Document:

Production and Marketing Agreement, dated as of December 8, 2011

 Exhibit 10.3 
 EXECUTION VERSION 
 PRODUCTION AND MARKETING AGREEMENT 

between 

GMX RESOURCES INC. 
 and 
 EDF TRADING NORTH AMERICA, LLC 

December 8, 2011 

 TABLE OF CONTENTS 

 

					
	 	  	Page	 
	 ARTICLE I DEFINITIONS AND REFERENCES
	  	 	1	  
	 Section 1.1 Defined Terms
	  	 	1	  
	 Section 1.2 Rules of Construction; Monthly and Daily Equivalents; Publications
	  	 	6	  
		
	 ARTICLE II NO ADVERSE CHANGES TO SUBJECT INTERESTS
	  	 	7	  
	 Section 2.1 Abandonment and Shut-In
	  	 	7	  
	 Section 2.2 Non-Consent Operations
	  	 	9	  
	 Section 2.3 Production Imbalances
	  	 	9	  
	 Section 2.4 Option to Adjust Scheduled Quantities
	  	 	10	  
	 Section 2.5 Defense of Agreement and Production Payment
	  	 	12	  
	 Section 2.6 Further Assurances
	  	 	12	  
		
	 ARTICLE III PRODUCTION OF SUBJECT INTERESTS
	  	 	13	  
	 Section 3.1 General Operating Requirements
	  	 	13	  
	 Section 3.2 Rates of Production
	  	 	14	  
	 Section 3.3 Quality and Pressure Requirements
	  	 	15	  
	 Section 3.4 Imbalance Charges
	  	 	15	  
	 Section 3.5 Environmental Compliance
	  	 	15	  
	 Section 3.6 Maintaining and Restoring Productivity
	  	 	16	  
	 Section 3.7 Insurance; Damage or Loss.
	  	 	16	  
	 Section 3.8 Continued Ability to Operate
	  	 	17	  
		
	 ARTICLE IV SALE OF PRODUCTION PAYMENT HYDROCARBONS TO WORKING INTEREST OWNER
	  	 	17	  
	 Section 4.1 Agreement to Sell and Purchase Production Payment Hydrocarbons
	  	 	17	  
	 Section 4.2 Monthly Payments for Hydrocarbons
	  	 	17	  
	 Section 4.3 Acceptance of Production Payment Hydrocarbons
	  	 	17	  
	 Section 4.4 Title; Liability
	  	 	18	  
	 Section 4.5 Working Interest Owner’s Failure to Accept Delivery
	  	 	18	  
	 Section 4.6 Suspension or Termination by Royalty Owner
	  	 	19	  
	 Section 4.7 Additional Hydrocarbons.
	  	 	19	  
		
	 ARTICLE V OTHER AGREEMENTS
	  	 	20	  
	 Section 5.1 Performance of Production Payment Documents
	  	 	20	  
	 Section 5.2 Interest on Late Payments; No Usury
	  	 	20	  
	 Section 5.3 Indemnity
	  	 	21	  
	 Section 5.4 Payment of Expenses
	  	 	23	  
	 Section 5.5 Information and Reporting.
	  	 	23	  
	 Section 5.6 Alternative Marketing of Production Payment Hydrocarbons
	  	 	27	  
	 Section 5.7 Preservation of Subject Well Drainage
	  	 	28	  
		
	 ARTICLE VI LIENS TO SECURE PERFORMANCE; OTHER REMEDIES
	  	 	28	  
	 Section 6.1 Mortgage
	  	 	28	  
	 Section 6.2 Production Proceeds
	  	 	29	  

  
 i 

					
	 Section 6.3 Replacement of Operator
	  	 	29	  
		
	 ARTICLE VII MISCELLANEOUS
	  	 	29	  
	 Section 7.1 Notices
	  	 	29	  
	 Section 7.2 Successors and Assigns
	  	 	29	  
	 Section 7.3 Acknowledgments and Admissions
	  	 	30	  
	 Section 7.4 Entire Agreement; Amendments; Waiver
	  	 	30	  
	 Section 7.5 Counterpart Execution
	  	 	30	  
	 Section 7.6 Applicable Law
	  	 	31	  
	 Section 7.7 Severability
	  	 	31	  
	 Section 7.8 Termination; Limited Survival
	  	 	31	  
	 Section 7.9 Waiver of Jury Trial and Punitive Damages
	  	 	31	  
	 Section 7.10 Consent to Jurisdiction
	  	 	31	  
		
	 Schedules:
	  			
		
	 Schedule 2.4 Target Tail Ratios
	  			
	 Schedule 3.7 Insurance
	  			

  
 ii 

 PRODUCTION AND MARKETING AGREEMENT 

This Production and Marketing Agreement (this “Agreement”), dated as of December 8, 2011 is made by and
between GMX Resources Inc., an Oklahoma corporation (“Working Interest Owner” and a “Party”), and EDF Trading North America, LLC, a Texas limited liability company (“Royalty
Owner” and a “Party”). 
 WHEREAS, by means of a certain Conveyance of Term
Overriding Royalty Interest dated as of the date hereof from Working Interest Owner to Royalty Owner (the “Conveyance”), Working Interest Owner has sold and conveyed to Royalty Owner the “Production Payment” (as
such term is defined in the Conveyance) in the Subject Interests described therein; and 
 WHEREAS, the Parties are
entering into this Agreement to set out certain agreements with respect to the operation and production of the Subject Interests and the marketing of the Production Payment Hydrocarbons; 

NOW, THEREFORE, as a material inducement to cause Royalty Owner to purchase the Production Payment and in consideration of the
mutual benefits and obligations of the Parties hereunder, Royalty Owner and Working Interest Owner have agreed, and hereby agree, as follows: 
 ARTICLE I 
 DEFINITIONS AND REFERENCES 

Section 1.1 Defined Terms. Reference is made to the Conveyance for the meaning of all capitalized terms defined therein, all of
which will when used herein (unless otherwise expressly defined herein) have the meanings given them in the Conveyance. As used herein, the terms “Agreement” and “Conveyance” have the meanings given
them above. For purposes of this Agreement, unless the context otherwise requires, the following terms have the following meanings: 
 “Additional Hydrocarbons” has the meaning given to such term in Section 4.8. 
 “Adjusted Prices” has the meaning given to such term in Section 2.1(c). 
 “Adjustment Rate” has the meaning given such term in Section 2.4. 
 “Agreed Rate” means the rate of ten percent (10%) per annum, calculated on the basis of actual days elapsed and a year of 360 days. 

“Anticipated Termination Time” means 9:00 a.m., Central Time, on October 31, 2019 or such earlier date as of
which, after giving effect to any adjustment of Scheduled Quantities pursuant to Section 2.4, the Termination Time is anticipated to occur. 
 “Commercial Well” has the meaning given to such term in Section 2.1(c). 

  
 1 

 “Company Engineers” means Degolyer and MacNaughton and any other
nationally recognized independent reserve engineering firm that Working Interest Owner and Royalty Owner from time to time agree to designate as the Company Engineers for the purposes hereof. 

“Downstream Contracts” means all contracts or arrangements to which Working Interest Owner (or any Person acting
on behalf of Working Interest Owner) is a party that provide for or relate to the gathering, transportation, treatment, processing, marketing or sale of Subject Hydrocarbons. 
 “Economically Feasible” has the meaning given to such term in Section 2.1(d). 
 “Environmental Laws” means all applicable Laws regulating or otherwise pertaining to (a) the use, generation, migration, storage, removal, treatment, remedy, discharge,
release, transportation, disposal or cleanup of pollutants, contamination, hazardous wastes, hazardous substances, hazardous materials, toxic substances or toxic pollutants, (b) environmental matters involving the soil, surface waters,
groundwater, land, stream sediments, surface or subsurface strata, ambient air and any other environmental medium on or off any Subject Interest, or (c) the environment or health and safety-related matters; including the following as from time
to time amended and all others whether similar or dissimilar and whether now existing or hereinafter enacted: the Comprehensive Environmental Response, Compensation, and Liability Act of 1980, as amended by the Superfund Amendments and
Reauthorization Act of 1986, the Resource Conservation and Recovery Act of 1976, as amended by the Used Oil Recycling Act of 1980, the Solid Waste Disposal Act amendments of 1980, and the Hazardous and Solid Waste Amendments of 1984, the Hazardous
Materials Transportation Act, as amended, the Toxic Substance Control Act, as amended, the Clean Air Act, as amended, the Clean Water Act, as amended, and all regulations promulgated pursuant thereto. 

“Event of Force Majeure” means any of the following: 

(a) physical events such as acts of God, landslides, lightning, earthquakes, fires, hurricanes, storms or storm warnings
that result in evacuation of the affected area, floods, washouts, explosions, breakage or accident or necessity of repairs to wells, equipment or lines of pipe; 

(b) weather related events affecting an entire geographic region, such as low temperatures which cause freezing or
failure of wells, equipment or lines of pipe; 
 (c) interruption of firm transportation and/or storage by
transporters of Hydrocarbons; and 
 (d) orders of any court or governmental authority having jurisdiction
(which in each case cannot be satisfied by actions taken with respect to wells other than Subject Wells, which actions do not violate other contractual duties of Working Interest Owner), strikes, lockouts or other industrial disturbances, riots,
sabotage, insurrections, wars and similar acts of other Persons; 
 provided that (i) in order to be entitled to assert an Event of Force
Majeure, (1) the affected Party must be making all reasonable efforts to mitigate the adverse impacts of any such event or 

  
 2 

 
occurrence, to resolve the event or occurrence once it has occurred, and to resume performance (provided that such Party will not be obligated to settle any strike or lockout) and (2) the
asserted Event of Force Majeure must not be reasonably within the control of and must not be caused by the fault or negligence of the affected Party and must be the type of event which, by the exercise of reasonable diligence, the affected Party is
unable to prevent; (ii) no Party will be entitled to assert an Event of Force Majeure on account of economic hardship or to the extent such Party’s performance is affected by the curtailment of interruptible or secondary firm
transportation unless primary, in-path, firm transportation is also curtailed; and (iii) no Party claiming an Event of Force Majeure will be excused from any responsibility to make cash payments that are due or become due during the period in
which an Event of Force Majeure persists. 
 “Hazardous Substances” means any substances regulated under
any Environmental Law, whether as pollutants, contaminants, or chemicals, or as industrial, toxic or hazardous substances or wastes, or otherwise, including any asbestos or asbestos-containing materials, any naturally occurring radioactive
materials, and any hydrocarbons or other substances that are released into the environment. 
 “Imbalance
Charges” means any fees, penalties, costs or charges (in cash or in kind, and whether or not denominated as price adjustments or as prices for spot sales in place of prices for nominated production) that are incurred, payable or
suffered by Royalty Owner to any Person in connection with any imbalance between the amount of Production Payment Hydrocarbons delivered at the Delivery Points and the amounts of nominated sales thereof or transportation, gathering or processing
capacity scheduled or available therefor, or that are otherwise assessed against Royalty Owner by a transporter or purchaser for failure to meet such Person’s balance, delivery or nomination requirements. Interest and penalties owing with
respect to Imbalance Charges will also constitute Imbalance Charges. 
 “Losses” has the meaning given
to such term in Section 5.3(b). 
 “Mortgage” means the Deed of Trust, Mortgage, Assignment,
Security Agreement and Financing Statement of even date herewith executed in connection herewith by Working Interest Owner with respect to the Retained Interests and certain related assets. 

“NYMEX Strip Prices” has the meaning given to such term in Section 2.1(c). 

“Overtake” has the meaning given to such term in Section 2.3(a). 

“Parties” means Working Interest Owner and Royalty Owner. 

“PDP Reserves” means proved developed producing reserves of Hydrocarbons, as determined in accordance with the
definitions and standards promulgated by the Society of Petroleum Engineers. The PDP Reserves will be measured in MMBtus of Gas, and for purposes of such calculation Oil will be converted to Gas at a ratio of six MMBtus of Gas to one Barrel of Oil.

 “Performance Default” means any of the following: (a) any failure by Working Interest Owner to
pay any money owing or belonging to Royalty Owner that continues unremedied for more than three Business Days after Working Interest Owner becomes aware of such failure; 

  
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(b) any breach by Working Interest Owner of any covenant or agreement made by Working Interest Owner herein or in any other Production Payment Document (other than as described in the
preceding clause (a)) that continues unremedied for 30 days following the earlier to occur of (i) written notice thereof being delivered to Working Interest Owner by Royalty Owner or (ii) Working Interest Owner first becoming aware of such
breach; (c) any of the representations or warranties made by Working Interest Owner herein or in any other Production Payment Document is false or incorrect in any material respect on any date made or as of which made; (d) the commencement
of a voluntary case by Working Interest Owner under the United States Bankruptcy Code, or Working Interest Owner’s application for or consent to any order for relief in any involuntary case filed under such code; (e) the commencement of
any involuntary case against Working Interest Owner under such code that is not dismissed within 30 days after filing; and (f) the appointment or taking possession of a receiver, liquidator, custodian, trustee, keeper or similar official of any
of the Subject Interests which either (i) is not made ineffective or discharged within 30 days thereafter or (ii) is requested, consented to or acquiesced to by Working Interest Owner. 

“Post-Adjustment Net Present Value” has the meaning given such term in Section 2.4. 

“Pre-Adjustment Net Present Value” has the meaning given such term in Section 2.4. 

“Production Payment Documents” means this Agreement, the Conveyance, the Purchase and Sale Agreement, the
Mortgage, and each other agreement, instrument, certificate or other document at any time made or given by Working Interest Owner with or to Royalty Owner in connection with this Agreement, the Conveyance, the Purchase and Sale Agreement or the
Mortgage, including all supplements and amendments to and restatements of any of the foregoing. 
 “Purchase and Sale
Agreement” means the Purchase and Sale Agreement of even date herewith between Working Interest Owner and Royalty Owner, under which Working Interest Owner has agreed to sell and Royalty Owner has agreed to purchase the Production
Payment. 
 “Related Adjusted Commodity Swaps” has the meaning given such term in Section 2.4.

 “Related Commodity Swaps” has the meaning given such term in Section 2.4. 

“Remaining Reserves” means, as of the date of any determination, the PDP Reserves projected to be attributable to
the Subject Interests (i.e., both the Production Payment Hydrocarbons and the Retained Interest Hydrocarbons) after such date for the remaining expected productive life thereof. For the purpose of calculating Remaining Reserves, the sales
prices of the Hydrocarbons to be produced from each Subject Interest will be assumed to be the Adjusted Prices as calculated on the date of determination. Calculations of Remaining Reserves will otherwise be based on the then most recent Reserve
Report, after disregarding any reserves shown in such Reserve Report that have actually been produced on or before the date of determination of such Remaining Reserves. 

  
 4 

 “Repair Operations” means reworking, redrilling, reconditioning,
fracing, refracing, plugging back, deepening, or other operations to repair, restore, or enhance the productivity of one or more Subject Wells or to repair, restore, replace or enhance equipment and facilities used to produce and handle Subject
Hydrocarbons. 
 “Reserve Report” means (a) any annual or semiannual reserve engineering report
prepared by Company Engineers or Working Interest Owner’s in-house reserve engineers with respect to the Subject Interests as required under Section 5.5(c), and (b) any reserve engineering report prepared by Reviewing Engineers with
respect to the Subject Interests as described in Section 2.4(a). Each Reserve Report will be in form and detail acceptable to Royalty Owner and will set forth the following: 

(i) an estimation of the Oil and Gas reserves, classified by appropriate categories, as of such date attributable to the
various Subject Interests, 
 (ii) a projection of the future production of, and net revenue from, such reserves,

 (iii) a calculation of the present worth of such net revenue discounted at the rate of ten percent per annum,
and 
 (iv) a schedule or description of the principal assumptions, estimates and projections made or used in the
preparation of such report, including estimated future product prices, capital expenditures, operating expenses and taxes. 
 Each such report
will be prepared in accordance with customary and generally accepted standards and practices for independent professional petroleum engineers and will be based on the NYMEX Strip Prices on the effective date of such report. 

“Retained Interest Hydrocarbons” means the Subject Hydrocarbons other than the Production Payment Hydrocarbons.

 “Reviewing Engineers” means an independent petroleum engineering firm of recognized national standing
that is selected by Working Interest Owner and Royalty Owner to make determinations as described in Section 2.4. If either Party notifies the other that it requests a determination by the Reviewing Engineers and the Parties are unable to agree
upon such a firm within 15 days thereafter, each Party will in good faith prepare a list of four independent petroleum engineering firms. Each list will set forth that Party’s priority order with the highest priority firm listed first. Each
Party will submit its list to the other within five days after the end of the 15 day period provided above. The lists will be compared and the first firm appearing in Royalty Owner’s list that also appears in Working Interest Owner’s list
will be the Reviewing Engineers used to make such determination. If either Party fails to provide a list of that Party’s recommended firms, such Party’s list will not be considered and the first firm named on the other Party’s list
will be the firm used to make the determination. If no firm is selected pursuant to the foregoing procedures, then the Reviewing Engineers will be selected by Royalty Owner. 
 “Royalty Owner” refers to EDF Trading North America, LLC, a Texas limited liability company, as well as to its successors and assigns hereunder. 

“Royalty Owner Indemnitees” has the meaning given to such term in Section 5.3(a). 

  
 5 

 “Royalty Owner Spot Market PP Hydrocarbons” has the meaning given to
such term in Section 5.6(b). 
 “Shortfall Value” has the meaning given to such term in
Section 4.8. 
 “Subject Contracts” means all Upstream Contracts and Downstream Contracts.

 “Tail Ratio” means, as of the date of any determination, the quotient of (a) the Tail Reserves,
divided by (b) the Remaining Reserves. 
 “Tail Reserves” means, as of the date of any
determination, the portion of the Remaining Reserves that is projected to be attributable to the Subject Interests after the Anticipated Termination Time (or, if any Adjustment Quantity is expected to exist at such time, after the first date
thereafter on which no Adjustment Quantity is expected to exist). 
 “Target Tail Ratio” means, on any
date or for any Month, the percentage set forth on Schedule 2.4 opposite the time period in which such date or Month occurs. 

“Trustee” means the Person or Persons who from time to time serve (or have served) as the trustee under the
Mortgage. 
 “Undertake” has the meaning given to such term in Section 2.3(a). 

“Upstream Contracts” means all joint operating agreements, unit operating agreements, facilities leases or use
agreements, water agreements (whether relating to water injection, supply, transportation or disposal), or other agreements or arrangements to which Working Interest Owner (or any Person acting on behalf of Working Interest Owner) is a party that
provide for or relate to the operation of the Subject Interests or the production of Hydrocarbons therefrom. 

“Working Interest Owner” refers to GMX Resources Inc., an Oklahoma corporation, as well as to its successors and
assigns hereunder. 
 “Working Interest Owner Spot Market PP Hydrocarbons” has the meaning given to such
term in Section 5.6(b). 
 Section 1.2 Rules of Construction; Monthly and Daily Equivalents; Publications.

 (a) Construction. 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. Titles appearing at the beginning of any of such subdivisions are for convenience only and will not constitute part of such
subdivisions and will be disregarded in construing the language contained in such subdivisions. 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. Unless the
context otherwise requires: “including” (and its grammatical variations) means “including without limitation”; “or” is not exclusive; words in the singular form will be
construed to include the plural and vice versa; words in any gender include all other genders; references herein to the Conveyance, the Purchase 

  
 6 

 
and Sale Agreement, or any other instrument or agreement refer to such instrument or agreement as it may be from time to time supplemented, amended or restated; and references herein to any
Person include such Person’s successors and assigns. All references in this Agreement to exhibits and schedules refer to the exhibits and schedules to this Agreement unless expressly provided otherwise, and all such exhibits and schedules are
hereby incorporated herein by reference and made a part hereof for all purposes. This Agreement has been drafted with the joint participation of Working Interest Owner and Royalty Owner and is to be construed neither against nor in favor of either
Party but rather in accordance with the fair meaning hereof. 
 (b) Monthly Equivalents. To the extent that this
Agreement refers to information or data measured or based upon Daily production or deliveries of Hydrocarbons and such information or data is instead provided or available only with respect to Monthly production or deliveries of Hydrocarbons, such
Monthly Hydrocarbons will be deemed produced or delivered in equal quantities on each Day during such Month. To the extent that this Agreement refers to Daily price information for production or deliveries of Hydrocarbons and such information or
data is instead provided or available only on a Monthly basis, such Monthly price information will be deemed to apply on each Day during such Month. 
 (c) Publications. To the extent that this Agreement (or any other Production Payment Document other than the Conveyance) incorporates prices, rates, adjustments to prices or rates, or other
information from a specific source or publication and that source or publication temporarily fails or permanently ceases to publish such information, or ceases publication altogether, or changes the heading or format under which such information is
published, or changes the source of information which it publishes under such heading or format, and in any such case the relevant Production Payment Document does not specify how to deal with such event, then Royalty Owner will designate a
reasonable alternative source for the same or equivalent information and the Parties will thereafter use such designated alternative source. 
 ARTICLE II 
 NO ADVERSE CHANGES TO SUBJECT INTERESTS 

Section 2.1 Abandonment and Shut-In. 
 (a) Abandonment. Working Interest Owner will not, without first obtaining the consent of Royalty Owner, abandon (or propose or consent to the abandonment of) any Subject Well or surrender, abandon
or release (or propose or consent to the surrender, abandonment or release of) any Subject Interest; provided, however, that Working Interest Owner may, without the consent of Royalty Owner, abandon any Subject Well (and the acreage held only by
such well) if such Subject Well is not a Commercial Well and it would not be Economically Feasible to restore the productivity of such Subject Well by Repair Operations. Notwithstanding the foregoing, Working Interest Owner may not under any
circumstances, without first obtaining the consent of Royalty Owner, abandon any Subject Well or Subject Interest to an Affiliate of Working Interest Owner. 
 (b) Shut-in of Subject Wells. Working Interest Owner will not, without first obtaining the consent of Royalty Owner, voluntarily shut-in a Subject Well (or propose or consent to such a shut-in),
provided that (i) a shut-in of a Subject Well will not be deemed to be 

  
 7 

 
voluntarily made if it is caused by or results from an Event of Force Majeure, or from well servicing or maintenance in the ordinary course of business, or if Working Interest Owner is waiting
for a pipeline connection or other transportation services for Gas produced from a Subject Well for which transportation or a pipeline connection is not otherwise available, and (ii) a Subject Well that has not achieved the status of, or has
ceased to be a Commercial Well and can be abandoned under subsection (a) above may be shut-in pending such abandonment. 

(c) Definitions of “Commercial Well,” “Economically Feasible,” “Adjusted Prices” and “NYMEX Strip
Prices”. For all purposes of this Agreement: 
 (i) A well will be deemed to be a “Commercial
Well” unless and until a condition arises, which reasonably appears to be permanent, such that such well is no longer capable of producing in paying quantities (without regard to the burden of the Production Payment) and a reasonably
prudent operator (acting without regard to the burden of the Production Payment) would not undertake Repair Operations to restore the productivity of such well. 
 (ii) An operation on a well will be deemed to be “Economically Feasible” whenever (A) the net present value (before deduction of federal income taxes), discounted at ten
percent per annum, of the Subject Hydrocarbons which it reasonably appears will be produced from such well after such operation — assuming such Hydrocarbons will be sold at the Adjusted Prices for each Subject Interest and net of (1) Taxes
(other than federal and state franchise and income taxes), (2) expenses of operating and maintaining such well (assuming such operating costs and expenses will be on the same basis as the last twelve Months (or the portion of such twelve Month
period for which such information is available) and excluding overhead costs and similar charges, and (3) royalties, overriding royalties and similar burdens reflected in the Net Revenue Interests set out on the Property Exhibit, but without
regard to the burden of the Production Payment — exceeds (B) the costs and expenses of Working Interest Owner directly related to such operation (net of any insurance proceeds related to such operation). 

(iii) The “Adjusted Prices” as calculated for a Subject Interest on any Day are, with respect to
Oil, the NYMEX Strip Price for Oil calculated as of such Day, minus $1.50 per Barrel, and, with respect to Gas (A) the NYMEX Strip Price for Gas calculated as of such Day. 

(iv) The “NYMEX Strip Prices” calculated as of any Day are the arithmetic average of the
settlement prices (per Barrel of Oil or MMBtu of Gas) on such Day of the applicable futures contract traded on the New York Mercantile Exchange for the first thirty-six Months after such Day. The NYMEX Strip Price for Oil will be the average of such
prices for the West Texas Intermediate Crude Oil Futures Contract for Cushing, Oklahoma Delivery that is traded on such exchange, and the NYMEX Strip Price for Gas will be the average of such prices for the Natural Gas Futures Contract for Henry Hub
Delivery that is traded on such exchange. 

  
 8 

 Section 2.2 Non-Consent Operations. Working Interest Owner will not, without the
prior consent of Royalty Owner, elect to be a non-participating party with respect to any plugging back, reworking, sidetracking, drilling, completion or other operation on any Subject Interest or Subject Lands if the consequence of such election is
that any part of Working Interest Owner’s interest in such Subject Interest on Subject Lands is temporarily (e.g., during a recoupment period) or permanently forfeited to the parties participating in such operations or electing not to abandon
such well, unless such operation would not be Economically Feasible. Upon any such election by Working Interest Owner that is consented to by Royalty Owner (or for which, pursuant to the preceding sentence, no consent is required), such election
will also be binding on the Production Payment as to the interest so temporarily or permanently forfeited but will not cause any modification in the Scheduled Quantities or in any component of the Daily Adjustment Amount. 

Section 2.3 Production Imbalances. 
 (a) Definitions. As used herein, “Undertake” means that an owner of production from a Subject Well takes a lesser share of Hydrocarbons produced from such Subject Well than
the share of Hydrocarbons which such owner is entitled to take by virtue of its ownership interest, determined without regard to any rights under any production balancing agreement or similar arrangement or any rights under common law with respect
to production balancing, and “Overtake” means that an owner of production from a Subject Well takes a greater share of Hydrocarbons produced from such Subject Well than the share of Hydrocarbons which such owner is entitled
to take by virtue of its ownership interest, again determined without regard to any rights under any production balancing agreement or similar arrangement or any rights under common law with respect to production balancing. Adjustments due to
Non-Consent Provisions, however, will not be considered Undertakes or Overtakes. 
 (b) No Undertakes Without Consent.
Subject to Section 3.2, without Royalty Owner’s prior consent Working Interest Owner will not Undertake from a Subject Well (either for itself or on behalf of Royalty Owner), except as a result of an Event of Force Majeure or a joint
interest owner in one or more Subject Wells electing to Overtake in order to balance previous Overtakes from such Subject Wells by Working Interest Owner or any of its predecessors in title to such Subject Wells, but only to the extent that such
previous Overtakes either occurred after the Effective Time or occurred prior to the Effective Time and are disclosed in Schedule 1 attached to the Purchase and Sale Agreement, provided that Working Interest Owner may Undertake from any Subject Well
on any Day so long as Royalty Owner’s actual share of production on such Day from all Subject Wells is the entire Scheduled Quantity and Adjustment Quantity for such Day. If any Undertake by Working Interest Owner occurs in violation of this
section, the Production Payment will be determined (to the maximum extent allowed under applicable Law and any applicable Permitted Encumbrances) without regard thereto. 
 (c) Limitation on Overtakes. Subject to Section 3.2, without Royalty Owner’s prior consent Working Interest Owner will not Overtake from a Subject Well on any Day (either for itself or on
behalf of Royalty Owner), except either (i) in order to produce and take up to 111% of the Scheduled Quantities and Adjustment Quantities for such Day from the Subject Wells, or (ii) if one or more other owners of production from such
Subject Well elects to Undertake, in order to produce and take the same amount of Hydrocarbons that Working Interest Owner and 

  
 9 

 
Royalty Owner would have received had such joint interest owner not elected to Undertake. If, pursuant to applicable contracts and Law, Working Interest Owner does Overtake, then the additional
Hydrocarbons so taken by Working Interest Owner will be included among the Subject Hydrocarbons and will be subject to the Production Payment. 
 (d) No Balancing From Other Properties. Working Interest Owner will not allow any Subject Interest to be subject to any production balancing arrangement or agreement under which one or more third
Persons may Overtake a portion of the production attributable to such Subject Interest as a result of Undertakes or Overtakes (or other actions or inactions) with respect to properties other than such Subject Interest. For the purposes of this
subsection (d), a production unit in which all parties have uniform interests will be considered to be a single Subject Interest. 
 Section 2.4 Option to Adjust Scheduled Quantities. 
 (a) Option. If
for any reason at any time, or from time to time, both of the following conditions exist: 
 (i) the Tail Ratio (determined as
of such time using the most recent Reserve Report) is less than the Target Tail Ratio, and 
 (ii) since the
date six months prior to the effective date of such Reserve Report, the actual production of Gas from the Subject Wells during any period of three consecutive Months has exceeded 120% of the projected production of Gas attributable to the Subject
Wells listed on the Property Exhibit of the Conveyance, 
 then in addition to any other rights or remedies available to Royalty Owner, Royalty
Owner will have the option to cause the remaining Scheduled Quantities to be adjusted as provided in subsection (b) of this Section. Royalty Owner may at any time, at its option and at its own expense, retain Reviewing Engineers to prepare a
new Reserve Report to be used to recalculate the Tail Ratio, and Working Interest Owner will cooperate in all respects with such Reviewing Engineers to enable them to promptly prepare such Reserve Report. 

(b) Procedure to Adjust Scheduled Quantities. Upon Royalty Owner’s election to exercise the option set forth in subsection
(a) of this section, Royalty Owner will in good faith adjust the remaining Scheduled Quantities by preparing a revised Schedule 1 to the Conveyance that results, at the time of Royalty Owner’s exercise of the option, in an anticipated Tail
Ratio as of the end of each Month remaining prior to the Anticipated Termination Time that is greater than, but as near as reasonably possible to, the Target Tail Ratio for such Month (it being understood that in order to achieve the Target Tail
Ratio for each such Month the Tail Ratio may be larger than the Target Tail Ratio for some Months); provided, however, that: 
 (i) Royalty Owner will not increase Scheduled Quantities in any Month to more than ninety percent (90%) of the Subject Hydrocarbons projected in the most recent Reserve Report to be produced and
saved in such Month, 
 (ii) any adjustment to the Scheduled Quantities under this Section will result in a
Post-Adjustment Net Present Value equal to the Pre-Adjustment Net Present Value, and 

  
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 (iii) no adjustments to the Scheduled Quantities will extend the projected
Termination Time, unless otherwise agreed to by Working Interest Owners and Royalty Owner. 
 Royalty Owner will present the revised Schedule 1
to Working Interest Owner for verification that the revised Schedule complies with the requirements of the foregoing sentence. If Working Interest Owner agrees with the revised Schedule 1, Royalty Owner will prepare an amendment to the Conveyance
incorporating the revised Schedule 1 into the Conveyance, Working Interest Owner and Royalty Owner will execute and acknowledge such amendment, and Royalty Owner will, at Working Interest Owner’s expense, cause such amendment to be filed in all
appropriate county, state and federal records. As used in this Agreement: 
 “Adjustment
Rate” means a monthly discount rate equal to (x) eleven and one-half percent (11.5%), divided by (y) 12. 
 “Related Commodity Swaps” means, at any time in question, the commodity and basis swaps of Royalty Owner with respect to a Scheduled Quantity which were in effect on or about the
Closing Date and remain in effect at such time. 
 “Pre-Adjustment Net Present Value”
means the net present value of the Scheduled Quantities prior to adjustment under this Section, which will be deemed to be equal to the net present value (before deduction of federal income taxes) of each Month’s Scheduled Quantities as of the
date of determination, assuming that such Scheduled Quantities will be sold at the NYMEX Strip Price whose Index Price component is the weighted average net fixed price to be paid for that Month under Royalty Owner’s Related Commodity Swaps
(and any Related Adjusted Commodity Swaps previously entered into as a result of any prior adjustment pursuant to this Section 2.4) and discounting the assumed sales proceeds at the Adjustment Rate. 

“Post-Adjustment Net Present Value” means the net present value of the Scheduled Quantities after
adjustment under this Section, which will be equal to the net present value (before deduction of federal income taxes) of each Month’s adjusted Scheduled Quantities as of the date of determination, assuming that the unchanged Scheduled
Quantities will be sold at the prices provided for in the preceding definition and that any increased Scheduled Quantities for any Month will be sold at the NYMEX Strip Price whose Index Price component is the net fixed price to be paid under
Royalty Owner’s commodity and basis swaps to be entered into with respect to such increased Scheduled Quantity (the “Related Adjusted Commodity Swaps”), discounting the assumed sales proceeds at the Adjustment Rate, and
subtracting the costs (or adding the benefits) to Royalty Owner of unwinding the Related Commodity Swaps (and any Related Adjusted Commodity Swaps previously entered into as a result of any prior adjustment pursuant to this Section 2.4) due to
reductions in Scheduled Quantities and of implementing the Related Adjusted Commodity Swaps for increases in Scheduled Quantities, and similarly adjusting for the economic benefits and economic detriments of changing the interest rate swaps of
Royalty Owner. 

  
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 (c) Determination by Reviewing Engineers. If, within 30 days after Working Interest
Owner’s receipt of Royalty Owner’s proposed revised Schedule 1, Working Interest Owner and Royalty Owner do not agree upon Royalty Owner’s revised Schedule 1 and execute and acknowledge an amendment to the Conveyance pursuant to
subsection (b) above, the Parties will select Reviewing Engineers to determine the revisions to be made to Schedule 1 to achieve the result set out in the first sentence of subsection (b) above. The fees and expenses of the Reviewing
Engineers will be borne equally by Royalty Owner and Working Interest Owner. The determination of the Reviewing Engineers will be binding upon Working Interest Owner and Royalty Owner and, upon the determination by the Reviewing Engineers of the
contents of the revised Schedule 1, Royalty Owner will prepare an amendment to the Conveyance incorporating the revised Schedule 1 into the Conveyance, Working Interest Owner will execute and acknowledge such amendment, and Royalty Owner will, at
Working Interest Owner’s expense, cause such amendment to be filed in all appropriate public records. If Working Interest Owner refuses to execute and acknowledge such amendment, Royalty Owner may do so on behalf and in the name of Working
Interest Owner, and Working Interest Owner hereby appoints Royalty Owner as its agent and attorney-in-fact for the purposes of making such execution and acknowledgement, which power is coupled with an interest and is irrevocable. 

Section 2.5 Defense of Agreement and Production Payment. If any Person (including Working Interest Owner or its Affiliates but
excluding Royalty Owner and its Affiliates) ever challenges or attacks (a) the validity or priority of the Production Payment Documents or of any rights, titles or interests of Royalty Owner that are created or evidenced thereby or (b) the
title of Working Interest Owner to any Subject Interest or of Royalty Owner to any part of the Production Payment, then upon learning thereof Working Interest Owner will give prompt written notice thereof to Royalty Owner and at Working Interest
Owner’s own cost and expense will diligently endeavor to defeat such challenge or attack and to cure any defect that may be developed or claimed, and Working Interest Owner will take all reasonable steps for the defense of any legal proceedings
with respect thereto, including the employment of counsel to represent Working Interest Owner, the prosecution or defense of litigation, and the release or discharge of all adverse claims. Royalty Owner is hereby authorized and empowered to take
such additional steps as in its judgment and discretion may be necessary or proper for the defense of any such legal proceedings or the protection of the validity or priority of the Production Payment Documents and the rights, titles, and interests
created or evidenced thereby, including the employment of independent counsel to represent Royalty Owner, the prosecution or defense of litigation, the compromise or discharge of any adverse claims made with respect to the Production Payment, the
purchase of any tax title and the removal of prior liens or security interests, and all reasonable and related expenditures so made of every kind and character will be paid to Royalty Owner by Working Interest Owner on demand. 

Section 2.6 Further Assurances. Working Interest Owner will, on request of Royalty Owner, (a) promptly correct any defect,
error or omission which may be discovered in the contents, execution or acknowledgment of any Production Payment Document, (b) execute, acknowledge, deliver and record or file such further instruments and do such further acts as may be
necessary, desirable or proper, in the reasonable judgment of Royalty Owner, to carry out more effectively the purposes of the Production Payment Documents and to more fully identify and make subject to the Production Payment Documents any property
intended to be covered thereby, including any renewals, additions, substitutions, replacements, or appurtenances to the 

  
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Subject Interests; and (c) execute, acknowledge, deliver, and file or record any document or instrument reasonably requested by Royalty Owner to protect its rights, title and interests under
the Production Payment Documents against the rights or interests of third Persons. Working Interest Owner will provide to Royalty Owner any assurances of title to the Subject Interests which Royalty Owner may from time to time reasonably request
concerning the Production Payment, including the recording and filing of the Conveyance (it being understood that no title deficiencies learned of by Royalty Owner will in any way be deemed to qualify any of Working Interest Owner’s warranties
of title or indemnities with respect to title in any Production Payment Document). 
 ARTICLE III 

PRODUCTION OF SUBJECT INTERESTS 
 Section 3.1 General Operating Requirements. At all times from the date hereof until the termination of the Production Payment, and whether or not Working Interest Owner is the operator of the
relevant Subject Interests, Working Interest Owner, at Working Interest Owner’s cost and expense, will: 
 (a) Cause the
Subject Interests to be maintained in full force and effect, free of any right of cancellation, forfeiture or termination, and to be developed, protected against drainage, and continuously operated for the production of Hydrocarbons in a good and
workmanlike manner as would a prudent operator (and without regard to the burden of the Production Payment), all in accordance with generally accepted industry practices, applicable operating agreements, the Leases, and all applicable Laws, and will
otherwise comply in all material respects with all applicable Laws, the Leases, and all other contracts or agreements forming a part of or related to the Subject Interests. 
 (b) Pay, or cause to be paid, as and when due and payable, all rentals, royalties, Taxes and other amounts payable in respect of the Subject Interests or the production therefrom, and all costs, expenses,
capital expenditures and liabilities incurred in or arising from the operation, maintenance or development of the Subject Interests, or the producing, treating, gathering, storing, marketing or transporting of Hydrocarbons therefrom at or prior to
the Delivery Points (except, in each case, to the extent contested in good faith by appropriate proceedings that effectively delay any remedy for non-payment thereof). 
 (c) Cause all Subject Wells that are Commercial Wells, and all machinery, equipment and facilities of any kind now or hereafter necessary or useful in the operation of such Subject Wells (as well as all
separation, metering and related facilities that are located at or prior to each Delivery Point and all related wells for the supply, injection or disposal of water, to the extent owned or operated by Working Interest Owner or its Affiliates) to be
maintained and kept in good and effective operating condition as would a prudent operator (and without regard to the burden of the Production Payment), and all repairs, renewals, replacements, additions and improvements thereof or thereto, useful or
needful to such end, to be promptly made. 
 (d) Give or cause to be given to Royalty Owner written notice of every adverse
claim or demand made by any Person affecting the Subject Interests, the Hydrocarbons produced therefrom, the Production Payment or the Production Payment Hydrocarbons in any manner 

  
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whatsoever, and of any suit or other legal proceeding instituted with respect thereto, and at Working Interest Owner’s expense cause all necessary and proper steps to be taken with
reasonable diligence to protect and defend the Subject Interests, the Subject Hydrocarbons produced therefrom, the Production Payment and the Production Payment Hydrocarbons against any such adverse claim or demand, including the employment of
counsel for the prosecution or defense of litigation and the contest, release or discharge of such adverse claim or demand. 

(e) Cause the Subject Interests to be kept free and clear of liens, charges and encumbrances of every character, other than the Permitted
Encumbrances. 
 (f) Except to the extent contested in good faith by appropriate proceedings that effectively delay any remedy
for non-payment thereof, pay all Taxes when due and before they become delinquent (and provide Royalty Owner with proof of such payment upon request), and reimburse Royalty Owner for any Taxes paid by Royalty Owner relating to the Production Payment
or the Production Payment Hydrocarbons. 
 (g) Maintain or cause to be maintained in full force and effect in accordance with
prudent operator standards, all permits, licenses, easements, servitudes, contracts and other rights reasonably necessary or useful in connection with the development, operation or management of the Subject Interests and the production, treating,
gathering, storing, marketing or transportation of the Subject Hydrocarbons or of water produced or used in connection therewith. 
 (h) Not resign as operator (or otherwise voluntarily relinquish such position) of any of the Subject Interests that are or hereafter become operated by Working Interest Owner until and unless the
successor operator is a subsidiary of Working Interest Owner or has been approved in writing by Royalty Owner. 
 (i) Not
conduct any work or operation in any wellbore of a Subject Well, which work or operation is related to any horizon, zone, formation or interval not included in the Subject Interests, without the prior written consent of Royalty Owner. 

(j) Measure all Subject Hydrocarbons, and determine the MMBtu content thereof, in accordance with the terms of the Conveyance, including
the requirements of Section 1.7 thereof. 
 Whenever Working Interest Owner is not the operator of a Subject Interest, it
will use its reasonable best efforts and diligently enforce its rights under any operating agreement for such Subject Interest in order to cause such Subject Interest to be operated and dealt with as contemplated in this Agreement. 

Section 3.2 Rates of Production. 
 (a) Rates of Production. Working Interest Owner will prudently operate and produce the Subject Interests and Subject Wells operated by Working Interest Owner, and Working Interest Owner will use
all commercially reasonable efforts to cause the Subject Interests and Subject Wells not operated by Working Interest Owner to be prudently operated and produced by whomever is the operator thereof, in each case in accordance with prudent industry
practices and the following additional requirements: 

  
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 (i) the amount of Hydrocarbons produced from any Subject Well shall not
exceed in any Month the lower of (1) the maximum amount that the Subject Well is capable of producing at its maximum efficient rate of flow or (2) the respective allowable rate of flow under applicable orders and Laws, if any; and

 (ii) the amount of Hydrocarbons produced from the Subject Wells shall be sufficient to prevent a material net
migration of Hydrocarbons from the reservoirs to which proved reserves are attributed underlying the Subject Interests. 
 (b)
Production Goals. Subject to the provisions of the preceding subsection (a) and Sections 2.1, 2.2, 2.3, 3.6, 3.7(b) and 3.8, Working Interest Owner will use all commercially reasonable efforts to ensure that the rate of production from
the Subject Wells, taken as a whole, is sufficient to allow the delivery to Royalty Owner of the Scheduled Quantity and the Adjustment Quantity for such Day. 
 Section 3.3 Quality and Pressure Requirements. All Production Payment Hydrocarbons delivered to Royalty Owner, or to Royalty Owner’s credit, will satisfy the quality and pressure requirements
and specifications as set forth in: 
 (a) all applicable agreements with or requirements of Delivery Point
Recipients (including tariffs filed with regulatory agencies) for acceptance and transportation of such Production Payment Hydrocarbons, 
 (b) all applicable agreements with or requirements of operators of processing plants or treatment facilities for acceptance of such Production Payment Hydrocarbons, and 

(c) all applicable agreements with or requirements of first purchasers for acceptance and purchase of such Production
Payment Hydrocarbons, 
 in each case without penalty or deduction for nonconformity. All costs and expenses to satisfy such quality and
pressure requirements will be borne and paid by Working Interest Owner. 
 Section 3.4 Imbalance Charges. Working
Interest Owner will make all commercially reasonable efforts to prevent any Imbalance Charges from becoming payable by Royalty Owner, will pay in place of Royalty Owner all such Imbalance Charges not prevented, and will in all circumstances
indemnify and hold Royalty Owner harmless from and against all Imbalance Charges. 
 Section 3.5 Environmental
Compliance. Working Interest Owner will not (a) cause or permit the Subject Lands or the condition thereof or operations thereon to be in violation of any Environmental Laws in any material respect, (b) cause or permit the disposal or
other release of any Hazardous Substance on or to the Subject Lands in violation of any Environmental Law in any material respect, (c) fail to timely remove or remediate any Hazardous Substance which has been or now or hereafter is released on
the Subject Lands in amounts which would violate any Environmental Laws in any material respect, or (d) take or omit to take any action that will subject Working Interest Owner or the Subject Lands to any material remedial obligation (or
Royalty Owner to any remedial obligation) under any Environmental Laws pertaining to the 

  
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Subject Lands, assuming in each case disclosure to the applicable governmental authorities of all relevant facts, conditions and circumstances, if any. Working Interest Owner will promptly notify
Royalty Owner in writing of any existing, pending or, to the best knowledge of Working Interest Owner, threatened investigation or inquiry of a material nature affecting any Subject Lands by any private party or governmental authority in connection
with any Environmental Laws. Working Interest Owner will take all steps reasonably necessary to determine that no Hazardous Substances are disposed of or otherwise released or being released on or to the Subject Lands in violation of any
Environmental Laws. 
 Section 3.6 Maintaining and Restoring Productivity. If any Subject Well at any time ceases to be a
Commercial Well for any reason and it would be Economically Feasible to restore or enhance the productivity of such Subject Well by Repair Operations, then Working Interest Owner will carry out such Repair Operations. 

Section 3.7 Insurance; Damage or Loss. 
 (a) Insurance. Working Interest Owner will maintain or cause to be maintained, at Working Interest Owner’s sole cost and expense and with financially sound and reputable insurers reasonably
satisfactory to Royalty Owner, insurance against such liabilities, casualties, risks and contingencies, and in such types as is customary in the case of independent oil and gas companies engaged in operations of similar properties, including
insurance of the types and coverages described in Schedule 3.7 and with limits of coverage no less than those set out in Schedule 3.7. Such insurance will name Royalty Owner as an additional insured and as a loss payee as provided in Schedule 3.7,
and Working Interest Owner will otherwise take all actions described in Schedule 3.7. Any loss proceeds from such property insurance, whether collected by Working Interest Owner or Royalty Owner, will be applied to the costs of repairing or
replacing the property loss or damage unless otherwise agreed by Working Interest Owner and Royalty Owner. Working Interest Owner will furnish certificates of such insurance to Royalty Owner and will obtain endorsements to such policies providing
that the insurer will notify Royalty Owner not less than 30 days prior to the expiration or termination of such policy of insurance. 
 (b) Repair. In the event of any damage to or loss of any platform, pipeline, well, equipment or facility on the Subject Lands or otherwise owned by any of Working Interest Owner or Endeavor
Pipeline and used in connection with the operation of any Subject Interest or the production of Subject Hydrocarbons, or the balancing, treating, gathering, transporting, tender, processing or other handling of Subject Hydrocarbons, or the
marketing, sale or transfer of Subject Hydrocarbons, Working Interest Owner or Endeavor Pipeline will (at no cost to Royalty Owner and without regard to whether insurance proceeds are available to Working Interest Owner) will promptly carry out or
cause to be carried out Repair Operations as necessary or appropriate to repair, restore or replace such damaged or lost property (or carry out other Repair Operations reasonably expected to replace the future production lost by such damage or
loss), unless such Repair Operations would not be Economically Feasible after taking into account insurance proceeds and recoveries (including any insurance proceeds and recoveries that would have been available but for Working Interest Owner’s
failure to maintain the insurance required hereunder). 

  
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 Section 3.8 Continued Ability to Operate. Working Interest Owner will at all times be
a limited liability company, corporation or limited partnership that is validly existing and in good standing under the Laws of its state of formation and duly qualified to do business and in good standing in each jurisdiction where any Subject
Lands are located. Working Interest Owner (and any Person operating the Subject Interest on its behalf) will at all times obtain and possess (or cause to be obtained and possessed) all consents, bonds, permits, licenses, right-of-ways, easements,
authorizations and waivers reasonably necessary under any applicable Law or any Lease or material contract, indenture, instrument or agreement binding on or affecting Working Interest Owner or the Subject Interests in order to permit the performance
by Working Interest Owner of the Production Payment Documents. 
 ARTICLE IV 

SALE OF PRODUCTION PAYMENT HYDROCARBONS 
 TO WORKING INTEREST OWNER 
 Section 4.1 Agreement to Sell and Purchase
Production Payment Hydrocarbons. Royalty Owner hereby agrees to sell to Working Interest Owner, and Working Interest Owner hereby agrees to buy from Royalty Owner, upon the terms of this Agreement, all of the Production Payment Hydrocarbons as
and when produced. For so long as Royalty Owner remains so obligated to sell the Production Payment Hydrocarbons to Working Interest Owner, any sale, conveyance or mortgage of the Production Payment or the Production Payment Hydrocarbons by Royalty
Owner will be made expressly subject to this Article IV. 
 Section 4.2 Monthly Payments for Hydrocarbons The price to be
paid by Working Interest Owner for the Production Payment Hydrocarbons is the Field Price each Month for each MMBtu or Barrel of Production Payment Hydrocarbons tendered or delivered during such Month. On or before the Monthly Settlement Date for
each Month, Working Interest Owner will pay to Royalty Owner, by wire transfer of immediately available funds, a sum equal to the product of the quantity of Production Payment Hydrocarbons tendered or delivered to Working Interest Owner during such
Month (measured in MMBtus or Barrels) times the applicable Field Price for such Month. In the event an adverse claim of any kind is asserted with respect to any Hydrocarbons sold or delivered to Working Interest Owner under this Agreement or any
money due hereunder, Working Interest Owner will continue to make payments as required hereunder until such claim is resolved by a final judgment of a court of competent jurisdiction,but shall be subrogated to all rights of Royalty Owner. At least
five (5) days prior to each such Monthly Settlement Date, Working Interest Owner will furnish or cause to be furnished to Royalty Owner statements in form acceptable to Royalty Owner (reasonably supported, if requested, by statements from
Delivery Point Recipients or first purchasers) showing the quantities of Production Payment Hydrocarbons actually tendered or delivered hereunder at each Delivery Point during such Month and Working Interest Owner’s calculation of the payments
due to Royalty Owner. 
 Section 4.3 Acceptance of Production Payment Hydrocarbons. Working Interest Owner will accept
and purchase all Production Payment Hydrocarbons, regardless of: (a) the quality or condition of such Production Payment Hydrocarbons, (b) the pressure at which such Production Payment Hydrocarbons are delivered, (c) whether such
Production Payment Hydrocarbons are made up of Production Payment Gas or Production Payment Oil or both, (d)

  
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whether the amount of Production Payment Hydrocarbons so delivered is less than, equals or exceeds the Scheduled Quantity (if any) for any Month, and (e) the Delivery Points at which such
Production Payment Hydrocarbons are delivered. Royalty Owner will not be responsible for any Imbalance Charges resulting from any Production Payment Hydrocarbons not being delivered in compliance with the requirements of the Conveyance or any
Downstream Contract. Working Interest Owner will use its best reasonable efforts to avoid Imbalance Charges, and Working Interest Owner will pay all Imbalance Charges assessed against Working Interest Owner or Royalty Owner. For so long as this
Agreement is in effect, Working Interest Owner will perform on Royalty Owner’s behalf (and Royalty Owner is hereby released from any obligation to perform) any and all duties owed by Royalty Owner to Working Interest Owner under the Conveyance
with respect to possessing, transporting, treating, processing, marketing and otherwise dealing with the Production Payment Hydrocarbons. Further, Working Interest Owner shall cause the Production Payment Hydrocarbons purchased from Royalty Owner
pursuant to this Agreement to be delivered to EPL for sale to Royalty Interest owner pursuant to the terms of the Endeavor NAESB Contract. 
 Section 4.4 Title; Liability. Royalty Owner hereby disclaims, and Working Interest Owner hereby releases Royalty Owner from, any warranty of title to any Production Payment Hydrocarbons sold by
Royalty Owner to Working Interest Owner (whether statutory, regulatory, at common law, by agreement, or otherwise); provided that Royalty Owner does warrant that it will convey to Working Interest Owner the same title to such Production Payment
Hydrocarbons that Royalty Owner receives from Working Interest Owner under the Conveyance, free and clear of all liens, burdens and other encumbrances of any kind or nature arising by, through or under Royalty Owner, but not otherwise.
ROYALTY OWNER FURTHER DISCLAIMS, AND WORKING INTEREST OWNER HEREBY RELEASES
ROYALTY OWNER FROM, ANY OTHER WARRANTIES OF ANY KIND WITH RESPECT TO
ANY PRODUCTION PAYMENT HYDROCARBONS SOLD HEREUNDER, IT BEING AGREED THAT ALL
PRODUCTION PAYMENT HYDROCARBONS SOLD HEREUNDER BY ROYALTY OWNER WILL BE SOLD
“AS IS,” WITH ALL FAULTS AND IN THE CONDITION THAT SUCH PRODUCTION PAYMENT
HYDROCARBONS ARE TENDERED BY OR ON BEHALF OF ROYALTY OWNER. Title to the Production Payment
Hydrocarbons sold hereunder by Royalty Owner to Working Interest Owner will pass to Working Interest Owner at the Delivery Points, and Working Interest Owner will be solely responsible for the handling, management and care of the Production Payment
Hydrocarbons at and after the Delivery Points and solely responsible for any damage, injury or loss that may occur in connection with the Production Payment Hydrocarbons. 
 Section 4.5 Working Interest Owner’s Failure to Accept Delivery. If, during any Month, Working Interest Owner fails to accept tender of delivery at the Delivery Points of all or any part of
the Production Payment Hydrocarbons, Working Interest Owner will be in breach of this Agreement. Upon any such breach, Royalty Owner will have the right to sell to one or more third party purchasers any Production Payment Hydrocarbons not accepted
by Working Interest Owner, and, as to any Production Payment Hydrocarbons so sold by Royalty Owner to any third party purchaser, Royalty Owner will be entitled to reimbursement from Working Interest Owner for the positive remainder, if any, of
(a) the price set forth under this Agreement, minus (b) the amount actually received from such sale (after deduction of all relevant costs), and Working Interest Owner will pay such amount to Royalty Owner upon demand therefor. 

  
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 Section 4.6 Suspension or Termination by Royalty Owner. Upon (i) any failure by
Working Interest Owner to pay amounts owing under Section 4.2 above, if such failure is not cured within five Business Days after it occurs, or (ii) any other Performance Default, Royalty Owner will have (in addition to the rights
described in the preceding Section 4.5 and all other rights and remedies available to Royalty Owner) the rights, exercisable upon written notice to Working Interest Owner, to: 

(a) suspend Royalty Owner’s obligations under this Agreement to sell any or all Production Payment Hydrocarbons not then previously
delivered hereunder, for the remainder of the then current Month or for any one or more Months thereafter, or 
 (b) terminate
Royalty Owner’s obligations under this Agreement to sell any or all Production Payment Hydrocarbons not then previously delivered (which right of termination may be exercised regardless of whether or not such right of suspension has first been
exercised). 
 If Royalty Owner so suspends or terminates such sale obligations with respect to any Production Payment Hydrocarbons not then
previously delivered hereunder, then Royalty Owner will have the right to sell such Production Payment Hydrocarbons to one or more third party purchasers, and, as to any Production Payment Hydrocarbons so sold by Royalty Owner to any third party
purchaser, Royalty Owner will be entitled to receive from Working Interest Owner the positive remainder, if any, of (i) the price set forth under this Agreement, minus (ii) the amount actually received from such sale (after deduction of
all relevant costs), and Working Interest Owner will pay such amount to Royalty Owner upon demand therefor. Royalty Owner will also have the right to liquidate and determine, in good faith and in a commercially reasonable manner, Royalty
Owner’s future damages reasonably to be expected from the loss of future sales of Production Payment Hydrocarbons to Working Interest Owner at the NYMEX Strip Prices from time to time in effect and the replacement of such sales to Working
Interest Owner at such NYMEX Strip Prices with sales to other purchasers at prices then available or reasonably expected to be available. In so doing, Royalty Owner may consider, among other valuations, any or all of the settlement prices of NYMEX
futures contracts, quotations from leading dealers in energy swap contracts or physical gas trading markets, similar sales or purchases and any bona fide third-party offers, all adjusted for the length of the term and differences in transportation
and processing costs. Royalty Owner will not be required to enter into any replacement transaction(s) in order to liquidate and determine such future damages. Royalty Owner’s rights and remedies under this Section 4.6 and the preceding
Section 4.5 will be in addition to any other rights and remedies that Royalty Owner may have with respect to any or all breaches by Working Interest Owner of this Agreement or any other Production Payment Document, and Royalty Owner’s
exercise of rights or remedies under any section of this Agreement will not limit any other rights or remedies of Royalty Owner and this Agreement will remain in effect in all other respects. 

Section 4.7 Additional Hydrocarbons. If production of Production Payment Hydrocarbons during any Month is insufficient to provide
Royalty Owner under the Conveyance with the full Scheduled Quantity for such Month, the value of such shortfall will be determined 

  
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by multiplying such shortfall (measured in MMBtus) by the Field Price for Gas for such Month (the “Shortfall Value”) and Working Interest Owner will have the option, but
not the obligation, to substitute other Hydrocarbons produced from the Subject Interests (“Additional Hydrocarbons”) during such Month with a value up to or equal to such Shortfall Value and to receive in exchange the future
Adjustment Quantities, as and when produced, that will constitute Production Payment Hydrocarbons as a result of the insufficient production for which such Adjustment Quantities are substituted. All Additional Hydrocarbons must be produced by
Working Interest Owner from the Subject Interests and will be valued at the applicable Field Price. To exercise such option, Working Interest Owner must deliver such Additional Hydrocarbons to Royalty Owner at one or more Delivery Points in
accordance with all applicable requirements of the Production Payment Documents. If Working Interest Owner exercises such option, Working Interest Owner will assume the risk that sufficient Hydrocarbons will be produced from the Subject Interests in
the future to produce the Adjustment Quantity to which Working Interest Owner is entitled hereunder and Royalty Owner will have no liability or obligation to Working Interest Owner in the event there is insufficient production to produce any such
Adjustment Quantity. For the purposes of this Section 4.7, it is understood that the Production Payment Hydrocarbons produced each Month will (a) first, be considered Production Payment Hydrocarbons attributable to the Scheduled Quantity
for such Month, (b) second, be considered Adjustment Quantities that have not been exchanged to Working Interest Owner for Additional Hydrocarbons, and (c) last, be considered Adjustment Quantities that have been exchanged to Working
Interest Owner under this section, so that Royalty Owner will receive its full share of Production Payment Hydrocarbons each Month before Working Interest Owner is entitled to receive any part of the Production Payment Hydrocarbons in exchange for
Additional Hydrocarbons. 
 ARTICLE V 
 OTHER AGREEMENTS 
 Section 5.1 Performance of Production Payment
Documents. Working Interest Owner will, at its sole cost and expense, perform all of its covenants and other obligations under this Agreement and the other Production Payment Documents, as and when provided therein and herein. 

Section 5.2 Interest on Late Payments; No Usury. Should Working Interest Owner fail to pay Royalty Owner any amount of money due
under any Production Payment Document at the time when such amount is due, Working Interest Owner will also pay interest on such amount at the Agreed Rate from the date such amount is due until it is paid. Working Interest Owner and Royalty Owner
stipulate and agree, however, that they intend to contract in strict compliance with applicable usury Law from time to time in effect. In furtherance thereof they further stipulate and agree that neither this Section 5.2 nor any of the other
terms and provisions contained in any Production Payment Document will ever be construed to create a contract to pay, for the use, forbearance or detention of money, interest in excess of the maximum amount of interest permitted to be charged by
applicable Law from time to time in effect. No party to any Production Payment Document will ever be liable for unearned interest or will ever be required to pay interest in excess of the maximum amount that may be lawfully charged under applicable
Law from time to time in effect, and the provisions of this section will control over all 

  
 20 

 
other provisions of the Production Payment Documents which may be in conflict or apparent conflict herewith. In determining whether or not the interest paid or payable, under any specific
circumstance, exceeds the maximum amount permitted under applicable Law, the parties to the Production Payment Documents will to the greatest extent permitted under applicable Law prorate, allocate, and spread the total amount of interest throughout
the entire contemplated term of the interest bearing obligations in accordance with the amounts thereof outstanding from time to time and the maximum legal rate of interest from time to time in effect under applicable Law in order to lawfully charge
the maximum amount of interest permitted under applicable Law. 
 Section 5.3 Indemnity. 

(a) As used herein, “Royalty Owner Indemnitees” means (i) Royalty Owner, (ii) each of Royalty
Owner’s successors and assigns (including its mortgagees and lenders), (iii) all of the Affiliates of each Person referred to in either of the preceding clauses (i) and (ii), and (iv) all of the partners, members, shareholders,
officers, directors, agents, representatives, beneficiaries, trustees (including Trustee), attorneys and employees of each Person described in any of the preceding clauses (i), (ii) and (iii). 

(b) Working Interest Owner agrees to indemnify and hold each Royalty Owner Indemnitee harmless from and against all claims, demands,
damages, liabilities, liens, losses, fines, penalties, charges, administrative and judicial proceedings, orders, judgments, remedial action requirements, investigations, and enforcement actions of any kind, together with all interest thereon and all
costs and expenses related thereto (including all fees and disbursements of counsel and other advisors) and all other obligations whatsoever (collectively, “Losses”) arising, in whole or in part, directly or indirectly, from
or in connection with any of the following: 
 (i) the exploring, drilling, developing, operating, maintaining,
reworking, redrilling or recompleting of the Subject Interests, Subject Lands, or Subject Wells, or other operations thereon, or the production of Subject Hydrocarbons, or the balancing, treating, gathering, transporting, tender, processing or other
handling of Subject Hydrocarbons, or the marketing, sale or transfer of Subject Hydrocarbons; 
 (ii) the
presence of any Hazardous Substances in, around, under or about any of the Subject Lands, any other properties or assets of Working Interest Owner, or any other properties or natural resources in the vicinity thereof or affected thereby (in this
subsection, all of the foregoing are referred to as the “Relevant Property”); the presence, use, generation, transportation, treatment, storage, remediation, disposal, release, or discharge at any time of any Hazardous
Substance on, under or from the Relevant Property; any failure at any time by any Person (whether Working Interest Owner, Royalty Owner, any of their Affiliates, or any other Persons) to comply with any Environmental Laws or with any other duties in
respect of damage to or remediation of the environment that are in any way related to the Relevant Property; or the exposure of any Person or property at any time to any Hazardous Substance on, under or from the Relevant Property or in
connection with any operations conducted on or in respect of the Relevant Property by any Person; 

  
 21 

 (iii) any injury or alleged injury to Persons or properties occurring or
allegedly occurring in connection with any of the matters described in the preceding subsections (i) or (ii); 
 (iv) any breach of Working Interest Owner’s warranties in Section 1.9 of the Conveyance (including any Losses suffered by any Royalty Owner Indemnitee as a result of any claim that such Royalty
Owner Indemnitee lacks good title to the Production Payment Hydrocarbons or otherwise must deliver or pay over to any Person any part of the Production Payment Hydrocarbons or any proceeds thereof at any time previously received or thereafter to be
received by such Royalty Owner Indemnitee); 
 (v) the breach or alleged breach of any Subject Contract by
Working Interest Owner or any other Person (including Royalty Owner); 
 (vi) any violation or alleged violation
of the rights of any Person as a result of Working Interest Owner’s conveyance of the Production Payment to Royalty Owner or Working Interest Owner’s execution, delivery or performance of any Production Payment Document; or 

(vii) any breach by Working Interest Owner of any of its representations, warranties, covenants or agreements in any of
the Production Payment Documents, or any matters relating to the enforcement or defense of the Production Payment Documents by Royalty Owner. 
 (c) THE FOREGOING INDEMNITY WILL APPLY WHETHER OR NOT ANY
LOSSES ARISE OUT OF THE SOLE, JOINT OR CONCURRENT NEGLIGENCE, FAULT
OR STRICT LIABILITY OF ANY ROYALTY OWNER INDEMNITEE OR IN CONNECTION
WITH ANY LIABILITY IMPOSED UPON ANY ROYALTY OWNER INDEMNITEE AS A
RESULT OF ANY THEORY OF STRICT LIABILITY OR ANY OTHER DOCTRINE OF
LAW (IN EACH CASE WHETHER ALLEGED, ARISING OR IMPOSED IN A LEGAL
PROCEEDING BROUGHT BY OR AGAINST WORKING INTEREST OWNER, ANY AFFILIATE OF
WORKING INTEREST OWNER, ANY ROYALTY OWNER INDEMNITEE, OR ANY OTHER PERSON),
provided that the foregoing indemnity will not apply to any Losses incurred by any Royalty Owner Indemnitee to the extent proximately caused by the gross negligence or willful misconduct of such Royalty Owner Indemnitee as determined in a final
judgment by a court of competent jurisdiction. The foregoing indemnity will not be qualified or limited by any other provisions of any Production Payment Documents and will survive the termination of the Production Payment and of this Agreement and
the other Production Payment Documents. Without limitation of the foregoing provisions, the foregoing indemnity will apply in the event of any dispute, adversary proceeding, litigation or other action among or between Working Interest Owner and any
of the Royalty Owner Indemnitees. 

  
 22 

 Section 5.4 Payment of Expenses. Working Interest Owner will promptly (and in any
event, within thirty (30) days after any invoice or other statement or notice) pay: (a) all transfer, stamp, mortgage, documentary or other similar taxes, assessments or charges levied by any governmental or revenue authority in respect of
any of the Production Payment Documents or any other document or transaction referred to herein or therein, (b) all reasonable out-of-pocket costs and expenses incurred by or on behalf of Royalty Owner (including attorneys’ fees,
consultants’ fees, engineering fees, travel costs and miscellaneous expenses) in connection with (i) the amendment, filing, recording, refiling or re-recording of any Production Payment Document (or any waiver in connection therewith) or
any other document or instrument or further assurances obtained, provided, filed or recorded or refiled or re-recorded in connection with the terms of any Production Payment Document, the analysis of the Production Payment, the administration of the
Production Payment Documents, or the monitoring of the Production Payment or Working Interest Owner’s compliance with the Production Payment Documents, and (c) all reasonable out-of-pocket costs and expenses incurred by or on behalf of
Royalty Owner (including attorneys’ fees, consultants’ fees, engineering fees, travel costs and miscellaneous expenses whether or not related to disputes, adversary proceedings or litigation between or involving Working Interest Owner and
Royalty Owner) in connection with the defense or enforcement of any of the Production Payment Documents, any attempt to cure any breach thereunder, or the defense of Royalty Owner’s exercise of its rights thereunder; provided that, in the case
of claims or causes of action by Royalty Owner against Working Interest Owner, Working Interest Owner will only be obligated to reimburse such costs and expenses to the extent that such claim or cause of action is resolved in favor of Royalty Owner
by a final order of a court of competent jurisdiction. 
 Section 5.5 Information and Reporting. 

(a) Monthly Statements. Until the termination of the Production Payment and the completion of all payments for Production Payment
Hydrocarbons, Working Interest Owner, at its own expense, will furnish to Royalty Owner (i) as and when provided in Section 4.2, the monthly statements described therein and (ii) within 55 Days after the end of each Month, a lease
operating statement in form acceptable to Royalty Owner, showing (1) gross volumes of Hydrocarbons produced and sold from the Subject Lands during such Month and the portions thereof that constituted Subject Hydrocarbons, (2) the average
sales prices paid to Working Interest Owner for the Retained Interest Hydrocarbons, and (3) the severance Taxes, lease operating expenses, capital expenditures and any other expenses for such Month. Each such lease operating statement will be
in a form and level of detail reasonable acceptable to Royalty Owner and certified by an authorized officer of Working Interest Owner to be materially true and correct. 
 (b) Quarterly Reports. Until the termination of the Production Payment and the completion of all payments for Production Payment Hydrocarbons, Working Interest Owner, at its own expense, will
furnish to Royalty Owner the following reports and information within 60 days after the end of each March, June, September, and December: 
 (i) A certificate executed by an authorized officer of Working Interest Owner certifying that, to the best of his knowledge after reasonable investigation, all Taxes, royalties, rentals and other amounts
with respect to the Subject Interests (other than amounts disputed in good faith by appropriate proceedings and royalties held in suspense due to title disputes or title questions) have been paid in full and in accordance with the

  
 23 

 
terms of the Leases, any other applicable agreements and all applicable Laws, and that Working Interest Owner is in compliance in all material respects with the terms of the Production Payment
Documents, the Leases, and the Subject Contracts, or if not, specifying in reasonable detail any exceptions thereto. 
 (ii) Reports concerning any material change in methods of treatment or operation of all or any Subject Wells which are productive of Hydrocarbons, any new drilling or development, any method of secondary
or tertiary recovery by repressuring or otherwise, or any other action with respect to the Subject Interests, the decision as to which may materially increase or reduce the quantity of Hydrocarbons ultimately recoverable from the Subject Interests,
or the rate of production therefrom, or which may shorten or prolong the period of time required for termination of the Production Payment. 
 (iii) A report setting out the current status of all production imbalances by Subject Well or Subject Interest. 
 (iv) Unaudited consolidated financial statements of Working Interest Owner as of the end of and for the fiscal quarter then ending (provided that no quarterly financial statements need be provided for the
fourth fiscal quarter of any fiscal year), including a balance sheet and statements of income and cashflows, prepared in accordance with generally accepted accounting principles (other than the omission of footnotes), consistently applied,
accompanied by a certificate of Working Interest Owner’s chief financial officer stating that such financial statements were so prepared and fairly present the matters addressed therein, subject to normal year end adjustments. 

(c) Annual and Semiannual Reports. Until the termination of the Production Payment and the completion of all payments for
Production Payment Hydrocarbons, Working Interest Owner, at Working Interest Owner’s own expense, will furnish to Royalty Owner the following reports and information: 

(i) Semi-annually, on or before March 15 and September 15 of each year, a Reserve Report prepared as of the
preceding December 31 and June 30, respectively. Each report dated as of December 31 will be prepared or audited by the Company Engineers, and each report dated as of June 30 will, at Royalty Owner’s election, be prepared by
Working Interest Owner’s in-house reserve engineers or by the Company Engineers. Each report will incorporate all current information and data available to Working Interest Owner pertinent to the estimation of Oil and Gas reserves attributable
to the Subject Interests and the Production Payment. Working Interest Owner will also furnish to Royalty Owner Working Interest Owner’s internally prepared summary of such report, if any, and a copy of any other reserve report from time to time
prepared for Working Interest Owner by any independent petroleum engineering firm covering the Subject Interests or any part thereof. 
 (ii) Annually, within 90 days after the end of each fiscal year, audited financial statements of Working Interest Owner as of the end of and for such year, including a balance sheet and statements of
income, owner’s equity and cash flows, prepared in accordance with generally accepted accounting principles, accompanied by a 

  
 24 

 
report of Working Interest Owner’s independent certified public accountants stating that their examination was made in accordance with generally accepted auditing standards and that in their
opinion such financial statements fairly present Working Interest Owner’s financial position, results of operations, owner’s equity and cash flows in accordance with generally accepted accounting principles consistently applied.

 (iii) At least 20 days prior to the expiration date of any policy, evidence satisfactory to Royalty Owner
confirming timely renewal of the insurance policies required hereunder. 
 (d) Notices. Until the termination of the
Production Payment and the completion of all payments for Production Payment Hydrocarbons, Working Interest Owner, at Working Interest Owner’s own expense, will furnish to Royalty Owner the following as and when indicated below: 

(i) As soon as possible and in any event within 5 days after Working Interest Owner becomes aware thereof, written notice
of (A) any breach of any Production Payment Document or any material breach (by any party thereto) of any Subject Contract, (B) any action, event or occurrence that could reasonably be expected to have a material adverse effect on the
Production Payment, or (C) any material change in the rate of production of Subject Hydrocarbons from the Subject Wells. 
 (ii) Promptly after obtaining actual knowledge thereof, written notice of any material adverse claim or demand made by any Person affecting the Subject Interests or the Hydrocarbons produced therefrom in
any manner whatsoever, or of any proceedings instituted or threatened with respect thereto, or of any other matter required to be reported under Section 3.1(d) or Section 3.5. 

(iii) Promptly after the filing thereof, copies of any notices and filings made by Working Interest Owner with the
Securities and Exchange Commission, but only to the extent not available on EDGAR. 
 (iv) At least 30 days prior
to the occurrence thereof, notice of any change in Working Interest Owner’s name, identity or organizational structure, or any change to its jurisdiction of organization, including in such notice a ratification of Royalty Owner’s authority
to file any related financing statement amendments contemplated in the Uniform Commercial Code. 
 In connection with any change in Working
Interest Owner’s name, identity or organizational structure, or any change to its jurisdiction of organization, Royalty Owner is hereby authorized (whether or not Working Interest Owner’s gives the ratification described in the preceding
subsection (iv)) to file any related financing statement amendments contemplated in the Uniform Commercial Code. 

  
 25 

 (e) Other Information Upon Request. Until the termination of the Production Payment
and the completion of all payments for Production Payment Hydrocarbons, Working Interest Owner, at Working Interest Owner’s own expense, will, upon request, furnish to Royalty Owner and its consultants and representatives the following
information and access as and when requested from time to time: 
 (i) Access to the Company Engineers or other
engineers who prepared the most recent annual and semiannual Reserve Reports delivered hereunder, and to their engineering databases and other relevant data, for the purpose of discussing and reviewing their data, analysis, and conclusions.

 (ii) Except to the extent prohibited by confidentiality agreements in place on the date hereof (or agreements
hereafter entered into with respect to seismic data), copies of surface maps showing property lines and well locations, well logs, core analysis data, flow and pressure tests, production analysis, casing programs and other similar information
related to the Subject Interests, the Subject Wells or the production therefrom. 
 (iii) A schedule of the
Upstream Contracts pursuant to which operations relating to the Subject Interests are carried out, all reasonably requested information pertaining thereto, and copies of each such Upstream Contract (or amendment thereto). 

(iv) A schedule of the Downstream Contracts under which the Subject Hydrocarbons were transported, treated, processed,
resold or otherwise dealt with during the most recent Month(s), setting out the amount of Subject Hydrocarbons dealt with under each such Downstream Contract and the prices paid or received thereunder by Working Interest Owner, the Leases covered
thereby, and the remaining term thereof, and a copy of each such Downstream Contract (or amendment thereto). 

(v) Access to remote field monitoring data specifically related to the wells subject to the Production Payment, such as
SCADA data that is available electronically. 
 (vi) Such other information relating to the Subject Interests or
the matters addressed in the Production Payment Documents as Royalty Owner may from time to time request. 
 (f) Audit and
Inspection Rights. Royalty Owner will have the right from time to time to audit the books and records of Working Interest Owner with respect to the Subject Interests and the Subject Hydrocarbons, including all information with respect to the
matters to be reported on by Working Interest Owner as provided herein. Such audits will be conducted by Royalty Owner so as to result in a minimum disruption in the ongoing business and affairs of Working Interest Owner and will be conducted during
normal business hours at Working Interest Owner’s offices or at the offices where Working Interest Owner maintains the records relating to the items set forth above. This right to audit will survive the termination of the Production Payment for
two years. If, as a result of any such audit, it is determined that any amount is due Royalty Owner under the Production Payment Documents, whether as a result of the failure of Working Interest Owner to properly deliver all Production Payment
Hydrocarbons, or the proceeds thereof, to Royalty Owner in accordance with the terms of the Production Payment Documents, or otherwise, Working Interest Owner will pay such amount to Royalty Owner together with interest at the Agreed Rate from the
date that such amount should have been 

  
 26 

 
delivered or paid in accordance with the terms of the Production Payment Documents to the date of payment. Working Interest Owner will also permit the duly authorized representatives of Royalty
Owner, at any reasonable time, to make such inspections of the Subject Interests and the property, equipment and facilities used in the operation thereof (or any records of Working Interest Owner related thereto) as such representatives may deem
proper. 
 Section 5.6 Alternative Marketing of Production Payment Hydrocarbons. 

(a) General Provision. As provided in the Conveyance, the Production Payment Hydrocarbons will be delivered to Royalty Owner in
kind or to the credit of Royalty Owner, free of Delivery Point Charges and other costs and expenses, at the applicable Delivery Points. Except as provided otherwise in Article IV hereof, Royalty Owner will take and market the Production Payment
Hydrocarbons upon delivery by Working Interest Owner at the applicable Delivery Points. 
 (b) Spot Market PP
Hydrocarbons. If the sales agreement between Royalty Owner and Working Interest Owner set out in Article IV hereof is ever suspended or terminated, Royalty Owner will have the right to take and market all or any portion of the Production Payment
Hydrocarbons and also the right to require Working Interest Owner to process and/or market, as Royalty Owner’s agent, all or any portion of the Production Payment Hydrocarbons on the same terms and conditions as Working Interest Owner’s
Retained Interest Hydrocarbons are processed and/or marketed. Any such Production Payment Hydrocarbons so marketed by Royalty Owner are called “Royalty Owner Spot Market PP Hydrocarbons” and any such Production Payment
Hydrocarbons that Royalty Owner so requires Working Interest Owner to process or market as Royalty Owner’s agent are herein called “Working Interest Owner Spot Market PP Hydrocarbons”. 

(c) Assistance with Marketing. Working Interest Owner will, without charge, render all assistance that may be useful or necessary
to Royalty Owner in marketing the Royalty Owner Spot Market PP Hydrocarbons, including giving Royalty Owner access to and the use of all treating, gathering, processing, storage, transportation and other facilities available to Working Interest
Owner or Working Interest Owner’s Affiliates, whether by ownership, contract or otherwise, which access and use will, to the maximum extent allowed by Law or other agreements existing on the date hereof, (i) be made available to the
Subject Hydrocarbons prior to any other Hydrocarbons owned or controlled by Working Interest Owner, (ii) be allocated between the Production Payment Hydrocarbons and the Retained Interest Hydrocarbons in proportion to the relative amounts
thereof, and (iii) be without charge by Working Interest Owner or its Affiliates for any such treating, gathering or other facilities in the area of production and with the same charges per unit of Oil or Gas as are paid by Working Interest
Owner to third parties for any other facilities. Working Interest Owner will process and market all Working Interest Owner Spot Market PP Hydrocarbons on the same terms as its own Retained Interest Hydrocarbons. Working Interest Owner will use its
reasonable best efforts to cause all proceeds of Working Interest Owner Spot Market PP Hydrocarbons and Retained Interest Hydrocarbons to be paid directly to Royalty Owner by the purchasers thereof, and upon receipt thereof, Royalty Owner will
retain the proceeds from the Production Payment Hydrocarbons and promptly remit the remainder to Working Interest Owner. Until such designation is effective (and if Working Interest Owner otherwise receives any such proceeds), Working Interest Owner
will receive such 

  
 27 

 
proceeds in trust on behalf of Royalty Owner and pay such proceeds to Royalty Owner by wire transfer on or before the first business day after receipt thereof, without any setoff, defense or
counterclaim, all of which are hereby waived by Working Interest Owner. 
 (d) Nominations. Whenever any Royalty Owner
Spot Market PP Hydrocarbons are being sold, Working Interest Owner will, not less than five Business Days prior to the first day of each Month in which such sales will occur, notify Royalty Owner of the daily quantities of such Production Payment
Hydrocarbons that Working Interest Owner expects to be produced and delivered for Royalty Owner’s account at each Delivery Point during such Month. Working Interest Owner will use its reasonable commercial efforts to cause the Production
Payment Gas constituting Royalty Owner Spot Market PP Hydrocarbons to be delivered at uniform daily rates throughout each Month at each Delivery Point in the quantities set out in such notice, but nothing in such notice will modify or limit Royalty
Owner’s right to receive Production Payment Hydrocarbons as provided in the Conveyance. Working Interest Owner will immediately notify Royalty Owner of any change (in excess of tolerances permitted by the relevant Delivery Point Recipient) in
the rate of delivery at the Delivery Points of any Gas constituting Royalty Owner Spot Market PP Hydrocarbons. Variations in rates of deliveries from those scheduled which do not exceed the tolerances permitted by the Delivery Point Recipient
without penalty will not require any such notice. Working Interest Owner and Royalty Owner will cooperate to ensure that nominations for Gas constituting Royalty Owner Spot Market PP Hydrocarbons are timely made to transporters and other appropriate
Persons and that such nominations reflect the actual expected deliveries and receipts. Working Interest Owner and Royalty Owner will use reasonable efforts to give each other 24 hours’ prior notice of any adjustments to be made in quantities
delivered or received. 
 Section 5.7 Preservation of Subject Well Drainage. From the Effective Date of this Agreement
through the termination of the Production Payment and the completion of all payments to Royalty Owner that are required under any of the Production Payment Documents, Working Interest Owner will not take any action in drilling or completing any well
that is not a Subject Well (or other operations in connection therewith) that has, or would reasonably be expected to have, a negative impact on the performance characteristics of any Subject Well. 

ARTICLE VI 

LIENS TO SECURE PERFORMANCE; OTHER REMEDIES 
 Section 6.1 Mortgage. The Conveyance is the grant of a property interest in the Subject Interests and the Subject Hydrocarbons, pursuant to which Royalty Owner will own and possess the Production
Payment Hydrocarbons if, as and when produced. Royalty Owner will look solely to the Production Payment Hydrocarbons for satisfaction and discharge of the Production Payment, and Working Interest Owner will not be personally liable for such
satisfaction and discharge (and the indemnity provided in Section 5.3 will not be construed to make Working Interest Owner personally liable for such satisfaction and discharge). Working Interest Owner has, however, made various covenants,
agreements, representations, warranties and indemnities in the various Production Payment Documents for which it is personally liable. In order to secure the performance by Working Interest Owner of all of Working Interest Owner’s obligations
and liabilities under this Agreement or any other Production Payment Document, Working Interest Owner is concurrently herewith executing and delivering the Mortgage. 

  
 28 

 Section 6.2 Production Proceeds. Notwithstanding that, by the terms of the Mortgage,
Working Interest Owner is granting to Royalty Owner the right to collect directly all of the “Production Proceeds” (as defined therein), so long as no Performance Default has occurred Working Interest Owner may continue to receive from the
purchasers of production all such Production Proceeds, subject, however, to the Liens created under the Mortgage, which Liens are hereby affirmed and ratified, and Royalty Owner will not exercise its rights and powers under Sections 3.1 and 3.2 of
the Mortgage. Upon the occurrence of a Performance Default, Royalty Owner may exercise all rights and remedies granted under the Mortgage, including the right to obtain possession of all Production Proceeds then held by Working Interest Owner and
the right to receive directly from the purchasers of production all other Production Proceeds. In no case shall any failure, whether intentioned or inadvertent, by Royalty Owner to collect directly any Production Proceeds constitute in any way a
waiver, remission or release of any of its rights under the Production Payment Documents, nor shall any release of any Production Proceeds by Royalty Owner to Working Interest Owner constitute a waiver, remission, or release of any other Production
Proceeds or of the rights of Royalty Owner to collect all other Production Proceeds thereafter. 
 Section 6.3 Replacement of
Operator. In addition to its other remedies under the Production Payment Documents, upon the continuance of a Performance Default for thirty consecutive days without being cured, Royalty Owner may require Working Interest Owner to do either or
both of the following: (i) employ a contract operator designated by Royalty Owner for any or all of the Subject Interests, or (ii) resign as operator of any or all of the Subject Interests, whereupon Working Interest Owner will so resign
and will appoint, vote for, and otherwise support a substitute operator acceptable to Royalty Owner. 
 ARTICLE VII

 MISCELLANEOUS 
 Section 7.1 Notices. All notices, requests, demands, instructions and other communications required or permitted to be given hereunder or under the Conveyance will be in writing and will be given
as provided in the Purchase and Sale Agreement. 
 Section 7.2 Successors and Assigns. The covenants, provisions and
conditions contained in this Agreement will be binding upon and (subject to the restrictions concerning the Subject Interests that are contained in Section 1.8 of the Conveyance) inure to the benefit of Working Interest Owner and Royalty Owner
and their respective successors and permitted assigns. Working Interest Owner will not transfer, assign or pledge its rights or obligations hereunder or under the other Production Payment Documents except as allowed under Section 1.8 of the
Conveyance. Royalty Owner and its successors and assigns may, and nothing contained in the Production Payment Documents will in any way limit or restrict the right of Royalty Owner, or Royalty Owner’s successors and assigns, to, sell, convey,
assign, mortgage or otherwise transfer the Production Payment or its rights and obligations under the Production Payment Documents in whole or in part. If Royalty Owner, or any of Royalty Owner’s successors and assigns, at any time executes a
mortgage, pledge or deed of trust covering all or 

  
 29 

 
any part of the Production Payment as security for any obligation, then the mortgagee, the pledgee or the trustee therein named or the holder of the obligation secured thereby will be entitled,
when and to the extent such mortgage, pledge or deed of trust so provides or Royalty Owner otherwise agrees, to exercise all of the rights, remedies, powers and privileges conferred upon Royalty Owner under the Production Payment Documents and to
give or withhold all consents required or permitted to be obtained from Royalty Owner pursuant to the Production Payment Documents. All references herein to either Working Interest Owner or Royalty Owner will include their respective successors and
permitted assigns. 
 Section 7.3 Acknowledgments and Admissions. Working Interest Owner hereby represents, warrants,
agrees, acknowledges and admits that Royalty Owner is not a fiduciary or an advisor for Working Interest Owner with respect to any Production Payment Document or the transactions contemplated thereby and that no partnership or joint venture exists
with respect to the Production Payment Documents between Working Interest Owner and Royalty Owner. 
 Section 7.4 Entire
Agreement; Amendments; Waiver. This Agreement and the other Production Payment Documents constitute the entire agreement between the Parties. This Agreement may not be amended or modified, and no rights hereunder may be waived, except by a
written document signed by the Party to be charged with such amendment, modification or waiver. Provisions of this Agreement that refer to any consent, approval, amendment or waiver by either Party require such consent, approval, amendment or waiver
to be in writing. No waiver of any of the provisions of this Agreement will be deemed to be or will constitute a waiver of any other provisions hereof (whether or not similar), nor will such waiver constitute a continuing waiver unless otherwise
expressly provided. 
 THIS WRITTEN AGREEMENT AND
THE OTHER PRODUCTION PAYMENT DOCUMENTS REPRESENT THE FINAL AGREEMENT BETWEEN THE
PARTIES AND MAY NOT BE CONTRADICTED BY EVIDENCE OF PRIOR, CONTEMPORANEOUS,
OR SUBSEQUENT ORAL AGREEMENTS OF THE PARTIES. 
 THERE ARE NO UNWRITTEN ORAL AGREEMENTS BETWEEN THE PARTIES.

 Section 7.5 Counterpart Execution. This Agreement may be executed by Working Interest Owner and Royalty Owner in
any number of counterparts, each of which will be deemed an original instrument and all of which will constitute but one and the same Agreement. 

  
 30 

 Section 7.6 Applicable Law. This Agreement will be governed by and construed in
accordance with the Laws of the State of Texas. 
 Section 7.7 Severability. If any term or provision of this Agreement
or any other Production Payment Document is ever determined to be illegal or unenforceable to any extent, such term or provision will otherwise remain effective and be enforced, and all other terms and provisions of the hereof or thereof will
nevertheless remain effective and will be enforced, to the fullest extent permitted by applicable Law. 
 Section 7.8
Termination; Limited Survival. Upon both (i) the termination of the Production Payment as provided in the Conveyance and (ii) the full and complete payment and performance of all obligations and duties of Working Interest Owner
under this Agreement and the other Production Payment Documents, Working Interest Owner will be entitled to request and receive the release by Royalty Owner of the liens and security interests under the Mortgage, and at such time Royalty Owner will,
at the request and expense of Working Interest Owner, execute and deliver an appropriate release to Working Interest Owner. Notwithstanding the foregoing or anything to the contrary herein or in any other Production Payment Document, the following
will survive any termination of the Production Payment, this Agreement, or any other Production Payment Document: (a) all waivers or admissions made by Working Interest Owner herein or therein, (b) all obligations that any Person may have
to indemnify or compensate Royalty Owner or any Royalty Owner Indemnitee hereunder or thereunder, and (c) all other provisions hereof or thereof that are expressly stated to survive the termination of the Production Payment or of this
Agreement, the Conveyance, or any other Production Payment Document. 
 Section 7.9 WAIVER OF
JURY TRIAL AND PUNITIVE DAMAGES. WORKING INTEREST OWNER AND ROYALTY
OWNER HEREBY RATIFY AND REMAKE THEIR WAIVERS OF AND AGREEMENTS CONCERNING
JURY TRIAL AND PUNITIVE AND OTHER DAMAGES MADE IN SECTION 7.9 OF
THE PURCHASE AND SALE AGREEMENT. 
 Section 7.10
CONSENT TO JURISDICTION. WORKING INTEREST OWNER AND ROYALTY OWNER HEREBY
RATIFY AND REMAKE THEIR CONSENTS TO AND AGREEMENTS CONCERNING JURISDICTION, FORUM
AND VENUE MADE IN SECTION 7.10 OF THE PURCHASE AND SALE AGREEMENT.

 [remainder of page intentionally left blank] 

  
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 IN WITNESS WHEREOF, Working Interest Owner and Royalty Owner have executed this Agreement as
of the date set forth above. 
  

			
	 WORKING INTEREST OWNER:

 GMX RESOURCES INC.

		
	By:	 	/s/ Harry C. Stahel, Jr.
		 	 Name: Harry C. Stahel, Jr.

Title:   Executive Vice President — Finance

  

			
	ROYALTY OWNER:

EDF TRADING NORTH AMERICA, LLC
		
	By:	 	/s/ Eric Dennison
		 	 Name: Eric Dennison

Title:   Senior Vice President

 Signature Page to Production and Marketing Agreement 

 SCHEDULE 2.4 
 TO PRODUCTION AND MARKETING AGREEMENT 
 TARGET TAIL RATIOS

  

																	
	 Month
	  	Target Tail
Ratio	 	 	Tail Reserves/
Remaining
Reserves	 	 	Tail
Reserves	 	  	Remaining
Reserves	 
	 Closing Date through December 31, 2011
	  	 	40	% 	 	 	43	% 	 	 	15,579	  	  	 	36,448	  
	 January 1, 2012 through June 30, 2012
	  	 	40	% 	 	 	44	% 	 	 	15,579	  	  	 	35,795	  
	 July 1, 2012 through December 31, 2012
	  	 	45	% 	 				 	 	15,579	  	  			
	 January 1, 2013 through June 30, 2013
	  	 	50	% 	 	 	52	% 	 	 	15,579	  	  	 	30,233	  
	 July 1, 2013 through December 31, 2013
	  	 	50	% 	 				 	 	15,579	  	  			
	 January 1, 2014 through June 30, 2014
	  	 	50	% 	 	 	59	% 	 	 	15,579	  	  	 	26,621	  
	 July 1, 2014 through December 31, 2014
	  	 	55	% 	 				 	 	15,579	  	  			
	 January 1, 2015 through June 30, 2015
	  	 	60	% 	 	 	65	% 	 	 	15,579	  	  	 	23,899	  
	 July 1, 2015 through December 31, 2015
	  	 	65	% 	 				 	 	15,579	  	  			
	 January 1, 2016 through June 30, 2016
	  	 	70	% 	 	 	72	% 	 	 	15,579	  	  	 	21,703	  
	 July 1, 2016 through December 31, 2016
	  	 	70	% 	 				 	 	15,579	  	  			
	 January 1, 2017 through June 30, 2017
	  	 	70	% 	 	 	78	% 	 	 	15,579	  	  	 	19,853	  
	 July 1, 2017 through December 31, 2017
	  	 	75	% 	 				 	 	15,579	  	  			
	 January 1, 2018 through June 30, 2018
	  	 	80	% 	 	 	85	% 	 	 	15,579	  	  	 	18,256	  
	 July 1, 2018 through December 31, 2018
	  	 	85	% 	 				 	 	15,579	  	  			
	 January 1, 2019 through June 30, 2019
	  	 	90	% 	 	 	92	% 	 	 	15,579	  	  	 	16,844	  

 SCHEDULE 3.7 
 TO 
 PRODUCTION AND MARKETING AGREEMENT 

INSURANCE 

Required Coverage 
 Working Interest
Owner will at all times while operations are conducted on the Subject Interests procure and maintain with responsible insurance companies for the benefit and protection of the Parties the following insurance and such other insurance as Working
Interest Owner deems appropriate: 
 (a) Worker’s Compensation Insurance and Employer’s Liability Insurance in
compliance with all applicable Laws. 
 (b) Comprehensive General Liability Insurance (including pollution) with a combined
single limit of not less than $1,000,000 per occurrence and $2,000,000 in the aggregate. This policy will be endorsed to provide coverage for explosion, collapse and underground damage hazards to property of others; contractual liability; and
products and completed operations; 
 (c) Comprehensive Liability Insurance covering all owned, hired or non-owned vehicles with
a combined single limit of not less than $1,000,000 per occurrence; 
 (d) Excess Umbrella Liability Insurance with a combined
single limit of not less than $10,000,000 per occurrence; 
 (e) Well Control Operator’s Excess Expense Liability Insurance
(including cost of well control, relief wells, redrilling) in an amount not less than $15,000,000 per occurrence; and 
 (f)
Property Insurance (subject to deductibles that are customary in the case of independent oil and gas companies engaged in operations of similar properties) on a replacement cost basis fully covering the property subject to this Production and
Marketing Agreement including the value of all facilities and well surface equipment. 
 Additional Requirements 

1. All insurance policies will be endorsed to be primary and noncontributory with any other valid and collectible insurance. 

2. Working Interest Owner will provide to Royalty Owner from time to time as requested a Certificate of Insurance, in form satisfactory to Royalty Owner,
as evidencing that satisfactory coverages of the type and limits set forth hereinabove are in effect. Policies providing such coverages will contain provisions that no cancellation or material changes in the policies will become effective except on
30 days’ advance written notice thereof to Royalty Owner. Irrespective of the requirements as to insurance to be carried as provided for herein, the insolvency, bankruptcy or failure of any insurance company carrying insurance of Working

 
Interest Owner, the failure of any insurance company to pay claims accruing, or the inadequacy of the limits of the insurance, will not affect, negate or waive any of the provisions of any
Production Payment Document applicable to the property, including, without exception, the indemnity obligations of Working Interest Owner. Working Interest Owner will furnish to Royalty Owner copies of all renewal applications or applications for
replacement insurance promptly following submission of the same. 
 3. Working Interest Owner will promptly notify Royalty Owner of any one or
more claims made under any insurance policy where Working Interest Owner is a named or additional insured (whether such claim is made by Working Interest Owner or any other person insured thereunder) where such claim(s) are for an aggregate amount
in excess of 50% of any aggregate policy limit. 
 4. Working Interest Owner will require any policies of liability insurance, except workers
compensation coverage, that are in any way related to the Subject Interests, and that are obtained or maintained by Working Interest Owner, to include Royalty Owner, its parent and affiliated companies and mortgagees, and their directors, officers,
employees and agents, as Additional Insureds, without any limitations based on the fault or negligence, in whole or in part, of such Additional Insureds. Working Interest Owner will require any property and casualty policies that are in any way
related to the Subject Interests, and that are obtained or maintained by Working Interest Owner, to name Royalty Owner as the loss payee to the extent of Royalty Owner’s or Working Interest Owner’s interests. If any insurance policy is
issued with the name of the insured being other than the name of Working Interest Owner, then Working Interest Owner will be added as a named insured and Royalty Owner and its parent and affiliated companies and mortgagees, and their directors,
officers, employees and agents will be named as Additional Insureds and loss payee as required in the preceding sentences of this paragraph. 

5. Working Interest Owner will require all policies of insurance that are in any way related to this Production and Marketing Agreement and that are
obtained or maintained by Working Interest Owner to include clauses providing that each underwriter will waive its rights of recovery, under subrogation or otherwise, against Royalty Owner, its parent and affiliated companies and mortgagees, and
their directors, officers, employees and agents.Form of Severance Compensation Agreement

 Exhibit 10.1 
 The Board of Directors (the “Board”) of Albemarle Corporation (the “Corporation”) recognizes that the possibility of a Change in Control of the Corporation exists, and the uncertainty
and questions which it may raise among management may result in the departure or distraction of management personnel to the detriment of the Corporation. 
 The Board has determined that appropriate steps should be taken to reinforce and encourage the continued attention and dedication of members of the Corporation’s management, including yourself, to
their assigned duties without distraction in the face of potentially disturbing circumstances arising from a possible Change in Control of the Corporation. 
 In order to induce you to remain in the employ of the Corporation and in consideration of your continued service to the Corporation, the Corporation agrees that you shall receive certain benefits in the
event of a Change in Control and certain severance benefits in the event your employment with the Corporation is terminated subsequent to a Change in Control, as set forth in this Severance Compensation Agreement (“Agreement”). 

1. Definitions. 
  

	 	a.	“Change in Control” means the occurrence of any of the following events: 

 

	 	(i)	any Person, or “group” as defined in section 13(d)(3) of the Securities Exchange Act of 1934, becomes, directly or indirectly, the Beneficial Owner of 20% or
more of the combined voting power of the then outstanding securities of the Corporation that are entitled to vote generally for the election of the Corporation’s directors (the “Voting Securities”) (other than as a result of an
issuance of securities by the Corporation approved by Continuing Directors, or open market purchases approved by Continuing Directors at the time the purchases are made). However, if any such Person or “group” becomes the Beneficial Owner
of 20% or more, and less than 30%, of the Voting Securities, the Continuing Directors may determine, by a vote of at least two-thirds of the Continuing Directors, that the same does not constitute a Change in Control; 

 

	 	(ii)	as the direct or indirect result of, or in connection with, a reorganization, merger, share exchange or consolidation (a “Business Combination”), a contested
election of directors, or any combination of these transactions, Continuing Directors cease to constitute a majority of the Corporation’s board of directors, or any successor’s board of directors, within two years of the last of such
transactions; 

  

	 	(iii)	 the shareholders of the Corporation approve a Business Combination, unless immediately following such Business Combination, (1) all or
substantially all of the Persons who were the Beneficial Owners of the Voting Securities outstanding immediately prior to such Business Combination Beneficially Own more than 60% of the combined voting power of the then outstanding voting securities
entitled to vote generally in the election of directors of the Corporation resulting from such Business 

	 	
Combination (including, without limitation, a company which as a result of such transaction owns the Corporation through one or more Subsidiaries) in substantially the same proportions as their
ownership, immediately prior to such Business Combination, of the Voting Securities, (2) no Person (excluding any employee benefit plan or related trust of the Corporation or the Corporation resulting from such Business Combination)
Beneficially Owns 30% or more of the combined voting power of the then outstanding voting securities entitled to vote generally in the election of directors of the Corporation resulting from such Business Combination, and (3) at least a
majority of the members of the board of directors of the Corporation resulting from such Business Combination are Continuing Directors. 

 For purposes of this Paragraph 1.a. and other provisions of this Agreement, the following terms shall have the meanings set forth below: 

(A) “Affiliate and Associate” shall have the respective meanings ascribed to such terms in Rule 12b-2 of the General
Rules and Regulations under the Securities Exchange Act of 1934, as amended and as in effect on the date of this Agreement (the “Exchange Act”). 
 (B) “Beneficial Owner” means that a Person shall be deemed the “Beneficial Owner” and shall be deemed to “beneficially own,” any securities: 

(i) that such Person or any of such Person’s Affiliates or Associates owns, directly or indirectly; 

(ii) that such Person or any of such Person’s Affiliates or Associates, directly or indirectly, has the right to
acquire (whether such right is exercisable immediately or only after the passage of time) pursuant to any agreement, arrangement or understanding (whether or not in writing) or upon the exercise of conversion rights, exchange rights, rights,
warrants or options, or otherwise; provided, however, that, a Person shall not be deemed to be the “Beneficial Owner” of, or to “beneficially own,” securities tendered pursuant to a tender or exchange offer made by such Person or
any such Person’s Affiliates or Associates until such tendered securities are accepted for purchase or exchange; 
 (iii) that such Person or any of such Person’s Affiliates or Associates, directly or indirectly, has the right to vote, including pursuant to any agreement, arrangement or understanding, whether or
not in writing; provided, however, that a Person shall not be deemed the “Beneficial Owner” of, or to “beneficially own,” any security under this subsection as a result of an agreement, arrangement or understanding to vote such
security if such agreement, arrangement or understanding: (1) arises solely from a revocable proxy given in response to a public proxy solicitation made pursuant to, and in accordance with the applicable

 
provisions of the General Rules and Regulations under the Exchange Act and (2) is not also then reportable by such Person on Schedule 13D under the Exchange Act (or any comparable or
successor report); or 
 (iv) that are beneficially owned, directly or indirectly, by any other Person (or any
Affiliate or Associates thereof) with which such Person (or any of such Person’s Affiliates or Associates) has any agreement, arrangement or understanding (whether or not in writing), for the purpose of acquiring, holding, voting (except
pursuant to a revocable proxy as described in ‘the proviso to subsection (iii) of this definition) or disposing of any voting securities of the Corporation provided, however, that notwithstanding any provision of this definition, any
Person engaged in business as an underwriter of securities who acquires any securities of the Corporation through such Person’s participation in good faith in a firm commitment underwriting registered under the Securities Act of 1933, shall not
be deemed the “Beneficial Owner” of, or to “beneficially own,” such securities until the expiration of forty days after the date of acquisition; and provided, further, that in no case shall an officer or director of the
Corporation be deemed (1) the beneficial owner of any securities beneficially owned by another officer or director of the Corporation solely by reason of actions undertaken by such persons in their capacity as officers or directors of the
Corporation; or (2) the beneficial owner of securities held of record by the trustee of any employee benefit plan of the Corporation or any Subsidiary of the Corporation for the benefit of any employee of the Corporation or any Subsidiary of
the Corporation, other than the officer or director, by reason of any influences that such officer or director may have over the voting of the securities held in the trust. 
 (C) “Continuing Directors” means any member of the Corporation’s Board, while a member of that Board, and (i) who was a member of the Corporation’s Board prior to
December 7, 2011, or (ii) whose subsequent nomination for election or election to the Corporation’s Board was recommended or approved by a majority of the Continuing Directors. 

(D) “Person” means any individual, firm, company, partnership or other entity. 

(E) “Subsidiary” means, with references to any Person, any company or other entity of which an amount of voting
securities sufficient to elect a majority of the directors or Persons having similar authority of such company or other entity is beneficially owned, directly or indirectly, by such Person, or otherwise controlled by such Person. 

 

	 	b.	“Code” shall mean the Internal Revenue Code of 1986, as amended. 

	 	c.	“Date of Termination” shall mean: 

  

	 	(i)	in case your employment is terminated for Total Disability, thirty (30) days after Notice of Termination is given (provided that you shall not have returned to the
full-time performance of your duties during such thirty (30) day period), and 

  

	 	(ii)	in all other cases, the date specified in the Notice of Termination (which shall not be less than thirty (30) nor more than sixty (60) days, respectively,
from the date such Notice of Termination is given). 

 d. “Good Reason for Resignation” shall
mean, without your express written consent, any of the following: 
  

	 	(i)	a change in your position with the Corporation which in your reasonable judgment does not represent a promotion from your status or position immediately prior to the
Change in Control or the assignment to you of any duties or responsibilities or diminution of duties or responsibilities which in your reasonable judgment are inconsistent with your position with the Corporation in effect immediately prior to the
Change in Control, it being understood that any of the foregoing in connection with termination of your employment for Cause, Retirement, or Total Disability shall not constitute Good Reason for Resignation; 

 

	 	(ii)	a reduction by the Corporation in the annual rate of your base salary as in effect immediately prior to the date of a Change in Control; 

 

	 	(iii)	the Corporation’s requiring your office nearest to your principal residence to be located at a different place which is more than thirty-five (35) miles from
where such office is located immediately prior to a Change in Control; 

  

	 	(iv)	the failure by the Corporation to continue in effect compensation or benefit plans in which you participate, which in the aggregate provide you compensation and
benefits substantially equivalent to those prior to a Change in Control; 

  

	 	(v)	the failure of the Corporation to obtain a satisfactory agreement from any Successor (as defined in Paragraph 5a hereof) to assume and agree to perform this Agreement,
as contemplated in Paragraph 5a hereof; 

  

	 	(vi)	any purported termination of your employment which is not effected pursuant to a Notice of Termination satisfying the requirements hereof; for purposes of this
Agreement, no such purported termination shall be effective for any purpose except to constitute a Good Reason for Resignation. 

Any of the foregoing events shall constitute Good Reason for Resignation only if, and to the extent, there exists “good reason” as such term is
defined under Section 409A of the Internal Revenue Code of 1986, as amended, and the Treasury Regulations issued thereunder (“Section 409A”). 

 e. “Incentive Compensation Award” shall mean payment or payments under
Incentive Compensation Plans. 
 f. “Incentive Compensation Plans” shall mean any variable compensation or
other incentive compensation plans maintained by the Corporation, in which awards are paid in cash, stock or other property including, but not limited to: (i) the Albemarle Corporation 2008 Incentive Plan, as amended (ii) any variable
compensation plan, (iii) or any successor plan thereto. 
 g. “Normal Retirement Date” shall mean the
first day of the calendar month next following the date on which a Participant attains the age of 65. 
 h. “Notice of
Termination” shall mean a written notice as provided in Paragraph 14 hereof. 
 i. “Pension Plan”
shall mean the Albemarle Corporation Pension Plan, as it may be amended prior to a Change in Control. 
 j. “Pension
Program” shall mean the Pension Plan, the Albemarle Corporation Supplemental Executive Retirement Plan (as amended prior to a Change in Control), plus any other excess or supplemental pension plans maintained by the Corporation. 

k. “Retirement” shall mean (1) voluntary retirement before your mandatory retirement age, if any, (termination of
your employment by you before your mandatory retirement age, if any, with Good Reason for Resignation shall not be deemed a Retirement for purposes of this Agreement) or (2) termination in accordance with any retirement arrangement other than
under the Pension Program, which is established with your consent with respect to you or (3) mandatory retirement as set forth under the policy of the Corporation as it existed prior to the Change in Control or as agreed to by you following a
Change in Control. 
 l. “Termination for Cause” shall mean termination of your employment upon your willfully
engaging in conduct demonstrably and materially injurious to the Corporation, monetarily or otherwise, provided that there shall have been delivered to you a copy of a resolution duly adopted by the unanimous affirmative vote of the entire
membership of the Board at a meeting of the Board called and held for such purpose (after reasonable notice to you and an opportunity for you, together with your counsel, to be heard before the Board), finding that in the good faith opinion of the
Board you were guilty of the conduct set forth and specifying the particulars thereof in detail. 
 For purposes of this
Paragraph l, no act, or failure to act, on your part shall be deemed “willful” unless done, or omitted to be done, by you not in good faith and without reasonable belief that your action or omission was in the best interest of the
Corporation. Any act or failure to act based upon authority given pursuant to a resolution duly adopted by the Board or based upon the advice of counsel for the Corporation shall be conclusively presumed to be done or omitted to be done by you in
good faith and in the best interests of the Corporation. 
 m. “Severance Multiple” shall mean the lesser of
(a) two (2), and (b) the number obtained by multiplying two (2) by a fraction, the numerator of which is the number of days from the Date of Termination to your Normal Retirement Date and the denominator of which is 730 but such
number under this clause (m) shall not be less than one (1). 

 n. “Total Disability” shall mean total physical or mental disability
rendering you unable to perform the duties of your employment for a continuous period of six (6) months. Any question as to the existence of your Total Disability upon which you and the Corporation cannot agree shall be determined by a
qualified physician not employed by the Corporation and selected by you (or, if you are unable to make such selection, it shall be made by any adult member of your immediate family), and approved by the Corporation. The determination of such
physician made in writing to the Corporation and to you shall be final and conclusive for all purposes of this Agreement. 
 2.
Compensation Upon Termination or While Disabled. Following a Change in Control, you shall be entitled to the following benefits: 
 a. Termination Benefits. If your employment by the Corporation shall be terminated subsequent to the Change in Control and during the term of this Agreement, and under circumstances that would
qualify as a “separation from service” under Section 409A, (a) by reason of your death after you have received a Notice of Termination, (b) by the Corporation other than a Termination for Cause, or (c) by you for Good
Reason for Resignation, then you shall be entitled to the benefits provided below, without regard to any contrary provision of any plan: 
  

	 	(i)	 Accrued Salary. The Corporation shall pay you, not later than the fifth (5th) day following the Date of Termination, your full base salary and vacation pay accrued through the Date of
Termination at the rate in effect at the time the Notice of Termination is given (or at the rate in effect immediately prior to a Change in Control, if such amounts were higher). 

 

	 	(ii)	Accrued Incentive Compensation. The Corporation shall pay you, not later than five (5) days following your Date of Termination, the amount of your accrued
Incentive Compensation which consists of the annual cash bonus. If the Date of Termination is after the end of a Variable Compensation Year, but before such Incentive Compensation for said Variable Compensation Year has been paid, the Corporation
shall pay you Incentive Compensation for that Variable Compensation Year based upon the calculated company score and your individual performance modifier. If an individual performance modifier has not been determined as of the Date of Termination,
it will be set at one hundred percent (100%). 

 In addition, if the Date of Termination is other than the first
day of a Variable Compensation Year, the Corporation shall pay you Incentive Compensation for the Variable Compensation Year in which the Date of Termination occurs, equal to the target variable compensation for the year in which the Change in
Control occurs, multiplied by a fraction, the numerator of which is the total number of days which have elapsed in the current Variable Compensation Year to the Date of Termination, and the denominator of which is three hundred sixty-five (365).
Payments under this clause (ii) shall be made to you not later than five (5) days after the Date of Termination. 

 If there is more than one Incentive Compensation Program, your accrued Incentive
Compensation shall be calculated separately for each Program. 
 For the purpose of this Paragraph 2.a.(ii), “Incentive
Compensation Program” means any of the Incentive Compensation Plans defined in Paragraph 1.f. and any other plan or program for the payment of incentive compensation, variable compensation, bonus, benefits or awards for which you were, or your
position was, eligible to participate; “Incentive Compensation” means any compensation, variable compensation, bonus, benefit or award paid or payable under an Incentive Compensation Program; and “Variable Compensation Year”
means a calendar or fiscal plan year of an Incentive Compensation Program. 
  

	 	(iii)	Insurance Coverage. The Corporation shall arrange to provide you (and your dependents, if applicable) with the following: 

(a) If you are eligible, you shall participate in the Corporation’s retiree medical benefit plans as if you retired from the
Corporation on your Date of Termination, except that the Corporation shall provide such medical coverage at no cost to you for eighteen (18) months following your Date of Termination and thereafter, you shall participate therein on the same
terms as other retired employees (to the extent these benefits are provided by a self-insured plan, any reimbursements for claims incurred shall be made as soon as practicable, but in no event can they be made later than the end of the calendar year
following the calendar year in which the claim was incurred); 
 (b) If you are not eligible for the retiree medical plans, you
will no longer continue to participate in the Corporation’s medical benefit plans, except for COBRA, and (i) if you elect to receive COBRA benefits, the Corporation shall provide you with such benefits at no cost to you for eighteen
(18) months following your loss of medical coverage. 
  

	 	(iv)	Retirement Benefits. The Supplemental Pension Benefit Credits made on your behalf under the Albemarle Corporation Executive Deferred Compensation Plan
(“EDCP”) as well as all earnings accrued on such amounts, shall be immediately vested and non-forfeitable and shall be paid in accordance with the terms of the EDCP. 

 

	 	(v)	Outplacement Counseling. The Corporation shall make available to you, at the Corporation’s expense, outplacement counseling. You may select the organization
that will provide the outplacement counseling, however, the Corporation’s obligation to provide you benefits under this subsection (v) shall be limited to $25,000. This counseling must be used, if at all, no later than the end of the
second calendar year after the year of your Date of Termination. 

	 	(vi)	Financial Counseling. Following your Date of Termination, the Corporation shall make available to you, two years (plus the remaining unexpired portion of the
year in which your Date of Termination falls) of financial counseling services with Ayco Company L.P. (Ayco), a nationally recognized financial counseling firm. Ayco may also provide you with tax counseling and tax preparation services. Should you
choose to do so, you may select a different organization to provide you with financial and tax counseling services, however, the Corporation’s obligation to provide you benefits under this subsection (vi) shall be limited to $25,000. To be
eligible for reimbursement, the financial counseling must begin in the calendar year of your Date of Termination, unless such Date of Termination is less than 60 days before the end of such calendar year, in which case the financial counseling must
begin no later than during the following calendar year. 

  

	 	(vii)	 Severance Payment. The Corporation shall pay as severance pay to you, not later than the fifth (5th) day following the Date of Termination, a lump sum severance
payment (the “Severance Payment”) equal to the Severance Multiple times the following: 

 (a) the
greater of your annual base compensation which was payable to you by the Corporation immediately prior to the Date of Termination and your annual base compensation which was payable to you by the Corporation immediately prior to a Change in Control,
whether or not such annual base compensation was includible in your gross income for federal income tax purposes; plus 
 (b)
the greater of your target annual variable compensation that was in place immediately prior to a Change in Control, or your target annual variable compensation that was in place immediately prior to the Date of Termination (whether or not such award
was includible in your gross income for federal income tax purposes). 
 The Severance Payment shall be reduced by the amount
paid to you under Paragraph 7(c) below. 
  

	 	(viii)	Reduction of Severance Payment. 

 If the payments or benefits to which you will be entitled under this Agreement (referred to in this Paragraph as the “Payments”) would cause you to be liable for the federal excise tax levied on
certain “excess parachute payments” under Code Section 4999 (“Excise Tax”), then the Payments shall be reduced (or repaid to the Corporation, if previously paid or provided) as provided below. In no event shall you be
entitled to receive any kind of gross-up payment or Excise Tax reimbursement from the Corporation. For purposes of this Paragraph (viii), the terms “excess parachute payment” and “parachute payment” will have the meanings
assigned to them by Section 280G of the Code. 

 If your Payments exceed 2.99 times your “Base Amount” (as defined in Code
Section 280G), a “reduced payment amount” shall be calculated by reducing the Payments to the minimum extent necessary so that no portion of any Payment, as so reduced or repaid, constitutes an “excess parachute payment.” If
it is determined that any Excise Tax is payable by you, you shall receive either (i) all Payments otherwise due to you or (ii) the reduced payment amount described in the preceding sentence, whichever will provide you with the greater
after-tax economic benefit taking into account for these purposes any applicable Excise Tax. 
 Whether Payments to you are to
be reduced, pursuant to this Paragraph, and the extent to which they are to be so reduced, will be determined by the Corporation in good faith and the Corporation will notify you in writing of its determination. Any such notice shall describe in
reasonable detail the basis of the Corporation’s determination. If you accept the Corporation’s determination, you shall so advise the Corporation of your determination within thirty (30) days of receipt of notice from the
Corporation. If you object to such determination within thirty (30) days of receipt of notice from the Corporation, the Corporation will retain, at its expense, a nationally recognized public accounting firm, employment consulting firm or law
firm selected by the Corporation and reasonably acceptable to you to review the matter. Such firm shall meet with you and your representatives and the Corporation and its representatives and thereafter render its written opinion as to the extent, if
any, that in such firm’s reasonable judgment the payments and benefits otherwise due to you hereunder must be reduced hereunder. The decision of such firm concerning the extent of any required reduction in such payments and benefits shall be
final and binding on both you and the Corporation. 
  

	 	(ix)	No Duty to Mitigate. You shall not be required to mitigate the amount of any payment provided for in this Paragraph 2 by seeking other employment or otherwise,
nor shall the amount of any payment or benefit hereunder be reduced by any compensation earned by you as the result of employment by another employer or by retirement benefits after the Date of Termination. 

 

	 	(x)	Six Month Delay. If, as of the Date of Termination, you are considered a Specified Employee (as such term is defined in Section 409A), any payments or
benefits due upon, or within the six month period following and due to, a termination of your employment that constitutes a “deferral of compensation” within the meaning of Section 409A and which do not otherwise qualify under
the exemptions under Treas. Reg. Section 1.409A-1, shall be paid or provided to you in a lump sum on the earlier of (i) the first day of the month following the six month anniversary of your separation from service (as such term is defined
in Section 409A) for any reason other than death, and (ii) the date of your death, and any remaining payments and benefits shall be paid or provided in accordance with the normal payment dates specified for such payment or benefit.

 b. Payments While Disabled. During any period prior to the Date of Termination and
during the term of this Agreement that you are unable to perform your full-time duties with the Corporation, whether as a result of your Total Disability or as a result of a physical or mental disability that is not total or is not permanent and
therefore is not a Total Disability, you shall continue to receive your base salary at the rate in effect at the commencement of any such period, together with all other compensation and benefits that are payable or provided under the
Corporation’s benefit plans, including its disability plans. After the Date of Termination, your benefits shall be determined in accordance with the Corporation’s Pension Program, insurance and other applicable programs. The compensation
and benefits, other than salary, payable or provided pursuant to this Paragraph 2b shall be the greater of (x) the amounts computed under the Pension Program, disability benefit plans, insurance and other applicable programs in effect
immediately prior to a Change in Control and (y) the amounts computed under the Pension Program, disability benefit plans, insurance and other applicable programs in effect at the time the compensation and benefits are paid. 

c. Payments if Termination for Cause, or by You Except With Good Reason. If your employment shall be terminated by the Corporation
for Cause or by you other than with Good Reason for Resignation, the Corporation shall pay you your full base salary and accrued vacation pay then in effect through the Date of Termination, at the rate in effect at the time Notice of Termination is
given plus any benefits or awards which have been earned or become payable but which have not yet been paid to you. You shall receive any payment due under this subsection c. on your Date of Termination. Thereafter the Corporation shall have no
further obligation to you under this Agreement. 
 d. After Retirement or Death. If your employment shall be terminated
by your Retirement, or by reason of your death, your benefits shall be determined in accordance with the Corporation’s Pension Program and insurance programs then in effect except that if your death occurs after the execution of a definitive
agreement which results in a Change in Control, then your beneficiary shall be entitled to the benefits under this Agreement as if the Corporation issued you a Notice of Termination terminating your employment thirty (30) days after a Change in
Control. 
 3. Vesting Upon a Change in Control. 

a. Upon a Change in Control, all unvested stock options and restricted stock held by you under the Incentive Compensation Programs shall
immediately vest and be non-forfeitable. 
 b. With respect to any outstanding Performance Units granted to you under the
Incentive Compensation Programs which have not then vested and been paid to you, then upon a Change in Control the following provisions shall apply to such Performance Units: 

 

	 	(i)	Any Performance Units which have been earned but not yet vested, shall become vested and non-forfeitable and paid to you on the date of the Change in Control;

	 	(ii)	That portion of the unearned Performance Units as specified in clause (iii) below will become vested and non-forfeitable and paid to you on the date of the Change
in Control; 

  

	 	(iii)	The number of Performance Units to be vested and paid in accordance with clause (ii) above shall equal the greater of: 

 

	 	(A)	the target number of Performance Units granted to you; and 

  

	 	(B)	a number of Performance Units based on actual performance of the Corporation against the performance criteria for the Performance Units for that portion of the
performance period for the Performance Units elapsed up to the end of the most recently completed calendar quarter prior to the date of the Change in Control and based on target performance during the balance of such performance period in accordance
with the following formula: 

  

					
	 Number of Units to
 be vested and paid
	  	=	  	(QC/8) x (AP/TP) × Number of Target Units + ((8-QC)/8) × Number of Target Units

  

					
	Where:	  	QC =	  	the number of completed calendar quarters of the performance period prior to a Change in Control.
			
		  	AP =	  	actual performance of the Corporation under the criteria for the Performance Units for the relevant period.
			
		  	TP =	  	target performance of the Corporation under the criteria for the Performance Units for the relevant period.

 4. Term of Agreement. This Agreement shall commence on the date hereof and shall continue in
effect through December 31, 2011; provided, however, that commencing on January 1, 2012 and each January 1 thereafter, the term of this Agreement shall automatically be extended for one additional year unless, not later than
September 30 of the preceding year, the Corporation or you shall have given notice that it or you do not wish to extend this Agreement. Notwithstanding any such notice by the Corporation or you not to extend the Agreement, if a Change in
Control shall have occurred prior to such termination of this Agreement, the attempted termination of this Agreement shall be deemed ineffective and this Agreement shall continue in full force and effect. In any event, the term of this Agreement
shall expire on the second (2nd) anniversary of the date of the Change in Control. This Agreement shall terminate if your employment is terminated by you or the Corporation prior to a Change in Control. 

 5. Successors; Binding Agreement. 

a. Successors of the Corporation. The Corporation will require any Successor to all or substantially all of the business and/or
assets of the Corporation to expressly assume and agree, by an agreement in form and substance satisfactory to you, to perform this Agreement in the same manner and to the same extent that the Corporation would be required to perform it if no such
succession had taken place. Failure of the Corporation to obtain such assent at least five business days prior to the time a person becomes a Successor (or where the Corporation does not have at least five business days advance notice that a person
may become a Successor, within three business days after having notice that such person may become or has become a Successor) shall constitute Good Reason for Resignation by you and, if a Change in Control has occurred or thereafter occurs, shall
entitle you immediately to the benefits provided in Paragraph 2a hereof upon delivery by you of a Notice of Termination which the Corporation, by executing this Agreement, hereby assents to. For purposes of this Agreement, “Successor”
shall mean any person that purchases all or substantially all of the assets of the Corporation or the Surviving Corporation (and Parent Corporation, if applicable) or obtains or succeeds to, or has the practical ability to control (either
immediately or with the passage of time), the Corporation’s business directly, by merger or consolidation, or indirectly, by purchase of voting securities of the Corporation or by acquisition of rights to vote voting securities of the
Corporation or otherwise, including but not limited to any person or group that acquires the beneficial ownership or voting rights described in Paragraph 1.a.(ii). 
 b. Your Successor. This Agreement shall inure to the benefit of and be enforceable by your personal or legal representatives, executors, administrators, successors, heirs, distributees, devises and
legatees. If you should die following your Date of Termination while any amount would still be payable to you hereunder if you had continued to live, all such amounts, unless otherwise provided herein, shall be paid in accordance with the terms of
this Agreement to your devisee, legatee or other designee or, if there is no such designee, to your estate. 
 6.
Confidentiality. 
 a. You acknowledge that: (i) the business conducted by the Corporation and its subsidiaries (the
“Business”) is intensely competitive and your position with the Corporation has exposed you to knowledge of Confidential Information (as defined below); (ii) the direct and indirect disclosure of any such Confidential Information to
existing or potential competitors of the Corporation would place the Corporation at a competitive disadvantage and would do damage, monetary or otherwise, to the Corporation’s business; and (iii) the engaging by you in any of the
activities prohibited by this Agreement may constitute improper appropriation and/or use of Confidential Information. For purposes of this Agreement, “Confidential Information” shall mean trade secrets, know-how and other proprietary
information of the Corporation known to you, and which gives the Corporation a competitive advantage, relating to the Corporation’s business, but shall not include information generally available to or known by the public or information that is
or becomes available to you on a non-confidential basis from a source other than the Corporation or its directors, officers or employees (other than by reason of a breach of any obligation of confidentiality). 

b. From and after the date of termination of your employment with the Corporation (“Date of Termination”) until the first
anniversary thereof (the “Non-Competition Period”), you shall not, directly or indirectly, whether individually, as a director, stockholder, owner, partner, employee, consultant, principal or agent of any business, or in any other
capacity, 

 
make known, disclose, furnish make available or utilize any of the Confidential Information, other than in the proper performance of the duties contemplated herein, or as required by law or by a
court of competent jurisdiction or other administrative or legislative body; provided that if required to disclose any of the Confidential Information by law or by a court or other administrative or legislative body, you shall promptly notify the
Corporation so that the Corporation may seek a protective order or other appropriate remedy. 
 c. You also agree to comply with
the Patent and Confidentiality Agreement previously signed by you and delivered to the Corporation, including those provisions which are applicable after your Date of Termination. 

7. Non-Compete; Consideration. 
 a. During the Non-Competition Period, you shall not engage in Competition (as defined below) with the Corporation. For purposes of this Agreement, “Competition” by you shall mean your
engaging in, or otherwise directly or indirectly being employed by or acting as a consultant to, or being a director, officer, employee, principal, agent, stockholder, member, owner, joint venturer or partner of, or permitting the your name to be
used in connection with the competitive activities of any other business or organization in competition with the business of the Corporation as the same shall be constituted on the date of the Change in Control; provided that it shall not be a
violation of this Agreement for you to: (i) become the registered or beneficial owner of less than five percent (5%) of any class of the capital stock of a competing corporation registered under the Securities Exchange Act of 1934, as
amended, provided that you do not actively participate in the business of such corporation until the expiration of the Non-Competition Period; (ii) be involved with the activities of any other business or organization which did not compete,
directly or indirectly, with the business of the Corporation as the same shall be constituted on the date of the Change in Control; or (iii) be engaged in any business from which the Corporation derives no more than five percent (5%) of
its revenues if you were not directly engaged in such business at the Corporation prior to the Date of Termination. 
 b.
Without limiting the generality of the foregoing, during the Non-Competition Period, you agree that you will not, directly or indirectly, for your benefit or for the benefit of any other person, firm or entity, do any of the following: 

 

	 	(i)	solicit from any customer doing business with the Corporation, business of the same or of a similar nature to the business conducted between the Corporation and such
customer; or 

  

	 	(ii)	solicit the employment or services of, or hire, any person who at the time is employed by or a consultant to the Corporation. 

 

	 	(iii)	solicit the services of any consultant engaged in competitive activities for the Corporation. 

c. In consideration for your agreement to the provisions of this Paragraph 7, the Corporation shall pay you, not
later than the fifth (5th) day following the Date of
Termination an amount equal to the sum of the following: 
  

	 	(i)	the greater of your annual base compensation which was payable to you by the Corporation immediately prior to the Date of Termination and your annual base compensation
which was payable to you by the Corporation immediately prior to a Change in Control, whether or not such annual base compensation was includible in your gross income for federal income tax purposes; plus 

	 	(ii)	the amount of your actual annual variable compensation payment you received for a year preceding the date on which the Change in Control occurs, (whether or not such
award was includible in your gross income for federal income tax purposes). 

 8. Remedies. 

a. You acknowledge that your agreement to the matters set forth in Paragraphs 6 and 7 is being entered into in connection with the
consummation of a transaction involving a Change in Control of the Corporation and that the services rendered by you to the Corporation are of a special and unique character, which gives this agreement a particular value to the Corporation, the loss
of which may not be reasonably or adequately compensated for by damages in an action at law; and that a material breach or threatened breach by you of any of the provisions contained in Paragraphs 6 or 7 of this Agreement will cause the Corporation
irreparable injury. You therefore agree that, upon breach by you of Paragraph 6 or 7 of this Agreement, the Corporation shall be entitled, in addition to any other right or remedy, to a temporary, preliminary and permanent injunction, without the
necessity of proving the inadequacy of monetary damages or the posting of any bond or security, enjoining or restraining you from any such breach or threatened breaches. 
 b. In addition, in the event of a material breach by you of the provisions of clauses a or b of Paragraph 7, the Corporation shall be entitled to obtain from you the amounts paid to you under Paragraph 7.

 c. You further acknowledge and agree that due to the uniqueness of your services and confidential nature of the information
you possess, the covenants set forth herein are reasonable and necessary for the protection of the business and goodwill of the Corporation. It is the intent of the parties hereto that if in the opinion of any court of competent jurisdiction any
provision set forth in this Agreement is not reasonable in any respect, such court shall have the right, power and authority to modify any and all such provisions as to such court shall appear not unreasonable and to enforce the remainder of this
Agreement as so modified. 
 9. Notice to Corporation to Cure. In the event that you believe that you have a Good Reason
for Resignation, you shall notify the Corporation in writing of such fact and the reasons therefore no later than 90 days after the relevant event has occurred. The Corporation may within thirty (30) days after your notice, elect to take such
steps that would be necessary so that you would no longer have a Good Reason for Resignation. Failure to satisfy the requirements of this Paragraph 9 will result in there not being any Good Reason for Resignation for purposes of this Agreement.

 10. Relationship to Other Agreements. To the extent that any provision of any other agreement between the Corporation
and you shall limit, qualify or be inconsistent with any 

 
provision of this Agreement, then for purposes of this Agreement, while the same shall remain in force, the provision of this Agreement shall control and such provision of such other agreement
shall be deemed to have been superseded, and to be of no force or effect, as if such other agreement had been formally amended to the extent necessary to accomplish such purpose. 

11. Nature of Payments. All payments to you under this Agreement shall be considered either payments in consideration of your
continued service to the Corporation or severance payments in consideration of your past service to the Corporation. 
 12.
Validity. The invalidity or unenforceability of any provision of this Agreement shall not affect the validity or enforceability of any other provision of this Agreement, which shall remain in full force and effect. 

13. Counterparts. This Agreement may be executed in several counterparts, each of which shall be deemed to be an original but all
of which together will constitute one and the same instrument. 
 14. Notice. Any purported termination of your
employment by the Corporation or by you following a Change in Control shall be communicated to the other party by a Notice of Termination. A Notice of Termination shall indicate the specific termination provision in this Agreement relied upon and
shall set forth in reasonable detail the facts and circumstances claimed to provide a basis for termination of your employment under the provision so indicated. For the purpose of this Agreement, notices and all other communications provided for in
the Agreement shall be in writing and shall be deemed to have been duly given when delivered or mailed by United States registered mail, return receipt requested, postage prepaid, addressed to the respective addresses set forth on the first page of
this Agreement, provided that all notices to the Corporation shall be directed to the attention of the Board of the Corporation with a copy to the Secretary of the Corporation or to such other address as either party may have furnished to the other
in writing in accordance herewith, except that notice of change of address shall be effective only upon receipt. 
 15. Fees
and Expenses. The Corporation shall pay all legal fees and related expenses incurred by you: (i) as a result of your termination following a Change in Control, (ii) in seeking to obtain or enforce any right or benefit provided by this
Agreement (including all fees and expenses, if any, incurred in contesting or disputing any such termination or incurred by you in seeking advice in connection therewith), (iii) in making the determinations under Paragraph 2.a(viii),
(iv) in seeking advice to determine whether you have a Good Reason for Resignation and providing the notice to the Corporation under Paragraph 9, (v) and contesting any claim by the Corporation under Paragraph 8; provided that such fees
are incurred no later than the end of the second calendar year after the year of your Date of Termination. 
 16.
Release. In order to receive payment of the amounts under Paragraph 2.a(i), (ii), (iv) and (vii), you shall execute and deliver to the Corporation a General Release which shall contain the provisions set forth in Exhibit A to this
Agreement and which shall otherwise be in a form reasonably acceptable to you and the Corporation. Such General Release must be executed within the ninety (90) day period following your termination, provided, however, that to the extent
any amounts payable under Paragraph 2.a.(i), (ii), (iv) or (vii) constitute deferred compensation for purposes of Section 409A, and the ninety (90) day period referred to herein shall commence in one tax year and end in the
subsequent tax year, the payments described in this Paragraph 16 shall be made solely in the subsequent tax year. 

 17. Survival. The respective obligations of, and benefits afforded to, the
Corporation and you as provided in Paragraphs 2, 3, 4, 5, 6, 7, 8, 9, 10, 11, 15 and 16 of this Agreement shall survive termination of this Agreement. 
 18. Miscellaneous. No provision of this Agreement may be modified, waived or discharged unless such waiver, modification or discharge is agreed to in writing and signed by you and such officer as
may be specifically designated by the Board. No waiver by either party hereto at any time of any breach by the other party hereto of, or compliance with, any condition or provision of this Agreement to be performed by such other party shall be
deemed a waiver of similar or dissimilar provisions or conditions at the same or at any prior or subsequent time. No agreements or representations, oral or otherwise, express or implied, with respect to the subject matter hereof have been made by
either party which are not expressly set forth in this Agreement. 
 19. Governing Law. a. The validity, interpretation,
construction and performance of this Agreement shall be governed by the laws of the State of Virginia. 
 b. Notwithstanding
anything herein to the contrary, this Agreement shall be interpreted and applied so that the payments and benefits set forth herein shall either be exempt from or shall comply with the requirements of Section 409A. 

To the extent that the Corporation determines that any provision of this Agreement would cause you to incur any additional tax or
interest under Section 409A, the Corporation shall be entitled to reform such provision to attempt to comply with or be exempt from Section 409A. To the extent that any provision hereof is modified in order to comply with
Section 409A, such modification shall be made in good faith and shall, to the maximum extent reasonably possible, maintain the original intent and economic benefit to you and the Corporation without violating the provisions of
Section 409A. 
 In no event may you, directly or indirectly, designate the calendar year of any payment to be made under
this Agreement or otherwise which constitutes a “deferral of compensation” within the meaning of Section 409A. 

20. Amendment. No amendment to this Agreement shall be effective unless in writing and signed by both you and the Corporation.

 If this letter sets forth our agreement on the subject matter hereof, kindly sign and return to the Corporation the enclosed
copy of this letter which will then constitute our agreement on this subject. 

 
	
	Sincerely,
	
	ALBEMARLE CORPORATION

  

			
	By:	 	  

	Name:	 	
	Title:	 	

  

	
	Agreed to this              day
	of                     , 20    
	
	  

	(Name)

 EXHIBIT A 
 GENERAL RELEASE 
 1. This General Release is given by
                     (“Employee”) to Albemarle Corporation (the “Corporation”) and its successors. 

2. Employee agrees to and hereby does release and discharge the Corporation, its subsidiaries and affiliates, and its and their
successors, assigns, directors, officers, representatives and employees (collectively, “Releasees”) from any and all claims, causes of action and demands of any kind, whether known or unknown, which Employee has or ever has had, which are
based on acts or omissions occurring up to and including the date this General Release is fully executed. In this General Release, Employee further releases the Corporation and its subsidiaries and affiliates from any and all compensation owed to
Employee, including vacation pay and any attorneys’ fees, damages and costs Employee could recover under any statute or common law theory, except arising under the Severance Compensation Agreement between Employee and the Corporation and any
employee benefit plan of the Corporation. Included within this release, without limiting its scope, are claims arising out of Employee’s employment or the termination of Employee’s employment based on Title VII of the Civil Rights Acts of
1964 as amended, the Americans with Disabilities Act of 1990 as amended, the Age Discrimination in Employment Act as amended, the Older Workers Benefit Protection Act as amended, the Fair Labor Standards Act of 1938 as amended by the Equal Pay Act
of 1963, the Family and Medical Leave Act, the Employee Retirement Income Security Act of 1974 as amended, the Civil Rights Act of 1991, [insert any appropriate reference to Virginia law], the U.S. Patriot Act, the Sarbanes-Oxley Act of 2002, and
any other federal, state or local civil rights, disability, discrimination, retaliation or labor law, or any theory of contract or tort law. 
 3. Notwithstanding anything to the contrary, nothing herein shall be construed to release, terminate or discharge Employee’s rights (i) to indemnification, advancement of expenses and
exculpation as provided in the articles or certificate of incorporation, bylaws or other organizational documents of the Corporation or any of its subsidiaries or affiliates, or as provided or permitted under any applicable law, or as provided in
any indemnification agreement or (ii) under any policy of directors’ and officers’ liability, errors and omissions liability or other insurance maintained by the Corporation or any of its subsidiaries and affiliates, in each case
where Employee was or is a party or otherwise involved or is threatened to be made a party to or otherwise involved in any threatened, pending or completed action, proceeding, investigation, inquiry or other matter, whether civil, criminal,
administrative or otherwise, by reason of the fact that Employee is or was a director, officer, employee or agent of the Corporation or any of its subsidiaries or affiliates (including Employee’s conduct with respect to an employee benefit
plan) or is or was serving at the request of the Corporation or any of its subsidiaries or affiliates as a director, officer, employee or agent of another corporation, partnership, joint venture, trust or other enterprise.

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