Document:

Exhibit 10.1

 

ASSET
PURCHASE AGREEMENT BETWEEN

 

MAXWELL
RESOURCES INC.

 

AS
SELLER

 

AND

 

DAVID
GILKESON

 

AS
BUYER

 

As
of SEPTEMBER 23, 2015

 

     

     

    

 

TABLE
OF CONTENTS

  

	 	 	 	Page
	 	 	 	 
	ARTICLE I PURCHASE AND SALE OF PURCHASED ASSETS	1
	 	1.1	Purchased
    Assets	1
	 	1.2	Excluded
    Assets	2
	 	1.3	Assumed
    Liabilities	2
	 	1.4	Purchase
    Price	2
	 	1.5	Allocated
    Values	3
	 	1.6	Adjustments
    to Base Purchase Price. - N/A	3
	 	1.7	Apportionment
    of Certain Taxes	3
	 	1.8	Closing
    Date Adjustment to Purchase Price.	3
	 	1.9	Post-Closing
    Adjustments to Base Purchase Price.	4
	 	1.10	Prepaid
    JOA Funds	4
	 	1.11	Division
    of Ownership.	4
	 	1.12	No
    Duplicative Effect; Methodologies	5
	 	 	 	 
	ARTICLE II CLOSING	5
	 	2.1	Closing	5
	 	2.2	Deliveries
    by Seller at Closing	5
	 	2.3	Deliveries
    by Buyer at Closing	5
	 	2.4	Proceedings
    at Closing	5
	 	 	 	 
	ARTICLE III REPRESENTATIONS AND WARRANTIES OF SELLER	6
	 	3.1	Organization
    and Qualification.	6
	 	3.2	Authority;
    Binding Effect.	6
	 	3.3	Governmental
    Entities	6
	 	3.4	No
    Conflicts	6
	 	3.5	Contracts	7
	 	3.6	Title
    and Condition of Purchased Assets	7
	 	3.7	Oil
    and Gas Interests.	7
	 	3.8	Oil
    and Gas Operations	7
	 	3.9	Environmental
    Matters	7
	 	3.10	Compliance
    with Laws	8
	 	3.11	No
    Litigation	8
	 	3.12	Brokers’
    Fees	8
	 	3.13	Books
    and Records	8
	 	3.14	Bankruptcy	8
	 	3.15	AFEs
    and Other Commitments	8
	 	3.16	Well
    Status; Plugging and Abandonment	8
	 	3.17	Current
    Bonds	8

 

    	Asset Purchase Agreement between
 Maxwell Resources, Inc. and David Gilkeson	 
i
	Proprietary and Confidential
 Intended for Addressee Only

     

    

 

TABLE
OF CONTENTS

(Continued)

 

	 	 	 	Page
	 	 	 	 
	 	3.18	Non-Consent
    Operations	8
	 	3.19	Consents	8
	 	3.20	Permits	9
	 	3.21	Payout
    Balances; Imbalances	9
	 	3.22	Tax
    Matters	9
	 	3.23	Tax
    Partnership	9
	 	3.24	Royalties
    and Suspense	9
	 	3.25	No
    Casualty Loss	9
	 	 	 	 
	ARTICLE IV REPRESENTATIONS AND WARRANTIES OF BUYER	9
	 	4.1	Organization
    and Qualification	9
	 	4.2	Authority;
    Binding Effect	9
	 	4.3	Governmental
    Entities	10
	 	4.4	No
    Conflicts	10
	 	4.5	No
    Litigation	10
	 	4.6	Brokers’
    Fees	10
	 	4.7	Securities
    Laws	10
	 	4.8	Restricted
    Securities; Restriction on Transfers	10
	 	4.9	Records
    and Independent Evaluation	10
	 	 	 	 
	ARTICLE V COVENANTS	11
	 	5.1	Post-Closing
    Covenants	11
	 	5.2	Expenses	11
	 	5.3	Access
    to Purchased Assets and Records	12
	 	5.4	Further
    Assurances	12
	 	5.5	Delivery
    of Books and Records to Buyer	12
	 	5.6	Tax
    Matters	12
	 	5.7	Covenants
    and Agreements of Buyer	13
	 	 	 	 
	ARTICLE VI TITLE MATTERS	13
	 	6.1	Title
    Information	13
	 	6.2	Defensible
    Title	13
	 	6.3	Permitted
    Encumbrances	13
	 	6.4	Title
    Defect	14
	 	6.5	Title
    Defect Value	15
	 	6.6	Title
    Defect Notice	15
	 	6.7	Accepted
    Title Liabilities	15
	 	6.8	Seller’s
    Cure Right; Adjustments to Purchase Price	15
	 	6.9	Disputes
    Relating to Title Defect Value	16
	 	6.10	Adjustment
    to Purchase Price; Title Defect Deductible	16
	 	6.11	Preference
    Rights and Transfer Requirements	16
	 	6.12	Upward
    Defect Adjustments	16
	 	6.13	No
    Title Representation or Warranty	17
	 	 	 	 
	ARTICLE VII RESERVED	17
	 	 	 
	ARTICLE VIII INDEMNIFICATION	17
	 	8.1	Indemnification
    by Seller	17
	 	8.2	Indemnification
    by Buyer	17
	 	8.3	Indemnification
    Claims	17
	 	8.4	Survival
    of Representations, Warranties and Covenants	20
	 	8.5	Limitations	20
	 	8.6	Treatment
    of Indemnification Payments	20

 

    	Asset Purchase Agreement between
 Maxwell Resources, Inc. and David Gilkeson	 
ii
	Proprietary and Confidential
 Intended for Addressee Only

     

    

 

TABLE
OF CONTENTS

(Continued)

 

	 	 	 	Page
	 	 	 	 
	ARTICLE IX RESERVED	20
	 	 	 
	ARTICLE X DEFINITIONS	20
	 	 	 
	ARTICLE XI MISCELLANEOUS	27
	 	11.1	Press
    Releases and Announcements	27
	 	11.2	No
    Third Party Beneficiaries	27
	 	11.3	Entire
    Agreement	27
	 	11.4	Assignment
    and Delegation	27
	 	11.5	Successors
    and Assigns	28
	 	11.6	Counterparts
    and Facsimile Signature	28
	 	11.7	Headings	28
	 	11.8	Notices	28
	 	11.9	Governing
    Law	29
	 	11.10	Suspended
    Funds	29
	 	11.11	Amendments	29
	 	11.12	Severability	29
	 	11.13	Sellers’
    Obligations Several Not Joint	29
	 	11.14	Sellers’
    Representative	29
	 	11.15	Submission
    to Jurisdiction	30
	 	11.16	Construction	30
	 	11.17	Limitation
    on Damages	30
	 	11.18	Minimum
    Royalty Litigation	31
	 	 	Signature
    Page	32

 

Schedules
and Exhibits

 

	Schedule
    1.5	—	Allocated
    Values
	Schedule
    1.6	—	Prepaid
    Expenses (N/A)
	Schedule
    3.3	—	Governmental
    Entities (N/A)
	Schedule
    3.4	—	No
    Conflicts (N/A)
	Schedule
    3.5	—	Contracts;
    Leases
	Schedule
    3.6	—	Title
    and Condition of Purchased Assets
	Schedule
    3.8	—	Oil
    and Gas Operations
	Schedule
    3.9	—	Environmental
    Matters (N/A)
	Schedule
    3.10	—	Compliance
    with Laws (N/A)
	Schedule
    3.11	—	No
    Litigation (N/A)
	Schedule
    3.12	—	Brokers’
    Fees (N/A)
	Schedule
    3.15	—	AFEs
    and Other Commitments (N/A)
	Schedule
    3.16	—	Well
    Status and Plugging & Abandonment (See Schedule 3.8)
	Schedule
    3.17	—	Current
    bonds (N/A)
	Schedule
    3.18	—	Non-Consent
    Operations (N/A)
	Schedule
    3.19	—	Consents
    (N/A)
	Schedule
    3.20	—	Permits
    (N/A)
	Schedule
    3.21(a)	—	Payout
    Balances (N/A)
	Schedule
    3.21(b)	—	Imbalances
    (N/A)
	Schedule
    3.22	—	Tax
    Matters (N/A)
	Schedule
    3.23	—	Tax
    Partnership (N/A)
	Schedule
    3.24	—	Royalties
    and Suspense (N/A)
	Schedule
    5.1	—	Governmental
    Approvals (N/A)
	Schedule
    6.3(k)	—	Preferential
    Rights of Third Persons to Purchase Production (N/A)
	Schedule
    10	—	Additional
    Properties (N/A)

 

    	Asset Purchase Agreement between
 Maxwell Resources, Inc. and David Gilkeson	 
iii
	Proprietary and Confidential
 Intended for Addressee Only

     

    

 

TABLE
OF CONTENTS

(Continued)

 

	Exhibit
    A	—	Leases
    and Contracts
	Exhibit
    B	—	Outside
    Opinion on Transaction and Reserve Report
	Exhibit
    C	—	Excluded
    Fee Mineral Interests, Royalty Interests and Overriding Royalty Interests (N/A)
	Exhibit
    D	—	Bonds,
    etc. to be Replaced at Closing (N/A)
	Exhibit
    E	—	Map
    of Additional Properties Area (N/A)
	Exhibit
    F	—	Water
    Rights (N/A)
	Exhibit
    G	—	Transition
    Services Agreement (N/A)
	Exhibit
    H	—	NOT
    USED (N/A)
	Exhibit
    I	—	Forms
    of Assignment and Bill of Sale
	Exhibit
    J	—	Form
    of Escrow Agreement (N/A)
	Exhibit
    K	—	List
    of Counties and Townships for Post-Closing Agreement (N/A)
	Exhibit
    L	—	Post-Closing
    Agreement (N/A)
	Exhibit
    M	—	Corporate
    Authority For Asset Purchase
	Exhibit
    N	—	Assignments
    and Notices

 

    	Asset Purchase Agreement between
 Maxwell Resources, Inc. and David Gilkeson	 
iv
	Proprietary and Confidential
 Intended for Addressee Only

     

    

 

ASSET
PURCHASE AGREEMENT

 

This
Asset Purchase Agreement is dated September 23, 2015, and is between Maxwell Resources, Inc., a Nevada corporation and (“MAXE”
or “Seller”) and David Gilkeson as (“Buyer”). 

 

INTRODUCTION:

 

Seller
owns certain interests in certain oil and gas properties and related assets in the State of Texas.

 

Seller
desires to sell to Buyer, and Buyer desires to purchase from Seller, Seller’s partial interest in and to such oil and gas
properties and related assets upon the terms in this Agreement. It is understood by
both parties that when the term “all” is used in this Agreement in reference to Buyers Purchased Interest, it is solely
referencing the interest purchased by the Buyer and assigned to the Buyer.

 

The
Parties therefore agree as follows:

 

ARTICLE
I

PURCHASE
AND SALE OF PURCHASED ASSETS

 

1.1
Purchased Assets. Subject to the terms and conditions in this Agreement, Seller agrees to sell to Buyer, and Buyer agrees
to purchase from Seller a portion of Seller’s rights, titles, and interests in and to the following (the “Purchased
Assets”):

 

(a)
A portion of the oil and gas leases described in Exhibit A whether Seller’s interest is correctly or incorrectly
described in Exhibit A (each, a “Lease” and sometimes, collectively, the “Leases”);

 

(b)
The Hydrocarbon wells described in Exhibit B hereto (“Wells”) which are drilled or subject to a well
proposal, whether pursuant to a joint operating agreement or otherwise, on the Leases or on pooled units which include the Leases
(the Wells together with the Leases are hereinafter collectively referred to as the “Subject Interests”);

 

(c)
To the extent transferable or assignable, all presently existing and valid operating agreements, oil, gas or mineral unitization,
pooling, and/or communization agreements, declarations and/or orders (including, without limitation, all units formed under orders,
rules, regulations, or other official acts of any federal, state, or other authority having jurisdiction, and voluntary unitization
agreements, designations or declarations), production sales contracts, and other agreements and contracts described in Schedule
3.5 to the extent that they relate to any of the properties described in subsections (a) and (b) above (each an “Assigned
Contract” and, collectively, the “Assigned Contracts”);

 

(d)
All surface or subsurface machinery, equipment, platforms, facilities, supplies or other property of whatsoever kind or nature,
wherever located, which relate to or are useful or being held for use for the exploration, development, or maintenance of any
of the Subject Interests and the production of Hydrocarbons from the Subject Interests, or the treatment, storage, gathering,
transportation or marketing of the production of the Subject Interests or allocated to the Subject Interests (collectively, the
“Equipment”);

 

(e)
All: (i) Hydrocarbons produced from or attributable to the Leases and Wells with respect to all periods after the Effective Time;
and (ii) proceeds from such Hydrocarbons;

 

(f)
To the extent owned or licensed by Seller and to the extent it can be licensed, sublicensed or transferred without payment of
license or transfer fees, or to the extent Buyer agrees in its sole discretion to pay a Third Person for applicable license or
transfer fees, a non-exclusive license in form and substance reasonably acceptable to Seller and Buyer (or sublicense (reasonably
acceptable to the owner of the information, Seller and Buyer), as applicable) of all geophysical, seismic and related technical
data relating to the lands covered by the Leases or pooled with those lands, together with any data (other than seismic data)
relating to reserves or otherwise relating to the Subject Interests;

 

(g)
All books, files, abstracts, title opinions, title reports, land and lease files, surveys, filings, well logs, production reports
and reports with Governmental Entities, Tax information and Tax Returns (excluding all income tax returns), maps, geological and
geophysical data, and records of Seller related to the operation or ownership of the Purchased Assets, excluding seismic data,
studies and information that Seller is prohibited from sharing, and for which no consent to assignment is obtained following Reasonable
Best Efforts to obtain such consent (including allowing Buyer to pay any transfer fee or similar cost) (collectively, the “Records”);

 

(h)
All rights, claims and causes of action to the extent attributable to ownership, use, maintenance or operation of the Purchased
Assets after the Effective Time, including past, present or future claims, whether or not previously asserted by Seller;

 

(i)
All: (i) fees, proceeds, revenues, accounts, instruments and general intangibles and economic benefits attributable to the Purchased
Assets with respect to any period of time after the Effective Time; (ii) Liens in favor of Seller, including Liens securing payment
for production of Hydrocarbons produced from the Purchased Assets (but only to the extent such Liens relate to the period after
the Effective Time), whether choate or inchoate, under any Law or under any of the Assigned Contracts, arising from the ownership,
sale or other disposition after the Effective Time of any of the Purchased Assets; and (iii) any claim of indemnity, contribution
or reimbursement relating to the Assumed Liabilities;

 

    	Asset Purchase Agreement between 
 Maxwell Resources, Inc. and David Gilkeson	 
 1
	Proprietary and Confidential 

Intended for Addressee Only

     

    

 

(j)
All intangible rights, inchoate rights, transferable rights under warranties made by prior owners, manufacturers, vendors and
Third Persons, and rights accruing under applicable statutes of limitation or prescription, to the extent related or attributable
to the Purchased Assets;

 

(k)
To the extent assignable by Seller, all licenses, permits, approvals, consents, franchises, certificates and other authorizations
and other rights granted by Governmental Entities and all certificates of conveniences or necessity, immunities, privileges, grants
and other rights that relate primarily to the ownership, use, maintenance or operation of the Purchased Assets; and

 

1.2
Excluded Assets. Notwithstanding Section 1.1, the Purchased Assets do not include the following assets of Seller (the “Excluded
Assets”):

 

(a)
All rights and choses in action, arising, occurring or existing in favor of Sellers prior to the Effective Time or arising out
of the operation of or production from the Purchased Assets prior to the Effective Time (including any and all contract rights,
claims, receivables, revenues, recoupment rights, recovery rights, accounting adjustments, mispayments, erroneous payments or
other claims of any nature in favor of Sellers and relating and accruing to any time period prior to the Effective Time); provided,
however, notwithstanding anything herein to the contrary, Excluded Assets shall not include any rights and choses in action
arising or attributable to any royalty litigation with respect to the Purchased Assets regardless of whether such rights or choses
in action are attributable to periods prior to, on or after the Effective Time;

 

(b)
Any accounts payable accruing before the Effective Time;

 

(c)
All corporate, financial, Tax and legal (other than title) records of Sellers;

 

(d)
All contracts of insurance or indemnity;

 

(e)
All Hydrocarbon production from or attributable to production from the Properties with respect to all periods prior to the Effective
Time as described in Section 1.6 and all proceeds attributable thereto;

 

(f)
Any refund of costs, Taxes or expenses borne by Sellers attributable to the period prior to the Effective Time;

 

(g)
All deposits, cash, checks, funds and accounts receivable attributable to Sellers’ interests in the Properties with respect
to any period of time prior to the Effective Time;

 

(h)
Other than as set forth in Section 1.1(f), Section 1.1(g) or to the extent used exclusively in the operation of the Purchased
Assets, the computer or communications software or intellectual property (including tapes, data and program documentation and
all tangible manifestations and technical information relating thereto) owned, licensed or used by Sellers;

 

(i)
Any logo, service mark, copyright, trade name or trademark of or associated with Sellers or any Affiliate of Sellers or any business
of Sellers or of any Affiliate of Sellers;

 

(j)
All vehicles, offices and related office equipment;

 

(k)
All gathering or other pipeline systems and related equipment, inventory, easements, licenses and rights of way currently or subsequently
owned by Sellers or any Affiliate of Sellers including wellsite flow lines;

 

(l)
Other than as set forth in Section 1.1(f) or Section 1.1(g), any seismic data, geological or geophysical data, or other similar
data relating to the Purchased Assets or any interpretations thereof or other data or records related thereto that Sellers may
not assign or transfer under its existing agreements and licenses without making any additional payments or incurring any liability
or obligation; and

 

1.3
Assumed Liabilities. Subject to the terms and conditions in this Agreement, at Closing, Buyer shall assume and become responsible
for all Assumed Liabilities. Other than the Assumed Liabilities, Buyer will not assume any Liabilities of Seller (the “Excluded
Liabilities”).

 

1.4
Purchase Price. The Consideration for the Purchased Assets shall be $180,000.

 

(a)
For federal tax purposes, the sale of the Purchased Assets shall occur on the date Sellers obtain the Post-Closing Agreement or
Buyer elects to waive the Sellers’ obligation to obtain the Post-Closing Agreement.

 

    	Asset Purchase Agreement between 
 Maxwell Resources, Inc. and David Gilkeson	 
 2
	Proprietary and Confidential 

Intended for Addressee Only

     

    

 

1.5
Allocated Values. Schedule 1.5 shows the agreed allocation of the purchase price (“Base Purchase Price”)
plus the agreed allocation of the price for the Additional Properties among the Wells, the Leases and the other Purchased Assets.
Such values (singularly, the “Allocated Value,” and collectively, the “Allocated Values”)
shall be binding for purposes of adjusting the Base Purchase Price under Section 1.6, Section 5.3, and Article VI. For purposes
of Tax filings, the Allocated Values shall be increased or decreased as follows: (a) any adjustments to the Base Purchase Price
under Section 1.6, Section 5.3, or Article VI shall be applied to the amounts in Schedule 1.5 for the particular affected
Purchased Assets, if determinable; and (b) any adjustments to the Base Purchase Price under Section 1.6 or Article VI that are
not specific to any particular Purchased Asset or Purchased Assets (for example, general and administrative expense) shall be
applied pro rata to each Purchased Asset allocation in Schedule 1.5 in proportion to the amount of each. Seller
and Buyer each agrees that (i) the Allocated Values shall be used by it as the basis for reporting asset values and other items
for purposes of all federal, state, and local Tax returns, including Internal Revenue Service Form 8594, and (ii) neither it nor
its Affiliates will take positions inconsistent with the Allocated Values in notices to Governmental Entities, in audit or other
proceedings with respect to Taxes, in notices to preferential purchaser right holders, or in other documents or notices relating
to the Transactions.

 

1.6
Adjustments to Base Purchase Price. - N/A

 

1.7
Apportionment of Certain Taxes. All Property Taxes and Hydrocarbon Taxes attributable to the period before the Effective
Time shall be for Seller’s account and all Taxes attributable to the period after and including the Effective Time shall
be for Buyer’s account. All Property Taxes assessed with respect to the Purchased Assets for year 2015 shall be prorated
based on the number of days in such period that occur before the Effective Time, on the one hand, and the number of days in such
period that include or occur after the Effective Time, on the other hand. All Hydrocarbon Taxes shall be deemed attributable to
the period during which such production occurred. The apportionment of Property Taxes and Hydrocarbon Taxes between the Parties
shall take place in the Adjustment Statement and the Final Adjustment Statement using estimates of such Taxes if actual numbers
are not available. If estimates of such Taxes are used in the Adjustment Statement and the Final Adjustment Statement to apportion
Taxes, upon determination of the actual amount of such Taxes, (a) Seller shall pay to Buyer an amount equal to the excess, if
any, of the actual Property Taxes and Hydrocarbon Taxes allocable to Seller over the estimated amount of such Taxes allocated
to Seller, and (b) Buyer shall pay to Seller an amount equal to the excess, if any, of the estimated amount of Property Taxes
and Hydrocarbon Taxes allocated to Seller over the actual amount of such Taxes allocable to Seller.

 

1.8
Closing Date Adjustment to Purchase Price.

 

(a)
At least three, but no more than five, Business Days prior to the expected Closing Date, Sellers’ Representative shall deliver
to Buyer a written statement (the “Adjustment Statement”) setting forth Seller’s good faith determination
of each adjustment to the Purchase Price required under this Agreement and showing the calculation of such adjustments (the “Initial
Adjustment Amount”). Sellers’ Representative shall attach to the Adjustment Statement such supporting documentation
and other data as is reasonably necessary to provide a basis for the Initial Adjustment Amount shown in the Adjustment Statement.

 

(b)
If Buyer has any questions or disagreements regarding the Adjustment Statement, then, upon request by Buyer at least two Business
Days prior to the Closing Date, Sellers’ Representative and Buyer shall in good faith attempt to resolve any disagreements,
and Sellers’ Representative shall afford Buyer the opportunity to examine the Adjustment Statement and such supporting schedules,
analyses and workpapers on which the Adjustment Statement is based or from which the Adjustment Statement is derived as are reasonably
requested by Buyer. Sellers’ Representative shall give personnel, accountants and representatives of Buyer reasonable access
to Sellers’ Representative’s premises and to its books and records for purposes of reviewing Seller’s calculation
of the Initial Adjustment Amount and will cause appropriate personnel of Seller to assist Buyer and Buyer’s personnel, accountants
and representatives, with no charge to Buyer for such assistance, in Buyer’s review of such calculation.

 

(c)
If Buyer and Sellers’ Representative agree on changes to the Initial Adjustment Amount based on such discussions, then the
Closing Date Aggregate Purchase Price shall be paid at Closing based on such changes. If Buyer and Seller do not agree on changes
to the Initial Adjustment Amount, then the Closing Date Aggregate Purchase Price shall be paid at Closing based on the amounts
provided in the Adjustment Statement. In either such case, appropriate adjustments to the Base Purchase Price shall be made after
Closing under Section 1.9.

 

(d)
If the Initial Adjustment Amount shown on the Adjustment Statement is a positive number, then the Base Purchase Price shall be
increased by such amount. If the Initial Adjustment Amount shown on the Adjustment Statement is a negative number, then the Base
Purchase Price shall be decreased by such amount. The Base Purchase Price as adjusted by the Initial Adjustment Amount (as such
may be modified pursuant to any comments of Buyer accepted by Seller) is referred to as the “Closing Date Aggregate Purchase
Price.”

 

    	Asset Purchase Agreement between 
 Maxwell Resources, Inc. and David Gilkeson	 
 3
	Proprietary and Confidential 

Intended for Addressee Only

     

    

 

1.9
Post-Closing Adjustments to Base Purchase Price.

 

(a)
After Closing, Sellers’ Representative shall review the Adjustment Statement and determine the actual Purchase Price Adjustment.
As promptly as practicable, but in no event later than 90 days after the Closing Date, Sellers’ Representative shall deliver
to Buyer a written statement setting forth each adjustment to the Purchase Price required under this Agreement and showing the
calculation of such adjustments (the “Final Adjustment Statement”), together with such supporting documentation
and other data as is reasonably necessary to provide a basis for the Purchase Price Adjustment shown in the Final Adjustment Statement.
Sellers’ Representative shall give personnel, accountants and representatives of Buyer reasonable access to Seller’s
premises and to its books and records for purposes of reviewing Seller’s calculation of the Purchase Price Adjustment and
shall cause appropriate personnel of Sellers’ Representative to assist Buyer and Buyer’s personnel, accountants and
representatives, with no charge to Buyer for such assistance, in Buyer’s review of such calculation. As soon as reasonably
practicable but not later than the 60th day after Buyer receives the Final Adjustment Statement, Buyer shall deliver to Sellers’
Representative a written report containing any changes that Buyer proposes to be made to the Final Adjustment Statement. The Parties
shall undertake to agree on the Final Adjustment Statement no later than 90 days after Sellers’ Representative has delivered
it to Buyer.

 

(b)
If the Parties do not agree on the Final Adjustment Statement within such 90-day period, either Buyer or Sellers (acting through
Sellers’ Representative) may submit any unresolved disagreements as to Buyer’s proposed changes as described above,
to a reputable mediator in Dallas, Texas for a final and binding determination, and Buyer and Seller shall execute any engagement,
indemnity and other agreements that such mediator may reasonably require in connection with or as a condition to such engagement.
Buyer and Seller shall cooperate diligently with any reasonable request of the mediator and furnish to the mediator any work papers
and other documents and information relating to such objections that the mediator may reasonably request and which are available
to such Party or its subsidiaries (or its independent public accountants). The Parties will be afforded the opportunity to present
to the mediator any material relating to the determination of the matters in dispute and to discuss such determination with the
mediator prior to the mediator’s delivery of written notice of determination and to the extent that a value has been assigned
to any objection that remains in dispute, the accounting firm shall not assign a value to such objection that is greater than
the greatest value for such objection claimed by a Party or less than the smallest value for such objection claimed by a Party.

 

(c)
The fees and expenses of the accounting firm in making that determination shall be borne equally by Buyer, on the one hand, and
Seller, on the other hand. Upon resolution of Buyer’s disagreements, the Final Adjustment Statement (including any revisions
resolved or agreed to), shall be conclusive, final and binding on Buyer and Seller as to the Purchase Price Adjustment.

 

(d)
Within three Business Days after the final determination of the Final Adjustment Statement under this Section 1.9 (by agreement
or arbitration), if: (i) the Base Purchase Price as adjusted by the Purchase Price Adjustment calculated based on the Final Adjustment
Statement exceeds the Closing Date Aggregate Purchase Price, then Buyer will pay to Seller such excess; or (ii) the Closing Date
Aggregate Purchase Price exceeds the Base Purchase Price as adjusted by the Purchase Price Adjustment calculated based on the
Final Adjustment Statement, then Seller will pay to Buyer such excess. Except for specific costs which are expressly provided
and accounted for in the final and binding Final Adjustment Statement, neither the Final Adjustment Statement nor this Section
1.9 shall operate to waive, release or impair the indemnity and hold harmless obligations of the Parties under Article VIII.

 

(e)
Following the adjustments under the forgoing subsections (a) through (d), no further adjustments shall be made under this Section
1.9. Following such adjustments, and notwithstanding anything to the contrary contained in this Agreement, should Sellers receive
any bills or revenue with regard to the Purchased Assets for the period on or after the Effective Time, Sellers will forward such
bills or revenue to Buyer, and should Buyer receive any bills or revenue with regard to the Purchased Assets for the period prior
to the Effective Time, Buyer will forward such bills or revenue to Sellers.

 

1.10
Prepaid JOA Funds. To the extent that as of Closing Seller holds funds received by Seller (in its capacity as operator
with respect to Operated Properties) as prepayments for items to be incurred after Closing, or incurred after the Effective Time
and not paid prior to Closing, under operating agreements which constitute Assigned Contracts and under which Buyer or its designee
is succeeding as operator (“Prepaid JOA Funds”): (a) no adjustment to the Base Purchase Price shall be made
with respect to such Prepaid JOA Funds; and (b) to the extent Buyer takes over payment responsibility for the relevant items as
successor operator, Seller shall deliver to Buyer at Closing, to an account(s) designated by Buyer in writing to Seller, an amount
of money equal to such Prepaid JOA Funds and an accounting of each of such prepayments and Buyer shall from and after such time
be responsible for the application of such Prepaid JOA Funds under the applicable operating agreement.

 

1.11
Division of Ownership.

 

(a)
Division of Hydrocarbons. After Closing, all hydrocarbons produced from the Subject Interests and not in storage tanks
above the pipeline connection or past a measuring point as of the Effective Time shall be owned by Buyer. All Hydrocarbons produced
from the Subject Interests and disposed of, or in storage tanks above the pipeline connection or past a measuring point as of
the Effective Time shall be owned by Seller. To the extent that Seller has sold Hydrocarbons (other than such Hydrocarbons described
in the preceding sentence) which constitute Purchased Assets after the Effective Time but prior to Closing, and the Base Purchase
Price has not been adjusted under Section 1.6 for such proceeds, Seller shall deliver such proceeds to Buyer promptly upon Seller’s
receipt.

 

    	Asset Purchase Agreement between 
 Maxwell Resources, Inc. and David Gilkeson	 
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	Proprietary and Confidential 

Intended for Addressee Only

     

    

 

(b)
Division of Operating Expenses; Royalties. As between Buyer and Seller: (i) all Operating Expenses attributable to the
Purchased Assets before the Effective Time shall be borne by Seller; (ii) all Operating Expenses attributable to the Purchased
Assets after the Effective Time shall be borne by Buyer, except to the extent accounted for as an increase to the Base Purchase
Price in accordance with Section 1.6(a)(i); (iii) Seller shall retain responsibility for, and shall timely pay and discharge (or
cause to be paid and discharged), all royalties to the extent attributable to Hydrocarbons produced from the Subject Interests
before the Effective Time; (iv) Seller shall be responsible for and shall timely pay and discharge (or cause to be discharged)
all royalties with respect to payments that have been received by Seller prior to Closing to the extent attributable to Hydrocarbons
produced from the Subject Interests during the Interim Period, which payments and discharges shall be accounted for as an increase
in the Purchase Price under Section 1.6(a)(i); and (v) Buyer shall be responsible for and shall timely pay and discharge (or cause
to be discharged) all royalties with respect to payments that are received by Buyer at or after Closing. If a Party receives after
the Closing Date any bills or accounts or any reimbursement in relation to Operating Expenses for which the other Party or Parties
are responsible under this Section 1.11, then the receiving Party shall promptly forward the same to the responsible Party or
Parties (for payment, in the case of any such bills or accounts). If a Party receives after the Closing Date any bill, account
or reimbursement in relation to Operating Expenses for which each Party is liable in part under this Section 1.11, the receiving
Party shall promptly forward a copy of the same to the other Party or Parties, but each Party shall be required to pay only such
portion of any bill or account for which it is responsible in accordance with this Section 1.11.

 

1.12
No Duplicative Effect; Methodologies. The provisions of Section 1.6 through Section 1.11 shall apply in such a manner so
as not to give the components and calculations duplicative effect to any item of adjustment and, except as otherwise expressly
provided in this Agreement, the Parties covenant and agree that no amount shall be (or is intended to be) included, in whole or
in part (either as an increase or reduction) more than once in the calculation of (including any component of) the Purchase Price
or Closing Date Aggregate Purchase Price, or any other calculated amount under this Agreement if the effect of such additional
inclusion (either as an increase or reduction) would be to cause such amount to be overstated or understated for purposes of such
calculation. The Parties acknowledge and agree that, if a conflict exists between a determination, calculation, methodology, procedure
or principle provided in the definitions in this Agreement on the one hand, and those provided by GAAP, on the other hand: (a)
the determination, calculation, methodology, procedure or principle provided in this Agreement shall control to the extent that
the matter is specifically provided for in this Agreement; and (b) the determination, calculation or methodology, procedure or
principle prescribed by GAAP shall control to the extent that the matter is not so addressed in this Agreement or requires reclassification
as an asset or liability to be included in a line item or specific adjustment.

 

ARTICLE
II

CLOSING

 

2.1
Closing. Closing shall take place at the offices of the Buyer at 3131 McKinney Ave, Suite 600, Dallas, Texas 75204, commencing
at 9:00 a.m. on the date of this Agreement (the “Closing Date”).

 

2.2
Deliveries by Seller at Closing. At Closing, Seller shall deliver to Buyer the following:

 

(a)
two (2) original counterparts of an Assignment and Bill of Sale in the forms of Exhibits I-A and I-B hereto (including
any appropriate state, federal or Indian conveyances) duly executed by an authorized officer of Seller and acknowledged by a notary
public;

 

(b)
change of operator forms, transfer orders or letters-in-lieu, or government approved assignment forms, in form reasonably acceptable
to both Parties duly executed by an authorized officer of Seller if applicable;

 

(c)
all required partial releases and termination statements from any Person who has a Lien on any of the Properties (excluding Permitted
Encumbrances), in form reasonably satisfactory to Buyer;

 

(d)
such other instruments as are necessary to consummate the Transactions (including a certificate of good standing of Seller in
its jurisdiction of incorporation, certified charter documents, certificates as to the incumbency of officers and the adoption
of authorizing resolutions);

 

(e)
see Exhibit “M” – on closing day Buyer will provide the Seller with Consideration as authorized in Exhibit “M”.

 

2.3
Deliveries by Buyer at Closing. At Closing, Buyer shall deliver to Seller the following:

 

(a)
four original counterparts of an Assignment, Bill of Sale and Conveyance (including any appropriate state, federal or Indian conveyances)
duly executed by an authorized officer of Buyer and acknowledged by a notary public;

 

(b)
the Closing Date Aggregate Purchase Price certificate immediately available to an account designated by Sellers’ Representative
at least two Business Days prior to the Closing Date;

 

(c)
such other instruments as are necessary to consummate the Transactions (including a certificate of good standing of Buyer in its
jurisdiction of incorporation, certified charter documents, certificates as to the incumbency of officers and the adoption of
authorizing resolutions); and

 

2.4
Proceedings at Closing. All proceedings to be taken and all documents to be executed and delivered at Closing shall be
deemed to have been taken and executed simultaneously, and, except as permitted under this Agreement, no proceedings shall be
deemed taken nor any document executed and delivered until all have been taken, executed and delivered.

 

    	Asset Purchase Agreement between 
 Maxwell Resources, Inc. and David Gilkeson	 
 5
	Proprietary and Confidential 

Intended for Addressee Only

     

    

 

ARTICLE
III

REPRESENTATIONS AND WARRANTIES OF SELLER

 

Except
as specifically provided hereinafter, Sellers, severally and not jointly, represent and warrant to Buyer that:

 

3.1
Organization and Qualification.

 

(a)
Maxwell Resources Inc. represents and warrants that:

 

(i)
It is a Nevada corporation that has been duly organized and is validly existing and in good standing under the laws of the State
of Nevada, has all requisite power and authority to carry on its business as currently being conducted and to own or lease and
operate the properties it owns or leases as and in the places now owned, leased or operated. Maxwell Resources, Inc. is duly qualified
or licensed to do business and is in good standing in each jurisdiction in which the character or location of its assets or properties
(whether owned, leased or licensed) or the nature of its business make such qualification necessary, except where the failure
to be so qualified or in good standing, individually or in the aggregate, has not had and could not reasonably be expected to
have a material adverse effect on Maxwell Resources, Inc. or the Transactions. Maxwell Resources, Inc. is not in violation of
any provision of its certificate of incorporation or bylaws or other organizational documents.

 

3.2
Authority; Binding Effect.

 

(a)
The execution and delivery by Seller of this Agreement and consummation by Seller of the Transactions have been duly and validly
authorized by all necessary corporate action on the part of Seller.

 

(b)
This Agreement and each agreement, instrument or document being or to be executed and delivered by Seller in connection with the
Transactions (“Seller Related Documents”), upon due execution and delivery by Seller, will constitute, assuming
the due execution and delivery by the counterparties to the Seller Related Documents, the legal, valid, and binding obligation
of Seller, enforceable in accordance with its respective terms (except as enforcement may be limited by bankruptcy, insolvency,
reorganization, moratorium or similar Laws relating to or limiting creditors’ rights generally or by application of equitable
principles regardless of whether such enforceability is considered in a proceeding at Law or in equity).

 

3.3
Governmental Entities. Except as provided in Schedule 3.3 or as otherwise expressly provided in this Agreement,
Seller is not required to submit any material notice, report or other filing with any Governmental Entity in connection with its
execution or delivery of this Agreement or any of the Seller Related Documents or consummation of the Transactions and no consent,
approval or authorization of any Governmental Entity is required to be obtained by Seller in connection with the execution, delivery
and performance of this Agreement.

 

3.4
No Conflicts. Except as provided in Schedule 3.4, the execution, delivery and performance of this Agreement and
any of the Seller Related Documents by Seller, and consummation of the Transactions, do not and will not:

 

(a)
Conflict with or result in any breach of the provisions of, or constitute a default or require the consent of any Person under
the certificate of incorporation or bylaws or other organizational documents of Seller;

 

(b)(i)
To Seller’s Knowledge, violate any restriction to which Seller is subject or, with or without the giving of notice, the
passage of time, or both, (ii) violate (or give rise to any right of termination, cancellation or acceleration under) any mortgage,
deed of trust, license, lease, indenture, contract or other material agreement or instrument, whether oral or written, to which
Seller is a party, or by which it or any of the assets of Seller is bound (which will not be satisfied, assigned or terminated
on or prior to Closing as a result of the Transactions), (iii) result in termination of any such instrument or termination of
any provisions in such instruments, or (iv) result in the creation or imposition of any Lien upon the Purchased Assets; or

 

(c)
Constitute a violation of any applicable Law in any material respect.

 

    	Asset Purchase Agreement between 
 Maxwell Resources, Inc. and David Gilkeson	 
 6
	Proprietary and Confidential 

Intended for Addressee Only

     

    

 

3.5
Contracts. Schedule 3.5 is a true and complete list, by category, of the following types of agreements and contracts
(but excluding the Leases unless required to be disclosed pursuant to subsection (n) below) that are attributable to or affect
the Subject Interests or any other Purchased Assets (collectively, the “Material Contracts” and each, a “Material
Contract”): (a) any agreement(s) with any Affiliate(s) of Seller; (b) any agreement(s) for the sale, exchange, or other
disposition of Hydrocarbons produced from the Purchased Assets, any agreement(s) for the purchase of Hydrocarbons, gathering contracts,
processing contracts, transportation contracts, marketing contracts, disposal or injection contracts, in each case that are not
cancelable without penalty on not more than 60 days prior written notice; (c) any agreement(s) to sell, lease, farm-out, or otherwise
dispose of any of Seller’s interests in any of the Purchased Assets other than conventional rights of reassignment; (d)
any tax partnership(s) of Seller affecting any of the Purchased Assets; (e) any operating agreement(s) to which Seller’s
interests in any of the Purchased Assets are subject; (f) any agreement(s) under which Seller has forfeited or not consented to,
its right to participate in future oil and gas operations; (g) any agreement(s) under which Seller has received an advance payment,
prepayment or similar deposit and has a refund obligation with respect to any natural gas or products purchased, sold, gathered,
processed or marketed by or for Seller out of the Purchased Assets; (h) any contract that requires Seller to expend more than
$100,000 in any year in connection with the Purchased Assets, (i) any option to purchase or call on the Hydrocarbons produced
from the Purchased Assets; (j) any title retention agreement(s) or Lien(s) affecting any of the Equipment; (k) any agreement creating
an area of mutual interest with respect to the Subject Interests; (l) any contract that can reasonably be expected to result in
an aggregate revenue to Seller of more than $100,000 in any year in connection with the Purchased Assets; (m) any non-compete
or similar restrictive agreements related to the Purchased Assets that would restrict, limit or prohibit the manner in which,
or the locations in which, Buyer or any of its Affiliates conducts business; (n) any Lease(s) with a remaining primary term of
less than one year or that contains a performance obligation that must be commenced within one year to maintain the Lease; and
(o) any surface use agreement to which Seller is a party or to which any of the Purchased Assets are subject other than as provided
in the applicable Lease. Buyer has been provided access to true and complete copies of all Material Contracts. Except as set forth
on Schedule 3.5, Seller is not in default under the terms of any Material Contract, and, to Seller’s Knowledge there
is no default existing or continuing by any other party under the terms of any Material Contract and each Material Contract is
in full force and effect in all material respects and is valid and enforceable by Seller in accordance with its terms, assuming
the due authorization, execution and delivery of the Material Contracts by each of the counterparties to those agreements (except
as enforcement may be limited by bankruptcy, insolvency, reorganization, moratorium or similar Laws relating to or limiting creditors’
rights generally or by application of equitable principles). Seller has not received or given any unresolved written notice of
default, amendment, waiver, price redetermination, market out, curtailment or termination with respect to any Material Contract.

 

3.6
Title and Condition of Purchased Assets. Except as provided in Schedule 3.6:

 

(a)
Subject to any disclosed encumbrances acceptable to buyer, Seller has good and valid title to all Purchased Assets (other than
the Leases) and, to Seller’s Knowledge, such assets are in an operable state of repair adequate to maintain such normal
operations in a manner consistent with the past practices of Seller, normal wear and tear excepted.

 

(b)
Other than any notices delivered under Section 6.6, Seller has not received any written notice of any claim asserting the existence
of a Title Defect in connection with any Subject Interest.

 

3.7
Oil and Gas Interests.

 

(a)
All payments (including all delay rentals, royalties, shut-in royalties (solely with respect to Leases for which Seller is the
operator of a Well located on such Leases) and valid calls for payment or prepayment under operating agreements) due and owing
by Seller under the Leases and Assigned Contracts have been and are being made (timely, and before the same became delinquent)
by Seller other than those delinquent payments that are contested by Seller in good faith in the normal course of business, and
to Seller’s Knowledge, all payments with respect to shut-in royalties due and owing by Seller under the Leases for which
Maxwell Resources, Inc., is not the operator of a Well located on such Leases have been and are being made (timely, and before
the same became delinquent) by the operator of such Wells in all material respects other than those delinquent payments that are
contested by such operator in good faith in the normal course of business.

 

(b)
Except as otherwise provided in Section 1.6(a)(iii), Seller is not obligated, by virtue of a prepayment arrangement, a “take
or pay” arrangement, production payment or any other arrangement, to deliver any Hydrocarbons produced from the Purchased
Assets at some future time without then receiving full payment therefor.

 

3.8
Oil and Gas Operations. Except as provided in Schedule 3.8, to Seller’s Knowledge, (a) all Wells have been
drilled, completed, operated and produced in accordance with generally accepted oil and gas field practices and in compliance
in all material respects with applicable leases, pooling and unit agreements, joint operating agreements and Laws, and (b) all
Wells and Equipment have been properly maintained and are suitable for their intended purposes. Wells are currently shut-in.

 

3.9
Environmental Matters. Except as provided in Schedule 3.9,

 

(a)
To Seller’s Knowledge, (i) Seller and the operations on the Leases are in compliance with Environmental Laws, (ii) all operations
on the Leases that require authorization under Environmental Permits are duly authorized by such Environmental Permits, and (iii)
no facts, conditions or circumstances exist in connection with, related to or associated with the Leases, the operations conducted
thereon, or the Environmental Permits, that could reasonably be expected to give rise to any claim or assertion that Seller, the
Leases or any operations thereon are not in material compliance with any Environmental Law or with any term or conditions of any
Environmental Permit;

 

(b)
Seller has not received written notice from any Governmental Entity that any of the Leases is the subject of any remediation,
removal, cleanup, response Action, enforcement Action or Order regarding any actual or alleged presence or release of Hazardous
Materials that has not been finally resolved, and to Seller’s Knowledge: (i) none of the Leases are the subject of any investigation
regarding any actual or alleged presence or release of Hazardous Materials; and (ii) no facts, conditions, or circumstances exist
in connection with, related to or associated with the Leases or the operations conducted thereon that could reasonably be expected
to give rise to liability for Environmental Matters;

 

(c)
There are no civil, criminal, or administrative Actions or notices pending or, to Seller’s Knowledge, threatened in writing
against Seller that are related to the Purchased Assets or the operations on the Leases under any Environmental Law, including
those related to allegations of economic loss, personal injury, illness, or damage to real or personal property or the environment;
and

 

    	Asset Purchase Agreement between 
 Maxwell Resources, Inc. and David Gilkeson	 
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	Proprietary and Confidential 

Intended for Addressee Only

     

    

 

(d)
All material reports, studies, written notices from Governmental Entities, tests, analyses, and other documents addressing environmental
issues related to the Lease properties or the operations conducted thereon, which are in Seller’s possession, have been
made available to Buyers.

 

3.10
Compliance with Laws. Except as provided in Schedule 3.10, and except with respect to Environmental Laws, which
are addressed exclusively in Section 3.9, Seller has been in compliance in all material respects with, and has developed, operated
and maintained the Purchased Assets and the Equipment operated by it in compliance in all material respects with, all applicable
Laws. To Seller’s Knowledge, the Purchased Assets not operated by Seller have been developed, operated and maintained in
compliance with all applicable Laws.

 

3.11
No Litigation. Except as provided in Schedule 3.11, no Action is in progress and no Order is pending or in effect,
or, to the Knowledge of Seller, is threatened against or relating to Seller (which could reasonably be expected to impair Seller’s
ability to perform its obligations under this Agreement) or relating to any of the Purchased Assets, or relating to the Transactions.

 

3.12
Brokers’ Fees. Except as provided in Schedule 3.12, Seller has no liability or obligation to pay any fees
or commissions to any broker, finder or agent with respect to the Transactions. Buyer shall not directly or indirectly have any
responsibility, liability or expense, as a result of undertakings or agreements of Seller or its Affiliates, for brokerage fees,
finder’s fees, agent’s commissions or other similar forms of compensation in connection with this Agreement or the
Transactions.

 

3.13
Books and Records. The Records are complete and correct in all material respects and have been maintained in accordance
with sound business practices.

 

3.14
Bankruptcy. There are no bankruptcy, reorganization, or receivership proceedings pending against, or, to Seller’s
Knowledge, being contemplated by or threatened against Seller.

 

3.15
AFEs and Other Commitments. Except as provided in Schedule 3.15, as of the Effective Time and as of the date of
this Agreement, there were and are no authorizations for expenditures (“AFEs”), capital expenditures related
to the drilling or reworking of wells, or other commitments for capital expenditures outstanding with respect to the Purchased
Assets in excess of $150,000 individually (net to Seller’s interest).

 

3.16 Well
Status; Plugging and Abandonment. Since the Effective Time, Seller has not abandoned, and is not in the process
of abandoning, any wells associated with the Leases (nor has it removed, nor is it in the process of removing, any material
items of personal property, except those replaced by items of substantially equivalent suitability and value). Except as
provided in Schedule 3.16, there are no wells associated with the Leases:

 

(a)
with respect to which Seller has received an Order requiring that such well be plugged and abandoned that has not been plugged
and abandoned;

 

(b)
that formerly produced in connection with Seller’s operations but that are currently shut in or temporarily abandoned or,
to Seller’s Knowledge, that formerly produced in connection with operations by Third Persons but that are currently shut
in or temporarily abandoned; or

 

(c)
that have been plugged and abandoned by Seller or, to Seller’s Knowledge, by Third Persons but have not been plugged in
accordance with all applicable requirements of each Governmental Entity having jurisdiction over the well.

 

3.17
Current Bonds. Schedule 3.17 contains a list of all surety bonds, letters of credit and other similar instruments
maintained by Seller or any of its Affiliates with respect to the Purchased Assets.

 

3.18
Non-Consent Operations. Except as provided in Schedule 3.18, no operations are being conducted or have been conducted
with respect to the Purchased Assets as to which Seller has elected to be a non-consenting party under the terms of the applicable
operating agreement and with respect to which Seller has not yet recovered its full participation.

 

3.19
Consents. Except for: (a) consents or approvals of or filings with the United States Department of Interior, or applicable
Governmental Entities in connection with assignments of the Purchased Assets operated by Seller that are customarily obtained
post- closing in a purchase and sale transaction of this nature; (b) Preference Rights and Transfer Requirements set forth on
Schedule 3.19; and (c) consents, approvals, authorizations, permits, filings or notices referenced in Schedule 3.19,
no consent, approval, authorization or permit of, or filing with or notification to, any Person is required for or in connection
with the execution and delivery of this Agreement by Seller or for or in connection with consummation of the Transactions and
performance of the terms and conditions contemplated in this Agreement by Seller. Except as provided in Schedule 3.19,
there are no preferential purchase rights, rights of purchase, rights of first refusal, rights of first offer or similar rights
affecting any of the Purchased Assets.

 

    	Asset Purchase Agreement between 
 Maxwell Resources, Inc. and David Gilkeson	 
 8
	Proprietary and Confidential 

Intended for Addressee Only

     

    

 

3.20
Permits. Except as set forth on Schedule 3.20, Seller possesses all material permits, licenses, orders, approvals,
variances, waivers, franchises, rights, and other authorizations, required to be obtained from any Governmental Entity for conducting
its business with respect to the Purchased Assets as presently conducted and there are no material uncured violations of the terms
and provisions of such authorizations. To Seller’s Knowledge, any Third Persons which operate any of the Purchased Assets
possess all material permits, licenses, orders, approvals, variances, waivers, franchises rights, and other authorizations, required
to be obtained from any Governmental Entity for conducting their business with respect to the Purchased Assets and there are no
material uncured violations of the terms and provisions of such authorizations. With respect to each such permit, Seller has not
received written notice from any Governmental Entity of any violations of such permits that remain uncured.

 

3.21
Payout Balances; Imbalances.

 

(a)
Schedule 3.21(a) contains Seller’s good faith determination of the status of any “payout” balance, as
of the dates shown on Schedule 3.21(a), for each Well that is subject to a reversion or other adjustment at some level
of cost recovery or payout.

 

(b)
Schedule 3.21(b) contains Seller’s good faith determination of all Imbalances attributable to the Purchased Assets
as of the date(s) provided in that schedule.

 

3.22
Tax Matters. Except as provided in Schedule 3.22:

 

(a)
all Tax Returns relating to or in connection with the Purchased Assets required to be filed have been timely filed and all such
Tax Returns are correct and complete in all material respects;

 

(b)
all Taxes relating to or in connection with the Purchased Assets that are or have become due have been timely paid in full and
Seller is not delinquent in the payment of any such Taxes (including all Property Taxes and Hydrocarbon Taxes);

 

(c)
no extension or waiver of any statute of limitations of any jurisdiction regarding the assessment or collection of any Tax (other
than Income Taxes) of Seller relating to or in connection with the Purchased Assets is in effect;

 

(d)
there are no administrative or judicial proceedings pending against the Purchased Assets or against Seller relating to or in connection
with the Purchased Assets by any Taxing Authority with respect to Taxes (other than Income Taxes);

 

(e)
there are no Liens on any of the Purchased Assets that arose in connection with the failure (or alleged failure) to pay any Tax,
other than current period Property Taxes not yet delinquent; and

 

(f)
Seller is not a foreign person within the meaning of Section 1445(f) of the Code.

 

3.23
Tax Partnership. Except as provided in Schedule 3.23, none of the Purchased Assets is held by or is subject to any
contractual arrangement between Sellers and any other Persons, whether owning undivided interests therein or otherwise, that is
treated as or constitutes a partnership for United States federal Tax purposes (a “Tax Partnership”). Any Tax
Partnership in which Buyer is purchasing a partnership interest either has in effect an election under Section 754 of the Code
or will make such an election for the taxable period that includes the Closing Date.

 

3.24
Royalties and Suspense. Except as provided in Schedule 3.24, to Seller’s Knowledge, all Royalties, payments
due working interest owners and other payments due from or in respect of production of Hydrocarbons from the Purchased Assets
have been timely and properly paid or suspended for proper cause. The amount of suspense (if any) for each Purchased Asset is
listed in Schedule 3.24 and Seller has or will give Buyer access to its detailed suspense ledgers and files supporting
each suspended interest.

 

3.25
No Casualty Loss. From the Effective Time to the Closing, no Wells or Equipment with an aggregate Allocated Value in excess
of $50,000 have been destroyed or otherwise impaired by Casualty nor has Seller received written notice that any Leases are subject
to condemnation or eminent domain proceedings.

 

ARTICLE
IV

REPRESENTATIONS
AND WARRANTIES OF BUYER

 

Buyer
represents and warrants to Seller that:

 

4.1
Organization and Qualification. Buyer is a corporation duly organized, validly existing and in good standing under the
laws of Nevada, with full corporate power and authority to acquire and own the Subject Interests and to conduct business in the
states in which the Subject Interests are located.

 

4.2
Authority; Binding Effect.

 

(a)
The execution and delivery of this Agreement by Buyer and consummation of the Transactions by it have been duly and validly authorized
by all necessary company action on the part of Buyer.

 

    	Asset Purchase Agreement between 
 Maxwell Resources, Inc. and David Gilkeson	 
 9
	Proprietary and Confidential 

Intended for Addressee Only

     

    

 

(b)
This Agreement and each agreement, instrument or document being or to be executed and delivered by Buyer in connection with the
Transactions (“Buyer Related Documents”), upon due execution and delivery by it, will constitute, assuming
the due execution and delivery by the counterparties to the Buyer Related Documents, the legal, valid, and binding obligation
of Buyer, enforceable in accordance with its respective terms (except as enforcement may be limited by bankruptcy, insolvency,
reorganization, moratorium or similar Laws relating to or limiting creditors’ rights generally or by application of equitable
principles regardless of whether such enforceability is considered in a proceeding at Law or in equity).

 

4.3
Governmental Entities. Buyer is not required to submit any material notice, report or other filing with any Governmental
Entity in connection with its execution or delivery of this Agreement or any of the Buyer Related Documents or consummation of
the Transactions and no consent, approval or authorization of any Governmental Entity is required to be obtained by Buyer in connection
with the execution, delivery and performance of this Agreement by it.

 

4.4
No Conflicts. The execution, delivery and performance of this Agreement and any of the Buyer Related Documents by Buyer,
and consummation of the Transactions, do not and will not:

 

(a)
Conflict with or result in any breach of the provisions of, or constitute a default or require the consent of any Person under
the organizational documents of Buyer;

 

(b)(i)
to Buyer’s knowledge, violate any restriction to which Buyer is subject or, with or without the giving of notice, the passage
of time, or both (ii) (or give rise to any right of termination, cancellation or acceleration under) any mortgage, deed of trust,
license, lease, indenture, contract or other material agreement or instrument, whether oral or written, to which Buyer is a party,
or by which it or any of the assets of Buyer is bound (which will not be satisfied, assigned or terminated on or prior to Closing
as a result of the Transactions), (iii) result in termination of any such instrument or termination of any provisions in such
instruments, or (iv) result in the creation or imposition of any Lien upon the properties or assets of Buyer; or

 

(c)
Constitute a violation of any applicable Law in any material respect.

 

4.5
No Litigation. There is no Action in progress or Order, pending or in effect, or, to the Knowledge of Buyer, threatened
against or relating to Buyer which is reasonably likely to impair its ability to perform its obligations under this Agreement
or against or relating to the Transactions.

 

4.6
Brokers’ Fees. Buyer has no liability or obligation to pay any fees or commissions to any broker, finder or agent
with respect to the Transactions. Seller shall not directly or indirectly have any responsibility, liability or expense, as a
result of undertakings or agreements of Buyer or its Affiliates, for brokerage fees, finder’s fees, agent’s commissions
or other similar forms of compensation in connection with this Agreement or the Transactions.

 

4.7
Securities Laws. If applicable, Seller is familiar with the Company and it is a knowledgeable, experienced and sophisticated
investor in the oil and gas business. Seller understands and accepts the risks and absence of liquidity inherent in ownership
of the Securities. Seller acknowledges that the Securities are deemed to be “securities” under the Securities Act
of 1933, as amended, and certain applicable state securities or Blue Sky laws and that resales thereof may therefore be subject
to the registration requirements of such acts. The Securities are being acquired solely for Buyer’s own account for the
purpose of investment and not with a view to resale, distribution or granting a participation therein in violation of any securities
laws. Seller acknowledges that it can bear the economic risk of its investment in the Securities and has such knowledge and experience
in financial and business matters that it is capable of evaluating the merits and risks of an investment in the Consideration.

 

4.8
Restricted Securities; Restriction on Transfers.

 

(a)
Seller understands that the Securities will not have been registered pursuant to the Securities Act of 1933, as amended or any
applicable state securities laws, that the Securities will be characterized as “restricted securities” under federal
securities laws, and that under such laws and applicable regulations the Securities cannot be sold or otherwise disposed of without
registration under the Securities Act or an exemption therefrom.

 

(b)
Buyer acknowledges that Seller intends to transfer the Warrants to its Members. Thereafter the Warrants may not be sold, assigned,
transferred, disposed of directly or indirectly for a period of one ( 1) year without the prior written consent of the Company.
In consenting to any such transfer, the Company may require such additional documents as it deems necessary.

 

4.9
Records and Independent Evaluation.

 

(a)
Records. Buyer is experienced and knowledgeable in the oil and gas business and is aware of its risks. Buyer acknowledges
that Seller is making available to it the Records and the opportunity to examine, to the extent it deems necessary in its sole
discretion, all real property, personal property and equipment associated with the Purchased Assets. Except for the representations
of Seller contained in this Agreement, Buyer acknowledges and agrees that Seller has not made any representations or warranties,
express or implied, written or oral, as to the accuracy or completeness of the Records or any other information relating to the
Assets furnished or to be furnished to Buyer or its representatives by or on behalf of Seller, including without limitation any
estimate with respect to the value of the Purchased Assets, estimates or any projections as to reserves and/or events that could
or could not occur, future operating expenses, future workover expenses and future cash flow.

 

    	Asset Purchase Agreement between 
 Maxwell Resources, Inc. and David Gilkeson	 
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	Proprietary and Confidential 

Intended for Addressee Only

     

    

 

(b)
Independent Evaluation. In entering into this Agreement, Buyer acknowledges and affirms that it has relied and will rely
solely on the terms of this Agreement and upon its independent analysis, evaluation and investigation of, and judgment with respect
to, the business, economic, legal, tax or other consequences of this Transaction including its own estimate and appraisal of the
extent and value of the petroleum, natural gas and other reserves of the Purchased Assets, the value of the Purchased Assets and
future operation, maintenance and development costs associated with the Purchased Assets. Buyer is aware of the geologic factors
and risks associated with operating oil and gas wells in the area of the Purchased Assets. Accordingly, Buyer assumes the risk
of the downhole condition of the Wells. Except as expressly provided in this Agreement, Seller shall not have any liability to
Buyer or its affiliates, agents, representatives or employees resulting from any use, authorized or unauthorized, of the Records
or other information relating to the Purchased Assets provided by or on behalf of Seller.

 

ARTICLE
V

COVENANTS

 

5.1
Post-Closing Covenants. Each of the Parties shall use its Reasonable Best Efforts to take all actions and to do all things
necessary, proper or advisable to complete and implement the Transactions, including:

 

(a)
Each Party shall use its Reasonable Best Efforts to obtain, at its expense, all waivers, permits, consents, approvals or other
authorizations from Governmental Entities and to effect all registrations, filings and notices with or to Governmental Entities,
as may be required for such Party to consummate the Transactions and to otherwise comply with all applicable Laws in connection
with consummation of the Transactions (including those provided in Schedule 5.1, the “Governmental Approvals”).

 

(b)
Seller shall use its Reasonable Best Efforts to obtain, at its expense, all such waivers, consents or approvals from Third Persons,
including as may be necessary to transfer the Assigned Contracts and the Leases to Buyer, and to give all such notices to Third
Persons, as are required to be listed on the schedules or as may be required for Seller to consummate the Transactions and to
otherwise comply with all applicable Laws in connection with consummation of the Transactions, including any waivers, consents
or approvals from Third Persons arising or delivered after Closing.

 

(c)
Seller shall cooperate with Buyer in the notification of all applicable Governmental Entities of the Transactions and in obtaining
all Governmental Approvals that may be necessary for Buyer to own and operate the Purchased Assets following consummation of the
Transactions.

 

(d)
On or before September 31, 2015, Sellers shall perform the Post-Closing Agreement set forth in Exhibit L.

 

5.2
Expenses. Except as otherwise provided in this Agreement, each of the Parties shall bear its own costs and expenses (including
legal and accounting fees and expenses) incurred in connection with this Agreement and the Transactions; provided, however,
all Transfer Taxes shall be paid by Buyer. Seller and Buyer shall cooperate with each other in demonstrating that the requirements
for exemption, if any, from such Transfer Taxes have been met.

 

(a)
With respect to any Purchased Assets for which Buyer delivers a notice of Environmental Defect prior to or on the Objection Date,
the Parties shall have the following rights and remedies:

 

(i)
Seller shall have the right, but not the obligation, to cure the Environmental Defect by obtaining a “no further action”
letter or its equivalent from the relevant Governmental Entity, or if the Parties agree that no such letter or approval is likely
to be forthcoming because the provision for such “no further action” letter or its equivalent is not provided for
under applicable Environmental Laws, a certificate from a licensed professional engineer reasonably acceptable to Buyer that a
cure of the Environmental Defect has been accomplished to the extent necessary to comply with existing Laws, so long as such cure
is accomplished in accordance with this Section 5.3(c)(i) on or before 120 days following the Closing (the “Environmental
Cure Period”). After an Environmental Defect has been cured and Sellers’ Representative provides Buyer with evidence
in accordance with this Section 5.3(c)(i) that such Environmental Defect has been cured, Seller shall be released from all further
liability or obligation to Buyer with respect to such affected Purchased Asset.

 

(ii)
Seller may notify Buyer in writing that it has elected to indemnify Buyer from all liabilities and obligations arising out of
the Environmental Defect, but only if Buyer agrees that the indemnity, in such circumstance, is an appropriate remedy, and if
the Parties can mutually agree on the form of the indemnity. If Seller later cures the Environmental Defect in accordance with
Section 5.3(c)(i), the indemnity and all further liability or obligation to Buyer with respect to the affected Purchased Asset
shall terminate.

 

    	Asset Purchase Agreement between 
 Maxwell Resources, Inc. and David Gilkeson	 
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	Proprietary and Confidential 

Intended for Addressee Only

     

    

 

(b)
If an Environmental Defect has not been resolved under Section 5.3(c)(i) or (ii) above by the end of the Environmental Cure Period,
a Party may refer the matter to arbitration (pursuant to the procedures provided in Section 8.3(d)) for determination of the existence
of and/or the value of such Environmental Defect at the time of the arbitration (the “Environmental Defect Value”);
provided, that such arbitrator shall be an environmental attorney with at least ten years experience in oil and gas environmental
issues, shall not have worked as an employee or outside counsel for any Party or its Affiliates during the five year period preceding
the arbitration or have any financial interest in the dispute, and shall be selected by mutual agreement of Buyer and Seller within
15 days after the end of the applicable Environmental Cure Period. Absent such agreement, the procedures provided in Section 8.3(d)
shall control. The determination of the arbitrator shall be binding on the Parties. Within ten days following the date of the
arbitrator’s decision, Sellers shall pay any Environmental Defect Value determined by the arbitrator with respect to such
affected Purchased Asset and shall be released from any liability for the applicable Environmental Defect; provided, however,
that notwithstanding anything to the contrary in this Agreement, there shall be no cure, remedy, deletion or adjustment to the
Purchase Price whatsoever in respect of any Environmental Defects unless the aggregate value of all Environmental Defects equals
or exceeds $1,000 (the “Environmental Defect Deductible”). The amount of the reduction in Purchase Price shall
be the aggregate amount of Environmental Defect Values that exceed the Environmental Defect Deductible. Contemporaneously with
any such payment or the arbitrator’s decision that no Environmental Defect exists, Seller shall be released from all further
liability or obligation to Buyer with respect to the affected Purchased Asset.

 

5.3
Access to Puchased Assets and Records. Buyer shall preserve until the fifth anniversary of the Closing Date all records
delivered by Seller to Buyer relating to any of the Purchased Assets prior to the Closing Date. After the Closing Date, Buyer
shall provide Seller with access, upon prior reasonable written request specifying the need therefor, during regular business
hours, to: (i) the officers and employees of Buyer; and (ii) the books of account and records of Buyer, but, in each case, only
to the extent relating to the Purchased Assets prior to the Closing Date, and Sellers and their representatives shall have the
right to make copies of such books and records; provided, however, that the preceding right of access shall not
be exercisable in such a manner as to interfere unreasonably with the normal operations and business of Buyer.

 

5.4
Further Assurances. After Closing, upon the terms and subject to the conditions of this Agreement, the Parties shall execute
such documents and other instruments and take such further actions as may be reasonably required to carry out the provisions of
this Agreement and consummate the Transactions.

 

5.5
Delivery of Books and Records to Buyer. Sellers’ Representative shall, within five days after Closing, deliver the
Records to Buyer.

 

5.6
Tax Matters.

 

(a)
Tax Refunds. The amount of any refunds of Hydrocarbon Taxes or Property Taxes attributable under the principles of Section
1.7 to periods before the Effective Time shall be for the account of Seller. The amount of any refunds of Hydrocarbon Taxes or
Property Taxes attributable under the principles of Section 1.7 to periods after the Effective Time shall be for the account of
Buyer. Each Party shall forward to the Party entitled to receive a refund of Tax under this Section 5.6 the amount of such refund
within ten days after such refund is received.

 

(b)
Tax Liabilities. If any Tax liability associated with the Purchased Assets should arise related to a time period before
the Effective Time, then such Tax liability shall be for the account of Sellers. Tax liabilities that arise on or after the Effective
Time shall be for the account of Buyer.

 

(c)
Cooperation. Buyer and Seller shall cooperate fully as and to the extent reasonably requested by the other Party, in connection
with the filing of any Tax Returns and any audit, litigation or other proceeding (each, a “Tax Proceeding”)
with respect to Taxes relating to or in connection with the Purchased Assets. Such cooperation shall include the retention and
(upon the other Party’s request) the provision of such records and information which are reasonably relevant to any such
Tax Return or Tax Proceeding and making employees available on a mutually convenient basis to provide additional information and
explanation of any material provided hereunder. The requesting Party shall reimburse the other Party for its costs incurred in
cooperating with the requesting Party.

 

(d)
Section 1031 Exchange. Each Party agrees to cooperate with the other Party to accommodate such other Party in effectuating
a like kind exchange (an “Exchange”) under Section 1031 of the Code in connection with the purchase and sale
of the Purchased Assets, provided that: (i) Closing shall not be delayed or affected by reason of the Exchange nor shall consummation
or accomplishment of an Exchange be a condition precedent or condition subsequent to the exchanging Party’s obligations
under this Agreement and the exchanging Party’s failure or inability to consummate an exchange for any reason or for no
reason at all shall not be deemed to excuse or release the exchanging Party from its obligations under this Agreement; (i) the
exchanging Party shall effect its Exchange through an assignment of this Agreement, or its rights under this Agreement, to a qualified
intermediary, but such assignment shall not release the exchanging Party from any of its Liabilities to the non- exchanging Party
under this Agreement or expand any Liabilities of the non-exchanging Party under this Agreement; (iii) no Party shall be required
to take an assignment of the purchase agreement for the relinquished or replacement property or be required to acquire or hold
title to any real property for purposes of consummating an Exchange desired by the other Party; and (iv) the exchanging Party
shall pay any additional costs that would not otherwise have been incurred by the non-exchanging Party had the exchanging Party
not consummated the transaction through an Exchange and the exchanging Party shall indemnify the non-exchanging Party against
any such additional costs or liabilities. No Party shall by this Agreement or acquiescence to an Exchange desired by the other
Party have its rights under this Agreement affected or diminished in any manner or be responsible for compliance with or be deemed
to have warranted to the exchanging Party that its Exchange in fact complies with Section 1031 of the Code.

 

    	Asset Purchase Agreement between 
 Maxwell Resources, Inc. and David Gilkeson	 
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	Proprietary and Confidential 

Intended for Addressee Only

     

    

 

5.7
Covenants and Agreements of Buyer. Buyer covenants and agrees with Seller that at Closing or as soon as practical thereafter,
but no later than 30 days after the Closing, Buyer or its designee shall provide replacement instruments for each bond or similar
contingent obligation given by Seller securing its, or its contract operator’s, obligations relating to the Purchased Assets,
set forth on Exhibit D (collectively, the “Instruments”). As soon as practical after Closing, but no
later than 30 days after the Closing, Buyer and Seller shall use their commercially reasonable efforts to obtain the release of
the Purchased Assets and/or Seller from the Instruments and Buyer shall indemnify and hold Seller harmless for claims related
to or arising out of any failure by Buyer to obtain such releases.

 

ARTICLE
VI

TITLE MATTERS

 

6.1
Title Information. Seller shall make all information in Seller’s or its agents’ possession regarding title
to the Purchased Assets available to Buyer in Sellers’ Representative’s offices at reasonable times during Seller’s
normal business hours.

 

6.2
Defensible Title. “Defensible Title” means the title of Seller in and to each Lease, Well or Well Location,
subject to and except for the Permitted Encumbrances:

 

(a)
entitles Seller to receive throughout the duration of the productive life of any Lease, Well or Well Location (after satisfaction
of all royalties, overriding royalties, nonparticipating royalties, net profits interest or similar burdens on or measured by
production of Hydrocarbons) not less than the Net Revenue Interests for the Hydrocarbons and proceeds of such Hydrocarbons produced,
saved and marketed in respect of each Lease, Well or Well Location as provided in Exhibit A, B or Schedule 10,
as applicable, and, if the Net Revenue Interest for any Well or undeveloped location is listed as both “BPO” and “APO,”
not less than the BPO Net Revenue Interest prior to the applicable payout event, and not less than the APO Net Revenue Interest
after the applicable payout event;

 

(b)
obligates Seller to bear costs and expenses relating to the ownership, maintenance, repair, development, operation and production
of Hydrocarbons in respect of each Lease, Well or Well Location, in an amount not greater than the Working Interest in respect
of each Lease as provided in Exhibit A, B or Schedule 10, as applicable, except to the extent modified by
integration or non-consent adjustments in the ordinary course of business after the date of and in accordance with this Agreement
or to the extent there is a corresponding proportionate increase in Seller’s Net Revenue Interests;

 

(c)
with respect to each Lease, entitles Seller to the Net Mineral Acres provided in Exhibit A or Schedule 10, as applicable,
with respect to such Lease; and

 

(d)
is free and clear of Liens and defects.

 

6.3
Permitted Encumbrances. “Permitted Encumbrances” shall include the following (but only to the extent
they exist and constitute a burden on the Purchased Assets as of the Effective Time):

 

(a)
any royalties, overriding royalties, net profits interests, production payments, reversionary interests and similar burdens on
production if the individual or net cumulative effect of such burdens does not: (i) reduce the Net Revenue Interests in respect
of a Lease, a Well or a Well Location from the Net Revenue Interest specified on Exhibit A, B or Schedule 10,
as applicable; (ii) increase Seller’s working interest above that shown in Exhibit A, B or Schedule 10,
as applicable, without a corresponding increase in the applicable Net Revenue Interest; (iii) increase the royalty, overriding
royalty and other burdens on production for any Lease to an amount greater than that provided in Exhibit A or Schedule
10, as applicable, for such Lease; or (iv) reduce the Net Mineral Acres for any Lease to an amount less than the Net Mineral
Acres provided in Exhibit A or Schedule 10, as applicable, for such Lease;

 

(b)
Liens for Taxes not yet due and payable or, if delinquent, that are being contested in good faith and credit is provided to the
appropriate Party pursuant to Section 5.6(b) in the Final Adjustment Statement;

 

(c)
rights to consent by, notices to, filings with or actions by federal, state, local or tribal authorities in connection with the
conveyance of the Purchased Assets if customarily obtained after a conveyance is made;

 

(d)
obligations to reassign upon final intention to abandon or release the Purchased Assets, or any of them;

 

(e)
easements, rights of way, servitudes, permits, surface leases and other rights with respect to the surface or any restrictions
on access to the surface or subsurface that are of a nature customarily accepted by a prudent owner or operator of oil and gas
properties and that do not materially interfere with the ownership, use, maintenance or operation of the Purchased Assets as currently
owned or operated;

 

    	Asset Purchase Agreement between 
 Maxwell Resources, Inc. and David Gilkeson	 
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	Proprietary and Confidential 

Intended for Addressee Only

     

    

  

(f)
any encumbrance, title defect or other matter (whether or not constituting a Title Defect) waived in writing by Buyer or not raised
by Buyer on or prior to the Objection Date (other than matters covered by Seller’s special warranty of title contained in
the Assignment, Bill of Sale and Conveyance);

 

(g)
division orders, transfer orders, letters in lieu of transfer orders and pooling or unitization orders, declarations or agreements
applicable to the Purchased Assets if the individual or net cumulative effect of such does not: (i) reduce the Net Revenue Interest
from those specified on Exhibit A, B or Schedule 10, as applicable; (ii) increase Seller’s working
interest above that shown in Exhibit A, B or Schedule 10, as applicable, without a corresponding increase
in the applicable Net Revenue Interest; (iii) increase the royalty, overriding royalty and other burdens on production for any
Lease to an amount greater than that provided in Exhibit A or Schedule 10, as applicable, for such Lease; or (iv)
reduce the Net Mineral Acres for any Lease to an amount less than the Net Mineral Acres provided in Exhibit A or Schedule
10, as applicable, for such Lease;

 

(h)
materialmen’s, mechanics’, repairmen’s, contractors’, or other similar Liens or charges if the amount
owed is not yet due and payable or, if delinquent, that are being contested in good faith;

 

(i)
rights reserved to or vested in any Governmental Entity to control or regulate any of the Purchased Assets in any manner and all
applicable Laws of general applicability in the area;

 

(j)
Liens arising under operating agreements, unitization and pooling agreements and production sales contracts securing amounts not
yet due and payable or, if delinquent, that are being contested in good faith;

 

(k)
calls on or preferential rights to purchase production held by Third Persons to purchase production for a price at or above market
price, as disclosed on Schedule 6.3(k);

 

(l)
the terms and conditions of all Material Contracts to the extent such do not decrease the Net Revenue Interest for the affected
Purchased Asset or increase the Working Interest for such Purchased Asset without a corresponding proportionate increase in the
Net Revenue Interest for such Purchased Asset; and

 

(m)
all liens, charges, encumbrances, Material Contracts, obligations, defects, irregularities and other matters affecting any Purchased
Asset which individually or in the aggregate are not such as to interfere materially with the operation, value of use of such
Purchased Asset and do not decrease the Net Revenue Interest for the affected Purchased Asset or increase the Working Interest
for such Purchased Asset without a corresponding proportionate increase in the Net Revenue Interest for such Purchased Asset.

 

6.4
Title Defect. “Title Defect” means any encumbrance, defect in or objection to real property title, excluding
Permitted Encumbrances, which renders Seller’s title less than Defensible Title; provided that each Title Defect
must be equal to or greater than $25,000 in value net to Sellers’ interest; provided that (i) if such Title Defect
arises from the failure to satisfy any Transfer Requirements, then such threshold shall not apply and (ii) if the same Title Defect
affects multiple Wells or Leases, then the amount of the Title Defect for each affected Well or Lease shall be aggregated for
the purposes of determining whether such threshold has been satisfied. Notwithstanding the preceding, the following shall not
(in and of themselves) constitute Title Defects:

 

(a)
defects in the chain of title consisting of the failure to recite marital status or omissions of successors or heirship proceedings,
unless Buyer provides affirmative evidence that such failure or omission could reasonably be expected to result in a Third Person’s
actual and superior claim of title to the Purchased Asset;

 

(b)
defects asserting a change in Net Revenue Interests or Working Interests based on an after-payout decrease in Net Revenue Interests
or increase in Working Interests under a farm-in, farm-out or other agreement that is listed on Schedule 6.4(b),
if the effect of such change is reflected in the Net Revenue Interests and Working Interests provided in Exhibit A, B
or Schedule 10, as applicable; expected to result in a Third Person’s actual and superior claim of title to the
Purchased Asset;

 

(c)
irregularities arising out of the lack of recorded powers of attorney from corporations or lack of evidence of corporate authority
to execute and deliver documents on their behalf or variation in corporate or entity name;

 

(d)
defects based solely on a lack of information in Sellers’ files;

 

(e)
defects in the chain of title more than fifty (50) years in the past, unless Buyers provide reasonable written evidence that such
failure or omission has resulted in another party claiming title to the relevant lease or asset;

 

(f)
the Minimum Royalty Litigation set forth on Schedule 3.11;

 

(g)
any provisions contained in the Leases, to the extent the provision does not reduce the Working Interest or Net Revenue Interest
represented by Sellers;

 

(h)
defects in acknowledgements;

 

(i)
defects or irregularities arising out of prior unreleased oil and gas leases whose primary terms expired more than ten (10)
years prior to the Closing, absent any proof of oil or gas production extending beyond the primary term;

 

(j)
defects or irregularities arising out of the lack of a survey; and

 

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	Proprietary and Confidential 

Intended for Addressee Only

     

    

 

(k)
outstanding deed of trust and mortgage liens burdening the interests of any lessor under any of the Leases, unless there is evidence
that the mortgagee or lien holder has asserted a default under any such deed of trust or mortgage and has exercised, or intends
to exercise, foreclosure proceedings.

 

6.5
Title Defect Value. “Title Defect Value” means the value of the Title Defect determined in accordance
with the following:

 

(a)
if Buyer and Seller agree in writing on the Title Defect Value, that amount shall be the Title Defect Value;

 

(b)
if the Title Defect is a discrepancy between the Net Revenue Interests in respect of the Lease and the Net Revenue Interests for
such Lease listed on Exhibit A or Schedule 10, as applicable, the Title Defect Value shall be equal to the Allocated
Value of the Lease multiplied by a fraction the numerator of which is the positive difference between the actual Net Revenue Interest
of Seller in the Lease and the Net Revenue Interest provided for such Lease on Exhibit A or Schedule 10, as applicable,
and the denominator of which is the Net Revenue Interest provided for such Lease on Exhibit A or Schedule 10, as
applicable;

 

(c)
if the Title Defect is a Lien other than a Permitted Encumbrance, the cost of removing the Lien;

 

(d)
if the Title Defect is the increase in the Working Interests in respect of the Lease to the extent such increase is not accompanied
by a corresponding increase in the Net Revenue Interests, the Title Defect Value shall be determined by Buyer in good faith in
its reasonable discretion; and

 

(e)
if the Title Defect is a discrepancy between the actual Net Mineral Acres for any Lease and the Net Mineral Acres for such Lease
stated in Exhibit A or Schedule 10, as applicable, then the Title Defect Value shall be the product obtained by
multiplying the Allocated Value of the Lease by a fraction the numerator of which shall be the positive difference, if any, between
the Net Mineral Acres for such Lease stated on Exhibit A or Schedule 10, as applicable, and the actual Net Mineral
Acres for such Lease and the denominator of which shall be the Net Mineral Acres for such Lease stated on Exhibit A or
Schedule 10, as applicable. Only that portion of the Lease that is adversely affected by a Title Defect shall be considered
for purposes of determining the Title Defect Value. For the avoidance of doubt, if a Title Defect affects a Well and/or Well Location
and an underlying Lease or Leases, the Title Defect Value shall be determined by adding the effect of the Title Defect on the
Well or Well Location to the effect of the Title Defect on the underlying Lease or Leases, and this shall not be deemed to be
duplication of values. The Allocated Values of the Wells and Well Locations have been determined on the basis that a separate
valuation is provided for the underlying Net Mineral Acres of Leases.

 

6.6
Title Defect Notice. Buyer shall give Seller notice of any Title Defects (“Title Defect Notice”) no
later than the Objection Date. If Buyer becomes aware of any Title Defect prior to the Objection Date, Buyer may, but are not
required to, provide a Title Defect Notice with respect to such Title Defect prior to the Objection Date, and Buyer may provide
one or more Title Defect Notices on or prior to the Objection Date. Each Title Defect Notice must be in writing and include all
of the following:

 

(a)
a description of the Title Defect in reasonable detail;

 

(b)
supporting documentation in Buyer’s possession, if any, reasonably necessary to support Buyer’s belief that the Title
Defect has not been released or cured and is still enforceable;

 

(c)
the identity and the Allocated Value, if any, of the Lease, Well and/or Well Location, as applicable, containing the Title Defect;
and

 

(d)
the amount by which Buyer reasonably believe the Allocated Value of such Purchased Assets is reduced by the alleged Title Defects.

 

6.7
Accepted Title Liabilities. Any Title Defect Notice that is not properly given pursuant to Section 6.6, shall not be a
valid Title Defect Notice, and any Title Defects not included in a valid Title Defect Notice delivered on or prior to the Objection
Date shall be deemed to be “Accepted Title Liabilities” and shall be deemed to have been waived by Buyer.

 

6.8
Seller’s Cure Right; Adjustments to Purchase Price.

 

(a)
If Buyer gives a Title Defect Notice, Seller shall have the right, but not the obligation, to attempt, at Seller’s sole
cost, to cure within 90 days after the Objection Date or the date of resolution of a disputed Title Defect under Section 6.9 (the
“Title Cure Period”), to Buyer’s reasonable satisfaction, any alleged Title Defects for which
a Title Defect Notice has been delivered under Section 6.6 on or prior to the Objection Date.

 

(b)
With respect to each Purchased Asset affected by Title Defects for which a Title Defect Notice has been delivered by Buyer under
Section 6.6 on or prior to the Objection Date and not cured during the Title Cure Period to Buyer’s reasonable satisfaction,
subject to Section 6.9 and 6.10, the Purchase Price shall be reduced by an amount equal to the Title Defect Value for such Purchased
Asset.

 

    	Asset Purchase Agreement between 
 Maxwell Resources, Inc. and David Gilkeson	 
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	Proprietary and Confidential 

Intended for Addressee Only

     

    

 

(c)
Section 6.9 shall, to the fullest extent permitted by applicable Laws, be the exclusive right and remedy of Buyer with respect
to any Title Defect, except in connection with Buyer’s remedies for any breach of Seller’s covenants under Section
8.1(b).

 

6.9
Disputes Relating to Title Defect Value. Seller (acting through Sellers’ Representative) and Buyer shall attempt
to agree on the effect of any efforts of Seller to cure any Title Defects and all Title Defect Values on or before 120 days after
the Objection Date. Any Title Defects and Title Defect Values in dispute and not resolved by such date shall be submitted to a
title attorney with at least three years’ experience in oil and gas titles in Texas as selected by mutual agreement of Buyer
and Seller (acting through Sellers’ Representative), or absent such agreement within a ten-day period following the date
that is 120 days after the Objection Date, by the Dallas, Texas office of the AAA (the “Title Arbitrator”).
The Title Arbitrator shall not have worked as an employee or outside counsel for any Party or it’s Affiliates during the
five (5) year period preceding the arbitration or have any financial interest in the dispute. The arbitration proceeding shall
be held in Dallas, Texas and shall be conducted in accordance with the Commercial Rules, to the extent such rules do not conflict
with the terms of this Section. The Title Arbitrator’s determination shall be made within 30 days after submission of the
matters in dispute and shall be final and binding on all Parties, without right of appeal. In making his or her determination,
the Title Arbitrator shall be bound by the rules provided in Section 6.5 and may consider such other matters as in the opinion
of the Title Arbitrator are necessary or helpful to make a proper determination. Additionally, the Title Arbitrator may consult
with and engage disinterested Third Persons to advise the Title Arbitrator, including title attorneys from other states and petroleum
engineers. The Title Arbitrator shall act as an expert for the limited purpose of determining the specific disputed Title Defects
and Title Defect Values submitted by any Party and may not award damages, interest or penalties to any Party with respect to any
matter. Each Party shall bear such Party’s own legal fees and other costs of presenting such Party’s case. Buyer and
Seller shall bear the costs and expenses of the Title Arbitrator in equal parts.

 

6.10 Adjustment
to Purchase Price; Title Defect Deductible.

 

(a)
The Purchase Price shall be adjusted for Title Defect Values as provided in Section 6.8(b); provided, however,
that notwithstanding anything to the contrary in this Agreement, there shall be no cure, remedy, deletion or adjustment to
the Purchase Price whatsoever in respect of any Title Defects unless the aggregate value of all Title Defects equals or
exceeds $50,000 (the “Title Defect Deductible”) and in such event the reduction in the Purchase Price
shall be the aggregate amount of Title Defect Values that exceed the Title Defect Deductible, unless such Title Defect arises
from the failure to satisfy any Transfer Requirements, in which case the Title Defect Deductible shall not apply.

 

(b)
Upon final resolution of all disputes as to the validity and amounts of Title Defects in accordance with Section 6.9, if: (i)
the Final Adjustment Statement has not then become final, the Title Defect Value this Article VI shall be used for purposes of
the Final Adjustment Statement and calculation of the Purchase Price for purposes of Section 1.9; or (ii) the Final Adjustment
Statement has become final then within three Business Days after the final determination of any reduction in the Purchase Price
for Title Defects, Seller will pay to Buyer the amount of such reduction.

 

6.11
Preference Rights and Transfer Requirements.

 

(a)
The Transactions are expressly subject to all validly existing and applicable Preference Rights and Transfer Requirements. Within
ten days after the date of this Agreement, Seller shall, subject to Buyer’s prior review of Seller’s consent request
letters and Preference Right waiver request letters, initiate all procedures which are reasonably required to comply with or obtain
the waiver of all Preference Rights and Transfer Requirements with respect to the Transactions. Seller shall use its Reasonable
Best Efforts to obtain all applicable consents and to obtain waivers of applicable Preference Rights.

 

(b)
Upon the exercise of any Preference Right after the Closing with respect to any Purchased Asset conveyed to Buyer, Buyer shall
tender the required interest in such Purchased Asset affected by such Preference Right, at the Allocated Value for such affected
Purchased Asset (or portion thereof) to the holder, or holders, of such right. In return for tendering the Purchased Asset to
such holders, Buyer shall collect and retain such amount from such purchaser as its sole and exclusive remedy for such exercise
of a Preferential Right. At Closing, Seller will assign to Buyer the Purchased Asset, including any Purchased Asset that is subject
to an unexercised Preference Right, subject to such right to purchase.

 

6.12
Upward Defect Adjustments. If Buyer or Seller discover additional interests in the Purchased Assets, including any Net
Mineral Acres in excess of the Net Mineral Acres set forth in Exhibit A or Schedule 10 or any interest that entitles
Seller to receive more than the Net Revenue Interests set forth in Exhibit A, Exhibit B or Schedule 10 or
obligates Seller to bear costs and expenses in an amount less than the Working Interests set forth in Exhibit A, Exhibit
B or Schedule 10 without a corresponding reduction in Seller’s Net Revenue Interest, the discovering party shall
notify the other party of such interest (the “Additional Interest”). The party who discovers the Additional
Interest shall give the other party written notice of the Additional Interest as soon as possible, but in no event later than
the Objection Date. This notice shall be in writing and shall include (i) a description of each Additional Interest, (ii) the
basis for each Additional Interest and supporting documentation with respect thereto, (iii) the Allocated Value of the Lease,
Well or undeveloped location affected by the Additional Interest, (iv) the value of the Additional Interest or the amount by which
the notifying party believes the Allocated Value of the Lease, Well or undeveloped location has been increased by the Additional
Interest and the computations upon which such party’s belief is based, which amount must be equal to or greater than $25,000
net to Sellers’ interest. The Purchase Price shall not be adjusted for value of any Addition Interest until the aggregate
value of all Additional Interests equals or exceeds the Title Defect Deductible and in such event the increase in the Purchase
Price shall be the aggregate amount of Additional Interests that exceed the Title Defect Deductible.

 

    	Asset Purchase Agreement between 
 Maxwell Resources, Inc. and David Gilkeson	 
 16
	Proprietary and Confidential 

Intended for Addressee Only

     

    

 

6.13
No Title Representation or Warranty. Except for the special warranty of title by, through and under Seller that will be
contained in the Assignment, Bill of Sale and Conveyance to be delivered at Closing and without limiting Buyer’s right to
adjust the Purchase Price as provided in this Article VI, Sellers make no warranty or representation, express or implied, statutory
or otherwise, with respect to Sellers’ title to any of the Purchased Assets and Buyer hereby acknowledges and agrees that
Buyer’s sole and exclusive remedy for any defect of title, including any Title Defect, with respect to any of the Purchased
Assets shall be pursuant to the procedures and as set forth in Article VI.

 

ARTICLE
VII

ARTICLE VII RESERVED

 

ARTICLE
VIII

INDEMNIFICATION

 

8.1
Indemnification by Seller. From and after Closing, Seller shall indemnify Buyer, Buyer’s permitted assigns and Affiliates
and their respective partners, directors, members, shareholders, officers, employees and agents (collectively, “Buyer
Indemnified Persons”) from and against the entirety of any Damages the Buyer Indemnified Persons may suffer resulting
from, arising out of, relating to, in the nature of, or caused by the following:

 

(a)
any breach by Seller of any of Seller’s representations and warranties in this Agreement (without giving effect to any supplement
to the disclosure schedules to this Agreement) or in the Seller Related Documents;

 

(b)
any breach by Seller of any of its covenants in this Agreement or in the Seller Related Documents;

 

(c)
any Excluded Liabilities; and

 

(d)
the litigation described in Schedule 3.11.

 

THE
FOREGOING INDEMNIFICATIONS BY SELLERS SHALL APPLY WHETHER OR NOT DAMAGES ARISE OUT OF (i) NEGLIGENCE (INCLUDING SOLE NEGLIGENCE,
SIMPLE NEGLIGENCE, CONCURRENT NEGLIGENCE, ACTIVE OR PASSIVE NEGLIGENCE, BUT EXPRESSLY NOT INCLUDING GROSS NEGLIGENCE OR WILLFUL
MISCONDUCT) OF ANY INDEMNITEE, OR (ii) STRICT LIABILITY.

 

8.2
Indemnification by Buyer. From and after Closing, Buyer shall indemnify Seller, Seller’s permitted assigns and Affiliates
and their respective partners, directors, members, shareholders, officers, employees and agents (the “Seller Indemnified
Persons”) from and against the entirety of any Damages the Seller Indemnified Persons may suffer resulting from, arising
out of, relating to, in the nature of, or caused by the following:

 

(a)
any breach by Buyer of any of its representations and warranties in this Agreement or in the Buyer Related Documents;

 

(b)
any breach by Buyer of any of its covenants in this Agreement or in the Buyer Related Documents; and

 

(c)
any Assumed Liabilities.

 

THE
FOREGOING INDEMNIFICATIONS BY BUYER SHALL APPLY WHETHER OR NOT SUCH DAMAGES ARISE OUT OF (i) NEGLIGENCE (INCLUDING SOLE NEGLIGENCE,
SIMPLE NEGLIGENCE, CONCURRENT NEGLIGENCE, ACTIVE OR PASSIVE NEGLIGENCE (INCLUDING ANY VIOLATION OF APPLICABLE ENVIRONMENTAL LAWS),
BUT EXPRESSLY NOT INCLUDING GROSS NEGLIGENCE OR WILLFUL MISCONDUCT) OF ANY INDEMNITEE, OR (ii) STRICT LIABILITY.

 

8.3
Indemnification Claims.

 

(a)
Third Person Claims.

 

(i)
If any Third Person notifies any Indemnified Person with respect to any matter (a “Third Person Claim”) that
may give rise to a claim for indemnification against an Indemnifying Party under Section 8.1 or Section 8.2, then the Indemnified
Person shall promptly give written notification to the Indemnifying Party of this Agreement. Such notification shall be given
within 30 days after receipt by the Indemnified Person of notice of such Third Person Claim, and shall describe in reasonable
detail (to the extent known by the Indemnified Person) the facts constituting the basis for such Third Person Claim and the amount
of the claimed Damages (if available); provided, however, that no delay or failure on the part of the Indemnified
Person in so notifying the Indemnifying Party shall relieve the Indemnifying Party of any liability or obligation hereunder except
to the extent such delay or failure results in insufficient time being available to permit the Indemnifying Party to effectively
defend against the Third Person Claim or otherwise prejudices the Indemnifying Party’s ability to defend against the Third
Person Claim.

 

    	Asset Purchase Agreement between 
 Maxwell Resources, Inc. and David Gilkeson	 
 17
	Proprietary and Confidential 

Intended for Addressee Only

     

    

 

(ii)
The Indemnifying Party may, upon written notice to the Indemnified Person, assume control of the defense of such Third Person
Claim with counsel reasonably satisfactory to the Indemnified Person; provided that (a) the Indemnifying Party notifies the Indemnified
Person in writing within 30 days after the Indemnified Person has given notice of the Third Person Claim that the Indemnifying
Party will indemnify the Indemnified Person from and against the Damages the Indemnified Person may suffer resulting from, arising
out of, relating to, in the nature of, or caused by the Third Person Claim (subject to the provisions of this Article VIII); (b)
the ad damnum, if any, is less than or equal to the amount of Damages for which the Indemnifying Party is liable under this Article
VIII; (c) the Indemnifying Party provides the Indemnified Person with evidence acceptable to the Indemnified Person that the Indemnifying
Party will have the financial resources to defend against the Third Person Claim and fulfill its indemnification obligations hereunder;
(d) the Third Person Claim does not involve criminal liability and seeks only money damages and not equitable relief against the
Indemnified Person; (e) settlement of, or an adverse judgment with respect to, the Third Person Claim is not, in the good faith
judgment of the Indemnified Person, likely to establish a precedential custom or practice adverse to the continuing business interests
or the reputation of the Indemnified Person, and (f) the Indemnifying Party conducts the defense of the Third Person Claim actively
and diligently.

 

(iii)
If the Indemnifying Party does not, or is not permitted under the terms of this Agreement to, so assume control of the defense
of a Third Person Claim, the Indemnified Person shall control such defense.

 

(iv)
The Non-controlling Party may participate in such defense at its own expense. The Controlling Party shall keep the Non-controlling
Party advised of the status and defense of such Third Person Claim and shall consider in good faith recommendations made by the
Non-controlling Party with respect thereto. The Non-controlling Party shall furnish the Controlling Party with such information
as it may have with respect to such Third Person Claim (including copies of any summons, complaint or other pleading which may
have been served on such party and any written claim, demand, invoice, billing or other document evidencing or asserting the same)
and shall otherwise cooperate with and assist the Controlling Party in the defense of such Third Person Claim. The reasonable
fees and expenses of counsel to the Indemnified Person with respect to a Third Person Claim shall be considered Damages for purposes
of this Agreement if: (x) the Indemnified Person controls the defense of such Third Person Claim under the terms of this Section
8.3; or (y) the Indemnifying Party assumes control of such defense and the Indemnified Person reasonably concludes that the Indemnifying
Party and the Indemnified Person have conflicting interests or different defenses available with respect to such Third Person
Claim.

 

(v)
The Indemnifying Party shall not agree to any settlement of, or the entry of any judgment arising from, any Third Person Claim
without the prior written consent of the Indemnified Person, which shall not be unreasonably withheld or delayed; provided that
the consent of the Indemnified Person shall not be required if the Indemnifying Party agrees in writing to pay any amounts payable
under such settlement or judgment and such settlement or judgment includes a complete release of the Indemnified Person from further
liability and has no other adverse effect on the Indemnified Person. The Indemnified Person shall send the Indemnifying Party
at least ten days prior notice of any settlement of the Third Person Claim that it proposes to enter into, and if the Indemnifying
Party has not yet assumed the defense of the Third Person Claim that is capable of being assumed under the terms of Section 8.3(a)(ii),
the Indemnifying Party may admit in writing its obligation to provide indemnity as described in Section 8.3(a)(ii)(a), assume
the defense, and reject the proposed settlement. If the Indemnifying Party has assumed the defense of the Third Person Claim or
the initial 30-day period in which the Indemnifying Party may elect to assume the defense has not yet run, the Indemnified Person
shall not agree to any settlement of, or the entry of any judgment arising from, any such Third Person Claim without the prior
written consent of the Indemnifying Party, which shall not be unreasonably withheld or delayed.

 

(b)
Within twenty 20 days after delivery of the notification of a Third Person Claim as provided in Section 8.3(a)(i) (a “Claim
Notice”), the Indemnifying Party shall deliver to the Indemnified Person a response, in which the Indemnifying Party
shall: (i) agree that the Indemnified Person is entitled to receive all of the Claimed Amount (in which case the Response shall
be accompanied by a payment by the Indemnifying Party to the Indemnified Person of the Claimed Amount to the extent the Claimed
Amount may be finally determined at that time, by check or by wire transfer (provided that to the extent the Claimed Amount may
not be finally determined at that time, the Indemnifying Party shall pay the Indemnified Person such additional amounts as to
constitute the full Claimed Amount at such time as the full Claimed Amount can be finally determined); (ii) agree that the Indemnified
Person is entitled to receive the Agreed Amount (in which case the Response shall be accompanied by a payment by the Indemnifying
Party to the Indemnified Person of the Agreed Amount, by check or by wire transfer); or (iii) dispute that the Indemnified Person
is entitled to receive any of the Claimed Amount.

 

(c)
During the 30-day period following the delivery of a Response that reflects a Dispute, the Indemnifying Party and the Indemnified
Person shall use good faith efforts to resolve the Dispute. If the Dispute is not resolved within such thirty (30)-day period,
the Indemnifying Party and the Indemnified Person shall discuss in good faith the submission of the Dispute to binding arbitration,
and if the Indemnifying Party and the Indemnified Person agree in writing to submit the Dispute to such arbitration, then the
provisions of Section 8.3(d) shall become effective with respect to such Dispute. The provisions of this Section 8.3(c) shall
not obligate the Indemnifying Party and the Indemnified Person to submit to arbitration or any other alternative dispute resolution
procedure with respect to any Dispute, and in the absence of an agreement by the Indemnifying Party and the Indemnified Person
to arbitrate a Dispute, such Dispute shall be resolved in a state or federal court sitting in Dallas, Texas, in accordance with
Section 11.15.

 

    	Asset Purchase Agreement between 
 Maxwell Resources, Inc. and David Gilkeson	 
 18
	Proprietary and Confidential 

Intended for Addressee Only

     

    

 

(d)
If, as provided in Section 8.3(c), the Indemnified Person and the Indemnifying Party agree to submit any Dispute to binding arbitration,
the arbitration shall be conducted by a single arbitrator (the “Arbitrator”) in accordance with the Commercial
Rules in effect from time to time and the following provisions:

 

(i)
In the event of any conflict between the Commercial Rules in effect from time to time and the provisions of this Agreement, the
provisions of this Agreement shall prevail and be controlling.

 

(ii)
The Parties shall commence the arbitration by jointly filing a written submission with the Dallas, Texas office of the AAA in
accordance with Commercial Rule 5 (or any successor provision).

 

(iii)
No depositions or other discovery shall be conducted in connection with the arbitration.

 

(iv)
Not later than 30 days after the conclusion of the arbitration hearing, the Arbitrator shall prepare and distribute to the Parties
a writing setting forth the arbitral award and the Arbitrator’s reasons therefor. Any award rendered by the Arbitrator shall
be final, conclusive and binding upon the Parties, and judgment thereon may be entered and enforced in any court of competent
jurisdiction (subject to Section 11.15).

 

(v)
The Arbitrator shall have no power or authority, under the Commercial Rules or otherwise; to (a) modify or disregard any provision
of this Agreement, including the provisions of this Section 8.3(d); or (b) address or resolve any issue not submitted by the Parties.

 

(vi)
In connection with any arbitration proceeding under this Agreement, each party shall bear its own costs and expenses, except that
the fees and costs of the AAA and the Arbitrator, the costs and expenses of obtaining the facility where the arbitration hearing
is held, and such other costs and expenses as the Arbitrator may determine to be directly related to the conduct of the arbitration
and appropriately borne jointly by the Parties (which shall not include any Party’s attorneys’ fees or costs, witness
fees (if any), costs of investigation and similar expenses) shall be shared equally by the Indemnified Person and the Indemnifying
Party.

 

(e)
Notwithstanding the other provisions of this Section 8.3, if a Third Person asserts (other than by means of a lawsuit) that an
Indemnified Person is liable to such Third Person for a monetary or other obligation which may constitute or result in Damages
for which such Indemnified Person may be entitled to indemnification under this Article VIII, and such Indemnified Person reasonably
determines that it has a valid business reason to fulfill such obligation, then: (i) such Indemnified Person shall be entitled
to satisfy such obligation, without prior notice to or consent from the Indemnifying Party; (ii) such Indemnified Person may subsequently
make a claim for indemnification in accordance with, and subject to the limitations provided in, this Article VIII; and (iii)
such Indemnified Person shall be reimbursed, in accordance with the provisions of this Article VIII, for any such Damages for
which it is entitled to indemnification under this Article VIII (subject to the right of the Indemnifying Party to dispute the
Indemnified Person’s entitlement to indemnification, or the amount for which it is entitled to indemnification, under the
terms of this Article VIII).

 

(f)
The rights to indemnification provided in this Article VIII shall not be affected by: (i) any investigation conducted by or on
behalf of an Indemnified Person or any knowledge acquired (or capable of being acquired) by an Indemnified Person, whether before
or after the Closing Date, with respect to the inaccuracy or noncompliance with any representation, warranty, covenant or obligation
which is the subject of indemnification hereunder; or (ii) any waiver by an Indemnified Person of any closing condition relating
to the accuracy of representations and warranties or the performance of or compliance with agreements and covenants.

 

(g)
This Article VIII shall not apply to any indemnification obligations of Seller for Environmental Defects that Seller and Buyer
agree to under Section 5.3(c)(ii) and such indemnity obligation shall not be limited in any manner by this Article VIII.

 

(h)
Notwithstanding anything to the contrary in this Agreement, for purposes of determining if there has been a breach of any representation
or warranty hereunder by Seller or Buyer for purposes of this Article VIII and determining the amount of any Damages that are
the subject matter of a claim for indemnification hereunder, each representation and warranty in this Agreement and each certificate
or document delivered under this Agreement shall be read without regard and without giving effect to the term(s) “material”
or “substantial” or any other materiality or similar qualification in such representation and warranty or certificate;
provided, however, the term “Material Contract” shall be given effect.

 

(i)
Notwithstanding anything to the contrary in this Agreement, nothing in Section 8.4 or this Section 8.3 shall in any way limit
any Party’s Liability or obligations with respect to any Purchase Price Adjustments or any other covenants or agreements
in Sections 1.4 through 1.12, or Article VI.

 

    	Asset Purchase Agreement between 
 Maxwell Resources, Inc. and David Gilkeson	 
 19
	Proprietary and Confidential 

Intended for Addressee Only

     

    

 

8.4
Survival of Representations, Warranties and Covenants. All representations and warranties of the Parties in this Agreement
shall survive Closing and any investigation made by or on behalf of any Party until the close of business on the first anniversary
of the Closing Date; provided, however, that: (i) the representations and warranties provided in Section 3.22 (Tax Matters)
and Section 3.23 (Tax Partnership) shall survive until the later of (A) 60 days after expiration of the applicable statute of
limitations for the applicable underlying claim, including any extensions or waivers of the applicable statute of limitations
and (B) if no applicable statute of limitations exists, then five (5) years from the Closing Date; and (ii) the representations
and warranties in Section 3.1 (Organization and Qualification) and Section 3.2 (Authority; Binding Effect) of this Agreement,
fraud and intentional misrepresentation shall survive indefinitely. All covenants of Sellers or Buyer contained in this Agreement
shall survive Closing except for (a) any covenant which by its terms terminates as of a specific date, or is only made for a specified
period, and (b) the covenants set forth in Section 8.1, which shall only survive until the close of business on the first anniversary
of the Closing Date, provided that the indemnification in Section 8.1(c) and Section 8.1(d) shall survive without time limit and
to the extent any representation or warranty survives for a longer period of time, the indemnification for such representation
and warranty shall survive for such period of time (the “Survival Period”). A written claim for indemnification under
this Article VIII for breach of a representation or warranty may be brought at any time during the Survival Period; provided,
that the representation or warranty on which such claim is based continues to survive under this Section 8.4 at the time notice
of such claim is given in accordance with Section 8.3, and if such written notice is given within such period, all rights to indemnification
with respect to such claim shall continue in force and effect.

 

8.5
Limitations. No Party shall have any obligation to indemnify an Indemnified Persons from and against any Damage under Section
8.1, other than Damages resulting by reason of any fraud, intentional misrepresentation, Excluded Liabilities or Assumed Liabilities,
unless (i) any individual Damage suffered by such Indemnified Person is greater than or equal to $1,000 in value (the “Individual
Deductible”) and (ii) the aggregate value of all Damages suffered by such Indemnified Person in excess of the Individual
Deductible exceeds $50,000 (the “Aggregate Deductible”) in which event such Indemnified Person may recover all Damages
incurred in excess of the Aggregate Deductible. Other than with respect to any Excluded Liabilities, in no event shall the aggregate
liability of any Seller to Buyer arising from or related to this Agreement, including without limitation any breach of any representation,
warranty, covenant or indemnity by it contained in this Agreement, exceed such Seller’s proportionate share (as determined
based on the percentage of ownership of each in the Properties) of an amount equal to $50,000.

 

8.6
Treatment of Indemnification Payments. The Parties agree to treat all indemnification payments made under this Article
VIII (including payments under Sections 8.1 and 8.2) as adjustments to the Purchase Price for all income Tax purposes and to take
no position contrary thereto in any Tax Return or audit or examination by, or proceeding before, any taxing authority, except
as required by a change in Law or a “determination” as defined in Section 1313 of the Code and the Treasury Regulations
thereunder.

 

ARTICLE
IX

RESERVED

 

ARTICLE
X

DEFINITIONS

 

For
purposes of this Agreement, each of the following terms shall have the meaning provided below. “Action” means
an action, suit or proceeding, claim, notice of violation, arbitration, litigation or investigation.

 

“AAA”
means the American Arbitration Association.

 

“AFEs”
is defined in Section 3.15.

 

“Accepted
Title Liabilities” is defined in Section 6.7.

 

“Additional
Interests” is defined in Section 6.12.

 

“Additional
Properties” mean those Leases within the area reflected on the map attached hereto as Exhibit E and listed on
Schedule 10.

 

“Adjustment
Statement” is defined in Section 1.8(a).

 

“Affiliate”
means any affiliate, as defined in Rule 12b-2 under the Securities Exchange Act of 1934, as amended.

 

“Agreed
Amount” means part, but not all, of the Claimed Amount.

 

“Agreement”
means this Asset Purchase Agreement.

 

“Allocated
Value” or “Allocated Values” is defined in Section 1.5.

 

    	Asset Purchase Agreement between 
 Maxwell Resources, Inc. and David Gilkeson	 
 20
	Proprietary and Confidential 

Intended for Addressee Only

     

    

 

“Arbitrator”
is defined in Section 8.3(d).

 

“Assessment”
is defined in Section 5.3(b).

 

“Assigned
Contract” or “Assigned Contracts” is defined in Section 1.1(c).

 

“Assumed
Environmental Liabilities” means all Losses relating to Environmental Matters in, on, under or relating to the Purchased
Assets attributable to the period of time before, on, and after the Effective Time other than Losses associated with Environmental
Defects which Sellers’ are obligated to bear pursuant to Section 5.3.

 

“Assumed
Liabilities” means:

 

(a)
all Operating Expenses of Seller to the extent attributable to the Purchased Assets and related to periods after the Effective
Time;

 

(b)
all other Liabilities of Seller (other than Operating Expenses) under or associated with or appurtenant to the Assigned Contracts
and the Leases, to the extent related to periods after the Effective Time;

 

(c)
all Liabilities arising out of Buyer’s operations and/or ownership of the Purchased Assets after the Effective Time;

 

(d)
the Assumed Environmental Liabilities;

 

(e)
all Liabilities for transfer, sales, use and similar Taxes arising in connection with consummation of the Transactions; provided
that Assumed Liabilities shall not include: (i) any Liability resulting from any breach or non-fulfillment of any representation,
warranty, covenant or agreement of Seller under this Agreement, (ii) any Operating Expense or other Liability to the extent accounted
for as an increase in the Base Purchase Price in accordance with Section 1.6(a)(i), (iii) any Liability to the extent arising
out of or attributable to the ownership, use, construction, maintenance or operation of the Excluded Assets, (iv) all Liabilities
which are payable by Seller or any Affiliate of Seller in its capacity as operator with respect to Operated Properties to the
extent the proceeds therefor have been received by Seller or any Affiliate of Seller as of Closing but are not delivered to Buyer
at Closing or (v) Seller Taxes, each of which subclauses (i) through (v) shall be deemed an Excluded Liability; and

 

(f)
Liabilities associated with any Minimum Royalty Litigation and any other Action or Order set forth in Schedule 3.11.

 

“Base
Purchase Price” is defined in Section 1.4.

 

“Business
Day” means any day that a Federal Reserve Bank is open for business.

 

“Buyer”
is defined in the first paragraph of this Agreement.

 

“Buyer
Indemnified Persons” is defined in Section 8.1.

 

“Buyer
Related Documents” is defined in Section 4.2(b).

 

“Casualty”
means any event or circumstance outside the ordinary course of business that occurs between the Effective Time and the Closing
Date causing physical damage to or destruction of all or any part of the Purchased Assets for any reason, including as a result
of fire, explosion, blowout, storm, tornado, hurricane, earthquake, earth movement, flood, water damage, or any similar event.

 

“Colfax
Exploration Partners I, LLC” means the limited liability company for federal income tax purposes

 

“Claim
Notice” is defined in Section 8.3(b).

 

“Claimed
Amount” means the amount of any Damages incurred or reasonably expected to be incurred by the Indemnified Person.

 

“Closing”
means the closing of the Transactions.

 

“Closing
Date” is defined in Section 2.1.

 

“Closing
Date Aggregate Purchase Price” is defined in Section 1.8(d).

 

“Closing
Deliverables Escrow Agreement” is defined in Section 2.2.

 

“Code”
means the Internal Revenue Code of 1986, as amended, and any successor Law.

 

“Commercial
Rules” means the Commercial Arbitration Rules of the AAA.

 

“Confidentiality
Agreement” is defined in Section 5.3(a).

 

    	Asset Purchase Agreement between 
 Maxwell Resources, Inc. and David Gilkeson	 
 21
	Proprietary and Confidential 

Intended for Addressee Only

     

    

 

“Consideration”
means the warrants Seller will receive in exchange for properties being purchased by Buyer.

 

“Controlling
Party” means the party controlling the defense of any Third Person Claim.

 

“Damages”
means the amount of any Liability, loss, cost, expense, claim, award or judgment incurred or suffered by any Indemnified Person
arising out of or resulting from the indemnified matter, whether attributable to personal injury or death, property damage, contract
claims (including contractual indemnity claims), torts, or otherwise, including reasonable fees and expenses of attorneys, consultants,
accountants or other agents and experts reasonably incident to matters indemnified against, and the costs of investigation and/or
monitoring of such matters, and the costs of enforcement of the indemnity.

 

“Defensible
Title” is defined in Section 6.2.

 

“Dispute”
means the dispute resulting if the Indemnifying Party in a Response disputes its liability for all or part of the Claimed Amount.

 

“Effective
Time Tank Oil” means oil and liquid Hydrocarbon inventories in tanks above the pipeline connections as of the Effective
Time.

 

“Effective
Time” means 12:01 a.m. Central time on September 1, 2015.

 

“Environmental
Cure Period” is defined in Section 5.3(c)(i).

 

“Environmental
Defect” is defined in Section 5.3(b).

 

“Environmental
Defect Value” is defined in Section 5.3(d).

 

“Environmental
Laws” means, as the same may have been amended, any federal, state or local Law relating to: (a) the control of any
potential pollutant or protection of the environment, including air, water or land; (b) the generation, handling, treatment, storage,
disposal or transportation of waste materials; or (c) the regulation of or exposure to hazardous, toxic or other substances alleged
to be harmful, including, the Comprehensive Environmental Response, Compensation and Liability Act, 42 U.S.C. § 9601 et seq.
(“CERCLA”); the Resource Conservation and Recovery Act, 42 U.S.C. § 6901 et seq. (“RCRA”); the Federal
Water Pollution Control Act, 33 U.S.C. § 1251 et seq.; the Clean Air Act, 42 U.S.C. § 7401 et seq. the Hazardous Materials
Transportation Act, 49 U.S.C. § 1471 et seq.; the Toxic Substances Control Act, 15 U.S.C. §§ 2601 through 2629;
the Oil Pollution Act, 33 U.S.C. § 2701 et seq.; the Emergency Planning and Community Right-to-Know Act, 42 U.S.C. §
11001 et seq.; the Safe Drinking Water Act, 42 U.S.C. §§ 300f through 300j; the Federal Insecticide, Fungicide and Rodenticide
Act, 7 U.S.C. § 136 et seq.; the Occupational Safety and Health Act, 29 U.S.C. § 651 et seq.; the Atomic Energy Act,
42 U.S.C. § 2011 et seq.; and all applicable related Law, whether local, state, territorial, or national, of any Governmental
Entity having jurisdiction over the property in question addressing pollution or protection of human health, safety, natural resources
or the environment and all regulations implementing the preceding. The term “Environmental Laws” includes all Orders
issued pursuant to Environmental Laws.

 

“Environmental
Matters” means any and all Actions, Orders, Liabilities (including attorneys’ fees and costs of litigation) of
any kind or character for pollution or environmental damages of any kind, including those relating to naturally occurring radioactive
materials, violations or alleged violations of Environmental Laws, common law causes of action such as negligence, gross negligence,
strict liability, nuisance or trespass, or fault imposed by Law or otherwise, and including all costs associated with remediation
and clean up, and fines and penalties associated with any of the preceding.

 

“Environmental
Permit” means any permit, license, registration or approval by any Governmental Entity made or issued under Environmental
Laws.

 

“Equipment”
is defined in Section 1.1(d).

 

“Escrow
Account” is defined in Section 1.4.

 

“Escrow
Agent” is defined in Section 1.4.

 

“Escrow
Agreement” is defined in Section 1.4.

 

“Escrow
Amount” is defined in Section 1.4(a).

 

“Estimated
Closing Defect Value” is defined in Section 6.9.

 

“Exchange”
is defined in Section 5.6(e).

 

“Excluded
Assets” is defined in Section 1.2.

 

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“Excluded
Liabilities” is defined in Section 1.3.

 

“Extended
Post-Closing Agreement Period” is defined in Section 1.4(b).

 

“Final
Adjustment Statement” is defined in Section 1.9(a).

 

“GAAP”
means United States generally accepted accounting principles.

 

“Governmental
Approvals” is defined in Section 5.1.

 

“Governmental
Entity” means any entity or body exercising executive, legislative, judicial, regulatory or administrative functions
of or pertaining to United States federal, state, local, or municipal government, foreign, international, multinational or other
government, including any department, commission, board, agency, bureau, subdivision, instrumentality, official or other regulatory,
administrative or judicial authority thereof, and any non-governmental regulatory body to the extent that the rules and regulations
or orders of such body have the force of Law.

 

“Hazardous
Materials” means any pollutant, contaminant, waste, or chemical, or any toxic, radioactive, ignitable, corrosive, reactive,
or otherwise hazardous substance, waste or material, or any substance, waste or material having any constituent elements displaying
any of the preceding characteristics and regulated under any Environmental Law and any substance, whether solid, liquid, or gaseous:
(a) which is listed, defined, or regulated as a “hazardous material,” “hazardous waste,” “solid
waste,” “hazardous substance,” “toxic substance,” “pollutant,” or “contaminant,”
or otherwise classified as hazardous or toxic, in or pursuant to any Environmental Law; (b) which is or contains asbestos, polychlorinated
biphenyls, radon, urea formaldehyde foam insulation, explosives, or radioactive materials; (c) any Hydrocarbons and any components,
fractions, or derivatives thereof, and any oil or gas exploration or production waste; or (d) which causes or poses a threat to
cause contamination or nuisance or a hazard to the environment or to the health or safety of persons.

 

“Hedge
Contract” means any contract to which Seller or any of its Affiliates is a party with respect to any swap, forward,
future or derivative transaction or option or similar agreement, whether exchange traded, “over-the-counter” or otherwise,
involving, or settled by reference to, one or more rates, currencies, commodities, equity or debt instruments or securities, or
economic, financial or pricing indices or measures of economic, financial or pricing risk or value or any similar transaction
or any combination of these transactions.

 

“Hydrocarbon”
or “Hydrocarbons” means oil, gas, condensate and/or other liquid or gaseous hydrocarbons or any combination
thereof or products therefrom.

 

“Hydrocarbon
Tax” or “Hydrocarbon Taxes” means any hydrocarbon production, severance or similar excise Tax based
upon or measured by the operation of the Purchased Assets or the production of Hydrocarbons therefrom, but excluding any Property
Tax.

 

“Imbalance”
or “Imbalances” means any over-production, under-production, over-delivery, under-delivery or similar imbalance
of Hydrocarbons produced from or allocated to the Purchased Assets, regardless of whether such over-production, under-production,
over-delivery under-delivery or similar imbalance arises at the platform, wellhead, pipeline, gathering system, transportation
system, processing plant or other location.

 

“Income
Tax” means any federal, state, local or foreign income, franchise or similar Tax.

 

“Indemnified
Person” means a Buyer Indemnified Person or a Seller Indemnified Person.

 

“Indemnifying
Party” means the Party from whom indemnification is sought by the Indemnified Person.

 

“Initial
Adjustment Amount” is defined in Section 1.8.

 

“Instruments”
is defined in Section 5.7.

 

“Interim
Period” means that period of time commencing with the Effective Time and ending at 7:00 a.m. (Central Time) on the Closing
Date.

 

“Knowledge”
means: (a) with respect to Buyer, the actual knowledge of David Gilkeson following reasonable inquiry to their immediate subordinates;
and (b) with respect Seller, the actual knowledge of Maxwell Resources, Inc., following reasonable inquiry to their immediate
subordinates.

“Laws”
means any constitutional provision, statute or other law, rule, regulation, or interpretation of any Governmental Entity and any
Order.

 

“Lease”
or “Leases” is defined in Section 1.1(a).

 

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“Liabilities”
means, with respect to any Person, any liability or obligation of such Person of any kind, character or description, whether known
or unknown, absolute or contingent, accrued or unaccrued, disputed or undisputed, liquidated or unliquidated, secured or unsecured,
joint or several, due or to become due, vested or unvested, executory, determined, determinable or otherwise, and whether or not
the same is required to be accrued on the financial statements of such Person.

 

“Lien”
means, with respect to any property or asset, any mortgage, lien, pledge, charge, security interest or other similar encumbrance
in respect of such property or asset.

 

“Losses”
means any and all debts, obligations and other liabilities (whether absolute, accrued, contingent, fixed or otherwise, or whether
known or unknown, or due or to become due or otherwise), diminution in value, monetary damages, fines, fees, Taxes, penalties,
interest obligations, deficiencies, losses and expenses (including amounts paid in settlement, interest, court costs, costs of
investigators, reasonable fees and expenses of attorneys, accountants, financial advisors and other experts), and other actual
out of pocket expenses incurred in investigating and preparing for or in connection with any Action.

 

“Material
Contracts” or “Material Contract” is defined in Section 3.5.

 

“Minimum
Royalty Law” means the Texas Minimum Royalty Act., 58 P.S. § 33, et seq., as amended is not applicable.

 

“Minimum
Royalty Litigation” means all claims, causes of action or demands asserted in any proceeding, in effect now or at any
time prior to or on the Closing seeking to invalidate, terminate, cancel or void any Lease or to recover any minimum royalty,
improper deductions from royalty payments previously paid under such Lease or any other damage or relief, legal or equity, in
each case to the extent based upon any violation of any Minimum Royalty Law, including without limitation, the Minimum Royalty
Litigation set forth on Schedule 3.11.

 

“Net
Mineral Acres” with respect to the mineral estate in lands covered by a particular Lease, means the product of: (a)
the percentage mineral interest ownership of the lessor under such Lease; (b) the percentage working interest of Seller; and (c)
the total number of gross acres covered by such Lease.

 

“Net
Revenue Interest” mean the percentage share in all Hydrocarbons produced from a well, lease, unit or other Oil and Gas
Interest after satisfaction of applicable lessor royalties, overriding royalties, oil payments and other payments out of or measured
by the production of Hydrocarbons from such well, lease, unit or other Oil and Gas Interest.

 

“Non-controlling
Party” means the party not controlling the defense of any Third Person Claim.

 

“Notice”
is defined in Section 11.8(a).

 

“Objection
Date” means December 31, 2015.

 

“Oil
and Gas Interest(s)” means:

 

(a)
all interests in and rights with respect to oil, gas, mineral and related properties and assets of any kind and nature, direct
or indirect, including working, royalty interests, production payments, operating rights, net profits interests, fee minerals,
fee royalties, other non-working interests and non-operating interests;

 

(b)
interests in and rights with respect to Hydrocarbons and other minerals or revenues therefrom and contracts in connection therewith
and claims and rights thereto (including oil and gas leases, operating agreements, unitization and pooling agreements and orders,
division order, transfer orders, mineral deeds, royalty deeds, oil and gas sales, exchange and processing contracts and agreements
and, in each case, interests thereunder), surface interests, fee interests, reservations and concessions;

 

(c)
easements, rights of way, licenses, permits, leases, and other interests associated with, appurtenant to, or necessary for the
operation of any of the preceding;

 

(d)
interests in equipment and machinery (including well equipment and machinery), oil and gas production, gathering, transmission,
compression, treating, processing and storage facilities (including tanks, tank batteries, pipelines and gathering systems), pumps,
water plants, electric plants, gasoline and gas processing plants, refineries and other tangible personal property and fixtures
associated with, appurtenant to, or necessary for the operation of any of the preceding, in each case to the extent such interests
comprise a part of the Purchased Assets;

 

(e)
any economic or contractual rights, options or interests in and to any of the preceding, including any sublease, farm- out or
farm-in agreement or production payment affecting any interest or estate in oil, gas or other hydrocarbons in place; and

 

(f)
any and all rights and interests attributable or allocable thereto by virtue of any pooling, unitization, communitization, production
sharing or similar agreement, order or declaration.

 

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	Proprietary and Confidential 

Intended for Addressee Only

     

    

 

“Operating
Expenses” means all operating expenses (including overhead costs as provided in the applicable joint operating agreements)
and capital expenditures (including without limitation, drilling, casing and completion costs) incurred in the ownership, use,
maintenance or operation of the Purchased Assets in the ordinary course of business and, where applicable, in accordance with
the relevant operating or unit agreement, if any, including overhead costs charged to the Purchased Assets under the relevant
operating agreement or unit agreement (including, without limitation, all delay rentals and lease extension payments), if any,
but excluding costs, expenses and Liabilities attributable to:

 

(a)
Liabilities for personal injury or death, property damage (other than damage to structures, fences, irrigation systems and other
fixtures, crops, livestock and other personal property in the ordinary course of business), torts, breach of contract (other than
failure to make payments under the terms of a contract) or violation of any Law (or private rights of action under any Law);

 

(b)
Liabilities arising as a result of any breach by Seller or any Affiliate of Seller, as operator with respect to Operated Properties,
of any applicable operating agreement or any Assigned Contract;

 

(c)
obligations to plug wells, dismantle or decommission facilities, close pits around plugged wells and restore the surface around
such wells, facilities and pits;

 

(d)
environmental Liabilities, including obligations to remediate any contamination of groundwater, surface water, soil, sediments
or personal property under applicable Environmental Laws;

 

(e)
obligations with respect to Imbalances;

 

(f)
Liabilities with respect to payment of working interests and Royalties relating to the Purchased Assets, including those held
in suspense;

 

(g)
obligations with respect to Hedge Contracts;

 

(h)
claims for indemnification or reimbursement from any Third Person with respect to costs of the type described in the preceding
clauses (a) through (g), whether such claims are made pursuant to contract or otherwise;

 

(i)
costs and expenses related to curing an Environmental Defect, Title Defect or Casualty; and

 

(j)
all Property Taxes and Hydrocarbon Taxes.

 

“Order”
means any decree, injunction, judgment, order, award, ruling, assessment or writ by a court, administrative agency, regulatory
body, other Governmental Entity, arbitrator or arbitration panel.

 

“Parties”
means Buyer and Seller.

 

“Permitted
Encumbrances” is defined in Section 6.3.

 

“Person”
means an individual, a corporation, a partnership, a limited liability company, a trust, an unincorporated association, a Governmental
Entity, or any other entity or body.

 

“Preference
Right” means any right or agreement that enables any Person to purchase or acquire any Purchased Asset or any interest
in any Purchased Asset or portion of any Purchased Asset as a result of or in connection with: (a) the sale, assignment or other
transfer of any Purchased Asset or any interest in any Purchased Asset or portion of any Purchased Asset; or (b) the execution
or delivery of this Agreement or consummation or performance of the terms and conditions contemplated in this Agreement.

 

“Prepaid
JOA Funds” is defined in Section 1.10.

 

“Property
Tax” or “Property Taxes” means any ad valorem, property or similar Tax imposed with respect to the
Purchased Assets, but excluding any Hydrocarbon Tax.

 

“Post-Closing
Agreement” is described in Exhibit L.

 

“Purchase
Price” is defined in Section 1.4.

 

“Purchase
Price Adjustment” is defined in Section 1.6(b).

 

“Purchased
Assets” is defined in Section 1.1.

 

“Reasonable
Best Efforts” means best efforts, to the extent commercially reasonable, provided, however, that “Reasonable
Best Efforts” shall not include the obligation to expend money other than reasonable out-of-pocket costs and any costs or
fees expressly required or provided for under any applicable contract under which such waiver, consent or approval is being sought
or such notice is required to be given.

 

“Records”
is defined in Section 1.1(g).

 

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 Maxwell Resources, Inc. and David Gilkeson	 
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	Proprietary and Confidential 

Intended for Addressee Only

     

    

 

“Response”
means a written response from the Indemnifying Party to the Indemnified Person containing the information provided for in Section
8.3.

 

“Royalties”
means royalties and overriding royalties.

“Seller”
is defined in the first paragraph of this Agreement.

 

“Seller
Indemnified Persons” is defined in Section 8.2.

 

“Seller
Related Documents” is defined in Section 3.2(b).

 

“Sellers’
Representative” is defined in Section 11.14.

 

“Seller
Taxes” means: (a) all Income Taxes and other Taxes (other than Hydrocarbon Taxes, Property Taxes or Transfer Taxes in
respect of the Purchased Assets) of Seller in respect of its business or the ownership, operation or disposition of the Purchased
Assets for any taxable period or portion of any taxable period, whether before or after the Closing Date; and (b) all Hydrocarbon
Taxes and Property Taxes in respect of the Purchased Assets for any taxable period or portion of any taxable period ending immediately
before the Effective Time.

 

“Subject
Interests” is defined in Section 1.1(b).

 

“Tax”
or “Taxes” means, with respect to any Person, any unclaimed property or escheat obligations, and all taxes,
charges, fees, levies or other similar assessments or liabilities, including income, capital gains, estimated, gross receipts,
ad valorem, premium, value-added, excise, alternative minimum, real property, personal property, sales, use, transfer, escheat,
withholding, employment, unemployment, insurance, social security, business license, business organization, environmental, workers
compensation, payroll, profits, license, lease, service, service use, capital stock severance, stamp, occupation, windfall profits,
customs, duties, franchise, withholding and other taxes of any kind whatsoever imposed by the United States of America or any
state, local or foreign government, or any agency thereof, or other political subdivision of the United States or any such government,
and any interest, fines, penalties, assessments or additions to tax resulting from, attributable to or incurred in connection
with any tax or any contest or dispute thereof, and including any liability for any of the preceding taxes or other items arising
as a transferee, successor, by contract, operation of Laws or otherwise for which such Person may be liable.

 

“Tax
Partnership” is defined in Section 3.23.

 

“Tax
Proceeding” is defined in Section 5.6(d).

 

“Taxing
Authority” means, with respect to any Tax, the Governmental Entity that imposes such Tax, and the agency (if any) charged
with the collection of such Tax for such entity or subdivision, including any Governmental Entity that imposes, or is charged
with collecting, social security or similar charges or premiums.

 

“Tax
Returns” means all forms, reports, returns (including information returns), declarations, statements or other information
(including any related or supporting schedules or attachments to any of the preceding, and any amendments to any of the preceding)
supplied or required to be supplied to any Governmental Entity in connection with Taxes.

 

“Third
Person” means a Person that is not party to this Agreement.

 

“Third
Person Claim” is defined in Section 8.3(a)(i).

 

“Title
Arbitrator” is defined in Section 6.9.

 

“Title
Cure Period” is defined in Section 6.8(a).

 

“Title
Defect” is defined in Section 6.4.

 

“Title
Defect Deductible” is defined in Section 6.10(a).

 

“Title
Defect Notice” is defined in Section 6.6.

 

“Title
Defect Value” is defined in Section 6.5.

 

“Transaction
Documents” means, collectively, this Agreement, the Seller Related Documents, and the Buyer Related Documents.

 

“Transactions”
means, collectively, the transactions contemplated in the Transaction Documents.

 

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	Proprietary and Confidential 

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“Transfer
Requirement” means any consent, approval, authorization or permit of, or filing with or notification to, any Person
which is required to be obtained, made or complied with for or in connection with any sale, assignment or transfer of any Purchased
Asset or any interest in any Purchased Asset and if not so obtained, made or complied with, then such sale, assignment or transfer
would be rendered void or voidable or otherwise cancel, terminate or repudiate any Lease; provided, however, that
“Transfer Requirement” shall not include any consent of, notice to, filing with, or other action by any Governmental
Entity in connection with the sale or conveyance of, or interests in, oil and/or gas leases, or contracts or interests in such
contracts, if they are not required prior to assignment of such oil and/or gas leases, contracts or interests or they are customarily
obtained subsequent to the sale or conveyance (including consents from state agencies).

 

“Transfer
Taxes” means all sales, use, transfer, recording, stock transfer and similar taxes and fees, if any, arising on or after
the Closing Date of or in connection with the sale of the Purchased Assets under this Agreement.

 

“Treasury
Regulations” and “Treasury Regulation” means the final and temporary (but not proposed) income tax regulations
promulgated under the Code, as such regulations may be amended from time to time.

 

“Well”
or “Wells” is defined in Section 1.1(b).

 

“Well
Location” or “Well Locations” means those drilling locations identified and described on Exhibit
B.

 

“Working
Interest” means the percentage of costs and expenses attributable to the maintenance, development and operation of an
Oil and Gas Interest.

 

ARTICLE
XI.

MISCELLANEOUS

 

11.1 Press
Releases and Announcements. Subject to a Party’s reasonable judgment that it is otherwise required by Law or by the
rules of a national securities exchange to make such disclosure, that Party shall, and shall cause its representatives (as
applicable), to (a) consult with the other Party regarding the timing and content of all announcements regarding this
Agreement, Closing and the Transactions to the financial community, any Governmental Entity, customers, suppliers or the
general public and (b) use its Reasonable Best Efforts to agree upon the text of any such announcement with the other party
prior to its release.

 

11.2
No Third Party Beneficiaries. This Agreement confers rights and remedies on Indemnified Persons as provided in Article
VIII, and no other Person other than the Parties has rights or remedies under this Agreement.

 

11.3
Entire Agreement. The Transaction Documents, the exhibits, the schedules and the other documents, instruments and agreements
specifically referred to in this Agreement or those documents or delivered under this Agreement or those documents constitutes
the final agreement between the Parties. It is the complete and exclusive expression of the Parties’ agreement on the subject
matter of this Agreement. This Agreement supersedes all other oral or written agreements or policies relating to this Agreement,
except for the Confidentiality Agreement, which will continue in full force and effect in accordance with its terms. The provisions
of this Agreement may not be explained, supplemented, or qualified through evidence of trade usage or a prior course of dealings.
No conditions precedent to the effectiveness of this Agreement exist other than those expressly stated in this Agreement. 

 

11.4
Assignment and Delegation.

 

(a)
No Party may assign any part of its rights or obligations under this Agreement without the other Party’s prior written consent,
which shall not be unreasonably withheld; provided that Buyer may, without obtaining the prior written consent of Seller,
assign: (i) Buyer’s rights and obligations, including all representations, warranties, and indemnities, under this Agreement,
in whole or in part, to any of its Affiliates, provided that any such assignment will not release Buyer from any of its obligations
under this Agreement; or (ii) an undivided 100% of Buyers rights and obligations (A), including all representations, warranties,
and indemnities, under this Agreement to Maxwell Resources, Inc. 11.4(a), whether they are voluntary or involuntary, by merger,
consolidation, dissolution, operation of law, or any other manner. For purposes of this section 11.4, (i) a “change of control”
is deemed an assignment of rights, and (ii) “merger” refers to any merger in which a party participates, regardless
of whether it is the surviving or disappearing entity.

 

(b)
No Party may delegate any performance under this Agreement.

 

(c)
Any purported assignment of rights or delegation of performance in violation of this Section 11.4 is void.

 

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	Proprietary and Confidential 

Intended for Addressee Only

     

    

 

11.5
Successors and Assigns.

 

(a)
If an assignment of rights occurs, the non-assigning Party is deemed to have agreed to perform in favor of the assignee.

 

(b)
If an assignment of rights occurs, (i) a contemporaneous delegation is deemed to have occurred, and (ii) the assignee is deemed
to have assumed the assignor’s performance obligations in favor of the non-assigning Party; except in each case where evidence
exists to the contrary.

 

(c)
This Section 11.5 does not address whether (i) rights under this Agreement are assignable or (ii) performance under this Agreement
is delegable. Section 11.4 addresses these matters.

 

(d)
For purposes of this Section 11.5, (i) “assignment” means any assignment, whether voluntary or involuntary, by merger,
consolidation, dissolution, operation of law or any other manner, (ii) “assignee” means any successor or assign of
the assignor, (iii) a “change of control” is deemed an assignment of rights, and (iv) “merger” refers
to any merger in which a party participates, regardless of whether it is the surviving or disappearing corporation.

 

11.6
Counterparts and Facsimile Signature. The Parties may sign this Agreement in several counterparts, each of which will be
deemed an original but all of which together will constitute one instrument. This Agreement may be executed by facsimile signature.

 

11.7
Headings. The section headings in this Agreement are inserted for convenience only and shall not affect in any way the
meaning or interpretation of this Agreement.

 

11.8
Notices.

 

(a)
For a notice or other communication (a “Notice”) under this Agreement to be valid, it must be in writing and
signed by the sending Party, and the sending Party must use one of the following methods of delivery: (i) personal delivery; (ii)
registered or certified mail, in each case, return receipt requested and postage prepaid; or (iii) nationally recognized overnight
courier, with all fees prepaid.

 

(b)
For a Notice to be valid, it must be addressed to the receiving party at one or more addresses listed below for the receiving
party or to any other address designated by the receiving party in a Notice in accordance with this section 11.8.

 

	 	If
    to Seller:	Maxwell
    Resources, Inc.
	 	 	3131
    McKinney Ave.
	 	 	Suite
    600TM
	 	 	Dallas,
    TX 75204
	 	 	 
	 	 	Email: medwards@maxwellre.com
	 	 	 
	 	If
    to Buyer:	 
	 	 	David
    Gilkeson
	 	 	219
    Cheddington Drive
	 	 	Katy,
    Texas 77450
	 	 	 
	 	 	Email:
        _______________________________

         

	 	 	 
	 	 	Phone:
    _______________________________

 

    	Asset Purchase Agreement between 
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	Proprietary and Confidential 

Intended for Addressee Only

     

    

 

(c)

 

(d)
been received as follows:

 

(i)
If it is delivered in person or sent by registered or certified mail or by nationally recognized overnight courier, upon the earlier
of (1) receipt as indicated by the date on the signed receipt, and (2) four Business Days after the Business Day on which it is
sent to the receiving party.

 

(ii)
If the receiving party rejects or otherwise refuses to accept it, or if it cannot be delivered because of a change in address
for which no notice was given, then upon that rejection, refusal or inability to deliver.

 

(e)
If a Notice is received after 5:00 p.m., Dallas, Texas time on a Business Day at the location specified in the address for the
receiving party, or on a day that is not a Business Day, then the Notice is deemed received at 9:00 a.m. on the next Business
Day.

 

(f)
If more than one method for delivery of a Notice under Section 11.8(a) is used, the earliest Notice date established by Section
11.8(c) will control.

 

(g)
If a Notice is given under this Section 11.8 of a permitted successor or assign of a Person, then a Notice will be given as provided
in this Section 11.8 also to such successor or assign of such Person.

 

11.9
Governing Law. The Laws of the State of Texas, without giving effect to principles of conflict of laws, govern all matters
arising under this agreement, including all tort claims.

 

11.10 Suspended
Funds. At Closing Sellers will transfer to Buyer all funds, if any, held by Sellers in suspense owing to Third Persons on
account of production from the Purchased Assets, together with identification of those funds on a Well-by-Well and
owner-by-owner basis. Buyer shall assume responsibility for the payment thereof to Third Persons entitled to the same, to the
extent of the funds transferred, and shall indemnify and hold Sellers harmless for claims related to or arising out of
Buyer’s payment, mispayments or failure to make payment of such funds. Sellers shall indemnify and hold harmless Buyer
for claims related to wrongfully withheld suspended funds attributable to the period of time prior to the Effective
Time.

 

11.11
Amendments. No amendment of this Agreement will be effective unless it is in writing and signed by the Parties. To be valid,
any document signed by a Party in accordance with this Section 11.11 must be signed by an officer of that Party authorized to
do so.

 

11.12
Severability. If any provision of this Agreement is held invalid, illegal or unenforceable, (a) the remainder of this Agreement,
or application of that provision to any Persons or circumstances other than those as to which it is held unenforceable, will not
be affected by that unenforceability and will be enforceable to the fullest extent permitted by Law, and (b) the Parties shall
negotiate in good faith to modify this Agreement so as to effect the original intent of the Parties to the fullest extent permitted
by applicable Law.

 

11.13
Sellers’ Obligations Several Not Joint. Anything to the contrary notwithstanding, the obligations and liability of
each Seller, arising under and in connection with this Agreement shall be several, in proportion to its ownership interests in
the Purchased Assets giving rise to such obligations and liabilities, and not joint. The representations, warranties, and covenants
relating to the business organization of a “Seller” or “Sellers,” are made individually by each Seller
only as to such Seller’s business organization. Each covenant or representation, or warranty made by “Seller”
or “Sellers,” is made individually and severally by each Seller and, no Seller shall be liable to Buyer for any breach
by any other Seller.

 

11.14
Sellers’ Representative. Sellers hereby appoints Richard Garza as their sole representative (“Sellers’
Representative”) to act as the agent and on behalf of Sellers for all purposes under this Agreement, including for the
purposes of: (i) administering and supervising the conduct of Buyer’s Title Review pursuant to Article VI and the conduct
of Buyer’s physical inspection and Site Assessment pursuant to Article V including without limitation determining any adjustments
to the Purchase Price in accordance with Article I or Article VI, giving and receiving environmental reports, materials and assessments
as provided in Article V and entering into any agreements contemplated by Article VI; (ii) determining whether the conditions
to closing in Article II have been satisfied and supervising the Closing, including waiving any such condition if Sellers’
Representative, in its sole discretion, determines that such waiver is appropriate; (iii) taking any and all actions that may
be necessary or desirable, as determined by Sellers’ Representative in its sole discretion, in connection with the amendment
of this Agreement or waivers of any term of this Agreement in accordance with Section 11.11; (vi) taking any and all actions that
may be necessary or desirable, as determined by Sellers’ Representative in its sole discretion, in connection with the payment
of the costs and expenses incurred with respect to Sellers in connection with the transactions contemplated by this Agreement;
(vii) granting any consent or approval on behalf of Sellers under this Agreement; (viii) executing and delivering any documents
and interests or taking any action as may be necessary or advisable pursuant to Section 5.6; and (ix) taking any and all other
actions and doing any and all other things provided in or contemplated by this Agreement to be performed by Sellers’ Representative
on behalf of Sellers. As the representative of Sellers, Sellers’ Representative shall act as the agent for Sellers, shall
have authority to bind Sellers in accordance with this Agreement, and Buyer may rely on such appointment and authority. Sellers
shall fully release, indemnify and hold Buyer harmless for any actions taken, or inactions by, Sellers’ Representative in
connection with this Agreement that are alleged to be in violation of Sellers’ Representative’s authority.

 

    	Asset Purchase Agreement between 
 Maxwell Resources, Inc. and David Gilkeson	 
 29
	Proprietary and Confidential 

Intended for Addressee Only

     

    

 

11.15
Submission to Jurisdiction. Each Party: (a) submits to the jurisdiction of any state or federal court sitting in Dallas,
Texas in any Action arising out of or relating to this Agreement (including any Action for the enforcement of any arbitral award
made in connection with any arbitration of a Dispute hereunder); (b) agrees that all claims in respect of such Action may be heard
and determined in any such court; (c) waives any claim of inconvenient forum or other challenge to venue in such court; (d) agrees
not to bring any Action arising out of or relating to this Agreement in any other court; and (e) waives any right it may have
to a trial by jury with respect to any Action arising out of or relating to this Agreement; provided in each case that, solely
with respect to any arbitration of a Dispute, the Arbitrator shall resolve all threshold issues relating to the validity and applicability
of the arbitration provisions of this Agreement, contract validity, applicability of statutes of limitations and issue preclusion,
and such threshold issues shall not be heard or determined by such court. Each Party agrees to accept service of any summons,
complaint or other initial pleading made in the manner provided for the giving of notices in Section 11.8, provided that nothing
in this Section 11.15 shall affect the right of any Party to serve such summons, complaint or other initial pleading in any other
manner permitted by Law.

 

11.16
Construction. (a) The language used in this Agreement shall be deemed to be the language chosen by the Parties to express
their mutual intent, and no rule of strict construction shall be applied against any Party.

 

(b)
Any reference to any federal, state, local or foreign statute or Law shall be deemed also to refer to all rules and regulations
promulgated thereunder, unless the context requires otherwise.

 

(c)
Any reference in this Agreement to “including” shall be interpreted as “including, without limitation.”

 

(d)
Any reference to any Article, Section or paragraph shall be deemed to refer to an Article, Section or paragraph of this Agreement,
unless the context clearly indicates otherwise. All references to Exhibits and Schedules refer to the Exhibits and Schedules attached
to this Agreement, unless the context clearly indicates otherwise. The Exhibits and Schedules which are attached to this Agreement
are incorporated into and made a part of this Agreement for all purposes.

 

(e)
The Parties have participated jointly in the negotiation and drafting of this Agreement. In the event an ambiguity or question
of intent or interpretation arises, this Agreement shall be construed as if drafted jointly by the Parties and no presumption
or burden of proof shall arise favoring or disfavoring any Party by virtue of the authorship of any of the provisions of this
Agreement.

 

(f)
The parties also represent that each had access to its own Attorney and each were in fact each represented by Counsel.

 

11.17
Limitation on Damages.

 

(a)
COVERAGE. NOTWITHSTANDING ANYTHING CONTAINED TO THE CONTRARY IN ANY OTHER PROVISION OF THIS AGREEMENT, IT IS THE EXPLICIT
INTENT OF EACH PARTY HERETO THAT SELLER IS NOT MAKING ANY REPRESENTATION OR WARRANTY WHATSOEVER, EXPRESS, IMPLIED, STATUTORY OR
OTHERWISE, BEYOND THOSE REPRESENTATIONS OR WARRANTIES EXPRESSLY GIVEN IN THIS AGREEMENT AND IN THE ASSIGNMENT, BILL OF SALE AND
CONVEYANCE TO BE DELIVERED AT CLOSING, AND IT IS UNDERSTOOD THAT, WITHOUT LIMITING SUCH EXPRESS REPRESENTATIONS AND WARRANTIES,
BUYER TAKES THE PURCHASED ASSETS AS IS AND WHERE IS AND WITH ALL FAULTS. WITHOUT LIMITING THE GENERALITY OF THE IMMEDIATELY PRECEDING
SENTENCE, EXCEPT FOR THE REPRESENTATIONS, WARRANTIES AND COVENANTS EXPRESSLY GIVEN IN THIS AGREEMENT AND IN THE ASSIGNMENT, BILL
OF SALE AND CONVEYANCE TO BE DELIVERED AT CLOSING, SELLER HEREBY (I) EXPRESSLY DISCLAIMS AND NEGATES ANY REPRESENTATION OR WARRANTY,
EXPRESS OR IMPLIED, AT COMMON LAW, BY STATUTE OR OTHERWISE, RELATING TO THE CONDITION OF THE PURCHASED ASSETS (INCLUDING, WITHOUT
LIMITATION, ANY IMPLIED OR EXPRESS WARRANTY OF MERCHANTABILITY OR FITNESS FOR A PARTICULAR PURPOSE, OR OF CONFORMITY TO MODELS
OR SAMPLES OF MATERIALS, OR THE PRESENCE OR ABSENCE OF ANY HAZARDOUS MATERIALS IN OR ON, OR DISPOSED OF OR DISCHARGED FROM, THE
PURCHASED ASSETS) AND (II) NEGATES ANY RIGHTS OF BUYER UNDER STATUTES TO CLAIM DIMINUTION OF CONSIDERATION AND ANY CLAIMS BY BUYER
FOR DAMAGES BECAUSE OF DEFECTS, WHETHER KNOWN OR UNKNOWN, IT BEING THE INTENTION OF SELLER AND BUYER THAT THE PURCHASED ASSETS
ARE TO BE ACCEPTED BY BUYER IN THEIR PRESENT CONDITION AND STATE OF REPAIR. FURTHERMORE IT IS REPRESENTED THAT EACH PARTY WAS
REPRESENTED BY COUNSEL AND DEPENDED ON COUNSEL FOR INPUT AND INTERPRETATION OF THIS TRANSACTION.

 

    	Asset Purchase Agreement between 
 Maxwell Resources, Inc. and David Gilkeson	 
 30
	Proprietary and Confidential 

Intended for Addressee Only

     

    

 

(b)
TEXAS DECEPTIVE TRADE PRACTICES ACT WAIVER. BUYER (A) REPRESENTS AND WARRANTS TO SELLER THAT IT (I) IS ACQUIRING THE PURCHASED
ASSETS FOR COMMERCIAL OR BUSINESS USE, (II) IS REPRESENTED BY LEGAL COUNSEL, (III) ACKNOWLEDGES THE CONSIDERATION PAID OR TO BE
PAID FOR THE PURCHASED ASSETS WILL EXCEED $500,000, AND (IV) HAS KNOWLEDGE AND EXPERIENCE IN FINANCIAL AND BUSINESS MATTERS SUCH
THAT ENABLE IT TO EVALUATE THE MERITS AND RISKS OF THE TRANSACTION CONTEMPLATED BY THIS AGREEMENT AND IS NOT IN A SIGNIFICANTLY
DISPARATE BARGAINING POSITION WITH RESPECT TO THE SELLER; AND (B) HEREBY UNCONDITIONALLY AND IRREVOCABLY WAIVES ANY AND ALL RIGHTS
OR REMEDIES IT MAY HAVE UNDER THE DECEPTIVE TRADE PRACTICES – CONSUMER PROTECTION ACT OF THE STATE OF TEXAS, TEX. BUS. &
COM. CODE § 17.41 ET SEQ. TO THE MAXIMUM EXTENT IT CAN DO SO UNDER APPLICABLE LAW, IF SUCH ACT WOULD FOR ANY REASON BE DEEMED
APPLICABLE TO THE TRANSACTIONS CONTEMPLATED HEREBY. WAIVER OF CONSUMER RIGHTS BUYER WAIVES ITS RIGHTS UNDER THE DECEPTIVE TRADE
PRACTICES – CONSUMER PROTECTION ACT, SECTION 17.41 ET SEQ., BUSINESS & COMMERCE CODE, A LAW THAT GIVES CONSUMERS SPECIAL
RIGHTS AND PROTECTIONS. AFTER CONSULTATION WITH AN ATTORNEY OF BUYER’S OWN SELECTION, BUYER VOLUNTARILY CONSENTS TO THIS
WAIVER. FURTHERMORE, WITH RESPECT TO PURCHASED ASSETS WHICH ARE LOCATED IN A STATE OR SUBJECT TO A JURISDICTION OTHER THAN TEXAS,
BUYER WAIVES ANY COMPARABLE PROVISION OF THE LAW OF THE STATE OR OTHER JURISDICTION WHERE SUCH PURCHASED ASSETS ARE LOCATED OR
TO WHICH SUCH PURCHASED ASSETS ARE SUBJECT.

 

(c)
DAMAGES. NOTWITHSTANDING ANYTHING CONTAINED TO THE CONTRARY IN ANY OTHER PROVISION OF THIS AGREEMENT, SELLER AND BUYER
AGREE THAT THE RECOVERY BY EITHER PARTY HERETO OF ANY DAMAGES SUFFERED OR INCURRED BY IT AS A RESULT OF ANY BREACH BY THE OTHER
PARTY OF ANY OF ITS REPRESENTATIONS, WARRANTIES OR OBLIGATIONS UNDER THIS AGREEMENT SHALL BE LIMITED TO THE ACTUAL DAMAGES SUFFERED
OR INCURRED BY THE NON- BREACHING PARTY (AND THE INDEMNIFIED PERSONS TO WHICH SUCH OBLIGATIONS MAY EXTEND UNDER THE TERMS HEREOF)
AS A RESULT OF THE BREACH BY THE BREACHING PARTY OF ITS REPRESENTATIONS, WARRANTIES OR OBLIGATIONS HEREUNDER AND IN NO EVENT SHALL
THE BREACHING PARTY BE LIABLE TO THE NON-BREACHING PARTY OR ANY INDEMNIFIED PERSON FOR ANY INDIRECT, CONSEQUENTIAL, SPECIAL, EXEMPLARY
OR PUNITIVE DAMAGES (INCLUDING, WITHOUT LIMITATION, ANY DAMAGES ON ACCOUNT OF LOST PROFITS OR OPPORTUNITIES, BUSINESS INTERRUPTION
OR LOST OR DELAYED PRODUCTION) SUFFERED OR INCURRED BY THE NON- BREACHING PARTY OR ANY INDEMNIFIED PERSON AS A RESULT OF THE BREACH
BY THE BREACHING PARTY OF ANY OF ITS REPRESENTATIONS, WARRANTIES OR OBLIGATIONS HEREUNDER. This Section shall operate only
to limit a Party’s liability and shall not operate to increase or expand any contractual obligation of a Party hereunder
or cause any contractual obligation of a Party hereunder to survive longer than provided in Section 8.4.

 

(d)
PLUGGING AND ABANDONMENT OBLIGATIONS. NOTWITHSTANDING ANYTHING CONTAINED TO THE CONTRARY IN ANY OTHER PROVISION OF THIS
AGREEMENT, IT IS EXPRESSLY AGREED FOR ALL PURPOSES OF THIS AGREEMENT THAT (I) THE PLUGGING AND ABANDONMENT OBLIGATIONS CONSTITUTE
ASSUMED LIABILITIES, (II) THE PLUGGING AND ABANDONMENT OBLIGATIONS SHALL NOT CONSTITUTE ENVIRONMENTAL CONDITIONS, ENVIRONMENTAL
LIABILITIES, ENVIRONMENTAL DEFECTS OR ENVIRONMENTAL MATTERS, (III) EXCEPT FOR THE REPRESENTATION SET FORTH IN SECTION 3.15, SELLER
MAKES NO WARRANTY OR REPRESENTATION, EXPRESS OR IMPLIED, WITH RESPECT TO THE PLUGGING AND ABANDONMENT OBLIGATIONS, AND (IV) SELLER
SHALL HAVE NO LIABILITIES OR OBLIGATIONS WITH RESPECT TO PLUGGING AND ABANDONMENT OBLIGATIONS EXCEPT TO THE EXTENT SUCH OBLIGATIONS
RELATE TO THE EXCLUDED ASSETS.

 

(e)
ENVIRONMENTAL RELEASE. Buyer and its Affiliates shall have no rights to recovery or indemnification for environmental liabilities
relating to the Purchased Assets under this Agreement or at law other than the rights and remedies specifically provided in Article
V herein or Article VIII herein (solely with respect to any breach by Sellers of their representation in Section 3.9), and all
rights or remedies which Buyer and its Affiliates may have at or under any law with respect to any environmental liabilities are
expressly waived other than the rights and remedies specifically provided in Article V herein or Article VIII herein (solely with
respect to any breach by Sellers of their representation in Section 3.9). FROM AND AFTER THE CLOSING AND EXCEPT FOR THE RIGHTS
AND REMEDIES SPECIFICALLY PROVIDED IN ARTICLE V HEREIN OR ARTICLE VIII HEREIN (SOLELY WITH RESPECT TO ANY BREACH BY SELLERS OF
THEIR REPRESENTATION IN SECTION 3.9), BUYER AND ITS AFFILIATES DO HEREBY AGREE, WARRANT AND COVENANT TO RELEASE, ACQUIT AND FOREVER
DISCHARGE EACH SELLER AND ITS AFFILIATES FROM ANY AND ALL CLAIMS OF WHATSOEVER NATURE, INCLUDING WITHOUT LIMITATION ALL CLAIMS
FOR CONTRIBUTION AND INDEMNITY UNDER STATUTE, INCLUDING THE COMPREHENSIVE ENVIRONMENTAL RESPONSE, COMPENSATION, AND LIABILITY
ACT, OR COMMON LAW, WHICH COULD BE ASSERTED NOW OR IN THE FUTURE AND THAT RELATE TO OR IN ANY WAY ARISE OUT OF ENVIRONMENTAL LIABILITIES
OR OTHER ENVIRONMENTAL MATTERS RELATING TO THE PURCHASED ASSETS. FROM AND AFTER CLOSING, BUYER AND ITS AFFILIATES WARRANT, AGREE
AND COVENANT NOT TO SUE OR INSTITUTE ARBITRATION AGAINST ANY SELLER OR ITS AFFILIATES UPON ANY CLAIM FOR INDEMNITY AND CONTRIBUTION
THAT HAVE BEEN ASSERTED OR COULD BE ASSERTED FOR ANY ENVIRONMENTAL LIABILITIES OR OTHER ENVIRONMENTAL MATTERS RELATING TO THE
PURCHASED ASSETS, EXCEPT FOR THE PURPOSE OF ENFORCING ARTICLE V HEREIN OR ARTICLE VIII HEREIN (SOLELY WITH RESPECT TO ANY BREACH
BY SELLERS OF THEIR REPRESENTATION IN SECTION 3.9).

 

11.18
Minimum Royalty Litigation. Notwithstanding anything to the contrary herein, Sellers make no representation, warranty or
covenant with respect to any Minimum Royalty Litigation.

 

(REMAINDER
OF PAGE INTENTIONALLY LEFT BLANK)

 

    	Asset Purchase Agreement between 
 Maxwell Resources, Inc. and David Gilkeson	 
 31
	Proprietary and Confidential 

Intended for Addressee Only

     

    

 

The
Parties are signing this Agreement on
the date stated in the introductory clause.

 

	SELLER:	 
	 	 
	MAXWELL
    RESOURCES, INC.	 
	 	 	 
	SIGNATURE:	/s/
    Mike Edwards	 
	Mike
    Edwards, CEO and President
	Maxwell
    Resources, Inc.

 

ACKNOWLEDGMENT

 

	STATE
    OF TEXAS	§
	 	§
	COUNTY
    OF DALLAS	§

 

This
foregoing instrument was acknowledged before me this _______ day of September, 2015, by Mike Edwards,
CEO and President of maxwell
Resources, inc., a
nevada Corporation, on behalf of said corporation.

 

	 	 
	 	NOTARY
    PUBLIC, STATE OF TEXAS

 

BUYER:

 

DAVID
GILKESON

 

	SIGNATURE:	/s/
    David Gilkeson	 

   

 

 

	Asset Purchase Agreement between 
 Maxwell Resources, Inc. and David Gilkeson	 
 32
	Proprietary and Confidential 

Intended for Addressee OnlyExhibit

STEELCASE INC. INCENTIVE COMPENSATION PLAN
		
	ARTICLE 1.
	Establishment, Objectives, and Duration

1.1    Establishment of the Plan.  Steelcase Inc., a Michigan corporation (hereinafter referred to as the “Company”), hereby establishes an incentive compensation plan to be known as the “Steelcase Inc. Incentive Compensation Plan” (hereinafter referred to as the “Plan”), as set forth in this document.  The Plan permits the grant of Nonqualified Stock Options, Incentive Stock Options, Stock Appreciation Rights, Restricted Stock, Performance Shares, Performance Units, Cash-Based Awards, Phantom Shares and Share-Based Awards.  Notwithstanding any provision in the Plan, to the extent that any Award would be subject to Section 409A of the Code, no such Award may be granted if it would fail to comply with the requirements set forth in Section 409A of the Code and any regulations or guidance promulgated thereunder.

The Plan as hereby amended and restated is effective as of July 15, 2015 (the “Effective Date”); provided, however, that the Plan as amended and restated shall be subject to the approval by the shareholders of the Company of the Plan at the annual meeting for such shareholders on July 15, 2015 (the “2015 Meeting”).

1.2    Objectives of the Plan.  The objectives of the Plan are to optimize the profitability and growth of the Company through annual and long-term incentives which are consistent with the Company’s goals and which link the personal interests of Participants to those of the Company’s shareholders; to provide Participants with an incentive for excellence in individual performance; and to promote teamwork among Participants.  The Plan is further intended to provide flexibility to the Company in its ability to motivate, attract, and retain the services of Participants who make significant contributions to the Company’s success and to allow Participants to share in the success of the Company.

1.3    Duration of the Plan.  The Plan shall commence on the Effective Date, as described in Section 1.1 hereof, and shall remain in effect, subject to the right of the Board of Directors to amend or terminate the Plan at any time pursuant to Article 18 hereof, until all Shares subject to it shall have been purchased or acquired according to the Plan’s provisions under Awards denominated in Shares, and with respect to all Awards, in no event may an Award be granted under the Plan on or after the tenth anniversary of the Effective Date.

		
	ARTICLE 2.
	Definitions

Whenever used in the Plan, the following terms shall have the meanings set forth below, and when the meaning is intended, the initial letter of the word shall be capitalized:

2.1    “Affiliate” shall have the meaning ascribed to such term in Rule 12b‐2 of the General Rules and Regulations of the Exchange Act.

2.2    “Award” means, individually or collectively, a grant under this Plan of Nonqualified Stock Options, Incentive Stock Options, Stock Appreciation Rights, Restricted Stock, Performance Shares, Performance Units, Cash-Based Awards, Phantom Shares or Share-Based Awards.

 1

2.3    “Award Agreement” means an agreement entered into by the Company and each Participant setting forth the terms and provisions applicable to Awards granted under this Plan.

2.4    “Beneficial Owner” or “Beneficial Ownership” shall have the meaning ascribed to such term in Rule 13d-3 of the General Rules and Regulations under the Exchange Act.

2.5    “Board” or “Board of Directors” means the Board of Directors of the Company.

2.6    “Cause” means (i) the Participant’s willful and continued failure to perform substantially his or her duties with the Company or the Affiliate then employing him or her (other than any such failure resulting from incapacity due to physical or mental illness), or (ii) the Participant’s willful engaging in illegal conduct or gross misconduct that is materially and demonstrably injurious to the Company; provided, that for purposes of this definition, no act or failure to act, on the Participant’s part, will be considered “willful” unless it is done, or omitted to be done, by the Participant in bad faith or without reasonable belief that his or her action or omission was in the best interests of the Company or the Affiliate then employing the Participant.

2.7    “Cash-Based Award” means an Award granted to a Participant, as described in Article 9 herein.

2.8    ”Change in Control” of the Company shall be deemed to have occurred if the event set forth in any one of the following paragraphs shall have occurred:

		
	(a)
	any Person (other than any Initial Holder or Permitted Transferee) (i) is or becomes the Beneficial Owner, directly or indirectly, of securities of the Company representing thirty percent (30%) or more of the combined voting power of the Company’s then outstanding securities, excluding any Person who becomes such a Beneficial Owner in connection with a transaction described in clause (i) of paragraph (c) below, and (ii) the combined voting power of the securities of the Company that are Beneficially Owned by such Person exceeds the combined voting power of the securities of the Company that are Beneficially Owned by all Initial Holders and Permitted Transferees at the time of such acquisition by such Person or at any time thereafter; or

		
	(b)
	the following individuals cease for any reason to constitute a majority of the number of Directors then serving: individuals who, on the date hereof, constitute the Board and any new Director (other than a Director whose initial assumption of office is in connection with an actual or threatened election contest, including but not limited to a consent solicitation, relating to the election of Directors of the Company) whose appointment or election by the Board or nomination for election by the Company’s shareholders was approved or recommended by a vote of at least two-thirds (2/3) of the Directors then still in office who either were Directors on the date hereof or whose appointment, election or nomination for election was previously so approved or recommended; or

		
	(c)
	there is consummated a merger or consolidation of the Company or any direct or indirect subsidiary of the Company with or involving any other corporation, other than (i) a merger or consolidation which would result in the voting securities of the Company outstanding immediately prior thereto continuing to represent 

 2

(either by remaining outstanding or by being converted into voting securities of the surviving entity or any parent thereto), at least fifty-five percent (55%) of the combined voting power of the securities of the Company or such surviving entity or any parent thereof outstanding immediately after such merger or consolidation, or (ii) a merger or consolidation effected to implement a recapitalization of the Company (or similar transaction) in which no Person (other than an Initial Holder or Permitted Transferee) is or becomes the Beneficial Owner, directly or indirectly, of securities of the Company (not including in the securities Beneficially Owned by such Person any securities acquired directly from the Company or its Affiliates) representing thirty percent (30%) or more of the combined voting power of the Company’s then outstanding securities; or

		
	(d)
	the shareholders of the Company approve a plan of complete liquidation or dissolution of the Company or there is consummated an agreement for the sale or disposition by the Company of all or substantially all of the Company’s assets, other than a sale or disposition by the Company of all or substantially all of the Company’s assets to an entity, at least fifty-five percent (55%) of the combined voting power of the voting securities of which are owned by shareholders of the Company in substantially the same proportions as their ownership of the Company immediately prior to such sale.

However, in no event shall a Change in Control be deemed to have occurred, with respect to a Participant, if the Participant is part of a purchasing group which consummates the Change in Control transaction. A Participant shall be deemed “part of a purchasing group” for purposes of the preceding sentence if the Participant is an equity participant in the purchasing company or group (except for: (i) passive ownership of less than three percent (3%) of the stock of the purchasing company; or (ii) ownership of equity participant in the purchasing company or group which is otherwise not significant, as determined prior to the Change in Control by a majority of the non-employee continuing Directors).

Notwithstanding the foregoing, a Change in Control shall not be deemed to have occurred by virtue of the consummation of any transaction or series of integrated transactions immediately following which the record holders of the common stock of the Company immediately prior to such transaction or series of transactions continue to have substantially the same proportionate ownership, directly or indirectly, in an entity which owns all or substantially all of the assets of the Company immediately following such transaction or series of transactions.

2.9    “Code” means the Internal Revenue Code of 1986, as amended from time to time.

2.10    “Committee” means the Compensation Committee of the Board and shall be comprised entirely of Directors who are considered “outside directors” under Section 162(m) of the Code.

2.11    “Company” means Steelcase Inc., a Michigan corporation, including any and all Subsidiaries and Affiliates, and any successor thereto as provided in Article 22 herein.

2.12    “Competition” means directly or indirectly engaging in competition with the Company or any subdivision, subsidiary, or affiliate of the Company (collectively, the “Company Group”) at any time during employment with the Company Group or during the three (3) year period following termination of employment with the Company Group, without prior 

 3

approval of the administrative Committee.  A Plan Participant engages in competition if that person participates directly or indirectly in the manufacture, design or distribution of any products of the same type as those of the Company Group, including, but not limited to, office furniture, office systems or architectural products, or the providing of any related services, for or on behalf of any person or entity other than the Company and its authorized dealers, at any location within or without the United States of America.  It is intended that this definition shall be enforced to the fullest extent permitted by law.  If any part of this definition shall be construed to be invalid or unenforceable, in whole or in part, then such definition shall be construed in a manner so as to permit its enforceability to the fullest extent permitted by law.

2.13    “Covered Employee” shall have the meaning set forth in Section 162(m)(3) of the Code.

2.14    “Director” means any individual who is a member of the Board; provided, however, that any Director who is employed by the Company or any Subsidiary or Affiliate shall be considered an Employee under this Plan and, except for purposes of the definition of “Change in Control” under this Plan, shall not be considered a Director.

2.15    “Effective Date” shall have the meaning ascribed to such term in Section 1.1 hereof.

2.16    “Employee”  means any employee of the Company or its Subsidiaries or Affiliates.  Except for purposes of the definition of “Change in Control” under this Plan, Directors who are employed by the Company shall be considered Employees under this Plan.
2.17    “Exchange Act” means the Securities Exchange Act of 1934, as amended from time to time, or any successor act thereto.

2.18    “Fair Market Value” shall be the closing sales price per Share for the date of grant on the principal securities exchange on which the Shares are traded or, if there is no such sale on the relevant date, then on the last previous day on which a sale was reported; if the security is not listed for trading on a national securities exchange, the fair market value of a security as determined in good faith by the Board.

2.19    “Freestanding SAR” means an SAR that is granted independently of any Options, as described in Article 7 herein.

2.20    “Good Reason” means, if the Participant is a participant under the Company’s Executive Severance Plan, the definition as set forth therein and for all other Participants the occurrence, on or after the date of a Change in Control and without the affected Participant’s written consent, of (i) a material reduction in the Participant’s base salary and annual bonus opportunity, (ii) a material adverse alteration in the nature or status of the Participant’s responsibilities, duties or title from those in effect immediately prior to the Change in Control, including without limitation, if the Participant was, immediately prior to the Change in Control, an executive officer of a public company, the Participant ceasing to be an executive officer of a public company or (iii) a relocation of the Participant’s principal place of employment to a location more than fifty (50) miles from the Participant’s principal place of employment immediately prior to the Change in Control; provided, that the Participant must provide written notice to the Company stating the circumstances believed to constitute Good Reason within 60 days of the initial existence of such circumstances and the Company shall have 30 days to remedy such circumstance and if not remedied, 

 4

the Participant may then deliver his or her notice resignation with Good Reason with a termination of employment effective date no later than 45 days following the 30-day remedy period.

2.21    “Incentive Stock Option” or “ISO” means an option to purchase Shares granted under Article 6 herein and which is designated as an Incentive Stock Option and which is intended to meet the requirements of Code Section 422.

2.22    “Initial Holder” shall have the meaning set forth in the Second Restated Articles of Incorporation of the Company.

2.23    “Insider” shall mean an individual who is, on the relevant date, an officer, director or more than ten percent (10%) beneficial owner of any class of the Company’s equity securities that is registered pursuant to Section 12 of the Exchange Act, all as defined under Section 16 of the Exchange Act.

2.24    “Nonqualified Stock Option” or “NQSO” means an option to purchase Shares granted under Article 6 herein and which is not intended to meet the requirements of Code Section 422.

2.25    “Option” means an Incentive Stock Option or a Nonqualified Stock Option, as described in Article 6 herein.

2.26    “Option Price” means the price at which a Share may be purchased by a Participant pursuant to an Option.

2.27    “Participant” means an Employee, Director, or other individual designated by the Board who has been selected to receive an Award or who has an outstanding Award granted under the Plan.

2.28    “Performance-Based Exception” means the performance-based exception from the tax deductibility limitations of Code Section 162(m).

2.29    “Performance Period” shall have the meaning set forth in Article 8 herein.

2.30    “Performance Share” means an Award granted to a Participant, as described in Article 9 herein.

2.31    “Performance Unit” means an Award granted to a Participant, as described in Article 9 herein.

2.32    “Period of Restriction” means the period during which the transfer of Shares of Restricted Stock is limited in some way (based on the passage of time, the achievement of performance goals, or upon the occurrence of other events as determined by the Board, at its discretion), and the Shares are subject to a substantial risk of forfeiture, as provided in Article 8 herein.

2.33    “Permitted Transferee” shall have the meaning set forth in the Second Restated Articles of Incorporation of the Company and include a Permitted Trustee solely in its capacity as a trustee of a Permitted Trust.

 5

2.34    “Permitted Trust” shall have the meaning set forth in the Second Restated Articles of Incorporation of the Company.

2.35    “Permitted Trustee” shall have the meaning set forth in the Second Restated Articles of Incorporation of the Company.

2.36    “Person” shall have the meaning ascribed to such term in Section 3(a)(9) of the Exchange Act, as modified and used in Sections 13(d) and 14(d) thereof, including a “group” as defined in Section 13(d) thereof, except that such term shall not include (i) the Company or any of its subsidiaries, (ii) a trustee or other fiduciary holding securities under an employee benefit plan of the Company or any of its Affiliates, (iii) an underwriter temporarily holding securities pursuant to an offering of such securities, or (iv) a corporation owned, directly or indirectly, by the shareholders of the Company in substantially the same proportions as their ownership of stock of the Company.

2.37    “Phantom Shares” means an Award granted to a Participant pursuant to Article 10 herein.

2.38    “Restricted Stock” means an Award granted to a Participant pursuant to Article 8 herein.

2.39    “Share-Based Award” means an Award granted to a Participant pursuant to Article 11 herein.

2.40    “Shares” means the shares of Class A Common Stock of the Company.

2.41    “Stock Appreciation Right” or “SAR” means an Award, granted alone or in connection with a related Option, designated as a SAR, pursuant to the terms of Article 7 herein.

2.42    “Subsidiary” means any corporation, partnership, joint venture, or other entity in which the Company has a fifty percent (50%) or greater voting interest.

2.43    “Tandem SAR” means a SAR that is granted in connection with a related Option pursuant to Article 7 herein, the exercise of which shall require forfeiture of the right to purchase a Share under the related Option (and when a Share is purchased under the Option, the Tandem SAR shall similarly be canceled).

		
	ARTICLE 3.
	Administration

3.1    General.  The Plan shall be administered by the Board and the Board may delegate its responsibility to the Committee.  The members of the Committee shall be appointed from time to time by, and shall serve at the discretion of, the Board of Directors.  The Board may delegate to the Committee any or all of the administration of the Plan; provided, however, that the administration of the Plan with respect to Awards granted to Directors may not be so delegated.  To the extent that the Board has delegated to the Committee any authority and responsibility under the Plan, all applicable references to the Board in the Plan shall be to the Committee.  The Committee shall have the authority to delegate administrative duties to Employees, officers or Directors of the Company or any other committee approved by the Committee.

 6

3.2    Authority of the Board.  Except as limited by law or by the Certificate of Incorporation or Bylaws of the Company, and subject to the provisions herein, the Board shall have full power to select Employees and Directors and other individuals who shall participate in the Plan; determine the sizes and types of Awards; determine the terms and conditions of Awards in a manner consistent with the Plan; construe and interpret the Plan and any agreement or instrument entered into under the Plan; establish, amend, or waive rules and regulations for the Plan’s administration; and (subject to the provisions of Article 18 herein) amend the terms and conditions of any outstanding Award as provided in the Plan.  Further, the Board shall make all other determinations which may be necessary or advisable for the administration of the Plan.  As permitted by law (and subject to Section 3.1 herein), the Board may delegate its authority as identified herein.

3.3    Decisions Binding.  All determinations and decisions made by the Board or the Committee pursuant to the provisions of the Plan and all related orders and resolutions of the Board or the Committee shall be final, conclusive and binding on all persons, including the Company, its shareholders, Directors, Employees, Participants, and their estates and beneficiaries.

		
	ARTICLE 4.
	Shares Subject to the Plan and Maximum Awards

4.1    Number of Shares Available for Grants.  Subject to adjustment as provided in Article 17 herein, the number of Shares hereby reserved for issuance to Participants under the Plan shall be 25,000,000 Shares that were originally authorized pursuant to the Plan as amended and restated as of February 27, 2010 of which approximately 8,777,944 Shares remain available as of May 25, 2015 in addition to any Shares that may be added back pursuant to the terms herein.  No more than 6,000,000 of which may be granted in the form of Shares of Restricted Stock.  Shares available under the Plan shall be now or hereafter issued or authorized but unissued.  For purposes of this Article 4, if an Award entitles the holder thereof to receive or purchase Shares, the number of Shares covered by such Award or to which such Award relates shall be counted on the date of grant of such Award against the aggregate number of Shares available for granting Awards under the Plan.  Shares that are subject to or underlie Awards which expire or for any reason are cancelled, terminated, forfeited, fail to vest, or for any other reason are not paid or delivered under the Plan shall again be available for issuance in connection with future Awards granted under the Plan.  Shares purchased on the open market with cash proceeds generated by the exercise of an Option will not increase or replenish the number of Shares available for grant.  In the event that Shares are delivered in respect of an Award, all of the Shares subject to the Award (including any Shares used to satisfy applicable tax withholding obligations) shall be considered in calculating the maximum number of Shares available for delivery under the Plan.  Shares surrendered or withheld as payment of either the exercise price of an Award and/or withholding taxes in respect of such an Award shall be counted against the share limits of this Plan and shall not again be available for issuance in connection with future Awards.  The foregoing adjustments to the Share limits are subject to any applicable limitations under Code Section 162(m) with respect to Awards intended as performance-based compensation thereunder.

4.2    Maximum Awards.  Unless and until the Board determines that an Award shall not qualify for the Performance-Based Exception, the following rules shall apply to grants of such Awards under the Plan:

		
	(a)
	Stock Options:  The maximum aggregate number of Shares that may be granted in the form of Stock Options, pursuant to any Award granted in any one fiscal year to any one single Participant shall be five hundred thousand (500,000).

 7

		
	(b)
	SARs:  The maximum aggregate number of Shares that may be granted in the form of Stock Appreciation Rights, pursuant to any Award granted in any one fiscal year to any one single Participant shall be five hundred thousand (500,000).

		
	(c)
	Restricted Stock:  The maximum aggregate grant with respect to Awards of Restricted Stock granted in any one fiscal year to any one Participant shall be two hundred and fifty thousand (250,000).

		
	(d)
	Performance Shares/Performance Units and Cash-Based Awards: The maximum aggregate payout (determined as of the end of the applicable Performance Period) with respect to Cash-Based Awards or Awards of Performance Shares or Performance Units granted in any one fiscal year to any one Participant shall be equal to the value of seven hundred and fifty thousand (750,000) Shares.

		
	(e)
	Phantom Shares:  The maximum aggregate payout (determine at the end of the applicable Performance Period) with respect to Phantom Shares granted in any one fiscal year to any one Participant shall be equal to the value of seven hundred and fifty thousand (750,000) Shares.

		
	(f)
	Other Share-Based Awards:  The maximum aggregate number of Shares that may be granted in the form of other Share-Based Awards, pursuant to any Award granted in any one fiscal year to one single Participant shall be two hundred and fifty thousand (250,000).

		
	ARTICLE 5.
	Eligibility and Participation

5.1    Eligibility.  Persons eligible to participate in this Plan include all Employees, Directors, and other individuals designated by the Board.

5.2    Actual Participation.  Subject to the provisions of the Plan, the Board may, from time to time, select from all eligible Employees, Directors, and other individuals designated by the Board, those to whom Awards shall be granted and shall determine the nature and amount of each Award.

		
	ARTICLE 6.
	Stock Options

6.1    Grant of Options.  Subject to the terms and provisions of the Plan, Options may be granted to Participants in such number, and upon such terms, and at any time and from time to time as shall be determined by the Board; provided, however, (a) that no Director shall be granted any ISO and (b) that any Option designed to qualify for the Performance-Based Exception shall be granted only by the Committee.

6.2    Award Agreement.  Each Option grant shall be evidenced by an Award Agreement that shall specify the Option Price, the duration of the Option, the number of Shares to which the Option pertains, termination and transferability rights, and such other provisions as the Board shall determine.  The Award Agreement also shall specify whether the Option is 

 8

intended to be an ISO within the meaning of Code Section 422, or an NQSO whose grant is intended not to fall under the provisions of Code Section 422.

6.3    Option Price.  The Option Price for each grant of an Option under this Plan shall be at least equal to one hundred percent (100%) of the Fair Market Value of a Share on the date the Option is granted.

6.4    Duration of Options.  Each Option granted to a Participant shall expire at such time as the Board shall determine at the time of grant; provided, however, that no Option shall be exercisable later than the tenth (10th) anniversary date of its grant.

6.5    Exercise of Options.  Options granted under this Article 6 shall be exercisable at such times and be subject to such restrictions and conditions as the Board shall in each instance approve, which need not be the same for each grant or for each Participant.

6.6    Payment.  Unless otherwise determined by the Board, Options granted under this Article 6 shall be exercised by the delivery of a written notice of exercise to the Company, setting forth the number of Shares with respect to which the Option is to be exercised, accompanied by full payment for the Shares.

The Option Price upon exercise of any Option shall be payable to the Company in full in one of the following manners: (a) in cash or its equivalent, or (b) to the extent so provided by the Board, by tendering previously acquired Shares having an aggregate Fair Market Value at the time of exercise equal to the total Option Price or by withholding from issuance upon exercise the Shares with an aggregate Fair Market Value equal to the total Option Price, or (c) by a combination of (a) and (b).

The Board also may allow cashless exercise as permitted under Federal Reserve Board’s Regulation T, subject to applicable securities law restrictions, or by any other means which the Board determines to be consistent with the Plan’s purpose and applicable law.

Subject to any governing rules or regulations, as soon as practicable after receipt of a written notification of exercise and full payment, the Company shall deliver to the Participant, in the Participant’s name, Share certificates in an appropriate amount based upon the number of Shares purchased under the Option(s) or other appropriate documentation of acquisition of such Shares.

6.7    Restrictions on Share Transferability.  The Board may impose such restrictions on any Shares acquired pursuant to the exercise of an Option granted under this Article 6 as it may deem advisable, including, without limitation, restrictions under applicable federal securities laws, under the requirements of any stock exchange or market upon which such Shares are then listed and/or traded, and under any blue sky or state securities laws applicable to such Shares.

		
	ARTICLE 7.
	Stock Appreciation Rights

 9

7.1    Grant of SARs.  Subject to the terms and conditions of the Plan, SARs may be granted to Participants at any time and from time to time as shall be determined by the Board.  The Board may grant Freestanding SARs, Tandem SARs, or any combination of these forms of SAR.

The Board shall have complete discretion in determining the number of SARs granted to each Participant (subject to Article 4 herein) and, consistent with the provisions of the Plan, in determining the terms and conditions pertaining to such SARs.

The grant price of a Freestanding SAR shall be at least equal to one hundred percent (100%) of the Fair Market Value of a Share on the date of grant of the SAR.  The grant price of Tandem SARs shall equal the Option Price of the related Option.
7.2    Exercise of Tandem SARs.  Tandem SARs may be exercised for all or part of the Shares subject to the related Option upon the surrender of the right to exercise the equivalent portion of the related Option.  A Tandem SAR may be exercised only with respect to the Shares for which its related Option is then exercisable.

Notwithstanding any other provision of this Plan to the contrary, with respect to a Tandem SAR granted in connection with an ISO: (a) the Tandem SAR will expire no later than the expiration of the underlying ISO; (b) the value of the payout with respect to the Tandem SAR may be for no more than one hundred percent (100%) of the difference between the Option Price of the underlying ISO and the Fair Market Value of the Shares subject to the underlying ISO at the time the Tandem SAR is exercised; and (c) the Tandem SAR may be exercised only when the Fair Market Value of the Shares subject to the ISO exceeds the Option Price of the ISO.

7.3    Exercise of Freestanding SARs.  Freestanding SARs may be exercised upon whatever terms and conditions the Board, in its sole discretion, imposes upon them.

7.4    SAR Agreement.  Each SAR grant shall be evidenced by an Award Agreement that shall specify the grant price, the term of the SAR, and such other provisions as the Board shall determine.

7.5    Term of SARs.  The term of a SAR granted under the Plan shall be determined by the Board, in its sole discretion; provided, however, that such term shall not exceed ten (10) years.

7.6    Payment of SAR Amount.  Upon exercise of a SAR, a Participant shall be entitled to receive payment from the Company in an amount determined by multiplying:

		
	(a)
	the difference between the Fair Market Value of a Share on the date of exercise over the grant price; by

		
	(b)
	the number of Shares with respect to which the SAR is exercised.

At the discretion of the Board, the payment upon SAR exercise may be in cash, in Shares of equivalent value, or in some combination thereof.  The Board’s determination regarding the form of SAR payout shall be set forth in the Award Agreement pertaining to the grant of the SAR.

 10

		
	ARTICLE 8.
	Restricted Stock

8.1    Grant of Restricted Stock.  Subject to the terms and provisions of the Plan, the Board, at any time and from time to time, may grant Shares of Restricted Stock to Participants in such amounts as the Board shall determine; provided, however, that Shares of Restricted Stock designed to qualify for the Performance-Based Exception shall be granted only by the Committee.

8.2    Restricted Stock Agreement.  Each Restricted Stock grant shall be evidenced by a Restricted Stock Award Agreement that shall specify the Period(s) of Restriction, the number of Shares of Restricted Stock granted, and such other provisions as the Board shall determine.

8.3    Other Restrictions.  The Board shall impose such other conditions and/or restrictions on any Shares of Restricted Stock granted pursuant to the Plan as it may deem advisable including, without limitation, a requirement that Participants pay a stipulated purchase price for each Share of Restricted Stock, restrictions based upon the achievement of specific performance goals (Company-wide, divisional, and/or individual), time-based restrictions on vesting following the attainment of the performance goals, and/or restrictions under applicable federal or state securities laws.  The time period during which the performance goals must be met shall be called a “Performance Period.”  The performance goals with respect to Awards designed to qualify for the Performance-Based Exception shall be established in writing by the Committee prior to the earlier of (a) ninety (90) days after the commencement of the Performance Period or (b) the date on which 25% of the Performance Period will elapse; provided, that in either case, achievement of the performance goals is substantially uncertain on such date.

The Company may retain the certificates representing Shares of Restricted Stock in the Company’s possession until such time as all conditions and/or restrictions applicable to such Shares have been satisfied; provided, however, that Shares shall not be delivered with respect to Awards designed to qualify for the Performance-Based Exception prior to the Committee’s certification, in writing, that the performance goals relating to such Awards have been satisfied.

Except as otherwise provided in this Article 8 or otherwise determined by the Board, Shares of Restricted Stock covered by each Restricted Stock grant made under the Plan shall become freely transferable by the Participant after the last day of the applicable Period of Restriction.

8.4    Voting Rights.  Participants holding Shares of Restricted Stock granted hereunder may be granted the right to exercise full voting rights with respect to those Shares during the Period of Restriction.

8.5    Dividends and Other Distributions.  During the Period of Restriction, Participants holding Shares of Restricted Stock granted hereunder may be credited with regular cash dividends paid with respect to the Shares while they are so held.  The Board may apply any restrictions to the dividends that the Board deems appropriate.  Without limiting the generality of the preceding sentence, if the grant or vesting of Shares of Restricted Stock is intended to comply with the requirements of the Performance-Based Exception, the Board may apply any restrictions it deems appropriate to the payment of dividends declared with respect to such Shares of Restricted Stock, including, without limitation, that the dividends and/or the Shares of Restricted Stock maintain eligibility for the Performance-Based Exception.

 11

		
	ARTICLE 9.
	Performance Units, Performance Shares, and Cash-Based Awards

9.1    Grant of Performance Units/Shares and Cash-Based Awards.  Subject to the terms of the Plan, Performance Units, Performance Shares and/or Cash-Based Awards may be granted at any time or from time to time, as shall be determined by the Board; provided, however, that Performance Units, Performance Shares and/or Cash-Based Awards designed to qualify for the Performance-Based Exception shall be granted only by the Committee.

9.2    Award Agreement.  Each Performance Unit, Performance Share and/or Cash-Based Awards grant shall be evidenced by an Award Agreement that shall specify the Performance Period(s) and such other provisions as the Board shall determine.

9.3    Value of Performance Units/Shares and Cash-Based Awards.  Each Performance Unit shall have an initial value that is established by the Board at the time of grant.  Each Performance Share shall have an initial value equal to the Fair Market Value of a Share on the date of grant.  Each Cash-Based Award shall have a value as may be determined by the Board.  The Board shall set performance goals in its discretion which, depending on the extent to which they are met, will determine the number and/or value of Performance Units/Shares and Cash-Based Award that will be paid out to the Participant.  The performance goals with respect to Awards designed to qualify for the Performance-Based Exception shall be established in writing by the Committee prior to the earlier of (a) ninety (90) days after the commencement of the Performance Period or (b) the date on which 25% of the Performance Period will elapse; provided, that in either case, achievement of the performance goals is substantially uncertain on such date.

9.4    Earning of Performance Units/Shares and Cash-Based Awards.  Subject to the terms of this Plan, after the applicable Performance Period has ended, the holder of Performance Units/Shares and Cash-Based Awards shall be entitled to receive payment with respect to the number and value of Performance Units/Shares and of Cash-Based Awards earned by the Participant over the Performance Period, to be determined as a function of the extent to which the corresponding performance goals have been achieved.

9.5    Form and Timing of Payment of Performance Units/Shares and Cash-Based Awards.  Payment of earned Performance Units/Shares and Cash-Based Awards shall be made in lump-sum payments at such time or times designated by the Board following the close of the applicable Performance Period, but in no event later than 2 1⁄2 months following the end of the calendar year in which the Performance Period closes.  Subject to the terms of this Plan, the Board, in its sole discretion, may pay earned Performance Units/Shares and Cash-Based Awards in the form of cash or in Shares (or in a combination thereof) which have an aggregate Fair Market Value equal to the value of the earned Performance Units/Shares and Cash-Based Awards at the close of the applicable Performance Period plus or minus any investment return from the close of the Performance Period to the date of payment as determined by the Board in its discretion; provided, however, that payment shall not be made with respect to Awards designed to qualify for the Performance-Based Exception prior to the Committee’s certification, in writing, that the performance goals relating to such Awards have been satisfied.  Such Shares may be granted subject to any restrictions deemed appropriate by the Board.  The determination of the Board with respect to the form and timing of payout of such Awards shall be set forth in the Award Agreement pertaining to the grant of the Award.

 12

At the discretion of the Board and subject to the requirements of Section 409A of the Code, Participants may be entitled to receive any dividends declared with respect to Shares which have been earned in connection with grants of Performance Units and/or Performance Shares which have been earned, but not yet distributed to Participants (such dividends shall be subject to the same accrual, forfeiture, and payout restrictions as those that apply to dividends earned with respect to Shares of Restricted Stock, as set forth in Section 8.5 herein).  In addition, Participants may, at the discretion of the Board, be entitled to exercise their voting rights with respect to such Shares.

		
	ARTICLE 10.
	Phantom Shares

10.1    Grant of Phantom Shares.  Subject to the terms of the Plan, Phantom Shares may be granted to Participants in such amounts and upon such terms, and at any time and from time to time, as shall be determined by the Board; provided, however, that Phantom Shares designed to qualify for the Performance-Based Exception shall be granted only by the Committee.

10.2    Award Agreement.  Each Phantom Share grant shall be evidenced by an Award Agreement that shall specify the terms and conditions of such Award and such other provisions as the Board shall determine.

10.3    Value of Phantom Shares.  Each Phantom Share shall have an initial value equal to the Fair Market Value of a Share on the date of grant.  The Board shall establish the terms and conditions of such Award, including any vesting provisions and performance goals.  The performance goals with respect to Awards designed to qualify for the Performance-Based Exception shall be established in writing by the Committee prior to the earlier of (a) ninety (90) days after the commencement of the Performance Period or (b) the date on which 25% of the Performance Period will elapse, provided, that in either case, achievement of the performance goals is substantially uncertain on such date.

10.4    Earning of Phantom Shares.  Subject to the terms of this Plan, the holder of any vested Phantom Shares shall be entitled to receive payout on the number and value of Phantom Shares earned by the Participant over the Performance Period, to be determined by the extent to which the corresponding performance goals have been achieved.

10.5    Form and Timing of Payment of Phantom Shares.  Payment of earned Phantom Shares shall be made in a single lump sum at such time as designated by the Board, but in no event later than 2 1⁄2 months following the end of the calendar year in which the Phantom Shares vest.  Subject to the terms of this Plan, the Board, in its sole discretion, may pay earned Phantom Shares in the form of cash or in Shares (or in a combination thereof) which have an aggregate Fair Market Value equal to the value of the earned Phantom Shares at such time as designated by the Board; provided, however, that payment shall not be made with respect to Awards designed to qualify for the Performance-Based Exception prior to the Committee’s certification, in writing, that the performance goals relating to such Awards have been satisfied.  Such Shares may be granted subject to any restrictions deemed appropriate by the Board.  The determination of the Board with respect to the form of payout of such Awards shall be set forth in the Award Agreement pertaining to the grant of the Award.

At the discretion of the Board and subject to the requirements of Section 409A of the Code, Participants may be entitled to receive any dividends declared with respect to Shares which have been earned in connection with grants of Phantom Shares which have been earned, but not yet distributed to Participants (such dividends shall be subject to the same accrual, 

 13

forfeiture, and payout restrictions as those that apply to dividends earned with respect to Shares of Restricted Stock, as set forth in Section 8.5 herein).

		
	ARTICLE 11.
	Other Share-Based Awards

Subject to the terms of the Plan, the Board may grant other Share-Based Awards under this Plan, including without limitation, those Awards pursuant to which Shares are acquired or may in the future be acquired and including Awards of dividend equivalents.  The Board, in its sole discretion, shall determine the terms and conditions of such other Share-Based Awards.

		
	ARTICLE 12.
	Performance Measures

Unless and until the Board proposes for shareholder vote and shareholders approve a change in the general performance measures set forth in this Article 12, the attainment of which may determine the degree of payout and/or vesting with respect to Awards which are designed to qualify for the Performance-Based Exception, the performance measure(s) to be used for purposes of such grants shall be based on one or more of the following criteria:

		
	(a)
	earnings per share;

		
	(b)
	net income (before or after taxes); 

		
	(c)
	return measures (including, but not limited to, assets, equity, sales, investment, return on invested capital (“ROIC”) or internal rate of return);

		
	(d)
	cash flow (including, but not limited to, operating cash flow, free cash flow, cash flow return on investment (discounted or otherwise), or cumulative cash flow per share);

		
	(e)
	earnings before or after taxes (including, but not limited to, earnings before all or any interest, taxes, depreciation and/or amortization (“EBIT”, “EBITA”, “EBITDA”);

		
	(f)
	gross revenues or sales;

		
	(g)
	operating profit (including, but not limited to, net operating profit after taxes (“NOPAT”);

		
	(h)
	margins (including, but not limited to, gross margin, operating margin or pre-tax profit margin);

		
	(i)
	operating expenses;

		
	(j)
	working capital;

		
	(k)
	share price (including, but not limited to, growth measures, total shareholder return (“TSR”) and relative total shareholder return);

		
	(l)
	dividend payments;

		
	(m)
	implementation or completion of critical projects or processes;

		
	(n)
	strategic business criteria, consisting of one or more objectives based on meeting specified market share, market penetration, product launch, inventory goals, geographic business expansion, customer satisfaction, employee satisfaction, human resources management, supervision of litigation, information technology, and goals relating to acquisitions, divestitures, joint ventures and similar transactions, productivity ratios, expense targets or cost reduction goals, and budget comparisons;

		
	(o)
	personal professional objectives, including any of the foregoing performance goals, the implementation of policies and plans, the negotiation of transactions, the development of long-term business goals, management 

 14

succession plans, formation of joint ventures, research or development collaborations, and the completion of other corporate transactions; and
		
	(p)
	any combination of, or a specified increase or decrease in, any of the foregoing.

Where applicable, the performance goals may be expressed in terms of attaining a specified level of the particular criteria or the attainment of a percentage increase or decrease in the particular criteria, and may be applied to one or more of the Company, a Subsidiary or Affiliate, or a division or strategic business unit of the Company, or may be applied to the performance of the Company relative to a market index, a group of other companies or a combination thereof, all as determined by the Committee.

The Board (or the Committee with respect to Awards designed to qualify for the Performance-Based Exception) shall have the discretion to adjust the determinations of the degree of attainment of the preestablished performance goals; provided, however, that Awards which are designed to qualify for the Performance-Based Exception, may not be adjusted upward (the Committee shall retain the discretion to adjust such Awards downward).  Nevertheless, the Board (or the Committee with respect to Awards designed to qualify for the Performance-Based Exception) shall make appropriate adjustments in the performance goals under an Award to reflect the impact of the following extraordinary items not reflected in such goals:  (1) any profit or loss attributable to acquisitions or dispositions of stock or assets, (2) any changes in accounting standards that may be required or permitted by the Financial Accounting Standards Board or adopted by the Company after the goal is established, (3) all items of gain, loss or expense for the year related to restructuring charges for the Company, (4) all items of gain, loss or expense for the year determined to be extraordinary or unusual in nature of infrequent in occurrence or related to the disposal of a segment of a business, (5) all items of gain, loss or expense for the year related to discontinued operations that do not qualify as a segment of a business as defined in APB Opinion No. 30, and (6) such other items as may be prescribed by Section 162(m) of the Code and the Treasury regulations thereunder as may be in effect from time to time, and any amendments, revisions or successor provisions and any changes thereto.  The Board (or the Committee with respect to Awards designed to qualify for the Performance-Based Exception) shall have full authority and discretion to, from time to time, as the Board deems necessary or appropriate, modify the accounting principles and components applied in the determination of the degree of attainment of the preestablished performance goals with respect to all Awards.

In the event that applicable tax and/or securities laws change to permit Board discretion to alter the governing performance measures without obtaining shareholder approval of such changes, the Board shall have sole discretion to make such changes without obtaining shareholder approval.  In addition, in the event that the Board determines that it is advisable to grant Awards which shall not qualify for the Performance-Based Exception, the Board may make such grants without satisfying the requirements of Code Section 162(m).

		
	ARTICLE 13.
	Beneficiary Designation

Each Participant under the Plan may, from time to time, name any beneficiary or beneficiaries (who may be named contingently or successively) to whom any benefit under the Plan is to be paid in case of his or her death before he or she receives any or all of such benefit.  Each such designation shall revoke all prior designations by the same Participant, shall be in a form prescribed by the Company, and will be effective only when filed by the Participant in writing with the Company 

 15

during the Participant’s lifetime.  In the absence of any such designation, benefits remaining unpaid at the Participant’s death shall be paid to the Participant’s estate.

		
	ARTICLE 14.
	Deferrals

The Board may permit or require a Participant to defer such Participant’s receipt of the payment of cash or the delivery of Shares that would otherwise be due to such Participant by virtue of the exercise of an Option or SAR, the lapse or waiver of restrictions with respect to Restricted Stock, or the satisfaction of any requirements or goals with respect to Performance Units/Shares.  If any such deferral election is required or permitted, the Board shall, in its sole discretion, establish rules and procedures for such payment deferrals and such deferrals shall comply with Section 409A of the Code and any regulations or guidance promulgated thereunder.

		
	ARTICLE 15.
	Rights of Employees/Directors

15.1    Employment.  Nothing in the Plan shall interfere with or limit in any way the right of the Company to terminate any Participant’s employment at any time, nor confer upon any Participant any right to continue in the employ of the Company.

15.2    Participation.  No Employee or Director shall have the right to be selected to receive an Award under this Plan, or, having been so selected, to be selected to receive a future Award.

15.3    Termination of Employment/Directorship/Relationship.  Each Participant’s Award Agreement shall set forth the extent to which the Participant shall have the right to exercise and/or receive payment for any Award following termination of the Participant’s employment or directorship with the Company, or termination of relationship with the Company.  Such provisions shall be determined in the sole discretion of the Board, shall be included in the Award Agreement entered into with each Participant, need not be uniform among Awards and may reflect distinctions based on the reasons for termination.

15.4    Competition.  In the event the Participant engages in any Competition with the Company, the Participant immediately and permanently forfeits the right to exercise and/or receive payment for any Award, whether or not vested.  The Participant must return to the Company the Participant’s gain resulting from Options exercised at any time within the twelve-month period preceding the date the Participant became engaged in competition with the Company.

15.5    Nontransferability.  Except as otherwise provided in a Participant’s Award Agreement or determined by the Board, Awards may not be sold, transferred, pledged, assigned, or otherwise alienated or hypothecated, other than by will or by the laws of decent and distribution.  Further, except as otherwise provided in a Participant’s Award Agreement or determined by the Board, a Participant’s rights under the Plan shall be exercisable during the Participant’s lifetime only by the Participant or the Participant’s legal representative.

		
	ARTICLE 16.
	Change in Control

 16

16.1    Change in Control Treatment of Outstanding Awards.  Unless otherwise specifically prohibited under applicable laws, or by the rules and regulations of any governing governmental agencies or national securities exchanges:

		
	(a)
	Performance Awards.  In the event that a Change in Control occurs during a Performance Period,

		
	(i)
	all outstanding Awards, other than the Cash-Based Awards, subject to performance-based vesting shall, immediately prior to the Change in Control, (I) be converted to an Award with a number of Shares underlying such Award equal to the greater of (x) the number of Shares earned as determined using the applicable performance achieved through the date of the Change in Control, as determined by the Committee in its sole discretion or (y) the target number of Shares, (II) cease to be subject to the achievement of performance criteria and (III) vest in full at the end of the Performance Period provided the Participant is employed by or is providing services to the Company or any Affiliate on such date; and 

		
	(ii)
	all outstanding Cash-Based Awards subject to performance-based vesting shall, immediately prior to the Change in Control, (I) be converted to a Cash-Based Award equal to the greater of (x) an amount of cash earned as determined using the applicable performance achieved through the date of the Change in Control, as determined by the Committee in its sole discretion or (y) the target level of cash, (II) cease to be subject to the achievement of performance criteria, (III) during the remainder of the Performance Period, be credited with such reasonable interest rate as the Committee shall determine (and until the Committee determines otherwise, such interest rate shall equal the three-year U.S. Treasury rate, as adjusted for the Company’s credit rating as of the end of the Company’s fiscal year prior to the Change in Control) and (IV) vest in full at the end of the Performance Period provided the Participant is employed by or is providing services to the Company or any Affiliate on such date.

		
	(b)
	Assumption/Substitution of Awards.  Unless otherwise determined by the Board and/or evidenced in an Award Agreement, with respect to each outstanding Award that is assumed or substituted in connection with a Change in Control, in the event that (1) a Change in Control occurs and (2) the Participant’s employment or service is terminated by the Company, its successor or affiliate thereof without Cause or the Participant resigns with Good Reason, in either case, on or after the effective date of the Change in Control but prior to twenty-four (24) months following such Change in Control, then:

		
	(i)
	Any and all Options and SARs granted hereunder shall become immediately exercisable, and shall remain exercisable throughout their entire term; 

		
	(ii)
	Any restriction periods and restrictions imposed on all outstanding Awards of Restricted Stock, Performance Units, Performance Shares, and Cash-Based Awards and Share-Based Awards shall lapse and be settled as soon as reasonable practicable, but in no event later than ten (10) days following such termination of employment; and

		
	(iii)
	Notwithstanding anything to the contrary, if the Change in Control event does not constitute a change in ownership or effective control of the Company or a change in ownership of a substantial portion of the assets of the Company under Section 409A of the Code, and if the 

 17

Company determines any Award constitutes deferred compensation subject to Section 409A of the Code, then the vesting of such Award shall be accelerated as of the date of termination of employment, but the Company shall pay such Award on its scheduled payment date (which may be a “separation from service” within the meaning of Section 409A of the Code), but in no event more than 90 days following the scheduled payment date.
		
	(c)
	No Assumption/Substitution of Awards.  Unless otherwise determined by the Board and/or evidenced in an Award Agreement, with respect to each outstanding Award that is not assumed or substituted in connection with a Change in Control, immediately upon the occurrence of the Change in Control,

		
	(i)
	Any and all Options and SARs granted hereunder shall become immediately exercisable, and shall remain exercisable throughout their entire term; 

		
	(ii)
	Any restriction periods and restrictions imposed on all outstanding Awards of Restricted Stock, Performance Units, Performance Shares, and Cash-Based Awards and Share-Based Awards shall lapse and be settled as soon as reasonable practicable, but in no event later than ten (10) days following the Change in Control; and

		
	(iii)
	Notwithstanding anything to the contrary, if the Company determines any Award constitutes deferred compensation subject to Section 409A of the Code, then to the extent required in order to avoid accelerated taxation and/or tax penalties under Section 409A of the Code, the vesting of such Award shall be accelerated as of the effective date of the Change in Control in accordance with clauses (i) and (ii) above, but the Company shall pay such Award on its scheduled payment date, but in no event more than 90 days following the scheduled payment date.

		
	(d)
	Assumed/Substituted.  For purposes of this Section 16.1, the Awards shall be considered assumed or substituted for if, following the Change in Control, (i) any adjustments necessary to preserve the intrinsic value of the Participant’s outstanding Awards have been made, and the Company’s acquirer or successor, as applicable, irrevocably assumes the Company’s obligations under this Plan or (ii) such acquirer or successor replaces the Participant’s outstanding Awards with Awards having substantially the same intrinsic value and having terms and conditions no less favorable to the Participant than those applicable to the Participant’s Awards immediately prior to the Change in Control.  In addition, the Awards shall be considered assumed or substituted for only if any equity based Awards, after the Change in Control, relate to common stock of the Company’s acquirer or successor which is publicly held and widely traded on an established stock exchange.  In respect of any Awards that are assumed or substituted and are converted into deferred cash awards, during the remainder of the applicable period prior to payment of such Award, the deferred cash award shall be credited with such reasonable interest rate as the Committee shall determine immediately prior to the Change in Control (and until the Committee determines otherwise, such interest rate shall equal the three-year U.S. Treasury rate, as adjusted for the Company’s credit rating as of the end of the Company’s fiscal year prior to the Change in Control).

		
	(e)
	Cashout of Awards.  Notwithstanding any other provision of the Plan, in the event of a Change in Control in which the consideration paid to the holders of Shares is solely cash, the Board may, in its discretion to the extent such treatment does not result in tax penalties under Section 409A of the Code, provide that each Award shall, upon the occurrence of a Change in Control, be cancelled in exchange for a payment in an amount equal to (i) the excess of the consideration paid per Share in the Change in Control over the exercise 

 18

or purchase price (if any) per Share subject to the Award multiplied by (ii) the number of Shares granted under the Award.
16.2    Termination, Amendment, and Modifications of Change in Control Provisions.  Notwithstanding any other provision of this Plan (but subject to the limitations of Section 18.3 hereof) or any Award Agreement provision, the provisions of this Article 16 may not be terminated, amended, or modified on or after the date of a Change in Control to affect adversely any Award theretofore granted under the Plan without the prior written consent of the Participant with respect to said Participant’s outstanding Awards; provided, however, the Board may terminate, amend, or modify this Article 16 at any time and from time to time prior to the date of a Change in Control.

		
	ARTICLE 17.
	Change in Capitalization

In the event of any change in corporate capitalization, such as a stock split, or a corporate transaction, such as any merger, consolidation, separation, including a spin off, or other distribution of stock or property of the Company, any reorganization (whether or not such reorganization comes within the definition of such term in Code Section 368) or any partial or complete liquidation of the Company, the Board shall make such adjustment in the number and class of Shares which may be delivered under Article 4, in the number and class of and/or price of Shares subject to outstanding Awards granted under the Plan, and in the Award limits set forth in Article 4 as it determines to be appropriate and equitable, in its sole discretion, to prevent dilution or enlargement of rights; provided, however, that the number of Shares subject to any Award shall always be a whole number; provided, further, that no such adjustment shall cause any Award hereunder which is or becomes subject to Section 409A of the Code to fail to comply with the requirements of such section.

		
	ARTICLE 18.
	Amendment, Modification, and Termination

18.1    Amendment, Modification, and Termination.  Subject to Sections 18.3 and 18.4, the Board may at any time and from time to time, alter, amend, suspend or terminate the Plan in whole or in part; provided, that no amendment shall be made without shareholder approval if such approval is necessary to comply with any applicable tax or regulatory requirements.  Prior to such approval, Awards may be made under the Plan expressly subject to such approval.

18.2    Adjustment of Awards.  The Board (or its delegate) may make adjustments in the terms and conditions of, and the criteria included in, any Award in any situation it deems appropriate, as long as the adjustment of such Award does not adversely affect the holder; provided, that no such adjustment shall be authorized to the extent that such authority would be inconsistent with the Plan’s meeting the requirements of Section 162(m) or 409A of the Code.

18.3    Awards Previously Granted.  Notwithstanding any other provision of the Plan to the contrary (but subject to Article 16, 17, 19 and 23 hereof), no termination, amendment, or modification of the Plan shall adversely affect in any material way any Award previously granted under the Plan, without the written consent of the Participant holding such Award.

18.4    Compliance with Code Section 162(m).  At all times when Code Section 162(m) is applicable, all Awards granted under this Plan shall comply with the requirements of Code Section 162(m); provided, however, that in the event the Board determines that such compliance is not desired with respect to any Award or Awards available for grant under the Plan, then compliance with Code Section 162(m) will not be required.  In addition, in the event that changes are made to Code 

 19

Section 162(m) to permit greater flexibility with respect to any Award or Awards available under the Plan, the Board may, subject to this Article 18, make any adjustments it deems appropriate.

18.5    Prohibition on Repricing.  Subject to limitations imposed by Section 409A of the Code or other applicable law, in no event shall the exercise price with respect to an Award be reduced following the grant of an Award, nor shall an Award be cancelled in exchange for a replacement Award with a lower exercise price or in exchange for another type of Award or cash payment without shareholder approval.

		
	ARTICLE 19.
	Clawback

If the Company’s financial results are materially restated, the Committee may review the circumstances surrounding the restatement and determine whether and which Participants will be required to forfeit the right to receive any future Awards or other equity based incentive compensation under the Plan and/or repay any Awards or cash payments determined by the Committee to have been inappropriately received by the Participant.  If the Company’s financial results are restated due to fraud, any Participant who the Committee determines participated in or is responsible for the fraud causing the need for the restatement, forfeits the right to receive any future Awards or other equity based incentive compensation under the Plan and must repay any Awards or cash payments in excess of the amounts that would have been received based on the restated financial results.  Any repayments required under this Article 19 must be made by the Participant within ten (10) days following written demand from the Company.  This Article 19 applies only to Participants in the Plan who also participate in the Steelcase Inc. Executive Severance Plan.

		
	ARTICLE 20.
	Withholding

20.1    Tax Withholding.  The Company shall have the power and the right to deduct or withhold, or require a Participant to remit to the Company, an amount sufficient to satisfy federal, state, and local taxes, domestic or foreign, required by law or regulation to be withheld with respect to any taxable event arising as a result of this Plan.

20.2    Share Withholding.  With respect to withholding required upon the exercise of Options or SARs, upon the lapse of restrictions on Restricted Stock, or upon any other taxable event arising as a result of Awards granted hereunder, Participants may elect, subject to the approval of the Board, to satisfy the withholding requirement, in whole or in part, by having the Company withhold Shares having a Fair Market Value on the date the tax is to be determined equal to the minimum statutory total tax which could be imposed on the transaction.  All such elections shall be irrevocable, made in writing, signed by the Participant, and shall be subject to any restrictions or limitations that the Board, in its sole discretion, deems appropriate.

		
	ARTICLE 21.
	Indemnification

Each person who is or shall have been a member of the Committee, or of the Board, shall be indemnified and held harmless by the Company against and from any loss, cost, liability, or expense that may be imposed upon or reasonably incurred by him or her in connection with or resulting from any claim, action, suit, or proceeding to which he or she may be a party or in which he or she may be involved by reason of any action taken or failure to act under the Plan and against and from any and all amounts paid by him or her in settlement thereof, with the Company’s approval, or paid by him or her in 

 20

satisfaction of any judgment in any such action, suit, or proceeding against him or her, provided he or she shall give the Company an opportunity, at its own expense, to handle and defend the same before he or she undertakes to handle and defend it on his or her own behalf.  The foregoing right of indemnification shall not be exclusive of any other rights of indemnification to which such persons may be entitled under the Company’s Articles of Incorporation of Bylaws, as a matter of law, or otherwise, or any power that the Company may have to indemnify them or hold them harmless.
		
	ARTICLE 22.
	Successors

All obligations of the Company under the Plan with respect to Awards granted hereunder shall be binding on any successor to the Company, whether the existence of such successor is the result of a direct or indirect purchase, merger, consolidation, or otherwise, of all or substantially all of the business and/or assets of the Company.

		
	ARTICLE 23.
	Legal Construction

23.1    Gender and Number.  Except where otherwise indicated by the context, any masculine term used herein also shall include the feminine; the plural shall include the singular and the singular shall include the plural.

23.2    Severability.  In the event any provision of the Plan shall be held illegal or invalid for any reason, the illegality or invalidity shall not affect the remaining parts of the Plan, and the Plan shall be construed and enforced as if the illegal or invalid provision had not been included.

23.3    Requirements of Law.  The granting of Awards and the issuance of Shares under the Plan shall be subject to all applicable laws, rules, and regulations, and to such approvals by any governmental agencies or national securities exchanges as may be required.

23.4    Securities Law Compliance.  With respect to Insiders, transactions under this Plan are intended to comply with all applicable conditions or Rule 16b-3 or its successors under the 1934 Act.  To the extent any provision of the plan or action by the Board fails to so comply, it shall be deemed null and void, to the extent permitted by law and deemed advisable by the Board.

23.5    Section 409A.  The intent of the parties is that payments and benefits under this Plan comply with Section 409A of the Code, to the extent subject thereto, and accordingly, to the maximum extent permitted, this Plan shall be interpreted and administered to be in compliance therewith.  Notwithstanding anything contained herein to the contrary, to the extent required in order to avoid accelerated taxation and/or tax penalties under Section 409A of the Code, a Participant shall not be considered to have terminated employment with the Company for purposes of this Plan unless the Participant would be considered to have incurred a “separation from service” from the Company within the meaning of Section 409A of the Code.  Each amount to be paid or benefit to be provided under this Plan shall be construed as a separate identified payment for purposes of Section 409A of the Code, and any payments described in this Plan that are due within the “short term deferral period” as defined in Section 409A of the Code shall not be treated as deferred compensation unless applicable law requires otherwise.  Without limiting the foregoing and notwithstanding anything contained herein to the contrary, to the extent required in order to avoid accelerated taxation and/or tax penalties under Section 409A of the Code, amounts that would otherwise be payable and benefits that would otherwise be provided pursuant to this Plan (or any other plan or agreement of the Company) 

 21

during the six-month period immediately following a Participant’s separation from service shall instead be paid on the first business day after the date that is six months following the Participant’s separation from service (or death, if earlier).  The Plan and any Award Agreements issued thereunder may be amended in any respect deemed by the Board or the Committee to be necessary in order to preserve compliance with Section 409A of the Code.  The Company makes no representation that any or all of the payments described in this Plan will be exempt from or comply with Section 409A of the Code and makes no undertaking to preclude Section 409A of the Code from applying to any such payment.  Each Participant shall be solely responsible for the payment of any taxes and penalties incurred under Section 409A of the Code.

23.6    Governing Law.  To the extent not preempted by federal law, the Plan, and all agreements hereunder, shall be construed in accordance with and governed by the laws of the State of Michigan.

		
	ARTICLE 24.
	Execution

IN WITNESS WHEREOF, Steelcase Inc. has caused this Plan, captioned “Steelcase Inc. Incentive Compensation Plan,” as amended and restated effective as of July 15, 2015, to be executed by its duly authorized officer this 15th day of July, 2015.

	
		
	STEELCASE INC.
	 

	
		
	By: 
	/s/ Lizbeth O'Shaughnessy

	 
	Lizbeth O'Shaughnessy

	Its:
	Senior Vice President, Chief Administrative Officer, General Counsel and Secretary

 22

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