or
arising out of, or connected , directly or indirectly, with the ownership or operation of the
Assets, or any part thereof, pertaining to the period prior to the Effective Time., including any
breach of this Agreement by Seller.

B. Buyer’s Indemnification of Seller.

Buyer assumes all risk, liability, obligation and Losses in connection with, and shall defend,
indemnify, and save and hold harmless Seller, its members, officers, directors, employees and
agents, from and against any and all Losses and causes of action, liabilities and expenses relating
to, or arising out of or connected, directly or indirectly, with the ownership or operation of the
Assets, or any part thereof, pertaining to the period after the Effective Time, including any
breach of this Agreement by Buyer.

C. Release.

Buyer shall be deemed to have released Seller at the Closing from any Losses for which Buyer
has agreed to indemnify Seller hereunder, and Seller shall be deemed to have released Buyer at the
Closing from any Losses for which Seller has agreed to indemnify Buyer hereunder.

14.5 Procedure.

The indemnifications contained in Section 14.4 shall be implemented as follows:

A. Claim Notice.

The Party seeking indemnification under the terms of this Agreement (“Indemnified Party”)
shall submit a written “Claim Notice” to the other Party (“Indemnifying Party”) which shall list
the amount claimed by an Indemnified Party, the basis for such claim, with supporting
documentation, and list each separate item of Loss for which payment is so claimed. The amount
claimed shall be paid by the Indemnifying Party to the extent required herein within 30 days after
receipt of the Claim Notice, or after the amount of such payment has been finally established,
whichever last occurs.

B. Information.

If the Indemnified Party receives notice of a claim or legal action that may result in a Loss
for which indemnification may be sought under this Agreement (a “Claim”), the Indemnified Party
shall give written notice of such Claim to the Indemnifying Party as soon as is practicable. If
the Indemnifying Party or its counsel so requests, the Indemnified Party shall furnish the
Indemnifying Party with copies of all pleadings and other information with respect to such Claim.
At the election of the Indemnifying Party made within 60 days after receipt of such notice, the
Indemnified Party shall permit the Indemnifying Party to assume control of such Claim (to the
extent only that such Claim, legal action or other matter relates to a Loss for which the
Indemnifying Party is liable), including the determination of all appropriate actions, the
negotiation of settlements on behalf of the Indemnified Party, and the conduct of litigation
through attorneys of the Indemnifying Party’s choice; provided, however, that any settlement of the
claim by the Indemnifying Party may not result in any liability or cost to the Indemnified Party
without its prior written consent. If the Indemnifying Party elects to assume control, (i) any
expense incurred by the Indemnified Party thereafter for investigation or defense of the matter
shall be borne by the Indemnified Party, and (ii) the Indemnified Party shall give all reasonable
information and assistance, other than pecuniary, that the Indemnifying Party shall deem necessary
to the proper defense of such Claim. In the absence of such an election, the Indemnified Party
will use its best efforts to defend, at the Indemnifying Party’s expense, any claim, legal action
or other matter to which such other Party’s indemnification under this Article 14 applies until the
Indemnifying Party assumes such defense. If the Indemnifying Party fails to assume such defense
within the time period provided above, the Indemnified Party may settle the Claim, in its
reasonable discretion at the Indemnifying Party’s expense. If such a Claim requires immediate
action, both the Indemnified Party and the Indemnifying Party will cooperate in good faith to take
appropriate action so as not to jeopardize defense of such Claim or either Party’s position with
respect to such Claim.

14.6 Dispute Resolution.

The Parties agree to resolve all “Disputes” concerning this Agreement pursuant to the
provisions of this section, such disputes to include without limitation (i) the existence and scope
of a Title Defect or Interest Addition, (ii) the Title Defect Value of that portion of the Asset
affected by a Title Defect, (iii) the Value of an Interest Addition, (iv) the adequacy of Seller’s
Title Defect curative materials, (v) the existence of an Environmental Defect, (vi) the
Environmental Defect Value, (vi) the adequacy of any Remediation actions take with respect to an
Environmental Defect, (vii) the Imbalance Volumes, or (viii) disputes concerning a Claim or amount
to be paid by an Indemnifying Party. The Parties agree to submit all Disputes to binding
arbitration in Denver, Colorado, such arbitration to be conducted as follows: The arbitration
proceeding shall be governed by Colorado law and shall be conducted in accordance with the
Commercial Arbitration Rules of the American Arbitration Association (“AAA”), though it need not be
administered by the AAA, with discovery to be conducted in accordance with the Federal Rules of
Civil Procedure, and with any disputes over the scope of discovery to be determined by the
Arbitrator(s). The arbitration shall be before a single arbitrator chosen by the mutual agreement
of the Parties involved in the matter to be arbitrated, or if no such agreement can be reached
within 10 days, a three-person panel of neutral arbitrators, consisting of one person picked by
each side, and the two arbitrators so selected picking the third (with the panel so picked or the
single arbitrator referred to as the “Arbitrator”). The Arbitrator(s) shall conduct a hearing no
later than 60 days after submission of the matter to arbitration, and the Arbitrator(s) shall
render a written decision within 30 days of the hearing. At the hearing, the Parties shall present
such evidence and witnesses as they may choose, with or without counsel. Adherence to formal rules
of evidence shall not be required but the Arbitrator(s) shall consider any evidence and testimony
that they determine to be relevant, in accordance with procedures that they determine to be
appropriate. Any award entered in the arbitration shall be made by a written opinion stating the
reasons and basis for the award made and any payment due pursuant to the arbitration shall be made
within 15 days of the decision by the Arbitrator(s). The final decision shall be binding on the
Parties, final and non-appealable, and may be filed in a court of competent jurisdiction and may be
enforced by any Party as a final judgment of such court. Each Party shall bear its own costs and
expenses of the arbitration, provided, however, that the costs of employing the Arbitrator(s) shall
be borne 50% by the Seller and 50% by the Buyer, unless ordered otherwise by the Arbitrator(s).

14.7 No Insurance; Subrogation.

The indemnifications provided in this Agreement shall not be construed as a form of insurance.
Buyer and Seller hereby waive for themselves, their respective successors or assigns, including,
without limitation, any insurers, any rights to subrogation for Losses for which each of them is
respectively liable or against which each respectively indemnifies the other, and, if required by
applicable policies, Buyer and Seller shall obtain waiver of such subrogation from their respective
insurers.

14.8 Reservation as to Non-Parties.

Nothing herein is intended to limit or otherwise waive any recourse Buyer or Seller may have
against any non-Party for any obligations or liabilities that may be incurred with respect to the
Assets.

ARTICLE 15

MISCELLANEOUS

15.1 Expenses.

All fees, costs and expenses incurred by Buyer or Seller in negotiating this Agreement or in
consummating this Transaction shall be paid by the Party incurring the same, including, without
limitation, engineering, land, title, legal and accounting fees, costs and expenses.

15.2 Notices.

All notices and communications required or permitted under this Agreement shall be in writing
and addressed as set forth below. Any communication or delivery hereunder shall be deemed to have
been made and the receiving Party charged with notice when received whether by (i) personal
delivery, (ii) telecopy or facsimile transmission, (iii) mail or (iv) overnight courier. All
notices shall be addressed as follows:

If to Seller:

Teton Piceance LLC

600 17th Street, Suite 1600 North

Denver, CO 80202

Attention: Rich Bosher and Russ Koeniger

Telephone: (303) 565-4600

Fax: (303) 565-4606

Email: rbosher@teton-energy.com

If to Buyer:

Puckett Land Company

5460 S. Quebec St., Ste. 250

Greenwood Village, Colorado 80111

Attention: Matthew A. Wurtzbacher

Telephone: (303) 763 1000

Fax: (303) 763 1040

Email: matt@puckettland.com

Any Party may, by written notice so delivered to the other Parties, change the address or
individual to which delivery shall thereafter be made.

15.3 Amendments/Waiver.

Except for waivers specifically provided for in this Agreement, this Agreement may not be
amended nor any rights hereunder waived except by an instrument in writing signed by the Party to
be charged with such amendment or waiver and delivered by such Party to the Party claiming the
benefit of such amendment or waiver.

15.4 Assignment.

This Agreement may not be assigned by Buyer without prior written consent of Seller, which
consent shall not be unreasonably withheld. No assignment of any rights hereunder by Buyer shall
relieve Buyer of any obligations and responsibilities hereunder.

15.5 Announcements.

Seller and Buyer shall consult with each other with regard to all press releases and other
announcements issued after the execution of this Agreement and prior to the Closing Date concerning
this Agreement or this Transaction. Buyer or Seller shall not issue any such press release or
other publicity without the prior written consent of the other Party, except as may be required by
applicable laws or the applicable rules and regulations of any governmental agency or stock
exchange; provided, however, that, Seller will, in any event, furnish Buyer with any proposed press
release or other publicity and give Buyer a reasonable, under the circumstances, amount of time to
comment thereon. Any such consent shall not be unreasonably withheld.

15.6 Counterparts/Fax Signatures.

Buyer and Seller may execute this Agreement in any number of counterparts, each of which shall
be deemed an original instrument, but all of which together shall constitute but one and the same
instrument. The Parties agree that facsimile signatures are binding.

15.7 Governing Law.

This Agreement and this Transaction and any arbitration or dispute resolution conducted
pursuant hereto shall be construed in accordance with, and governed by, the laws of the State of
Colorado.

15.8 Entire Agreement.

This Agreement constitutes the entire understanding among the Parties, their respective
members, shareholders, officers, directors and employees with respect to the subject matter hereof,
superseding all written or oral negotiations and discussions, and prior agreements and
understandings relating to such subject matter. Each Exhibit and Schedule attached to this
Agreement is incorporated into this Agreement.

15.9 Knowledge.

The “Knowledge” of a Party shall mean, for purposes of this Agreement, the actual, conscious
knowledge of any officer or manager of a Party, which officer or manager has been or is involved in
the ownership, operation or administration of the Assets. For purposes of this Section 15.9, any
officer or manager directly involved in the ownership, operation or administration of the Assets
shall be deemed to have knowledge of the files and records of Seller.

15.10 Binding Effect.

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

15.11 Survival.

The representations set forth in Sections 6.1 through 6.20, and Sections 7.1 through 7.6 shall
survive without limitation as to time. The remaining representations and warranties set forth in
this Agreement, except those relating to Seller’s special warranty of title as described herein,
shall not survive the Closing. Except for representations that survive without limitation as to
time, a claim for a breach of a representation or warranty must be made on or before Closing.
Delivery of the Assignment, Bill of Sale and Conveyance at the Closing will not constitute a merger
of this Agreement with such Assignment.

15.12 Limitation on Damages.

The Parties shall not have any liability to each other for consequential, special, punitive or
exemplary damages arising out of or related to a Party’s breach of any provision of this Agreement.

	15.13	 	No Third-Party Beneficiaries.

This Agreement is intended to benefit only the Parties hereto and their respective permitted
successors and assigns. There are no third party beneficiaries to this Agreement.

15.14 Condition Precedent.

A condition precedent to the effectiveness of this Agreement is signature by both Buyer and
Seller. Unless and until both Buyer and Seller have executed this Agreement, the Agreement will
not be legally binding.

15.15 Exhibits.

All of the exhibits referred to in this Agreement are hereby incorporated into this Agreement
by reference and constitute a part of this Agreement.

15.16 References, Titles and Construction.

A. All references in this Agreement to articles, sections, subsections and other subdivisions
refer to corresponding articles, sections, subsections and other subdivisions of this Agreement
unless expressly provided otherwise.

B. Titles appearing at the beginning of any of such subdivisions are for convenience only and
shall not constitute part of such subdivisions and shall be disregarded in construing the language
contained in such subdivisions.

C. The words “this Agreement”, “this instrument”, “herein”, “hereof”, “hereby”, “hereunder”
and words of similar import refer to this Agreement as a whole and not to any particular
subdivision unless expressly so limited.

D. Words in the singular form shall be construed to include the plural and vice versa, unless
the context otherwise requires. Pronouns in masculine, feminine and neutral genders shall be
construed to include any other gender.

E. Unless the context otherwise requires or unless otherwise provided herein, the terms
defined in this Agreement which refer to a particular agreement, instrument or document also refer
to and include all renewals, extensions, modifications, amendments or restatements of such
agreement, instrument or document, provided that nothing contained in this subsection shall be
construed to authorize such renewal, extension, modification, amendment or restatement.

F. Examples shall not be construed to limit, expressly or by implication, the matter they
illustrate.

G. The word “or” is not intended to be exclusive and the word “includes” and its derivatives
mean “includes, but is not limited to” and corresponding derivative expressions.

H. No consideration shall be given to the fact or presumption that one party had a greater or
lesser hand in drafting this Agreement.

I. All references herein to “$” or “dollars” shall refer to U.S. Dollars.

Remainder Of This Page Intentionally Left Blank.

2

The Parties have executed this Agreement effective as of the Effective Time.

SELLER:

TETON ENERGY CORPORATION

BY:      

Name:     

Title:      

Date:      , 2009

TETON PICEANCE LLC

By:

Name:       

Title:       

Date:      , 2009

BUYER:

PUCKETT LAND COMPANY

By:

Name:       

Title:       

Date:      , 2009

3EX-10.1

SIXTH AMENDMENT TO CREDIT AGREEMENT

SIXTH AMENDMENT TO CREDIT AGREEMENT (this “Sixth Amendment”), dated as of April 27,
2009, among STARWOOD HOTELS & RESORTS WORLDWIDE, INC., a Maryland corporation (the
“Corporation”), each additional Dollar Revolving Loan Borrower (as defined in the Credit
Agreement referred to below) from time to time party to the Credit Agreement, each additional
Alternate Currency Revolving Loan Borrower (as defined in the Credit Agreement) from time to time
party to the Credit Agreement, various lenders from time to time party to the Credit Agreement (the
“Lenders”) and DEUTSCHE BANK AG NEW YORK BRANCH, as Administrative Agent (in such capacity,
the “Administrative Agent”). Unless otherwise defined herein, all capitalized terms used
herein shall have the respective meanings provided such terms in the Credit Agreement referred to
below.

W I T N E S S E T H:

WHEREAS, the Borrowers, the Lenders, the Administrative Agent, JPMorgan Chase Bank, N.A. and
Société Générale, as Syndication Agents, Bank of America, N.A. and Calyon New York Branch, as
Documentation Agents, and Deutsche Bank Securities Inc., J.P. Morgan Securities Inc. and Banc of
America Securities LLC, as Lead Arrangers and Book Running Managers, are parties to that certain
Credit Agreement, dated as of February 10, 2006 (as amended, modified and/or supplemented to, but
not including, the date hereof, the “Credit Agreement”); and

WHEREAS, subject to the terms and conditions of this Sixth Amendment, the Lenders and the
Borrowers wish to amend certain provisions of the Credit Agreement;

	 	 	 
	 	 	NOW, THEREFORE, it is agreed:

	PART I.
	 	Acknowledgments, Agreements and Amendments.

	 	 	 

SECTION 1. Section 9.01 of the Credit Agreement is hereby amended by (i) deleting the
text “Section 9.01(xiii)” appearing in clauses (iii) and (xi) of said Section and inserting the
text “Section 9.01(xiv)” in lieu thereof; (ii) deleting the text “and” appearing at the end of
clause (xiii) of said Section; (iii) deleting the text “10%” appearing in clause (xiv) of said
Section and inserting the text “5%” in lieu thereof; (iv) deleting the period (“.”) at the end of
clause (xiv) of said Section and inserting the text “; and” in lieu thereof; and (v) inserting the
following new clause (xv) immediately following clause (xiv) of said Section:

“(xv) Liens incurred after the Initial Borrowing Date and in existence on the Sixth
Amendment Effective Date which are listed, and the property subject thereto described, in
Schedule 9.01(a), and giving effect to any renewals, replacements and extensions of such
Liens, in each case so long as (x) the principal amount of the obligations secured thereby
is not increased as a result thereof (except to the extent any such incremental obligations
are independently justified under (and applied as a utilization of the basket described in)
Section 9.01(xiv) above), (y) such renewals, replacements and extensions do not result in
Liens applying to any Assets which are not already subject to the Liens securing the
respective obligations being renewed, replaced or extended, and (z) prior to the Sixth
Amendment Effective Date, such Liens were exclusively justified under (and applied as a
utilization of the basket described in) Section 9.01(xiv) (as in effect prior to the Sixth
Amendment Effective Date). ”

SECTION 2. Section 9.03 of the Credit Agreement is hereby amended by (i) deleting the
text “and” appearing at the end of clause (ii) of said Section and (ii) deleting clause (iii) of
said Section in its entirety and inserting the following new clauses (iii) and (iv) in lieu
thereof:

“(iii) the Corporation may authorize, declare and make an annual Dividend once per
Fiscal Year in the form of a cash distribution to its shareholders (payable in the first
fiscal quarter of each Fiscal Year) in an amount not to exceed $100,000,000 per Fiscal Year;
provided that (x) in no event shall the amount of such Dividend paid in any Fiscal
Year exceed Excess Cash Flow for the immediately preceding Fiscal Year, (y) in no event
shall any Dividend be authorized, declared or made, unless (1) the Consolidated Leverage
Ratio (determined, for this purpose, on a Pro Forma Basis based on the
Consolidated Indebtedness as of the date of such authorization, declaration or cash
distribution after giving effect to any Indebtedness incurred (or to be incurred) to make
such cash distribution) as at the last day of the Reference Period then last ended is less
than 5.00:1.00 and (2) no Specified Default or Event of Default exists at the time of the
respective authorization, declaration or distribution or would exist immediately after
giving effect thereto and (z) on or prior to the date of the payment of such Dividend, the
Corporation shall have furnished to the Administrative Agent a certificate from an
Authorized Officer of the Corporation certifying to the best of his or her knowledge as to
compliance with the requirements of this clause (iii) and containing the calculations (in
reasonable detail) required to demonstrate compliance with preceding subclauses (x) and
(y)(1); and

(iv) the Corporation may authorize, declare and make Dividends in the form of share
repurchases from time to time, so long as (x) the Consolidated Leverage Ratio as at the last
day of the most recently ended Reference Period (determined, for this purpose, on a
Pro Forma Basis based on the Consolidated Indebtedness as of the date of
such authorization, declaration or repurchase after giving effect to any Indebtedness
incurred (or to be incurred) to make such repurchase) is less than 4.50:1.00, (y) no
Specified Default or Event of Default exists at the time of the respective authorization,
declaration or repurchase or would exist immediately after giving effect thereto and (z) on
or prior to the date of the payment of such Dividends, the Corporation shall have furnished
to the Administrative Agent a certificate from an Authorized Officer of the Corporation
certifying to the best of his or her knowledge as to compliance with the requirements of
preceding subclauses (x) and (y) and containing the calculations (in reasonable detail)
required to demonstrate compliance with preceding subclause (x).”

SECTION 3. Section 9.05 of the Credit Agreement is hereby amended by deleting the text
“4.50:1.00” appearing in said Section and inserting the text “5.50:1.00” in lieu thereof.

SECTION 4. Section 11.01 of the Credit Agreement is hereby amended by deleting the
definition of “Applicable Margin” appearing therein in its entirety and inserting the
following text in lieu thereof:

“Applicable Margin” shall mean, from and after any Start Date to and including
the corresponding End Date, the respective percentage per annum set forth below under the
respective Tranche and Type of Loans or Fee and opposite the respective Ratings-Based Level
(i.e., 1, 2, 3, 4, 5 or 6, as the case may be) and Leverage-Based Level
(i.e., I, II, III, IV, V or VI, as the case may be) indicated to have been achieved
on the applicable Test Date for such Start Date (as adjusted in accordance with the
immediately succeeding proviso and as set forth in the respective officer’s certificate
delivered pursuant to Section 8.01(d)):

	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	Ratings-Based

Level
	 	Unsecured Debt Rating

	 	Leverage-Based Level
	 	Consolidated

Leverage Ratio
	 	“Applicable Margin”

for Term Loans

maintained as

Eurodollar Loans
	 	“Applicable Margin”

for Revolving Loans

maintained as Euro

Rate Loans
	 	“Applicable Margin”

for Base Rate and

Canadian Prime Rate

Loans
	 	“Applicable Margin”

for Facility Fee

	 	 	 	 	 

	 	 
	 	 
	 	 
	 	 
	 	 
	 	 
	 	1	 	 	BBB+ or higher from

S&P and Baa1 or

higher from Moody’s

	 	I

	 	Less than 2.25:1.0

	 	2.00%

	 	1.75%

	 	0.0%

	 	0.25%

	 	 	 	 	 

	 	 
	 	 
	 	 
	 	 
	 	 
	 	 
	 	2	 	 	Ratings-Based Level

1 is not applicable

and ratings of BBB

or higher from S&P

and Baa2 or higher

from Moody’s

	 	II

	 	Greater than or

equal to 2.25:1.0

and less than

3.00:1.0

	 	2.25%

	 	1.95%

	 	0.25%

	 	0.30%

	 	 	 	 	 

	 	 
	 	 
	 	 
	 	 
	 	 
	 	 
	 	3	 	 	Ratings-Based Levels

1 and 2 are not

applicable and

ratings of BBB- or

higher from S&P and

Baa3 or higher from

Moody’s

	 	III

	 	Greater than or

equal to 3.00:1.0

and less than

3.75:1.0

	 	2.50%

	 	2.15%

	 	0.50%

	 	0.35%

	 	 	 	 	 

	 	 
	 	 
	 	 
	 	 
	 	 
	 	 
	 	4	 	 	Ratings-Based Levels

1, 2 and 3 are not

applicable and

ratings of BB+ or

higher from S&P and

Ba1 or higher from

Moody’s

	 	IV

	 	Greater than or

equal to 3.75:1.0

and less than

4.25:1.0

	 	2.75%

	 	2.35%

	 	0.75%

	 	0.40%

	 	 	 	 	 

	 	 
	 	 
	 	 
	 	 
	 	 
	 	 
	 	5	 	 	Ratings-Based Levels

1, 2, 3 and 4 are

not applicable

	 	V
	 	Greater than or

equal to 4.25:1.0

and less than 4.75
	 	3.00%

	 	2.55%

	 	1.00%

	 	0.45%

	 	 	 	 	 

	 	 
	 	 
	 	 
	 	 
	 	 
	 	 
	 	6	 	 	Ratings-Based Levels

1, 2, 3 , 4 and 5

are not applicable

	 	VI

	 	Greater than or

equal to 4.75:1.0

	 	3.50%

	 	3.00%

	 	1.50%

	 	0.50%

	 	 	 	 	 

	 	 
	 	 
	 	 
	 	 
	 	 
	 	 

; provided that for purposes of calculations pursuant to the preceding table,
if the Ratings-Based Level and the Leverage-Based Level at a given time under the foregoing
table would result in the determination of different “Applicable Margins” at such time, then
the “Applicable Margin” shall be determined by reference to that Level (i.e., either
the Ratings-Based Level or the Leverage-Based Level) which would then result in a higher
“Applicable Margin”; provided, further, that notwithstanding anything to the
contrary contained above, (x) if the Corporation fails to deliver the financial statements
required to be delivered pursuant to Section 8.01(a) or (b) (accompanied by the officer’s
certificates required by Section 8.01(d) showing the applicable Consolidated Leverage Ratio
and Unsecured Debt Ratings on the relevant Test Date) on or prior to the respective date
required by such Sections, then Ratings-Based Level 6 and Leveraged-Based Level VI pricing
shall apply until such time, if any, as the financial statements required as set forth above
and the accompanying officer’s certificates have been delivered showing that the pricing for
the respective Margin Adjustment Period is at a Level which is less than Ratings-Based Level
6 and Leveraged-Based Level VI (it being understood that, in the case of any late delivery
of the financial statements and officer’s certificates as so required, the reduced
Applicable Margin, if any, shall apply only from and after the date of the delivery of the
complying financial statements and officer’s certificates), (y) subject to clause (z) below,
at any time during the period from the Sixth Amendment Effective Date to but not including
the date of the actual (or, if earlier, required) delivery of the officer’s certificates
pursuant to Section 8.01(d) in respect of the fiscal quarter ended March 31, 2009,
Ratings-Based Level 4 and Leveraged-Based Level IV pricing shall apply and (z) Ratings-Based
Level 6 and Leveraged-Based Level VI pricing shall apply at all times when any Default or
any Event of Default exists.

SECTION 5. Section 11.01 of the Credit Agreement is hereby amended by deleting the
definition of “Consolidated EBITDA” appearing therein in its entirety and inserting the
following text in lieu thereof:

“Consolidated EBITDA” shall mean, for any period, Consolidated Net Income for
such period, adjusted by (x) adding thereto (i) to the extent actually deducted in
determining said Consolidated Net Income, consolidated interest expense and provision for
taxes for such period (excluding, however, consolidated interest expense and taxes
attributable to Unconsolidated Joint Ventures of the Corporation and any of its
Subsidiaries), (ii) the amount of all amortization of intangibles and depreciation that were
deducted determining Consolidated Net Income for such period (including in any event (and
regardless of any contrary treatment under GAAP) the pro rata share of
depreciation and amortization of Unconsolidated Joint Ventures of the Corporation and its
Subsidiaries), (iii) any non-recurring non-cash charges in such period to the extent that
(A) such non-cash charges do not give rise to a liability that would be required to be
reflected on the consolidated balance sheet of the Corporation (and so long as no cash
payments or cash expenses will be associated therewith (whether in the current period or for
any future period)) and (B) same were deducted in determining Consolidated Net Income for
such period, and (iv) the total amount of cash severance costs actually incurred by the
Corporation and its Subsidiaries during such period, to the extent same were deducted in
determining Consolidated Net Income for such period, provided that, in the case of
each fiscal quarter ended in Fiscal Year 2009 or in Fiscal Year 2010 and included in such
period, the amount of cash severance costs added back to Consolidated EBITDA pursuant to
this subclause (iv) for such fiscal quarter, when aggregated with the aggregate amount of
cash severance costs added back to Consolidated EBITDA pursuant to this subclause (iv) for
all other fiscal quarters ended in Fiscal Year 2009 or in Fiscal Year 2010 and included in
such period, shall not exceed $25,000,000 (it being understood, for the avoidance of doubt,
that, in the case of each fiscal quarter ended in Fiscal Year 2008 and included in such
period, the actual amount of cash severance costs shall be added back to Consolidated EBITDA
pursuant to this subclause (iv) for such fiscal quarter) and (y) subtracting therefrom, to
the extent included in determining Consolidated Net Income for such period, the amount of
non-recurring non-cash gains during such period; provided that (I) Consolidated
EBITDA shall be determined without giving effect to any extraordinary gains or losses
(including any taxes attributable to any such extraordinary gains or losses) or gains or
losses (including any taxes attributable to such gains or losses) from sales of assets other
than from sales of inventory (excluding Real Property) in the ordinary course of business
and (II) to the extent any calculation pursuant to this Agreement is to be made on a
Pro Forma Basis (for events other than the occurrence of the Transaction),
such Consolidated EBITDA shall be further adjusted as provided in the definition of
Pro Forma Basis for transactions occurring after the Initial Borrowing Date.

SECTION 6. Section 11.01 of the Credit Agreement is hereby amended by inserting the
following new definitions in appropriate alphabetical order:

“Capital Expenditures” shall mean all expenditures by the Corporation and its
Subsidiaries which should be capitalized in accordance with GAAP.

“Excess Cash Flow” shall mean, for any period, the remainder of (x)
Consolidated EBITDA for such period minus (y) the sum of (w) Consolidated Interest
Expense for such period, (x) scheduled amortization payments made with respect to any
Indebtedness of the Corporation and its Subsidiaries during such period (excluding, however,
balloon payments made at final stated maturity), (y) Maintenance Capital Expenditures
incurred or made during such period and (z) taxes paid in cash by the Corporation and its
Subsidiaries during such period.

“Maintenance Capital Expenditures” shall mean (i) Capital Expenditures relating
to improvements, repairs, maintenance and substantially equivalent replacements of existing
property, plant or equipment and (ii) Capital Expenditures required to be made due to a
change in law or ongoing regulatory requirements.

“Sixth Amendment” shall mean the Sixth Amendment to Credit Agreement, dated as
of April 27, 2009.

“Sixth Amendment Effective Date” shall have the meaning provided in the Sixth
Amendment.

SECTION 7. The Credit Agreement is hereby further amended by inserting a new Schedule
9.01(a), attached hereto as Annex A, immediately following Schedule 9.01.

PART II. Miscellaneous Provisions.

A. Each Guarantor, by its signature below, hereby confirms that (i) its Guaranty shall remain
in full force and effect and (ii) its Guaranty covers the obligations of each of the Borrowers
under the Credit Agreement (as modified by this Sixth Amendment), including the Term Loans but
excluding the direct primary obligations of such Guarantor in its capacity as a Borrower.

B. In order to induce the Lenders to enter into this Sixth Amendment, the Corporation
represents and warrants to the Lenders that, on the Sixth Amendment Effective Date, before, as of
and after giving effect to the execution, delivery and performance by the Corporation of this Sixth
Amendment and the transactions contemplated hereby, (i) there shall exist no Default or Event of
Default and (ii) all representations and warranties contained in the Credit Agreement and in the
other Credit Documents are true and correct in all material respects with the same effect as though
such representations and warranties had been made on the Sixth Amendment Effective Date (it being
understood and agreed that any representation or warranty which by its terms is made as of a
specified date shall be true and correct in all material respects only as of such specified date).

C. This Sixth Amendment is limited as specified and shall not constitute a modification,
acceptance or waiver of any other provision of the Credit Agreement or any other Credit Document.

D. This Sixth Amendment may be executed in any number of counterparts and by the different
parties hereto on separate counterparts, each of which counterparts when executed and delivered
shall be an original, but all of which shall together constitute one and the same instrument. A
complete set of counterparts shall be lodged with the Corporation and the Administrative Agent.

E. THIS SIXTH AMENDMENT AND THE RIGHTS AND OBLIGATIONS OF THE PARTIES HEREUNDER SHALL BE
CONSTRUED IN ACCORDANCE WITH AND GOVERNED BY THE LAWS OF THE STATE OF NEW YORK.

F. This Sixth Amendment shall become effective on the date (the “Sixth Amendment Effective
Date”) when each of the following conditions has been satisfied:

(i) each Borrower, each Guarantor and the Lenders constituting the Required Lenders
shall have signed a counterpart hereof (whether the same or different counterparts) and
shall have delivered (including by way of facsimile transmission) the same to the
Administrative Agent (or its designee);

(ii) the Administrative Agent (or its designee) shall have received from the
Corporation by wire transfer of immediately available funds, for the account of each Lender
who has consented to this Sixth Amendment by signing a counterpart hereof and delivering the
same as provided in the preceding clause (i) on or prior to 5:00P.M. (New York City time) on
April 16, 2009, a non-refundable cash fee in Dollars in an amount equal to 0.50% of the sum
of (i) the Revolving Loan Commitment of such Lender in effect on such date and (ii) the
aggregate principal amount of Term Loans of such Lender outstanding on such date;

(iii) the Corporation shall have repaid in full all outstanding B-1 Term Loans under,
and as defined in, that certain Credit Agreement, dated as of June 29, 2007, among the
Corporation, the lenders from time to time party thereto, the co-documentation agents named
therein, Bank of America N.A., as administrative agent, The Bank of Nova Scotia, Citicorp
North America, Inc. and the Royal Bank of Scotland PLC, as co-syndication agents, Banc of
America Securities LLC, as sole lead arranger and joint book running manager, and the Bank
of Nova Scotia and Citigroup Global Markets, Inc., as joint book running managers, together
with all accrued and unpaid interest on such B-1 Term Loans;

(iv) the Administrative Agent shall have received from the Corporation and each other
DRLB Guarantor certified copies of resolutions of the Board of Directors (or equivalent
managing body) of such Credit Party with respect to the matters set forth in this Sixth
Amendment, and such resolutions shall be satisfactory to the Administrative Agent; and

(v) the Corporation shall have paid (or caused to be paid) to the Agents and the
Lenders all fees, costs and expenses (including, without limitation, reasonable legal fees
and expenses) payable to the Agents and the Lenders to the extent then due.

The Administrative Agent shall promptly deliver notice to the Corporation of the occurrence of the
Sixth Amendment Effective Date.

G. From and after the Sixth Amendment Effective Date, all references in the Credit Agreement
and each of the other Credit Documents to the Credit Agreement shall be deemed to be references to
the Credit Agreement as modified by this Sixth Amendment on the Sixth Amendment Effective Date.
This Sixth Amendment shall constitute a Credit Document for all purposes under the Credit Agreement
and the other Credit Documents.

[Signatures appear on the following page.]

IN WITNESS WHEREOF, the parties hereto have caused their duly authorized officers to
execute and deliver this Sixth Amendment as of the date first above written.

	 
	STARWOOD HOTELS & RESORTS WORLDWIDE, INC., as a Borrower and

Guarantor

By:

	Name:

	Title:

	STARWOOD CANADA CORP., as an Alternate Currency Revolving Loan Borrower

By:

	Name:

	Title:

	CLOCKTOWER HOTEL LIMITED PARTNERSHIP, as an Alternate Currency Revolving Loan

Borrower

By: STARWOOD CANADA ULC, its General Partner

By:

	Name:

	Title:

	STARWOOD CANADA FINANCE LP, as a Dollar Revolving Loan Borrower

By:

	Name:

	Title:

1

	 
	SHERATON HOTELS (U.K.) PLC, as an Alternate Currency Revolving Loan Borrower

By:

	Name:

	Title:

	SHERATON ON THE PARK PTY LIMITED (ABN 14 003 366 550), as an Alternate Currency

Revolving Loan Borrower

By:

	Name:

	Title:

2

	 
	STARWOOD (M) FRANCE HOLDINGS SAS, as an Alternate Currency Revolving Loan

Borrower

By:

	Name:

	Title:

3

	 
	DEUTSCHE BANK AG NEW YORK BRANCH,

Individually and as Administrative Agent

By:

	 

	Name:

	Title:

	By:

	 

	Name:

	Title:

4

SIGNATURE PAGE TO THE SIXTH AMENDMENT, DATED AS OF THE
DATE FIRST WRITTEN ABOVE, TO THAT CERTAIN CREDIT
AGREEMENT, DATED AS OF FEBRUARY 10, 2006, AMONG STARWOOD
HOTELS & RESORTS WORLDWIDE, INC., EACH ADDITIONAL DOLLAR
REVOLVING LOAN BORROWER, EACH ADDITIONAL ALTERNATE
CURRENCY REVOLVING LOAN BORROWER, THE VARIOUS LENDERS
PARTY THERETO, DEUTSCHE BANK AG NEW YORK BRANCH, AS
ADMINISTRATIVE AGENT, JPMORGAN CHASE BANK, N.A. AND
SOCIETE GENERALE, AS SYNDICATION AGENTS, BANK OF AMERICA,
N.A. AND CALYON NEW YORK BRANCH, AS DOCUMENTATION AGENTS,
AND DEUTSCHE BANK SECURITIES INC., J.P. MORGAN SECURITIES
INC. AND BANC OF AMERICA SECURITIES LLC, AS LEAD
ARRANGERS AND BOOK RUNNING MANAGERS

NAME OF INSTITUTION:

	 	 	 	      

	 	 	 	By:
     

Name:

	 	 	 	Title:

5

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